Theme parks were the best performers during the first fiscal quarter despite some attendance declines, and Disney has a pipeline of new openings in the coming years that should keep the segment comfortably in positive territory.
Disney’s Animal Kingdom is finally about to move into the big leagues — or at least that’s the parent company’s plan.
The perpetual half-day park is set to open its long-awaited Avatar land on May 27, Walt Disney Co. chairman and CEO Robert Iger announced Tuesday.
Pandora – The World of Avatar, based on the blockbuster James Cameron film, will add two rides, dining options, and shopping to the sprawling but often underutilized park in Orlando.
“The whole experience experience is sizable, and it is an add-on to Animal Kingdom, which has always been a good park, but it has never been a full-day experience,” Iger said during the company’s quarterly earnings call. “So we added within the last year a nighttime safari experience and some other entertainment, and by adding this, we’re going to be turning our fourth gate — the last one to be opened in Orlando — into a much fuller experience.”
While the original Avatar is practically a classic by now — it opened in 2009, and the park project was announced in 2011 — Cameron has said he is making four sequels, scheduled for release starting in 2018.
“To the extent that we can know, we really believe that in the coming years, the interest in Avatar is only going to grow as those movies enter the marketplace,” Iger said. “We think this has big potential.”
He also told analysts that new lands based on the Star Wars franchise will open at Disneyland and Disney’s Hollywood Studios in Orlando in 2019. Along with Toy Story-themed attractions also in the works, the additions are part of a massive investment in the company’s domestic theme parks as competitors such as Universal Studios improve their offerings.
The details came as Disney reported fiscal first-quarter earnings that showed parks and resorts were a bright spot for the company. Overall, revenues were down 3 percent to $14.8 billion in the quarter that ended December 31, while net income dropped 14 percent to $2.5 billion.
The parks and resorts segment, however, saw revenues increase 6 percent to nearly $4.6 billion.
Internationally, the new Shanghai Disney Resort still was a solid performer; Iger said attendance there could potentially top 10 million by June, when it will have been open a full year. Revenues also grew at Disneyland Paris and Hong Kong Disneyland Resort.
In the U.S., per-person spending increased 7 percent even though park attendance dropped 5 percent. Those declines were due to a handful of factors, including Hurricane Matthew, which forced Florida parks to close for a day and a half in Orlando, and the timing of winter holidays.
Chief financial officer Christine McCarthy said that since the company introduced seasonal pricing last year in U.S. parks, there has been a shift in demand “to try to smooth attendance over those peak demand periods.” That means that while attendance might be slightly lower during typically busy periods, it might increase during slower stretches when prices are lower.
One analyst asked if there were fresh opportunities to increase single- or multi-day ticket prices, especially with the Avatar attraction opening soon.
“Yes,” Iger said. “Nothing to announce at this point, but we do take ticket pricing up on typically an annual basis, and we do so in a variety of different ways.”
Iger also had nothing to announce about who will replace him in the CEO job — though he did let on that he might be willing to stay past his current contract.
The Wall Street Journal reported this week that Iger, who has held the top job since 2005 and was scheduled to leave next year, might extend his stay yet again as a search for the company’s next chief continues.
Asked to comment on the story during the earnings call Tuesday, Iger tried to skip to another question with a laugh. Then he gave an answer that left the door far more open than it has been in the past.
“While I’m confident that my successor is going to be chosen on a timely basis and chosen well, if it’s in the best interest of the company to extend my term, I’m open to that,” he said.
Last May, after his heir apparent Tom Staggs resigned as chief operating officer, Iger told analysts he had no plans to stay beyond June of 2018, when his contract is set to expire. The company’s board had scuttled exit plans several times previously; they set the 2018 exit date back in 2014.
“I will remind people that I have just over two years left on my contract as CEO of the company and the board is very actively engaged in a succession process, as it has been actually for some time,” Iger said last year. “It believes it has ample time to identify a successor under timing circumstances that will be just fine for the company.”
But according to the Journal, there are no potential candidates — either inside or outside the company — who would be ready to take over the position by next year. Iger, 65, said Tuesday afternoon that there were no developments to announce.
“We have a good, strong sucession process under way; the board’s engaged in this, as I’ve said before, on a regular basis,” he said. “And the absence of any announcement or specifics about it should in no way indicate otherwise.”
Iger, who has been with the company for 43 years, said that choosing 2018 as his year to leave was “a very personal decision.”
But, he said: “I’m going to do what is in the best interest of this company, which is something the board is clearly going to help determine.”
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Photo Credit: Walt Disney Co. chairman and CEO Bob Iger is shown at Disney California Adventure Park with Mickey Mouse. Iger told analysts he was "open" to staying in the job beyond his current contract. Josh Hallett / Flickr
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