Following up on our theme park analysis from the past two weeks (where we discussed the results from SeaWorld, Universal, and Cedar Fair), this week brought Q2 2023 results from Disney and Six Flags.
On a year-over-year basis, Disney's park visits increased by +1%, outperforming other theme parks by various amounts. Each of Disney’s parks enjoyed sequential momentum heading into early Q3, with the California-based parks holding onto their Q2 momentum. (Recall that Florida has been held back due to adverse weather conditions and its outperformance during 2021-2022, which left the region vulnerable to vacationers wanting to visit someplace new.) By contrast, Six Flag’s attendance was down -7% overall year-over-year. Disneyland is also up +5% compared to 2019 and California Adventure is flat versus 2019, which is an impressive achievement given the higher cost of visiting the park (Disney has been the industry price leader which has created a pricing umbrella for others to run from behind) and the revenge overseas travel to Europe and LatAm by affluent households in America, who likely spent more and stayed longer (when visiting Disney last year and the prior). Importantly, given that SeaWorld Orlando saw an -8% decrease in visitors and Universal Orlando saw a -20% decreases versus a 0%-6% decrease in Disney Orlando’s visitor counts, there is no evidence that the company’s spat with Florida's Governor has had a material impact on families’ willingness to visit, or visitation overall. (We suspect that visitation is down more than visits due to the aforementioned reasons for the market.)
On pricing, Disney’s per cap spending and per room spending were flat, offering firm evidence that Disney is sacrificing revenue in order to keep the parks affordable for more families. This is a key initiative of Disney CEO Bob Iger, who discussed it further on the company's Q2 2023 update: “Following a number of recent changes we've implemented, we continue to see positive guest experience ratings in our theme parks, including Walt Disney World, and positive indicators for guests looking to book future visits." (Also affecting the per-day figures is the attendance mix differences that we mentioned above.) Iger identified the parks, along with film studios and streaming, as the businesses that will drive the greatest growth and value creation over the next five years for the company. Iger also noted the company is, “making numerous investments globally to grow [its] parks business over the next 5 years" and that the company is "very optimistic about the future of this business over the long term.” (The networks, TV studios, and consumer products were not identified.)
