The future looks promising for the Walt Disney Co.'s parks and resorts division, which saw its fiscal year-end earnings top previous records in advance of several buzz-worthy developments that are in the works both stateside and abroad, most notably the opening of the Shanghai Disney Resort this coming spring.
For the fiscal year ending Oct. 3, Disney's domestic theme parks — the Disneyland Resort in California and Walt Disney World in Florida — were the driving force behind the division's success even as international properties lagged. While the performance stateside has been impressive and promises to continue to do well with the recent announcement that the company will be adding Star Wars-themed lands to the California and Florida parks, Disney executives have high hopes pegged to the forthcoming Shanghai park.
"We continue to be impressed with the buzz that we see whenever we go to China," Disney CEO Bob Iger said during the company's fourth quarter earnings call earlier this month. "More than anything else, we think it's a great opportunity for us to grow our business in Asia and particularly in China. We think it's going to open up the door for even more opportunities there, both in Shanghai and around China."
Iger said that the company expects to announce an opening date for the theme park, Disney's first in mainland China and the second in the country after Hong Kong Disneyland, before the end of this year. The opening date, he said, will be sometime in spring.
According to Disney COO Tom Staggs, all the major structures and landmarks are in place at the Shanghai park, and the company has begun holding a number of job fairs in China to build up the employee base.
"One of the things we're most looking forward to in 2016, of course, is the grand opening of Shanghai Disney Resort next spring," Staggs said. "We committed ourselves to making this resort authentically Disney and distinctly Chinese. … Our collaboration with Chinese cultural experts, creative talent and artisans is apparent throughout."
Disney executives have cautioned on the last several earnings calls that while the excitement for the Shanghai resort is building, so, too, are the preopening expenses. Nevertheless, those expenses have been offset by continued growth domestically.
Disney's parks and resorts division reported a 10% earnings increase in Q4, to $4.4 billion, and 7% operating income growth, to $738 million. For the full year, parks and resorts revenue rose 7%, to $16 billion, and operating income increased 14%, to $3 billion.
Attendance at the domestic parks was up 15% in the quarter, and Disneyland in particular experienced strong attendance growth due to the buzz surrounding the park's 60th anniversary celebration.
Meanwhile, the company continues to experience softer performance at its international parks and resorts, with lower attendance and occupied room nights for the quarter at Hong Kong Disneyland Resort and higher operating costs at Disneyland Paris.