Disney Park Attendance Drops Despite New Land Opening
A strange phenomenon has been happening at Disney theme parks the last few months. There have been frequent reports from visitors on social media that lines for rides have dissipated, which has been surprising, especially at Disneyland where the much-anticipated Star Wars: Galaxy's Edge has been open since late May. Social media reports, buzz in online Disney groups or photos without huge Disney summer crowds are just anecdotal. However, during the company's investor call yesterday, we found out that attendance at the US Disney theme parks has indeed been down, at least from April 1–June 30.
While attendance during those three months at both Disneyland and Walt Disney World was down 3%, Disneyland Paris interestingly saw an uptick (here’s why it’s a fun and budget-friendly alternative to the US parks).
Disney shed some light on the factors it has identified that lead to softer than expected attendance in the US during the quarter that included the first few weeks of the opening of Galaxy's Edge, as well as at Disney World where the new land has not yet opened.
Blocked Out Passholders
First, Disneyland annual passholders on the less expensive versions of the pass, who make up a large portion of that park's visitors, were largely blocked out from park visits for much of the time surrounding the opening of Galaxy’s Edge and also throughout the summer. In fact, some passholders at the least expensive tiers are still blocked out of Disneyland until Sept. 3.
Increased Ticket Prices
Earlier this year, Disneyland raised single-day ticket prices by about 10% over last summer's prices. Annual passes got more expensive, too, to the tune of up to 23% more at Disneyland.
This is likely part of the reason that while theme park attendance is a bit soft at the domestic parks, Christine McCarthy, senior executive vice president and CFO of The Walt Disney Company said that "per capita spending was up a healthy 10% on higher admissions, food and beverage and merchandise spending." She went on to say that, "per room spending at our domestic hotels was up 3%, and occupancy was up 2 percentage points to 88%." In other words, while there have been fewer people in the domestic Disney parks, but the ones that are there are spending more on average.
Anaheim Hotels Are Pricier
It's not just the admission tickets that are hitting wallets harder this year at Disneyland and potentially causing some guests to skip a visit. Disney reports that Anaheim hotel rooms in general have become more expensive than they used to be as area hotels have raised their rates.
Disneyland itself actually only has three hotels, and rates are often $400 to $500+ per night. In contrast, there are a couple dozen Disney resorts at Disney World to pick from with rates that start at around $100+ on off-peak dates. On the bright side, you have many viable options for using hotel points to stay within walking distance of Disneyland in Anaheim, but those without points may have been facing higher than normal rates.
Only One Star Wars Ride Is Operational
Also during the call McCarthy noted, "... at Walt Disney World, our survey data suggest that guests are deferring visitation until after Star Wars: Galaxy's Edge opens, which we believe contributed to the decline in attendance we saw during the third quarter." (Galaxy's Edge opens at Aug. 29 at Disney World.) But even when the land opens in Florida, like at Disneyland, the second of two rides in the lands (Rise of the Resistance) won't be open at first. This could reasonably push people to delay trips until 2020 when both Star Wars rides should be open at both domestic Disney parks.
Fear of the Masses
Finally, and most interestingly to me, is that Disney believes some visitors were so worried that mass crowds tied to the opening of Galaxy's Edge would lead to a bad park experience that a significant number of them simply stayed away.
During the call, Bob Iger, chairman and chief executive officer of the company, said, "First of all, helped in part by some of our efforts, there was tremendous concern in the marketplace that there was going to be huge crowding when we opened Galaxy’s Edge. And so some people stayed away just because they expected that it would not be a great guest experience."
This line of thinking is consistent with comments we saw on TPG articles leading up to the opening of Galaxy's Edge both on the site and in the TPG Facebook groups. There was a constant theme of people sharing that they were not planning Disney trips this year for fear it would all be too packed to have fun.
Those fears aren't always unfounded as Harry Potter’s new Hagrid ride opened at Universal Orlando in June to 11+ hour waits and intermittent up and down time.
Disney remains optimistic and states that interest in the Star Wars-themed lands is extremely high and they are still bullish for the long-term future of the lands at both US parks.
I'm a Disney fan and certainly wouldn't bet against Disney long-term, but the constant drumbeat of noticeable annual ticket price increases and an increasing amount of strategy required for an optimal Disney visit (especially at Disney World), may have hit at least a speed bump, if not a small wall. With very formidable competitors, such as Universal, single-day tickets pricing over $100 (to as high as $159 for peak dates), annual passes that can cost more than $1,000 and hotel nights that can easily be $400 to $500 per night, it's easy to see why families may wait until the perceived "perfect moment" for a visit to Mickey and friends.
That said, as a frequent visitor and annual passholder, having a few less parkgoers and a few more lands to visit isn't exactly a bad thing, even if the other side of the coin was the per-visitor spending trending upward a bit. In terms of crowds, my visits to both Disneyland and Disney World this summer have been ... pleasant, and this included the public opening of Star Wars: Galaxy's Edge in California where the wait for the new ride got down to just five minutes on the very first day.
Disney will almost certainly incentivize visitors to return until the parks hit that sweet spot that the company is after. We've already seen that in action with discounted bring-a-friend tickets for passholders, sales on Disney hotel rooms, special ticket offers and even free dining plans. (Maybe Disney tickets and hotels should reappear in the Chase Ultimate Rewards booking portal to lure back points travelers.)
It's confirmed, the domestic Disney parks were indeed less crowded from April to June, even with a brand-new land open at Disneyland for the last month of that time period. The reasons for the dip are multilayered, and a few months from now the situation will likely be very different. But, for now, a fear of larger than normal crowds really shouldn't be what keeps you away from Disney. If you can visit soon, you may just luck your way into a trip that costs a little less than you expected if the specials and discounts continue to pop up.