Omicron does zero damage to Disney Parks division
Disney’s domestic parks and resorts had a historic quarter.
Disney CEO Bob Chapek on Wednesday said the domestic parks “achieved all-time revenue and operating income records despite the omicron surge” of Covid-19 in the company’s first fiscal quarter of 2022.
Revenue for Disney Parks, Experiences and Products was $7.23 billion, up from $3.59 billion a year earlier. Operating income was $2.45 billion, up from an operating loss of $119 million.
Disney isn’t alone. NBCUniversal’s theme park division reported that the fourth quarter of 2021 was its most profitable on record.
Chapek said the Disney Parks division had its second-best quarter of all time. He attributed the performance to continued investment in storytelling and technology as well as investment in new franchise-based lands (like Star Wars: Galaxy’s Edge), food and beverage offerings, and merchandise.
“There is more great Disney storytelling infused into every aspect of a visit to our parks than ever before,” he said on a call with financial analysts. “At the same time, we’re giving guests new tools to personalize their visits and spend less time in line and more time having fun.”
Chapek was referring to Disney Genie+ and Lightning Lanes, for which guests pay a fee to access shorter lines to ride attractions. While he expected them to be popular, Chapek said he was “blown away” by their use in the quarter. He said one-third of domestic park guests purchased one or both of the services. During the holiday period, that figure rose to 50%.
Disney’s domestic parks operated with higher revenue levels than 2019 but with lower attendance. Chapek attributed that to Disney’s ability to strategically manage attendance.
“As we return to a more normalized environment, we look forward to more fully capitalizing on the extraordinary demand for our parks, along with the already realized yield benefits that took shape this quarter,” he said.
Continued investment is on tap, as well. Chapek pointed to Star Wars: Galactic Starcruiser, the new Star Wars-themed hotel and experience that opens March 1, and a new Guardians of the Galaxy roller coaster at Epcot, Cosmic Rewind, set to open this summer.
Disney CFO Christine McCarthy offered further insight into the parks’ performance.
All of Disney’s parks and resorts around the world were open for the entire quarter, she said. In the same quarter last year, only Disney’s campuses in Florida and Shanghai were open for the entire quarter. Hong Kong and Disneyland Paris were open for a limited number of weeks, and Disneyland in California was closed for the entire quarter.
McCarthy said domestic park attendance was up double digits compared to the prior quarter, partly reflecting increased visitor numbers during the holiday season. Spending per guest was up more than 40%, aided by Genie+ and Lightning Lane sales.
According to McCarthy, demand for the fiscal second quarter remains strong for domestic parks, thanks to the Walt Disney World Resort’s 50th anniversary celebration that is currently ongoing, as well as new attractions and experiences in both Florida and California.
There is also room for growth from international visitors. Traditionally, between 18% and 22% of Disney World visitors come from abroad, McCarthy said. They haven’t returned yet.
The entire company’s revenue was up 34% to $21.82 billion in the fiscal first quarter. Operating income was $3.26 billion, up from $1.33 billion a year earlier.
Disney stock was up 7% in after-hours trading on Wednesday.
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