Disney released its third fiscal quarter earnings report for 2015 yesterday, and while the report was jam-packed with information about the performance of Disney’s film properties, TV networks and other business ventures (you can check out the full earnings report here), there were plenty of interesting revelations about Disney’s theme parks tucked away in the report as well.
Not only do these quarterly financial results provide a window into the current state of Disney theme parks around the world, they can also give us a bit of a hint about some future developments for these parks as well.
1. MyMagic+ is even more successful than we thought
Despite the lack of new attractions debuting in 2015, Disney’s most recent financial results show that Walt Disney World hit yet another all-time high for guest traffic in the third fiscal quarter this year (which ended June 27th). In addition to breaking the third quarter attendance record during this time period, guest spending during the third quarter is also way up at Walt Disney World as well, hitting its own third-quarter high. Though there are likely many factors contributing to this growth, executives are primarily attributing increased in-park revenue to the success of the MyMagic+ system.
Though specifics were not provided about how exactly MyMagic+ is driving increased spending at Walt Disney World, it looks like Disney’s $1 Billion investment in the pilot version of MyMagic+ is paying off big time for the company. These results may help explain Disney’s haste to bring MagicBands and MyMagic+ to Disneyland (which, incidentally launched a preliminary version of its own My Disney Experience app yesterday as well). Though we’re not expecting a full rollout of MyMagic+ at Disneyland resort any time in the near future, it's clear that Disney is trying to get this technology on the west coast as soon as possible, with this new app potentially laying the groundwork for at least a partial rollout later this year.
2. Even more price hikes are on the way…because guests don’t mind paying more
Speaking of Disneyland, one area where both the east and west coast parks have something in common is rising prices. 2015 not only brought ticket price hikes to all Disney parks in the US, but also saw prices for food, merchandise, and hotel rooms inflate to their highest levels yet. But what’s interesting here is that despite nearly every component of a Disney vacation costing more in 2015, guests on both coasts don’t seem to mind paying more. In fact, Disney's third quarter financial results actually show that guest spending is up quarter over quarter, as guests now spend on average about 2% more on on food, drinks and merchandise in the parks than they did during the third quarter last year. And in even more good news for Disney, Parks and resorts revenues increased 4% to $4.1 billion overall.
This development is certainly an interesting one, as the increase of both spending and revenue basically ensures that price hikes at Walt Disney World and Disneyland Resort will continue for the foreseeable future. Disney still hasn't found an upper limit for what it can charge guests without losing revenue, and while some guests may find themselves priced out of a Disney vacation very soon, those who are willing to spend that extra cash will be able to make up the difference and fill this void, making Disney's annual price hikes a low risk endeavor that is virually guaranteed to goose thier balance sheets every year.