According to early results, Disney's strategy of alleviating park congestion while increasing revenue appears to be working.
The company said the
Walt Disney World Resort in Florida had a second-quarter dip in
park attendance after the implementation of tiered admission pricing for the domestic theme parks.
At
the end of February, Disney assigned “value,” “regular”
and “peak” single-day rates for each day of the year at theme parks in Florida and Southern California. Disney's intention was to spread out attendance throughout the year. The result was an increase in the average admission price for the Magic
Kingdom, Disney's most popular theme park.
“We
like the steps that we’ve taken in terms of pricing,” Disney CEO Bob Iger said during Tuesday's earnings
call for the company's fiscal second quarter. “We've taken a number of steps … to essentially grow revenue, in some
cases, actually at the expense of some attendance where we're changing our
pricing approach, sometimes in part to moderate attendance so that the park
experience is a little bit better but all designed with the effect of
essentially raising revenue.”
Disney said there was a “modest decrease” in attendance between January and March at Disney World, which was
offset by a slight increase at Disneyland in California. The result was that park attendance was essentially flat for the quarter,
but Disney's Parks and Resorts division reported a revenue
increase of 4%, to $3.9 billion. The division's operating income increased 10%,
to $624 million.
Disney
highlighted gains in the company’s cruise business, which
set records for revenue and operating income, according to the company. Disney did not break out numbers for the cruise operation, which is part of the Parks and Resorts division.
Iger
also talked about the opening of Shanghai Disney on June 16.
“After
17 years of working on this project, I'm still awed by it,” said Iger. “It
really is impossible to overstate our excitement about this spectacular resort.
It represents the very best that Disney has to offer in a way that is both
respectful and relevant to the people of China, or as we have been saying, it
is authentically Disney and distinctly Chinese, and we can't wait to share it
with the world.”
The Walt Disney Company overall
reported a 2% gain in net income, to $2.1 billion. Revenue rose
4%, to nearly $13 billion.