Disney’s Theme Parks Problem Is a Monster of Its Own Making

Money might not buy happiness, but you’ll need a lot of it to visit the “Happiest Place on Earth.”

The Walt Disney Company’s latest earnings report revealed that even its iconic theme parks are struggling to keep up growth in these financially tight times. The lacking performance is reflective of larger industry trends, but the years of increasingly testing park guests’ tolerance for high ticket prices and additional fees might finally be catching up to the House of Mouse.

While Disney had a net positive Q3, its Experiences sector brought in just $8.4 billion in revenue, making for a paltry 2% growth compared with this time last year. Operating profit, meanwhile, slipped 3%, to $2.2 billion. The company chalked up the results to “moderation of consumer demand … that exceeded our previous expectations” and noted the downturn will likely impact its domestic parks for “the next few quarters.”

Despite Disney’s ever-growing portfolio, parks are still a vital part of its bottom line. Disney Experiences, which includes Disney parks and cruise ships, made up 70% of the company’s total operating income in 2023 alone, per Fast Company. So far this fiscal year, Experiences has accounted for about 40% of Disney’s total revenue.

Disney Experiences’ sluggish quarter is partly reflective of a larger slowdown happening in the theme parks industry. Comcast, owner of Universal Destinations & Experiences, reported a 10.6% decrease in parks revenue for Q2, while Six Flags saw total revenue (-1%), attendance (-2%) and in-park spending (-5%) all slide backward.

Despite the cooldown, Disney still dominates the competition in terms of attendance. The Themed Entertainment Association (TEA) and AECOM Economics & Advisory’s recently published “2023 Theme Index Report” noted that Disney claimed 8 of the top 10 most visited parks globally, with Florida’s Magic Kingdom (17.7 million) and Anaheim’s Disneyland (17.3 million), respectively, taking first and second place. Both of those parks, however, saw only a few percentage points of growth compared with 2022, and neither has consistently achieved pre-pandemic attendance numbers.

Looking at Disney’s domestic parks attendance over the past several years, in fact, reveals a relatively mixed bag. Turnout for Disney’s Hollywood Studios and Animal Kingdom is trending downward, and while EPCOT and California Adventure had healthy YoY growth, only the latter out of all six parks has surpassed pre-pandemic attendance levels (Disney complied with government mandated attendance caps for the first several months after reopening in 2021).

In general, the modest growth rates for U.S. theme parks last year — Disney and otherwise — are especially apparent when looking at attendance overseas, which saw an increase of double and even triple-digit percentages in 2023. Venues in China and Japan are still enjoying a wave fueled by COVID restrictions being lifted, and yet the “pandemic bump” didn’t seem to do nearly as much for U.S.-based parks.

A possible explanation behind Disney’s parks slowdown is a similar phenomenon playing out in the live music industry: High prices are starting to outpace demand and consumers’ willingness to pay up.

Disney vacation planning site AllEars, which keeps records of Disney World ticket prices, found that a single-day adult ticket was between $90 and $99 in 2014. Starting next year, the same ticket will cost between $119 and $189 — a 32.22% and 90.91% increase, respectively. Going back another decade shows ticket prices have more than doubled since 2005 ($59.75 flat) and increased almost every year between then and now.

In response to the rising ticket prices, a Disney spokesperson said that the parks offer more price choices and value deals for guests than ever before, including local resident discounts and annual passes.

Of course, Disney World attendance still consistently rose in previous years despite rising prices. The turning point seems to have been when Disney started adding more fees alongside the exorbitant ticket prices.

The company scrapped its free FastPass system for the paid Genie+ (now Lighting Lane) service in 2021, which was so disliked it made line wait times worse. At Disney World, the free airport shuttle for resort guests is now a paid add-on, while the “Minnie Van” shuttle that transported guests between parks now uses surge pricing — true to its sponsor, Lyft.

A Disney spokesperson added that additional fees of this nature are now standard across the theme park industry and are competitive compared to what other parks charge for similar services like express lines. Several services have also been reintroduced due to guest demand in recent years, including free parking for resort guests and dining plans.

The hefty ticket prices plus the costs for formerly free services have resulted in budget akin to traveling abroad — which seems to be what those who can afford a trip to Disneyland or Disney World are choosing to do instead. Why go to the Japan area of EPCOT when you can go to Tokyo Disneyland on roughly the same budget?

Disney received a costly reminder of this reality with the closure of Star Wars: Galactic Starcruiser, the hotel where guests could LARP through an original Star Wars story and stay in windowless rooms starting at $2,500 a night.

For now, Disney’s strategy is to continue throwing money at the problem. New attractions historically equal bigger crowds — it seemingly worked for EPCOT and California Adventure last year — and a slew of major additions to the parks were announced at the recent D23 conference as part of its ongoing $60 billion investment.

The company is apparently banking on these bigger and bolder attractions, featuring its treasure trove of beloved IPs, revitalizing park demand and justifying the ticket prices. Considering that some Disney disciples will happily take on debt to visit the parks, that bet doesn’t seem totally farfetched. But that’s also assuming Disney won’t do what it has done almost every year and raise prices once again.