Disney is pointing fingers. Yesterday, August 9, was an important day for The Walt Disney Company. The company released its third-quarter earnings, revealing plenty about the business. The information was pertinent for the company, with many numbers, percentages, and areas to cover.
As the company’s reports are reviewed, CEO Bob Iger has made it clear there is still a way to go. Iger extended his contract with The Walt Disney Company after signing back on in 2022. The transformation and structures he has put in place needed more time, so his contract now ends in 2026. With the release of information, Disney is looking into different sectors to see what succeeded and what didn’t. Furthermore, the company is looking for the best ways to grow and prosper despite hardships. Among the actor’s strike, Disney is still dealing with the lawsuit against Florida’s Governor Ron DeSantis and struggling with box office sales and overall earnings.
Is Disney World to Blame?
It seems unlikely that “The Most Magical Place On Earth” could be at fault for anything, but I may be a bit biased. Disney World has four parks, Magic Kingdom, Animal Kingdom, EPCOT, and Hollywood Studios. All four Parks bring an exciting and magical adventure to each Guest that visits. With that expectation, there is also an expectation on the business side to deliver that via income. The data in the third-quarter earnings helps the company understand what is working and what isn’t in the Parks.
Interestingly enough, Disneyland did not suffer any decrease. According to the report, “Lower operating income at our domestic parks and resorts was attributable to a decrease at Walt Disney World Resort, while results at Disneyland Resort were up modestly compared to the prior-year quarter.” Additionally, Disneyland Resort saw higher attendance and increased Guest spending. With that said, Walt Disney World is singing a different tune.
Disney Parks, Experiences and Products Disney Parks, Experiences and Products revenues for the quarter increased 13% to $8.3 billion. Higher results due to increases at international parks, offset by lower results at domestic operations. $DIS pic.twitter.com/Bwnv4zzpuq
— Scott Gustin (@ScottGustin) August 9, 2023
What The Reports Say
The report states, “The decrease at Walt Disney World Resort was primarily due to higher costs and lower volumes. The increase in costs was attributable to inflation and accelerated depreciation related to the planned closure of Star Wars: Galactic Starcruiser. Lower volumes were due to decreases in occupied room nights and attendance.” What is most pondered is that Disney World realizes their increase in ticket sales did affect the income, which came at a time that inflation was also in full gear for Guests. The lower crowds were also something noticed across the Disney community, which may be for more reasons than just inflation.
Star Wars: Galactic Starcruiser opened in March 2022 and has only posed issues since. The hotel was unlike anything Disney had ever done before. “Upon arrival, Guests are immediately immersed in the galactic universe as they are welcomed into the starcruiser by the ship’s crew,” Disney Dining details. Unfortunately, even with the immersive experience, the astronomical prices at the hotel were reason enough to turn Guests off. The Disney boutique hotel is set to close on September 28 after its clearly underwhelming contribution to the Parks.
Although there are a few contributing factors, it seems Disney hasn’t skipped a beat in trying to amp up Guest visits to Disney World. The Parks have recently rolled out holiday experiences like Mickey’s Not-So-Scary Halloween Party, along with Florida resident ticket options that are severely discounted.
Even with lower earnings, Walt Disney World is still “The Most Magical Place On Earth” to visit. With Disney’s efforts, it’s likely the next quarter may be looking up with so many exciting events to look forward to.