Earlier this week Disney unveiled its financial results for the most recent quarter ending December 30, 2023. During this time, revenue for the Walt Disney Company held steady, increasing 4% to $23.5 billion, thanks to a 2% decline in operating income.

And while this is certainly great news for the company overall, tucked away in the Walt Disney Company's press release were some potentially concerning details about what is happening at Walt Disney World, specifically concerning crowd levels at the park, or more specifically the lack thereof.

Disney confirms attendance is down significantly year over year at Walt Disney World

Though many guests who visited Walt Disney World last year probably already suspected this, Disney has confirmed that theme park attendance and hotel room occupancy saw a significant decrease during the final months of 2023 when compared with the same period in 2022. 

According to Disney, this drop-off is mainly due to the end of the 50th-anniversary celebration, which drove higher attendance in 2022.  However, there could be another major factor at work here as well.

Price hikes are driving away at least some guests, but keeping overall revenue high

It's no secret that the cost of a Walt Disney World vacation has increased significantly in recent years, driven by price hikes on everything from tickets and parking to food and souvenirs. Taken together, these rising costs are almost certainly driving away some guests, leading to the current attendance slump at the resort. However, depending on who you ask, this might be a feature, not a bug.

Disney noted in its press release that despite lower guest levels during the most recent quarter, these higher prices led to higher guest spending overall for the quarter, which helped maintain revenue levels even though fewer people were visiting.

This trend seems to show the benefits of Disney continually hiking prices and boosting revenue. Even if this strategy means slower attendance, that could also represent a cost savings opportunity, as fewer guests means Disney can cut operating costs at the same time, all while Disney continues to make more money with perpetually rising prices.

Can this strategy last long term?

Though Disney's current financial results paint a pretty decent picture of the resort's overall status, it's hard not to wonder if their strategy of perpetual price hikes at their theme parks will work out long term. Already, Walt Disney World is offering some pretty deep discounts and deals on rooms and dining plans for 2024, showing that perhaps they are at least a little worried about attendance slowdowns. 

However, considering the limited scope of these deals, it's hard to imagine them moving the needle too much in terms of the average cost to visit Walt Disney World, especially when annual ticket price hikes are likely right around the corner.

Walt Disney World has had a strange few years in the post-COVID era, from massive crowd surges and record attendance in 2021 and 2022 to a noticeable trend downward in 2023, particularly during the holiday period. It will be interesting to see how the resort moves forward, especially as Epic Universe gets ready to open down the street in 2025. 

Will Disney continue to charge more in the hope that guests visiting Universal's newest destination will still visit Walt Disney World while they're in central Florida already? Or will they offer more aggressive discounts and deals, similar to what we saw in 2008-2010? There's no way to know for sure, but we'll be watching Disney's next moves closely to see how the resort reacts to changing crowd levels in 2024 and beyond.