Attendance Down at WDW and Disneyland

[lrodk]

As reported today in the AFX Press:

Attendance was down at major theme parks operated by Walt Disney Co and Vivendi Universal SA as the summer season started, the Wall Street Journal Europe reported.

At the Walt Disney World resort in Orlando, Fla, where Disney operates four theme parks and a fleet of hotels, attendance is down by around 7 pct during the current quarter, the Journal said, citing people familiar with the matter. Occupancy at Disney's hotels in Florida is down by about the same percentage, it said. Spending by guests in the theme parks is not expected to increase this quarter, for the first time in several years.

In California, Disney's total attendance is up because the company opened a second theme park, California Adventure, next door to the flagship Disneyland park in Anaheim. But California Adventure has been "such a disappointment" that the company last week launched a discount program for Southern California residents, and attendance at Disneyland is down 3-4 pct during the quarter, the Journal said.

At the two Florida parks owned by Vivendi and Blackstone Capital Partners, Universal Studios Florida and Islands of Adventure, attendance is down 7-9 pct in the current quarter, the paper said, citing people familiar with the company.

The company's new park in Japan, however, is attracting about 1 mln visitors a month and is well on track to surpass its first year target of 7 mln visitors, it said.

Disney chief financial officer Tom Staggs says the attendance decline for the next quarter is likely to be similar to the current quarter, which ends June 30. He added, "I don't have a picture of a strong rebound yet".

Merrill Lynch analyst Jessica Reif Cohen, who noted Disney's attendance drop in a report, said she is concerned that a decline in consumer confidence could make things still more difficult for theme park numbers. "I think they're in for three or four quarters of very tough comparisons," she said.

Disney Parks and Resorts chairman Paul Pressler said a particular problem for Disney in Orlando has been a decline in international visitors, especially from Europe. However, the Orlando tourism operations have been partly offset by a rise in convention business, with Disney's cruise line performing strongly. cmr/jfr

 

[DisDuck]

So while some have indicated that Cruise Line be sold as not part of core business, it seems to be one of the few positives at Disney right now. Let's go DCL.

 

[Sarangel]

I'd also like to point out (for those DCA nay-sayers), though the emphasis is mine:

In California, Disney's total attendance is up because the company opened a second theme park, California Adventure

This doesn't justify the mistakes that were made in putting DCA together, but it does mean that there is some return on investment.

The article also skips over the Downtown Disney in CA, which is bringing in loads of cash.

Sarangel

 

[YoHo]

Sarangel, you missed the more important line....

attendance at Disneyland is down 3-4 pct during the quarter,

Apparently Another Voice isn't as in the know as we thought. Disneyland's attendence is down. HMMMMMMMMMMMM, maybe that means DCA would in fact do better in a better economic climate.


Also I found it interesting that Universal's numbers are even more depressed then Disney's.

 

[Another Voice]

What I said was that Disney was meeting its projections - and other sources say that Disneyland is basically flat with last year. And that's even better than the pre-DCA projections that forecast a 15%-20% dip in Disneyland attendance because of the expected success of California Adventure.

And to your point about the economic impact - assuming that the economy is depressing attendance by 4%. That would add all of 360 guests to the average daily gate at California Adventure. Is that the margin between success and failure?

And why do you believe the Wall Street Europe has more accurate attendance information than the Los Angeles Times and the Orange County Register? As people are fond of saying about Jim Hill – consider the source.

 

[All Aboard]

And to your point about the economic impact - assuming that the economy is depressing attendance by 4%. That would add all of 360 guests to the average daily gate at California Adventure. Is that the margin between success and failure?

AV, need some clarification. Average daily attendence at Disneyland is 9,000? I would have thought it was higher than that.

basically flat with last year

Hey, that's sharp-pencil guy terminology. You sure you're not one of us??

 

[YoHo]

hey, that's 131400 more guests at the end of the year. not impressive, not the dividing line between success and failure. but at $33 a head its 4.3 mil more then they would have made otherwise.

As to believeing the WSJ Eu over OCR and LA Times. I don't know about the Europe version, bt WSJ is a much better paper then LA times (just as LA times is a better paper then the Chicago Tribune. So I suppose I'd be as likely or more likely to believe it when stories conflict. It also has more investors reading it, which means it has a more imediate impact on Disney's stock price.

 

[Another Voice]

Yea, the last reliable inside information I got had the average daily attendance at 9,000 per day. The park has never even had 20,000 in a single day and there were weeks in February and March when the gate never topped 5,000 (its rumored that one day had less than 1,000 admissions by ticket). On some Sundays, Annual Pass holders and other non-paying guests are more than half of the admissions. These numbers kinda explain the discounts and kids-for-free policy, don’t they?

Of course, these numbers can get really fuzzy; how do you count park hoppers and annual pass holders? Disney has a lot of people spinning numbers right now to cover-up and confuse the issue. That’s why I’m suspect of the WSJ-Europe numbers, I just don’t have enough information about what those numbers represent or what spin was put on the information.

If nothing else, Disney’s own actions point to serious trouble – unprecedented discounts, constantly changing admission practices, rushing attractions and the latest flood of kid-friendly entertainment announcements. It would be interesting to dig up the posts from last year and compare what people said then to how things have turned out.

 

[ztbz]

I notice this last week after the 4 of July that Many of the Disney Resorts are Half Empty.
You should be able to get a Good Discount this year if you stay at Disney World.

 

[lrodk]

The Orlando Sentinal adds it's take on the slow-down of resort business in Orlando, vs the rest of the country, in the following exerpt:

[In May, Orlando's average daily occupancy fell to a level that looks positively average when compared with the nation as a whole, according to Smith Travel Research. That's quite a change for a market that typically runs about 10 percent higher than the national average.

Orlando hotels in May suffered a 13.3 percent decline in average daily occupancy, leaving 65.7 percent of the rooms filled on the typical day. Nationwide, the average was 63 percent.

A year earlier, Orlando hotels were at 75.8 percent, compared with 66.5 percent for the nation.

But that's not all bad, said Tallahassee-based hotel consultant Edward Xanders , pointing to one benefit of the dour economy.

With hoteliers having trouble maintaining profit margins -- few are actually looking at losing money this year -- the business isn't attracting as many new projects as in years past.

That should slow down the development pipeline, giving hoteliers some relief from fears of overbuilding.

In each of the past three years, Xanders' company, Interim Hospitality Consultants, has done feasibility studies for as many as 18 hotel projects around the country.

"This year, I've done one," Xanders said.]

 

[lrodk]

The OBJ reports on decreased resort tax revenues during what's shaping up to be a flat, or even negative, year of growth for Orange County. Here's the story:

There's only one problem with the worst-case scenario for Orange County resort tax collections offered up this week.

It could get a lot worse.

For the first time since they were levied in 1978, local resort tax collections may not grow by even 1 percent.

And if that happens, there will be even less money available for renovating the TD Waterhouse Centre than Orange County officials projected.

In a study designed to figure out how much of the resort tax could be applied toward funding a new arena for the NBA team, county officials calculated that the taxes would grow by a modest 1 percent this year.

However, tax collections already have dipped below expectations for three straight months. If the trend continues -- and most in the industry believe it will -- the county's 1 percent growth rate won't materialize.

"I don't think we'll get anywhere close to 1 percent" growth, says Garritt Toohey, vice president of Tamar Inns, which owns six hotels in the Orlando area.

Even Martha Haynie, Orange County Comptroller and head of the group that figured out the numbers, agrees that the 1 percent figure is probably too high.

"I think it's likely zero growth," Haynie says

 

[SpaceAce]

Any thoughts or information on the effect that cutting park hours had on attendance? That left a sour note for many people like myself who loved staying until midnight. Or any information on how much Disney saved by cutting staffing or cutting employee hours related to cutting park hours. Maybe Disney isn't even losing money considering cost cutting?