NEWS: Disney Predicts Theme Park Attendance Will Decrease in 2025, and We Think We Know Why

The Walt Disney Company just released its second-quarter earnings report for fiscal year 2024 and held its latest earnings call.

We got plenty of updates on just how the Disney parks, the cruise line, streaming services, and more are doing. And, while park attendance is currently up — CEO Bob Iger isn’t convinced it’ll stay that way. Here’s why.

When it comes to overall financial numbers (we’re talking general revenue for the ENTIRE Walt Disney Company), Disney revealed revenues increased by one percent compared to both last year and the past six months. This quarter, revenues increased to $22.1 billion.

Disney Experiences (A.K.A. parks) has been a big revenue driver at the Company, and last quarter, Disney reported generating all-time records in parks revenue, operating income, and operating margin.

Experiences revenue experienced a 10 percent increase compared to April 1st, 2023. Revenue now sits at $8,393 million as opposed to last year’s $7,646 million.

Cinderella Castle

Iger shared that the past quarter saw strong parks growth, mostly driven by Hong Kong Disneyland. Domestic growth came from Disney World and Disney Cruise Line. Over at Disneyland, results did decline, but Iger said that that was a result of “higher wages.”

Later during the call, CFO Hugh Johnston shared that revenue for the third fiscal quarter is “expected to come in roughly comparable to the prior year.” Johnston attributed this dip to “non-comparable” or “timing-related” items — such as Disney Cruise Line’s new island destination, Lookout Cay, along with normalization from post-COVID travel.

But, Iger isn’t so sure that park attendance will be so high by the time 2025 rolls around.

During the question and answer portion of the earnings call, an analyst with Wells Fargo Securities, Steven Cahall, asked Iger what the company expected as far as park attendance was concerned for fiscal year 2025.

Iger shared, “First, in terms of attendance, look, what we’re basically communicating is relative to the post-COVID highs, things are tending to normalize.”

He reiterated the fact that the parks had increased growth this quarter, saying, “The parks business did 10% growth in the quarter. And obviously, that’s an extremely high revenue number. That said, we still see in — the bookings that we look ahead toward indicate healthy growth in the business. So we still certainly feel good about the opportunities for continued strong growth…We’ve got the best in the business in terms of product. People still have a strong desire to basically go on vacation and come to see us.”

He also pointed out that Disney has “some one-time expenses occurring in Q3,” and said, “If we were to back out one-timers both for Q3 and Q4, we expect OI for the quarter to be in the mid-to-high single-digit range for Q3 and to be double-digit for Q4. So I certainly feel like the Parks business is still doing very, very well,” he shared.

So, while post-COVID travel increased Disney’s park revenue by quite a bit, things have started to even out when it comes to “revenge travel.” And, the results of the third quarter will likely be impacted by higher wage expenses, pre-opening expenses related to the Disney Treasure and Disney Adventure, along with Lookout Cay.

With these one-time factors having an impact on the upcoming third quarter of the fiscal year, chances are we’ll also see park attendance impacted in 2025 and beyond.

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