Disney Investors Focus on Streaming, Don’t Forget Theme Parks
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LOS ANGELES – Last April, I took a walk down the deserted Main Street at Disneyland with the head Walt Disney amusement park, Josh D’Amaro.
The California park is a week away from opening after more than a year of closure due to Covid-19 restrictions, and the actors worked hard to perfect the final touches before guests arrived.
It’s a quaint walk down the iconic cobblestone street. It was a quiet word, one that would probably never have been used to describe a Disney theme park. There’s no background music, no bustling sounds of kids playing with Mickey balloons or soft cookies, and no parade of colorful characters ready to pose for photos or sign autographs.
As we followed the trolley trail to the statue of founder Walt Disney, D’Amaro spoke about the future of the company’s parks in optimistic, but realistic terms. The road ahead will not be smooth, he noted. Attendance caps, mask requirements and mandatory temperature checks are the cost of reopening. For five-quarters, Disney’s parks division has reported a loss in operating income, and that will continue if the gates don’t reopen. If D’Amaro was worried, he didn’t show it.
While most of Disney’s earnings over the past two years have been focused on Disney+ and the company’s streaming efforts, the amusement park industry’s resurgence is crucial to Disney’s bottom line. On Wednesday, the company will update shareholders on the most recent results and trends as it releases second-quarter financial earnings. Disney shares have fallen about 30% since January.
In 2019, the segment, which includes travel and hospitality, accounted for 37% of the company’s total revenue of $69.6 billion. Usually, amusement parks make up the bulk of this revenue.
New theme park enclaves like Avengers Campus and Star Wars Galactic Starcruiser have drawn tourists to Disney’s domestic amusement centers, but more activities expand, including new additions to Disney World’s Epcot, on the horizon.
A year after his outing with D’Amaro, Disney’s parks have recovered dramatically. The division, which also includes Disney’s consumer products and experiences, peaked at $7.2 billion in revenue in the fiscal first quarter, double the $3.6 billion generated in the fiscal first quarter. quarter of the previous year. This segment saw business results skyrocket to $ 2.5 billion compared to a loss of $ 100 million in the same period last year.
The company said in February that its domestic parks had yet to see a significant return from international tourists, which pre-pandemic accounted for 18% to 20% of visitors. Also, not all of its international parks were open full-time this past quarter. While Paris Disneyland is celebrating its 30th anniversary, Shanghai Disneyland has temporarily closed due to local Covid spikes.
A new beginning
“As miserable as the pandemic has been, we have this opportunity not just to reopen those gates again, but to reboot,” D’Amaro told CNBC last week. “You don’t get many of these opportunities in life when the world stands still for you for a moment,” D’Amaro told CNBC.
Technology brought into use or updated during the pandemic remains an important part of the Disney experience. While rides, restaurants, and character meetups are often what get people through the park gates, shorter wait times, quicker service, and atmosphere keep visitors coming back.
The virtual ride queues, which help maintain social distancing, and the online booking system, which helps with crowd control, are not going away, says D’Amaro. The company relies on data from these services to help staff high-traffic areas of the park and reallocate traffic to less crowded locations.
Ordering and paying via mobile phones, which were pre-pandemic, are becoming increasingly popular with customers. Before the pandemic, Disney saw the adoption of single digits into its mobile ordering system. Now, around nine out of 10 guests choose to use it.
One plus is that consumers tend to spend more money making purchases through mobile ordering and payment options than they do buying directly with cash or credit cards.
Chewbacca is seen at Disneyland Park on July 14, 2020 in Anaheim, California. Disneyland is scheduled to reopen on April 30, 2021.
Getty Images Entertainment | beautiful pictures
A recent addition to Disney’s suite of tech innovations is the Genie, a kind of digital concierge. First announced in 2019 during Disney’s Expo D23, the service creates customized itineraries for guests based on the attractions they most want to experience and the restaurants they want to dine in.
A paid version, called Disney Genie +replaces the domestic park’s FastPass, FastPass+, and MaxPass services, which have been discontinued during the pandemic.
For $15 per day ticket at Walt Disney World in Florida and $20 per day ticket at Disneyland, visitors can use the new Lightning Lane at several attractions. Visitors can make one option at a time to cross the main road at a set time for rides like the Haunted Mansion, Big Thunder Mountain and Millennium Falcon: Smugglers Run.
D’Amaro says Genie, Genie+, and Lightning Lane adoption rates have exceeded expectations.
“We don’t leave the pedal because it involves investments,” says D’Amaro. “We’ve had the opportunity to see our future so much more clearly and begin to navigate a future that’s not bound by what we did before the pandemic or what we did 10 years ago. five or 20 years ago, but in fact, boundless.”
In addition to smoother operations, Disney has been offering guests new places to explore in and next to its parks over the last year.
Avengers facility to open June 2021. The new area, located within Disneyland’s California Adventure theme park, has replaced A Bug’s Land. It includes the previously available Guardians of the Galaxy: Mission: Breakout at the edge of Hollywood Land.
It also hosts a new Spider-Man attraction, a dining venue known as Pym Test Kitchen, and the gateway to Doctor Strange’s mecca. At its center is the Avengers complex, the home of Marvel’s most powerful heroes. On the rooftop launcher is a large quinjet that will light up and spin the engine for guests.
The Avengers campus is a popular destination for Disneyland guests, who can encounter and interact with their favorite heroes, anti-heroes, and villains from the Marvel Cinematic Universe.
And for theme park junkies looking to find more than just a photo session, Disney recently opened New Star Wars experience Galactic Starcruiser. Branded as an “immersive adventure,” Star Wars Galactic Starcruiser combines elements of the company’s resorts, cruise lines and theme parks into one stretch of space cruise 48 hours.
Ouannii, a Rodian musician, is on board the Halcyon with the galactic supergiant Gaya.
The experience comes with a hefty price tag — about $1,200 per person per day — but has generally been well received by guests since opening in March.
The upcoming second quarter financial results will cover the first month of these rides and give shareholders insight into what they can expect revenue-wise from this attraction going forward. . The two Star Wars Galaxy Edge land extensions cost around $2 billion, but it’s unclear what Disney has invested in other recent upgrades to its parks.
Disney’s next park expansion will take place at the end of May. The Wonders of Xandar Pavilion at Disney World’s Epcot is the latest in Disney’s massive transformation to the nearly 40-year-old park, which has long been known for its unique food and annual carnival.
The Cosmic Energy Pavilion was formerly Xandar’s Pavilion of Wonders, home to Guardians of the Galaxy: Cosmic Rewind.
The Wonders of Xandar Pavilion is based on Marvel’s “Guardians of the Galaxy” and features a new coaster: Guardians of the Galaxy: Cosmic Rewind.
“We have a lot going on here at Epcot,” Kartika Rodriguez, vice president of Epcot, told CNBC in February, during a media tour of the new tourist destination.
Epcot has now expanded its French pavilion to include Remy’s Ratatouille Adventures, a trail-free ride that takes guests through the French version of Pixar. It also added a new space-themed restaurant called Space 220, which takes diners hundreds of miles above the park for interstellar dining. Still coming is an awe-inspiring attraction of “Moana” called Journey of Water.
“I think ours [Walt Disney Imagineering] The partners have found a truly unique way to ensure that Epcot stays true to what it’s about… it’s about growth, it’s about connectivity,” said Rodriguez. And that’s what Epcot, dreaming of what tomorrow’s world will be like. “
Refreshing its parks is one way Disney keeps its parkgoers excited again and enhances its storytelling and experiences. D’Amaro says the company is a long way from doing innovation.
The company is set to launch its newest cruise ship Disney Wish this summer and is working on completing the Tron: Lightcycle Run roller coaster at the Magic Kingdom.
Perhaps more exciting, however, is the promise of something new on the horizon. Disney’s Galactic Starcruiser is a blueprint that can be easily applied to other franchises owned by the company and Innovations in animation and AI can bring fan-favorite characters big and small to the park.
“There are so many things we can do and so many places we can go,” he said.