Disney's theme park results were strong for the quarter, but its pipeline of projects around the world show the company has much bigger ambitions.
Disney’s newest world is about to top 10 million visitors.
Walt Disney World Co. CEO Bob Iger said during a quarterly earnings call Tuesday afternoon that the Shanghai Disney Resort would welcome its 10 millionth guest “in the next few days” — well ahead of its first anniversary.
The $5 billion development, Disney’s first in mainland China, opened in mid-June of 2016. In February, Iger said the number of visitors “could potentially exceed 10 million” by the time it has been open a year. That turned out to be an understatement.
“As the resort has become a true national destination in China, attendance is outpacing our most optimistic projections, and the park’s performance is exceeding our expectations,” Iger said. “The addition of the new Toy Story land will only add to the park’s popularity, and it’s just the first of several planned expansions in Shanghai.”
During Disney’s second fiscal quarter, which ended April 1, the Shanghai park was “modestly profitable.” A loss is expected for the current quarter, but executives still believe the resort will break even in its first fiscal year of operation.
The parks and resorts division had a strong quarter, despite the fact that results this year did not include Easter holiday attendance. While the same quarter in 2016 included spring break crowds, this year those numbers fall in the third fiscal quarter.
Revenue for the parks segment increased 9 percent to $4.3 billion, while operating income soared 20 percent to $750 million. The parent company saw revenue increase 3 percent to $13.3 billion, with profits up 11 percent to $2.4 billion.
Attendance at domestic parks grew 4 percent. Because the Easter break did not fall during the quarter, Disney offered seasonal promotions to get more people in the gates. Per-room spending at hotels rose just a bit, and occupancy of 88 percent was comparable to the same time in 2016.
After an analyst asked what might drive future growth in the theme parks segment — attendance, price, or longer stays — Iger said all of the above.
“We have a lot of investment activity actually across the globe in that segment,” he said.
A land based on Pandora from the Avatar movie is set to open at Disney’s Animal Kingdom in Orlando later this month, while Star Wars expansions are being built in California and Florida. There’s also a $1.4 billion expansion at Hong Kong Disneyland, a strategy to take full control of the troubled Paris park, and growth plans for the business in Tokyo, Iger said. Shanghai Disney Resort is also expected to grow its footprint significantly.
“We think we can expand length of stay across the globe with some of these investments,” Iger said.
He said the company will also continue to mine the intellectual property made by its film studio, naming coming attractions that feature Frozen, Guardians of the Galaxy, and Star Wars as examples.
“Clearly the demand for our parks has gone up as people have engaged more with our popular IP,” he said.
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Photo credit: Disney's CEO said the Shanghai theme park is exceeding expectations. This promotional photo shows an evening fireworks show at Shanghai Disney Resort. Kent Phillips / Walt Disney World Resorts