Big quarter for Disney parks, hotels and cruise line

Disney CEO Bob Iger called the theme parks business “a key growth driver for the company,” during Disney’s earnings call for its fiscal second quarter.

Disney’s Domestic Parks & Experiences (which includes Disney domestic hotels and Disney Cruise Line) reported a 14% revenue increase to $5.57 billion. Its international theme parks reported a 106% revenue increase to $1.18 billion.

Domestic Parks & Experiences’ operating income was up 10% to $1.52 billion, while international parks recorded an operating income of $156 million (compared to an operating loss of $268 million in last year’s fiscal Q2).

CFO Christine McCarthy called Disney’s international parks a “bright spot” this quarter with higher attendance and improved financial results.

She said domestic Parks & Experiences benefitted from a solid showing from Disney Cruise Line. Its newest ship, the Wish, did well, as did the cruise line’s older ships.

Iger highlighted a number of international expansions upcoming, including Frozen-inspired expansions in Paris, Hong Kong and Tokyo Disney, Shanghai’s Zootopia-themed expansion and Rapunzel and Peter Pan themed areas coming to Tokyo.

He also touched upon some changes made at Disney World “that will improve the experiences for guests,” including eliminating park reservation requirements for date-based tickets and bringing back dining plans.

“This is just another example of how we’re continuously listening to our guests and finding ways to improve their experiences,” Iger said.

The lawsuit against Florida

Iger also addressed Disney’s battle with Florida over control of the special taxing district that Disney operates within Disney World. Disney filed suit against the state over the matter.

“This is about one thing and one thing only, and that’s retaliating against us for taking a position about pending legislation,” Iger said. “And we believe that in us taking position, we’re merely exercising our right to free speech.”

Disney last year was outspoken against Florida’s so-called “Don’t Say Gay” law, which led to Gov. Ron DeSantis calling Disney a “woke” corporation. He has since signed a bill giving him control over the taxing district formerly known as the Reedy Creek Improvement District. Disney has sued DeSantis, alleging he impinged on its right to free speech. 

Iger also took the opportunity on Wednesday to talk about special districts like Reedy Creek. There are about 2,000 in the state of Florida, he said, mostly established to foster development.

“It basically made it easier for us and others to do business in Florida,” he said. “And we built a business that employs, as we’ve said before, over 75,000 people and attracts tens of millions of people to the state. So while it’s easy to say that the Reedy Creek special district that was established for us over 50 years ago benefitted us, it’s misleading to not also consider how much Disney benefitted the state of Florida.”

The CEO also pushed back against a “false narrative that we’ve been fighting to protect tax breaks as part of this,” Iger said.

He described Disney as the largest taxpayer in Central Florida, paying local and state taxes of more than $1.1 billion in 2022. The special district has resulted in the company paying more in real estate taxes, he said.

“We all know there was no concerted effort to do anything to dismantle what was once called Reedy Creek special district until we spoke out on the legislation, so this is plainly a matter of retaliation while the rest of the Florida special districts continue operating basically as they were,” Iger said.

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