Theme parks stay hot, beating prepandemic demand, spend

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Special events, like Mickey's Not So Scary Halloween Party at Disney's Magic Kingdom, help attract guests to theme parks in the fourth quarter. The event features a number of unique activities, like Mickey's Boo-To-You Halloween Parade.
Special events, like Mickey's Not So Scary Halloween Party at Disney's Magic Kingdom, help attract guests to theme parks in the fourth quarter. The event features a number of unique activities, like Mickey's Boo-To-You Halloween Parade. Photo Credit: Courtney Keifer, Disney

Demand and spending at destination theme parks has been high in recent months, in some cases exceeding prepandemic levels.

And although some experts think that some factors could lead to a plateauing of attendance, they also say that park operators have options to keep revenue up even if visitor numbers decline.

Demand at Disney's domestic parks "continues to be strong," CEO Bob Chapek said during the company's most recent earnings call -- revenue was up more than $3 billion in its most recent quarter, which ended July 2. And attendance "on many days" is ahead of 2019 levels, according to CFO Christine McCarthy.

Chapek specifically called out "substantial increases" in per capita spending, up 10% compared with the year prior and up more than 40% compared with the same period in 2019. That is partly thanks to Disney's Genie service, which includes paid, skip-the-line options; Chapek said around 50% of guests are opting into the Genie service.

Comcast, parent of NBCUniversal, also reported positive theme park results for its quarter ending June 30. CEO Brian Roberts said its parks recorded record earnings before interest, taxes, depreciation and amortization of $632 million and that attendance and per capita spend "continue to be above prepandemic levels." Revenue was up 65% compared with the same quarter last year.

Executives expect the current level of demand and spending will likely continue.

"I think we feel really good about the parks and feel like there's a lot of growth ahead of us despite what could be macro challenges that we could or might face," NBCUniversal CEO Jeffrey Shell said. 

What's driving demand

Carissa Baker
Carissa Baker

Carissa Baker, assistant professor of theme park and attraction management at the University of Central Florida's Rosen College of Hospitality Management, pointed out that all the Florida parks have new attractions, "so that's driving demand."

"And then all of them have special events," she added. "I think all of those things have been driving this record demand."

The market does ebb and flow, meaning demand will ease at some point, Baker said. For Disney, she predicted that will happen when the celebration of Walt Disney World's 50th anniversary concludes at the end of March. For Universal, she predicted a lessening of demand in advance of the opening of its newest theme park, Epic Universe, slated for summer 2025.

But while she did predict a slight drawback in attendance, Baker said it will not be "a huge issue."

Dennis Speigel
Dennis Speigel

In the near term, destination parks will continue to see strong demand, said Dennis Speigel, CEO and founder of consultancy International Theme Park Services.

"I'm not sure they'll see an attendance slump, quite frankly," Speigel said. "Maybe a little bit of a flattening, but I don't think they'll see a huge downward bump for the remainder of the year, because I think they've made it basically through the most difficult time, which was Q2, Q3."

In the fourth quarter, Speigel said, parks can rely on special activities like Disney's Mickey's Not So Scary Halloween Party and Universal's Halloween Horror Nights to keep spending up.

Len Testa
Len Testa

Len Testa, president of TouringPlans.com and the TouringPlans host agency, looks at the popularity of Star Wars: Galactic Starcruiser, Disney's themed hotel/experience, as one indication of demand. It's expensive, but most dates are sold out through the rest of the year, he said.

If demand slackens, then what?

If demand at the parks does ease, operators have a number of tools at their disposal to continue to attract guests.
Disney's McCarthy referenced one during the earnings call: It can loosen restrictions on annual passholders.

Testa said that, historically, Disney has also used hotel-room discounting to draw guests. Annual passholder perks, like discounts or additional days to make park reservations, could also be on the table.

Baker said special events, including parties and festivals, can also be used.

But one thing is likely to cause attendance to swell in Orlando in a couple of years: Epic Universe's opening.

"This is going to be a really big deal for the area," Baker said.

Speigel agreed. "It's the old, overused expression, 'a rising tide lifts all boats,'" he said. "Everybody will benefit from Epic Universe, no question about it." 

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