Disney Parks Profits Break Records – Even Before Major Expansion

All is well in the magic kingdom.

Disney’s The theme park division posted record revenue and profit for fiscal 2024, with full-year revenue up 5 percent to $34.15 billion and operating income up 4 percent 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 generated $41.18 billion in fiscal 2024. However, the entertainment segment’s operating profit was low, collecting just $3.92 billion.

Revenue growth at Experiences was the strongest of any Disney division, and company executives expect the good times to continue.

Disney expects profits for Experiences to grow 6% to 8% in fiscal 2025 — and that’s before it breaks ground on planned land expansions, new rides and revamped attractions. will give

As part of Disney’s 10-year, $60 billion investment in the segment, guests will finally get to see what’s next beyond Big Thunder Mountain at Magic Kingdom, with the cast of “Coco” at Disneyland in the Land of the Visit the Dead and battle King Thanos. Inside the Avengers campus at California Adventure.

Many of these plans were revealed during the company’s D23 Expo in August, however, it will be a few years before Disney park guests get a chance to explore the new additions.

In the meantime, the company is boosting revenue with higher ticket prices as well as in-park entertainment and limited-time offers to keep guests coming back.

Disney has a wide variety of park guests, from locals who frequent year-round, to once-in-a-lifetime guests 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 driven by different elements or different factors,” said Gavin Doyle, founder of MickeyVisit.com.

For those who visit the parks less frequently, new marquee attractions and lands can serve as incentives for tickets and hotel stays.

In the past five years, Disney has added two Star Wars-themed lands and a Marvel Land, as well as opening new rides at Epcot such as Cosmic Rewind, which features “Guardians of the Galaxy” characters and the “Tron” roller coaster. are included. Magic Kingdom. Disney also recently revamped the popular Splash Mountain attraction with “The Princess and the Frog” characters.

At the other end of the spectrum, those who visit annually or several times during the year, need only the “smallest nudge.” And it can come in the form of new live shows, character meet-and-greets, holiday dinner specials, seasonal festivities, as well as parades and nighttime spectacles.

“There’s stuff that happens throughout the year to make every day of the year different,” Doyle said. “There are festivals all year long … limited-time parades and fireworks events. It leans toward that Walt Disney strategy, where you have something that’s super exciting and has a timer on it and There is a ticking clock that compels people to come and do a time when they have to make their journey.

It’s those more frequent visitors that are critical to Disney’s projected profit growth of 6% to 8% in fiscal 2025, even as it takes a $130 million hit from the effects of Hurricanes Helene and Milton. A loss is expected as well as $90. million impact from cruise pre-launch spending during the first quarter of the fiscal year.

As Disney works on big, long-term projects like a “Cars”-themed Frontier Land in Florida and a new Avatar-themed land in California, among other projects, it’s adding daily live entertainment options as well. are also unique. , seasonal menu items can help increase revenue.

“It’s the little things that add up to big things,” said David Lightbody, senior vice president of Disney Live Entertainment.

The company also wants to capitalize on a competitor’s upcoming opening. of Universal The new Epic Universe theme park in Florida, which is expected to boost travel and tourism in the area, will also benefit local Disney parks.

Visitors who visit more frequently have some of the strongest emotional attachments to the parks and have more shopping opportunities when it comes to merchandise and concessions.

Disney doesn’t break out food and merchandise sales at its parks, but it shared that guests were spending more at its home parks during the most recent quarter.

Many guests will use seasonal offers, such as limited-time holiday food and drinks, as an excuse to visit the parks and go on scavenger hunts to try all the new treats, Doyle said.

This also extends to Disney’s festivals, which often feature unique menu items that cannot be had at any other time of the year.

And those same park-goers purchase limited-time merchandise, such as exclusive popcorn buckets, Spirits jerseys, mugs and pins, which have become popular collectibles for the company’s biggest fans.

Similarly, this group includes guests who come only for Disney holiday experiences — such as California Adventure’s Oogie Boogie Bash or Mickey’s Very Merry Christmas Party at Walt Disney World — that incur an additional fee on top of a daily ticket. .

Throughout the year, Disney has a variety of live entertainment offerings for guests including musical shows, character meet and greets, parades and nightly fireworks shows.

These events may change seasonally, with character costumes, music or color themes to suit the time of year. It meets short for new surprises in the parks while retaining its trademark nostalgia.

“The parades and the nighttime spectacles play an incredibly important role in Disney’s day,” Lightbody said. They kind of break up 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 began in Hong Kong in 2014, went stateside in 2015 to mark Disneyland’s 60th anniversary and continues through 2018. It featured more than 1.5 million LED lights and paid homage to another long-running Main Street Electrical Parade. A fan favorite spectacle.

“This parade is one of Disneyland’s best ever and is loved by many,” MickeyVisit.com content director Lindsey Brookshire wrote when Disney first teased the parade’s return in October. was

Disney has not confirmed a start date for the parade, but social media has been flooded with park-goers eagerly awaiting its return.

Another key benefit of nighttime live events is that they keep guests in the park longer, which means extending sales of drinks, snacks and other merchandise into the evening hours.

Lightbody referred to Disney’s nighttime shows as “Kiss Goodnight,” a way to wrap up the day and give guests a spectacular display.

For most domestic park-goers, celebratory fireworks are often limited to holidays like the Fourth of July and New Year’s. Therefore, living these moments at Disney defines the special nature of the trip.

“When a parade or special does well, it taps into your nostalgia for a past visit or childhood, or you never imagined,” Doyle said. What was it?” “It will also lean toward 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 is both a setting and a reflection of a particular time.”

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBC Universal is opening an Epic Universe theme park next year.