Why Disneyland, Disney World had lower attendance in 3rd quarter

Both Disneyland and Walt Disney World saw a 3% decline in attendance during the Walt Disney Co.’s fiscal third quarter, ending in June.

The reason? Star Wars: Galaxy’s Edge.

Yes, the new land that opened in Disneyland on May 31, 2019, and will be opening on Aug. 29 at Hollywood Studios in Walt Disney World was the reason for lower attendance. The quarter ran from April 1 to June 29, 2019.

Fear of crowds, Disneyland’s effort to control crowds and price increases was the reason for the decrease at Disneyland, Disney CEO Bob Iger said during the quarterly earnings call.

“I think a number of things happened,” he said. “First of all, helped in part by some of our efforts, there was tremendous concern in the marketplace that there was going to be huge crowding when we open Galaxy’s Edge. And so some people stayed away just because they expected that it would not be a great guest experience.”

At the same time, all the local hotels in the region, expecting a huge influx of visitation, raised their prices. “So it simply got more expensive to come stay in Anaheim. In addition to that, we raised our prices. We brought our daily price up, so if you think about local visitation, we brought the price of a one day ticket up substantially from a year ago. And then we opened up Galaxy’s Edge with one attraction instead of two, the second attraction is going to open in January. And so all of those factors contributed to attendance that was below what we would have hoped it would be,” Iger said.

Another factor for Disneyland was the annual passholder blackout dates. The reason Disneyland blacked out passholders was to manage demand during the first few weeks “in order to maintain a high level of guest satisfaction,” Disney CFO Christine McCarthy said.

At Walt Disney World,” our survey data suggest that guests are deferring visitation until after Star Wars: Galaxy’s Edge opens, which we believe contributed to the decline in attendance we saw during the third quarter,” McCarthy said.

Even though attendance was down, the parks still raked in the money. Spending was up 10% on higher admissions, food and beverage and merchandise spending. Per room spending at Disneyland and Disney World hotels was up 3%, and occupancy was up 2 percentage points to 88%.

In the long term, Iger said, “we have no concerns whatsoever about them. We’re opening Galaxy’s Edge in August in Orlando. The second attraction there will open in December. And as I said, the second attraction in Anaheim will open in January. So we feel great about the product that we’ve created. It’s just going to take some time for — basically for things to work themselves out in terms of how the marketplace is reacting.”

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