Disneyland Paris Finally Had a Good Year

The long-beleaguered Disneyland Paris resort is finally getting some praise.

A year after announcing plans to take full control of the troubled Paris park, Disney executives said attendance, guest spending, and hotel occupancy were all up in the quarter that ended Dec. 30.

Chief Financial Officer Christine McCarthy said during an earnings call Tuesday that Disneyland Paris set a new revenue record in the first fiscal quarter, fueled by the resort's 25th anniversary celebration. But her optimism wasn't limited to just that three-month stretch.

"The resort ... has now been profitable for the last three quarters," McCarthy said. "So we are very pleased with the progress we're making there."

In February 2017, Walt Disney Co. announced its intentions to take over the remaining ownership of the park, which ultimately happened in June. In earlier years, the company had owned as little as 40 percent of the resort.

Last year, Disney also said it would also support a recapitalization of up to 1.5 billion euros  ($1.86 billion) — one of many bailouts over the years — and invest heavily in upgrading the park. That came after terror attacks in Paris and security fears kept visitors away.

Disneyland Paris wasn't the only strong performer in the entertainment giant's theme parks division during the first fiscal quarter. Revenue for the parks and resorts segment increased 13 percent to $5.15 billion, while operating income soared 21 percent to $1.35 billion.

Overall — and despite declines in the studio entertainment and consumer products segments — Disney saw revenue increase four percent to more than $15 billion. Profits jumped from about $2.5 billion a year earlier to $4.42 billion, an increase driven in large part by a one-time net tax benefit of $1.6 billion due to the new U.S. tax law.

At U.S. domestic parks, attendance increased 6 percent thanks partially to new attractions. The opening of Pandora — The World of Avatar, a new land at Disney's Animal Kingdom in Orlando, contributed to record attendance at the park, McCarthy said.

Operating income at domestic parks and resorts increased 18 percent. Per-person spending was up 7 percent because of higher admission prices and increased spending on food, drinks, and merchandise, while per-room spending at domestic hotels jumped 6 percent.

Booked rates are pacing up 13 percent, McCarthy said, "which reflects our strategy of improving the guest experience through better load balancing of attendance throughout the year." Disney introduced seasonal pricing in early 2016 to try to keep the parks from becoming overcrowded at peak times.

One park that executives typically love to brag about is Shanghai Disney Resort, which opened in June of 2016. When they didn't mention the resort during initial comments, an analyst wanted to know why.

"Would love it if you could just share something on that," said Todd Juenger, an analyst with Sanford Bernstein. "How is it, is revenue up or down, is attendance up or down, [operating income] up or down?"

McCarthy said, essentially, all of the above: The resort saw growth in attendance, guest spending, revenue, and operating income.

Disney CEO Bob Iger said Shanghai Disney saw some "unbelievable records" during the quarter, including attendance of about 68,000 on a single day in October; for context, the park drew more than 11 million visitors in its first year. The company is introducing a three-tier pricing system for the Shanghai park in June, with peak dates priced highest.

"That will have some impact on the bottom line going forward, provided attendance continues to be strong — which we fully expect that it will," Iger said.

A new expansion, Toy Story Land, opens in Shanghai in April, and more additions are in the works.

"We have on the drawing board a number of other potential expansions," Iger said. "We've got some discussions underway with our partners there to address some of that in the months and of course the years ahead."