Disney World's Big Attendance Surprise

By Markets Fool.com

Image source: Disney.

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There were plenty of welcome and unwelcome surprises in Disney's (NYSE: DIS) fiscal fourth-quarter report on Thursday. However, the biggest head-turning nugget in the media giant's fresh financials is that attendance at its Florida resort actually increased this summer.

The surprising piece of information may not seem evident at first. Disney's theme-park revenue rose a mere 1% -- with operating income down 5% -- and that was with the benefit of higher ticket prices, a boost in guest spending, and roughly 3 million guests at the new Shanghai Disneyland that wasn't around last year. However, the important factor in all of this is that Disney's last fiscal year had an additional week.

Disney was more explicit in Thursday night's earnings call. Attendance at its domestic theme parks was down 10% -- something that makes the mere 1% reported decline in revenue more impressive -- as a result of seven fewer days this time around. Attendance at Disney's stateside parks actually slipped by 3% on a comparable basis, but that was entirely the handiwork of a decline in visits to Disneyland. Disney's original resort in California experienced an understandable downturn in turnstile clicks, as its performance was stacked against the prior year, when Disneyland was celebrating its 60th anniversary. Disney didn't spell out attendance figures at Disney World, but it did point out that the guest counts were higher than last summer on a comparable basis.

It's a small world after all

Folks returned to Disney World this summer, even if anecdotal evidence suggests otherwise. I spend my summers in Disney's Florida playground, and the crowds certainly seemed lighter this past quarter.

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If anything this seemed like a lost summer for the House of Mouse.

  • The only new major ride that Disney opened -- Epcot's Frozen Ever After -- was marred with downtime.
  • A new nighttime show at Disney's Animal Kingdom failed to materialize, and the last-minute replacement was canceled within a couple of months.
  • Disney's Animal Kingdom push to become a full-day destination with nighttime experiences resulted in closing times of 11 p.m. all summer long, but what seems to be a weak turnout resulted in the end of the extended operations. The park closed at 7 p.m. last night.
  • Events in the area including the Pride nightclub massacre and the death of a toddler after a gator attack at Disney's Grand Floridian resort threatened to keep tourists away from the area.

Disney's increase in daily attendance during the summer is impressive, and so it what happened when people got there.Per capita spending rose 7% on higher ticket prices as well as more money spent on food and beverages. Disney hotel occupancy levels improved 200 basis points to 86%.

Some will argue that Disney's turnaround in Florida was in the cards that were being dealt earlier this earnings season. SeaWorld Entertainment (NYSE: SEAS) posted attendance growth at its Florida parks for the same summertime period, despite a sharp drop in Latin American visitors.Universal Orlando parentComcast(NASDAQ: CMCSA)didn't spill the beans on theme-park trends, but the 16% pop in pro forma revenue for its domestic theme parks suggests that it didn't have any trouble drawing crowds this summer.

SeaWorld Entertainment reported two days before Disney, and Comcast chimed in a few days before that. Disney completes the set. It's an impressive turnaround at Disney World. If attendance is growing when the theme-park resort isn't at its best, one can only imagine how good things will be in the years to come when it earns the upticks.

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