Continued softness seen at Disney theme parks
Featured, Jason Garcia, News — By Jason Garcia on February 8, 2010 at 11:46 am
A day before the Walt Disney Co. reports earnings for the final three months of 2009, analysts at J.P. Morgan today upgraded shares in the company based on improving economic trends. But they are less upbeat about Disney’s theme-parks division than they are about the company as a whole.
J.P. Morgan predicts that revenue at Walt Disney Parks and Resorts slipped 3 percent during the October-through-December period (the first quarter of Disney’s fiscal year) and operating profit shrank 12 percent when compared with the same period a year ago.
“Discounts will continue to be a drag on earnings recovery at Parks and Resorts,” J.P. Morgan analyst Imran Khan wrote in a research note. For the year, J.P. Morgan projects “flattish” attendance at Disney’s parks and a 3.6 percent decrease in guest spending.
Also weighing on earnings: Rising pension and post-retirement medical costs. Disney executives have said they expect such costs to rise by $270 million this year — with half of that total being absorbed by the parks division (which has far more employees than any of Disney’s other divisions).
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13 Comments
I’m not a Disney exec, but some of their deals are just plan idiotic. $99 4-day pass is great. Expiring May 25th is not, give it until the end of the year. volunteering for a free pass is great. Limiting it to 1M people is not, allow it to be 1 ticket per person with no limits on total amount. That way, if i’m not in the 1M by the end of February, and rather would like to volunteer in November, I can without worry.
Bring back the freebie on the birthday. Most people don’t go alone, and even at 30% usage, will still generate some cash from parking and such. Maybe do a free parking day once a month.
I called for a room reservation the other day and they told me that every single room in every single WDW resort was booked for the next 500 days. It doesn’t sound to me like they’re having that much of a problem.
Disney has over 18 resorts that go from Value to Deluxe. There is no way every room was booked. I was just there in December and there were plenty of rooms available in the resort we stayed at. What they do is-they make available so many rooms per resort. There are only so many people to clean them. Disney has scaled back help so they only make available what they can clean. I suggest to call back and try again. If there is alot of specials running they are going to block out many rooms for those specials but you should be able to get something. Good luck.
Jack, not sure who you talked to, but they aren’t even booking that far out! I’m a travel agent and I’m sure I can book you a room! Would you like a value, moderate, or a deluxe?
Jack, I don’t mean to sound mean, but was your post meant to be a joke ? The information you provided is not true at all. Go on Disney’s website and you can book a room at any resort for practically any day you want through the end of the year. On any given day a particular type of room may not be available at a particular resort. Other than that, they are not anywhere near full. In fact, I just called in a reservation today.
Besides, if everything was full for the next 500 days (which they aren’t even booking that far), why would they be running any promotions? You can’t promote rooms that don’t exist. You also wouldn’t see any commercials, etc. since there’d be no need.
Jack… no way possible. Certainly not that many days out.
The in-park guest spending is down? What a BIG surprise! The reason it’s down is because the quality of the merchandise sold at the Parks & Resorts is beyond cheap – what happened to top quality, distinctive merchandise in every location? Everything is interchangeable now between WDW and DL and very few items are truly WDW or DL centric – they even have a line called “Disney Parks”! If you go to a Yankees game do you really want to buy a jersey that says “Major League Basesball” instead of “Yankees”? And everywhere you turn it’s the same stuff – plush toys and T-shirts!
I agree… My wife wanted me to get a stuffed Mickey for our son on my last trip. I got one, but have to return it on my next trip as the cost of it, is actually the same price as a LARGER one at the Disney store in the mall. And the mall one has a BOGO deal, so I could get TWO large ones for the price of the small one. Ithought I was doing good at DTD with my 10% discount.. yeah right.
Disney needs to lower prices and get more quantity in.
Agree … selection is not as wide as it was.
Quality has also dropped. Shirts shrink and fade, things break … never had that happen until just the last 2 years.
Steve,they went from Russell Athletic and Jerzees brand to Hanes 2 years ago and you can tell the difference.That’s why I will not buy another shirt there when we go back at Christmas.We go to the outlet in St.Augustine to buy our souveniers to get that lower price.
So how much is enough??? Maybe a small reduction for the ceo’s salary and bonus of 29 million. If business is off in my company, execs don’t get huge bonuses! Disney is the mother of the classic “free enterprise” companys, capitalism for the little guys and socialism for the rich.
you would not be having problems with profits if you would lower your prices and make up on volumne. People are not going to Disney World because it has become out of reach financially. Specials are nice but over too fast … was not what Mr. Disney wanted he wanted a place for the entire family to be able to go and spend quality time together..you have made that impossible now.
We’re going at Christmas(haven’t been in 3 years)and hoping they have a deal so it can be applied to our ressies.