Posted on: August 9, 2012
Investment in California parks paying off, says Disney CEO
After having pumped more than $1 billion into the Disneyland Resort’s Disney California Adventure, Disney appears confident that its plan to reinvigorate the theme park has worked.
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Since the June opening of Cars Land at Disney California Adventure, attendance has been up, along with guest satisfaction, said Disney CEO Bob Iger during the company’s third-quarter conference call. He said Disneyland Resort set an attendance record for the third quarter.
Since June, California Adventure has been drawing nearly 50% of the total attendance to the Disneyland Resort on most days, up from roughly 25% in the past, Iger said.
For the quarter, attendance at all domestic parks was up 1% and per capita spending was up 8% on higher ticket prices and higher spending on food and beverages.
Average per room spending at domestic hotels was up 6%, while occupancy decreased 1.5 points to 79%. Domestic inventory has increased with the opening of Aulani in Hawaii and Disney’s Art of Animation at Disney World.
The launch of the Disney Fantasy in March and the Disney Dream last year has more than doubled the company’s cruise capacity. Disney said its cruise ships are currently at 94% occupancy for the year.
“With these significant investments behind us, this will be the peak year for our capital expenditures in our domestic parks and resorts business,” said Iger. “Going forward, we expect each one of these projects to deliver strong returns on invested capital that will exceed our hurdle rate and drive improvement in our overall returns.”
Disney said operationg income for its Parks and Resorts division grew 21% in the third quarter to $630 million. Revenue for the division increased 9% to $3.4 billion.