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Disney Confirms Budget Cuts as Theme Park Attendance Crashes

Yesterday, The Walt Disney Company released its quarterly earnings report and, as expected, the company touted the amazing performance of its film properties during this quarter, which included a record-breaking run by Finding Dory at the box office.

However, though Disney had some really great news from its films division for shareholders, CEO Bob Iger didn’t mention that much about Disney Parks and Resorts during the investors call and presentation. And after a quick look at the press release detailing the financial results (which you can read in full here), it’s not very hard to see why, as the news out of Disney Parks, especially in the US, isn’t immediately spectacular. It's not all doom and gloom either, but let's get the obvious out of the way first...

1. Domestic attendance at Disney Parks is now confirmed to be down year over year

Surprising absolutely no one who has been to a Disney park in the past three months, Disney has confirmed that attendance, specifically at the US theme parks, is down year over year during the third quarter. As expected, Disney didn’t confirm by what percentages specific parks were down during this time, instead simply saying that Disney parks were down 4% during this period in attendance overall. We’d imagine that the vague wording here was purposeful, as drops at Walt Disney World in particular are likely pretty big, with Disneyland potentially still seeing gains (or at least staying flat) due to its (ending) 60th Anniversary celebration as well as the Season of the Force event.

It’s also worth remembering that the fiscal quarter to which this report is referring only covers the period from April 1 to June 30, 2016, which means that lower attendance in July and August will be reflected in the next quarterly report, which could be substantially worse than this one.

Though the attendance drops aren't exactly surprising, it will be interesting to see what happens in the fourth quarter and beyond, especially if further drops give rise to a period of substantial discounts, similar to 2009/2010, which saw free ticket giveaways and unprecedented deals for guests in the wake of a US recession. 

While we don't exactly know how Disney will push back against these drops in the future, the resort has confirmed that it is making some adjustments in the short term to try and stem revenue losses from lower attendance.

2. Budget cuts are already happening everywhere, and more might be coming 

Though Disney does not typically confirm when budget cuts occur in its Parks and Resorts division, they did concede in their earnings report that “cost efficiency initiatives” (a fancy term for budget cuts) are currently underway at both Walt Disney World and Disneyland Resort . That matches up with recent reports that have said massive layoffs have hit the company recently (particularly in the Imagineering department) and rumors that more cuts will be coming in late August and early September (including the end of Paint the Night and Disneyland Forever at Disneyland).

Unfortunately, this summer has been a disappointing one for Disney, and it looks like the company is going to try and run their parks as trimly as possible for the next few months while they recover in the short term. However, it's not all bad news...

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There are 44 comments.

I am an avid Disney fan, but speaking for myself (and I have talked to many more people) the rise in ticket prices,special events,gifts, food almost everything pertaining to Disney has kept the people away. It's not so bad for a couple but if they have children the cost is just too much. Lower the prices and people will come back and spend money. Keep raising prices and I'm afraid Disney will sink. People will find other places to vacation. DISNEY, I HOPE U'R LISTENING !!!!!!!! I mean really, U pay $100.00 a day to get into the park then U have to pay another $100.00 if U want to attend the MVMCP !!! Ridiculous !! U can charge for the party and parade but go down,way down on the price !!!! People can afford that especially if they have are a family of 4 or 5...... Just sayin Disney !

but then you let everyone in and complain of the long lines and huge crowds.

I could not agree more Roz. I LOVE Disney(20X in 35yrs.) and I have been to Orlando twice in the last 6 months without going to the Parks; the value is no longer worth the expense.

We just can't afford to visit now because of all the price increases plus flying from central NY. Or we drive and it adds four vacation days and two hotels plus gas,food, etc.to the vacation.
We use to visit every few years and even went on three cruises. It's sad for us! Disney was our extended family vacation of choice!
Camping, going to Darien Lake, Sea Breeze, and back to Wildood, NJ will be our vacations in the near future.

Please stop whining about high prices and how families with children can't afford to pay. Disney doesn't care about the average family being able to afford a ticket. They want rich people to go because they fork out more money in the long run. They don't have to be frugle. The average person can't afford Disney but they will spend 40-50k on a new car, 200-400k on a house, splurge for the best cable TV every month and buy the latest IPhone. Anyone can go to Disney if you learn how to do without the finer things in life!

I wouldn't call 4% a crash in attendance. Given there has been no big new openings recently it is not surprising that attendance has fallen off a little. Especially considering the new offerings from Universal and Sea world in Florida. I expect most visitors all hit Disney for a few days, but are opting to spend more time other places.

Attendance may be down, but profits are still up.

We Disney fans must remember that this is still a business. While we would all love low ticket prices, short lines, and cheap added events, it won't happen as long as people are willing to pay for them. With profits up, it's clear that is happening.

The backlash to price increases of theme park tickets, parking, food and merchandise has begun! We are Disney fans and own three DVC properties, but once Disney did away with non-expiration passes we refused to shell out big bucks to go to every park every trip. Now it's one, maybe two. We also look to find deals at other parks like Sea World and Universal. We also spend a lot more time at our resort and eat lighter meals. So Disney has no one to blame for lower park attendance except themselves. Boo hoo!

I have been a lifelong Disney fan and am even a former Cast Member. I own DVC, a a member of D23, have the Chase Disney Visa Card and Debit Cards and up until recently, have been an annual passholder at either Disney World or more recently, Disneyland.

I speak only for myself and my experience, but I have seen my Annual Pass price triple at Disneyland in the last 8 years I have been in So Cal.

What I found ironic when I 1st got my DL annual was it was only a few dollars less than my Disney World Premium Pass. I got WAY more value from DW than I ever could or would at DL.

Now, to have these prices triple when the current infation rate in this US is FAR less, really speaks to the company's motivations.

I do not fault the company for raising prices or making a profit. I run my own business and do the same, but I really feel the Disney Experience has become aspirational for too many instead of realistic.

I gave up my DL annual pass this year. I cannot justify the $1000 pricepoint for the actual facilities and experience I get.

I expect to be back in Orlando by year's end and it truly is a debate about re-upping there.

I wish Disney would just come out and say who their target avatar(customer) is. So many "think" it is families, but is it affluent families or Main Street families? I wonder.

Quite frankly, for all the visits I have made since WDW opened (I was 17 at the time) I was hooked! Over the years, convincing my husband to honeymoon there, when he was not so hot on the idea, but he was taken instantly as well. We waited to take our son until he was 7, so he could truly remember. We had other visits as a family, including our 25th anniversary! However.. I chose to not return to the parks anymore. I want to keep those most excellent memories. I had to make that sad decision when the way disabled (yes me) people were going to be treated changed. On top of that, came the fast pass issue, where you had to lose spontaneity of the day, by choosing so far in advance where you would be. It was difficult enough with the ADRs, but at least there were way less of those to deal with. I do so much miss WDW, last visit was 2011. But at least I shall only have wonderful memories. I wonder how many others "left" for those or other reasons ie: magic bands, etc.

Disney is raising prices, while cost cutting and eliminating content, but still making more money than ever. A Disney CEO isn't going to care much at this point.

I really hope they continue to raise prices. The lower attendance has been great with reduced wait times and crowd levels. We would gladly pay more for less crowds. I am hoping they remove the payment options from the AP's soon as well.

As a regular Disney visitor, lower attendance (crowds) is just fine with me.
And as a Disney stockholder, the fact that revenue & profit is still keeping pace due to higher prices and uncharge events is also great news.

Keep it up Disney!!
Don't worry about the whiners & complainers.
People like me will keep visiting your Parks as well as buying your stock.

I'm sorry. I have to agree with Jeff. I'm a stockholder as well and have seen my stock's value increase by over 50% since 2002. There are so many factors at play in running a business like Disney that if you did not optimize profit in every way, you would be failing. Also, the average visitor is extremely happy with their Disney experience and attendance (even though it as dipped recently) continues to be a record levels. Don't blame Disney folks. It's called capitalism. No one builds big rides and resorts because they just love to do so. They do it for money. Disney does this better than any other company and with excellence customer service. When was the last time Walmart cared about its customers or put its profit back into customer satisfaction and the product they deliver?

I considered a trip to Disney in August during the free dining plan. But when I went on the website to book a potential room, there were very few choices. And the ones that were available were quite expensive (suites, water views). A stay at one of the moderates for a family of four was almost $6,000 for a week. I was disappointed.

I first began to go to Disney World in 1973. My family and I and another family went every year and stayed at the Contemporary Resort for about 12 years. Prices were very reasonable. Now the price is nothing but stupid! Never touching it for less then $350 a night which the average family can not afford. Every family should have an opportunity to experience the Contempory! HAve a sale occasionally! In 2006 I stayed there for $250 a night and the experience was exactly the same and nothing extra added for the increase in price! I have stayed many times at the cheaper resorts and they are nice but ,Now, It appears to me if you don't belong to the "Disney club" then you are an outsider. And when I was there in October of 2015 and the Magic Kingdom was shut down early for a Halloween party that a person had to buy a ticket for----shame on you! Some people do not celebrate or approve of Halloween so we were pushed out of the park early! Shame on you! Disney is more interested in making money then the attendees having a wonderful experience. Have a trolley at Disney Springs to help people move around. That's a big area to have to walk for people that have handicaps. And the DISNEY CRUISE, nice but too many people allowed on ship. Allow a few boutiqe stores on your cruise island
and more food areas. I hope you study these suggestions and you will improve your attendance

wait, you don't "approve" of Halloween? please explain.

I couldn't agree more with the previous comment. All the price changes, and especially special occasion pricing, has made it very unacceptable. Add exchange on the dollar and it all closes the deal. It is far too expensive . The first time I went to WDW in 1980, I paid 25$ for a three day pass at the MK. now that was only one park. But 100$ a day just for the MK is ridiculous. And on top of that you have to get wrist bands 30$. Then it was fastpass tickets for only certain rides , paying extra for parade areas , like the list goes on. I consider myself an avid if not a rabid Disney fan of everything DISNEY. But I have a breaking point, and I don't appreciate being nickel and dimed now. I don't think Mr. Disney would be impressed. His main reason for creating DL was that all family members could enjoy everything. The average family of 4 would be hard pressed to financially afford a weeks vaycay now.

The "wrist bands"/ MagicBands are not required. You are not forced to purchase them. Also, I don't know of any times where guests had to pay extra for parade areas. That is completely false. Viewing the parades is available to anyone who has purchased an admission ticket. There is no additional fee to watch a parade. $100 for a day at Magic Kingdom breaks down to roughly $7 per hour if you do your research and go on a day the park is open for 15 hours. People pay upwards of $100 and more for sporting events and concerts that last far fewer hours and they don't complain. As far as fastpasses go, you can get a fastpass for practically every attraction, but the amount of fastpasses you can get is limited. What's the harm there? You can get 3. Once you've used your 3, you can get another one, and so on. I don't see the problem with that.

the price per hour is a great thing. i can't believe i never thought about it.

Very interesting that the article mentions increased food prices and special events are helping. My suggestion would be get rid of the dining plan and bring prices back to normal. Stop nickel and diming with "extra" paid admission events every day and night. Also, stop limiting the number of fastpasses to 3 with an extra one being used. Why not be able to have 1 per hour at any park? Offer some more perks to DVC members, as they are the ones coming time and time again.

I love Disney. My family and I have been 8 times. We always stay in a Disney resort. However the rising cost of these vacations have caused us to accept the fact that we may never get to go again.

Disney at one time and for the longest time was synonymoud with Family. Sunday nights, the family would gather round as NBC televised The Wonderful World of Disney. As a family, we would see the new Disney release. Sleeping Beauty, The Love Bug, The Fox and the Hound, Bedknobs and Broomsticks, Darby O'Gill, all the way up to Finding Dory. As a family, we would map out travel routes to end up at Disneyland or DisneyWorld. And once on site, part of the magic was that we were family with the workers at the parks. Everyone cared.
I hang my head for the theme parks. They have been hemmoraging money for two decades. So many changes across the board from the 3 revamps of Downtown Disney to the update and restructuring of the Studios Park(ongoing) to the tweaking of various rides (Tiki Room) which don't have the Disney Magic touch to them. It is almost as if the corporate board has lost its sense of wonder and only looks to the bottom line. Rather than playing with the visiting families, they are trying to fool them into being entertained. And the fakery is palpable. Fakeness doesn't promote Family.
I foresee Bob Iger mandating labor cuts soon which will promote tension within the workforce. Sure, it will let off pressure on the company's coffers as paychecks don't have to be paid to workers who are not there, but it is a short term bandage at best. It is also not the family philosophy of Disney. You don't fire family. The more lower workers the theme parks rid themselves to maintain managers' salaries, the smaller the workforce family becomes and ultimately the more aggitated they become.
It snowballs from there.
Hopefully, the reduction in workforce doesn't happen, but I am sure it will in this day of corporatr America.
Once it does, it spells the doom of the theme parks.

As sad as it is they are cutting back in a lot of ways including staff. Remember regardless how you may feel you still need to smile and have the Disney Magic.
Once they take away it is gone.

MAYBE, they should stop charging so stinking much! as a kid we went several times a year.. that was 4-5 people family..food drinks, parking etc..and really..nothing new at Disneyland to justify the EXTREME COST INCREASE!.
" from the LATIMES 1989 "
Cost of Entering Magic Kingdom Raised to $25.50

December 13, 1989|MARY ANN GALANTE | TIMES STAFF WRITER
ANAHEIM — It isn't a cheap thrill. In fact, Disneyland gets more expensive all the time.

And now--just in time for the Christmas rush--Disneyland has once again raised its ticket prices by $2, bringing the cost of adult admission to $25.50 for a one-day pass. Children's admission is now $20.50 for a one-day ticket, up from $18.50. And parking is now $4, up from $3."

and that was expensive back then...

What has hurt Disney is the greed of the CEO's and shareholders. They are draining the company. The employees make an Ok wage. However a lot of it is paid back to the company for high insurance rates with high deductibles. The parks seem to be taking away things and charging more for less. This would not happen if Walt was alive. Bob Iger is killing Disney with his greed. Then again Disney was once in trouble back in the 80's that is why they sold the bricks out front of MK. At one time Florida was trying really hard to get them to sell Disney to the state. Keep Cutting Back Disney and watch numbers decline more

It's like Disney is the only company on earth who seems to be unaware of the recession over the past decade? I am a local here in Orlando, and I can get a annual pass to Busch Gardens, Sea World and both Universal Parks for the price of one Annual Pass to Disney? The Magic Kingdom hasn't changed much in the past 20 years, and that's their cash cow. Still Disney is Disney, I love'm, but I'm not surprised by the loss in revenue... Hope they wake up soon!

We used to go to Disney World and stay at one of their resorts. Absolutely loved it! Not to much anymore. You can't afford to take a family of 6 there anymore. If we go now we stay outside the park and only visit the park 2 days. Everything inside the park is so expensive from souvenirs to food. You can buy all the souvenirs and clothing you want cheaper outside the park. Change is good but they should have never changed the castle! Walt is probably rolling in his grave. It started as Cinderellas Castle and it should have never changed!

Ummm, it's still very much Cinderella's castle. That hasn't changed. Not sure what has caused you to believe the castle has changed. It still looks like it did in 1971.

Riiiiiight. Just booked a family vacation in October and wanted to be close.to the park as my mom needs assitance. Only rooms available were villas at 600 a night! Fast passes booked up.in mins. Hard to find.reservations.for.dinner and this is school season! Yeah Disney is.cutting budgets cause the poor CEOs are making 1.billion less this year. Boo hoo. Been going to WDW since i was 2 and a half. Now taking our toddler. Price are outrageous but thats why we work so hard. We still enjoy the magic.

A couple of thoughts...

1. Attendance may be down because Hollywood Studios was, and is, largely under construction and crowds thinned, despite the Star Wars shows, because there really was less to see.
2. Epcot closed several major attractions in the quarter and attendance was sparse because major draws in a thin park were closed.
3. Magic Kingdom attendance was in overcrowded conditions in slow months because the two other parks were slow.
4. Animal Kingdom failed to implement improvements on schedule.
5. The rise in prices is affecting park attendance at the three lesser parks because they are not worth the price during all of this upheaval and people are moving their vacations to avoid peak pricing.

This will not reap a long-term gain for Disney.

The last time we were at Walt Disney World was in September 2013. We are heading back to Orlando in February for 5 nights but we are not visiting Disney. We are staying at a Universal Resort and hitting Universal for 3 days and Lego Land for 1 day. The rest of the time we are planning to just enjoy our resort and maybe hit the mini golf. Not only has the price of a WDW vacation increased unbelievably since 2013 but the amount of planning required has also increased and I simply do not feel like doing it. I do not want to plan meals 180 days in advance. I do not want to schedule rides 60 days in advance. I want to be able to go where I want to when I want to and eat at whatever restaurant strikes my fancy. I am excited to see the Harry Potter lands at Universal and so is our 9 year old. There's not enough new at WDW right not to tempt me into paying their prices while the price is right at Universal.

Attendance is down, but overall revenue is up. Disney has made acquisitions that will lead it well into the next decade. Disney's stock is very healthy and they are building several projects worldwide that will help ensure they will remain the top theme park operator in the world. The American economy is on the verge of yet another collapse and the threat of civil unrest is at an all time high. The middle class that Walt Disney targeted is quickly disappearing and Disney is being financially responsible in targeting their current key demographic. I fear that the period of growth and expansion we have experienced in the past few decades will soon be over and theme park operators worldwide will turn to international audiences to fill their coffers once they are no longer able, or welcomed, in the United States. Disney weathered the last recession like a beast and came out on top.

Of course attendance is down. They have inflated prices at the same time that they have ignored Walt's concept of a park for everyone. This goes back to Alien Encounter Extra Terrorestrial being softened Stitch) so that most small children could handle it. It continues with one of the most short-sighted abominations, which is making of a cultural and historic ride found in the World Showcase into a kiddie ride for 4 to 10 year old princesses. Another bizarre occurrence of short-sightedness is building Avatar Land instead of the Beastly Kingdom. Hear me out, I think that Avatar Land is going to be cool, really cool; however, after it runs its course, then what? They could have built something that would not go defunct in 10 to 20 years and that would only need changing as technology led to improvements in the experiences one can have on rides.
I'm not necessarily for or against many of the changes that are happening but I do pay attention to the general feedback from all of the posts on dozens, if not hundreds, of threads that are related to some of these changes. What is clear to me is that upper management does not seem to accept that a large public outcry against a reported change is a signal that they should rethink a decision. The long range consequence of being blatantly dismissive of their wider customer base in favor of a subset is perceived as disenfranchisement by that larger customer base, which leads to them taking their business elsewhere.

This is typical short-term thinking that is the cause of Disney's problems and the reason Walt would be ashamed of what the company has become.
Raising prices while making cuts that impact service and attractions is exactly the *wrong* way to correct this in the long term. In the very short term you might have some minimal impact that looks good on paper, but Disney will continue to hemorrhage money in the long term while following this policy. If Disney doesn't see in these reduced numbers that they have pushed the price increases *way* too far in too short of a time, I don't know what will make it sink in. The answer is to drop prices to get attendance back up. And with no huge cuts of personnel or other features. That's where long term success will come from.

I read the comments and the bottom line is Disney is a business however when you start to increase prices on a yearly basis sometimes twice a year you are going to lose people. I'm a DVC owner and when I first bought in the perks were pretty good then they slowly started to take them away or changing them. I no longer buy annual passes and when I do come to Disney I buy a 2 or 3 day ticket and enjoy the resort the other days. I believe that is why the attendance is dropping and resorts are doing well. If Disney continues on its current path things will probably get worse before better

Part of what I think is what's a drop in attendance is their inability to bring enough new stuff for a diverse crowd. Sure Star Wars in Hollywood Studios, but what if you aren't a huge Star Wars fan? And Frozen ever after is cool, but if you don't have a fast pass, have fun waiting 1 and 1/2 hours. When they did their 50th Happiest Celelbration in 2005, they brought in a new attraction and new characters for ALL 4 Disney parks, plus NEW fire works and new parades. This last few years They sank their money into Shanghai Disney, and FL keeps just being the same ol' stuff. (Mostly) in comparison to 05' with the huge party today's parks in Florida looks like small improvements nothing big.~~ plus the rise in prices~~

In the past ten years, I have taken my 4 grandkids to Disney World two or three times a year. We have also taken three cruises. This year I have not taken them. The prices for tickets have gone up so much, I just can't afford it. Just lower the prices and you will see the increase in attendance.

I used to visit WDW every year, however the last time I visited the parks looked dirty and in need of a face lift.For the money you pay to get into the park you should see chipped paint on railings and gum all over the sidewalk. I actually saw a pile of human poop outside a bathroom in Hollywood Studios!

I bought my first season pass last Sept and having to travel from TX, dont get to use it much. But EVERYTIME i chose to go this year (all Off season) the parks have been PACKED. and i just stayed away ALL summer.

Just went to Disneyworld and had a blast. Our kids who are from ages 18 to 10 had a wonderful time and we created some great memories. However, sadly, this is our last time going for quite some timE(Congrats DVC members and shareholders, you got your wish! 5 less people in line). It will take us years to get back due to cost of total vacation; combine that with so much construction at most parks that it will takes years to complete. And after it is complete it takes about 3 years to actually get a place in line to ride any new ride. And to take a cruise is insane. 6k in the off peak time of the season!?! They may as well just let us know they are advertising only to the upper class so we can at least figure somewhere else to go on vacation.
We love going to Disney. The memories last us forever and the experience is fantastic. Can't get enough, but we have to be reasonable. We had to save for 4 years to return to wdw. And that was with the help of our disney rewards. Without those we would have not made it. The extras have priced us right out of the parks and hotels. $75 average for a quick service meal at any park is crazy (party of 5). $25 to $65 for a stuffed animal or $35 a shirt (again, shareholders rejoice!); $200 a night for an "moderate" hotel? The park prices are not terrible but yes it would help to bring them down. The company has to eventually realize that the decline at the parks has to be dealt with and raising prices somewhere else is only a band aid.
It also depresses me that the shareholders don't seem to realize that the more they push out the occasional visitor just so they don't have to wait in line, that eventually their shares are going down. The very people who they don't want to wait behind are the people making them $. That really makes me want to take our next vacation straight to the beach!

I was at WDW last week and noticed the quality had gone down at all the parks -- a toilet was running outside the ticket booth one morning and was still running when I went back in the restroom 8 hours later; also overflowing trashcans, trash in the street, and lack of listed menu items at the restaurants. If budget cuts mean laying off workers than park quality is only going to get worse. I am also a passholder and stockholder but I do not feel that the quality I am receiving at the park is justifying the price. Universal Studios is currently offering a better entertaiment value.

We have been DVC members since 2002 and own at two resorts, with 2-3 trips a year and frim out of state, but are not planning another trip for at least 2 years. We will bank our points. It is too expensive for tickets for what you are getting. Hollywood Studios is basically closed, compared to the past. Epcot is now just the countries, except for fast track and soarin. The countries have not changed or updated in years. The service you receive in the parks is subpar for what you are paying. You used to get good natured cast members that were helpful and friendly, that is few and far between now. The front desk at the Bay Lake Towers and Boardwalk were horrendous. Had major issues at both and no one cared. Have taken 3 cruises and we are now changing to Royal instead. I can get 2 connected balcony rooms for the cost of one Disney room and they have more for the kids to do. When your mist ardent fans, your DVC owners stop coming you know there is an issue.

We have been DVC members since 2002 and own at two resorts, with 2-3 trips a year and frim out of state, but are not planning another trip for at least 2 years. We will bank our points. It is too expensive for tickets for what you are getting. Hollywood Studios is basically closed, compared to the past. Epcot is now just the countries, except for fast track and soarin. The countries have not changed or updated in years. The service you receive in the parks is subpar for what you are paying. You used to get good natured cast members that were helpful and friendly, that is few and far between now. The front desk at the Bay Lake Towers and Boardwalk were horrendous. Had major issues at both and no one cared. Have taken 3 cruises and we are now changing to Royal instead. I can get 2 connected balcony rooms for the cost of one Disney room and they have more for the kids to do. When your mist ardent fans, your DVC owners stop coming you know there is an issue.

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