People walk in front of Cinderella’s Castle at the Magic Kingdom Park at Walt Disney World on May 31, 2024, in Orlando, Florida.
Gary Hershorn | Corbis News | Getty Images
All is well in the Magic Kingdom.
Disney’s theme park division posted record revenue and profit for fiscal 2024, with revenue rising 5% for the full year to $34.15 billion and operating income up 4% to $9.27 billion.
Experiences, which includes parks, resorts, cruises and consumer products, was the second-highest revenue driver behind Disney’s entertainment division, which tallied $41.18 billion in fiscal 2024. However, the entertainment segment’s operating profits were smaller, collecting just $3.92 billion.
Revenue growth in experiences was the strongest of any Disney division, and company executives expect the good times to continue.
Disney expects to see 6% to 8% profit growth for experiences in fiscal 2025 — and that’s before it breaks ground on a slew of planned land expansions, new rides and rethemed attractions.
As part of Disney’s 10-year, $60 billion investment in the segment guests will finally get to see what lies beyond Big Thunder Mountain at the Magic Kingdom, visit the Land of the Dead with the cast of “Coco” at Disneyland and battle King Thanos within the Avengers Campus at California Adventure.
Many of those plans were revealed during the company’s D23 Expo back in August, however, it’ll be a few years before Disney’s park guests will have the opportunity to explore the new additions.
In the meantime, the company is driving revenue with higher ticket prices as well as in-park entertainment and limited-time offerings to keep guests coming back.
Frequent visitors
Disney has a wide variety of park guests, ranging from locals who visit often throughout the year to the once-in-a-lifetime visitors who may be traveling from afar.
“You have these different buckets of guests, all of whom are interested in having a great day at the Disney parks, but are motivated by different elements or different factors,” said Gavin Doyle, founder of MickeyVisit.com.
For those who venture to the parks less frequently, new marquee attractions and lands can serve as motivation to book tickets and hotel stays.
In the last five years, Disney has added two Star Wars-themed lands and a Marvel land as well as opened new rides like Cosmic Rewind at Epcot, which features characters from “Guardians of the Galaxy,” and a “Tron” roller coaster at Magic Kingdom. Disney also recently rethemed the iconic Splash Mountain attraction with characters from “The Princess and the Frog.”
Exterior of the Millennium Falcon: Smugglers Run ride at Disney’s Galaxy’s Edge.
Disney
On the other end of the spectrum, those who visit annually or several times during the year, only need “the smallest nudge,” Doyle said. And that can come in the form of new live shows, character meet-and-greets, holiday food specials, seasonal festivals as well as parades and nighttime spectaculars.
“There’s stuff that happens all throughout the year to be able to make every day of the year different,” Doyle said. “There’s festivals all throughout the year … limited-time parades and firework celebrations. This leans into that Disney vault strategy, where you have something that’s super exciting and it has a timer on and a ticking clock that drives people to come and have a time that they have to have their trip by. I think that’s really critical here, and it causes people to come to the parks even more.”
The Mickey Mouse and Minnie Mouse float passes by during the daily Festival of Fantasy Parade at the Magic Kingdom Park at Walt Disney World on May 31, 2024, in Orlando, Florida.
Gary Hershorn | Corbis News | Getty Images
It’s those more frequent guests who are crucial for Disney to reach that projected 6% to 8% profit growth in fiscal 2025, even as it expects to take a $130 million hit due to the impact of hurricanes Helene and Milton, as well as a $90 million impact from cruise prelaunch costs during the fiscal first quarter.
As Disney works on larger, longer-term projects like the revamp of its Florida-based Frontier Land to be “Cars” themed and a new Avatar-based land in California, among other projects, having these daily live entertainment options as well as unique, seasonal menu items can help drive revenue.
“It’s small things adding up to big things,” said David Lightbody, senior vice president of Disney Live Entertainment.
The company is also looking to capitalize on the upcoming opening of rival Universal’s new Epic Universe theme park in Florida, which is expected to drive travel and tourism to the area and give a bump to Disney’s local parks as well.
For a limited-time only
Guests who visit more frequently have some of the strongest emotional attachment to the parks and have more purchasing opportunities when it comes to merchandise and concessions.
Disney doesn’t break out food and merchandise sales within its parks, but shared that during the most recent quarter guests were spending more money at its domestic parks.
Doyle said that many guests will use seasonal offerings, like limited-time holiday food and drinks, as an excuse to go to the parks and have scavenger hunts to try out all the new treats.
Festive food options arrive just in time for the holidays at Disney’s theme parks.
Disney
This also extends to Disney’s festivals, which often feature unique menu items that can’t be obtained at any other time of the year.
And these same parkgoers are more likely to purchase the limited-time merchandise, like exclusive popcorn buckets, spirit jerseys, mugs and pins, which have become popular collectibles for the company’s biggest fans.
Limited time holiday merchandise available at Disney parks.
Disney
Similarly, there are guests in this cohort who come just for Disney’s holiday experiences — like California Adventure’s Oogie Boogie Bash or Mickey’s Very Merry Christmas Party at Walt Disney World — which cost an additional fee on top of a daily ticket.
Tried-and-true spectacles
Throughout the year, Disney has a variety of live entertainment offerings for guests including musical shows, character meet-and-greets, parades and nighttime fireworks shows.
These events can change seasonally, with character outfits, music or color themes catered to the time of year. This meets the brief for new surprises at the parks, while maintaining its trademark nostalgia.
“Parades and nighttime spectaculars play an incredibly important role in the Disney day,” said Lightbody. “Because they’re those two times when everyone comes together, a kind of collective experience in the day, and they kind of punctuate the day.”
To celebrate Disneyland’s 70th anniversary next year, the company is bringing back the beloved nighttime parade “Paint the Night.” The parade, which debuted in Hong Kong in 2014 made its way stateside for Disneyland’s 60th anniversary in 2015 and ran on and off through 2018. It featured more than 1.5 million LED lights and paid homage to the long-running Main Street Electrical Parade, another fan-favorite spectacle.
The Paint the Night Parade travels through Hollywood Land at Disney California Adventure on the first day of Pixar Fest in Anaheim on Thursday, Apr 12, 2018.
Medianews Group / Orange County Register Via Getty Images | Medianews Group | Getty Images
“This parade is one of the best Disneyland has ever done and it is beloved by many,” wrote Lindsay Brookshier, content director of MickeyVisit.com, when Disney first teased the parade’s return back in October.
Disney hasn’t confirmed the start date for the parade, but social media has been flooded with parkgoers who are eagerly awaiting its return.
Another key benefit to the nighttime live events is that they keep guests at the park longer, which means extending sales of drinks, snacks and other merchandise into the evening hours.
A stunning firework show is held at the Magic Kingdom Park in Walt Disney World Resort on July 1, 2021 in Lake Buena Vista, Florida. .
Liao Pan | China News Service | Getty Images
Lightbody referred to Disney’s nighttime shows as a “kiss goodnight,” a way to wrap up the day and give guests a bombastic display.
For most domestic parkgoers, celebratory fireworks are often limited to holidays like the Fourth of July and New Year’s. So, having these moments at Disney punctuates the special nature of the trip, he said.
“When a parade or special offering does well, it leans into your nostalgia for a previous visit or for a childhood you may have had, or not even had but just imagined,” said Doyle. “It will also lean into that specific moment, creating a moment in time for your family. … So it’s playing on nostalgia while also creating a new experience in that moment. It’s both a setting and a reflection of a special time.”
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is opening the Epic Universe theme park next year.
Read the original article here