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LOS ANGELES – In April last year I took a walk down an empty Main Street in Disneyland with the head of Walt Disney theme parks, Josh D’Amaro.
The California park was a week away from opening after more than a year of closure due to Covid-19 restrictions, and cast members worked hard to put the finishing touches on before guests arrived.
It was a strange walk down the iconic cobblestone lane. It was quiet, a word that has probably never been used to describe a Disney theme park. There was no background music, no hustle and bustle of kids clamoring for a Mickey Mouse balloon or soft pretzel, and no parade of colorful characters ready to pose for photos or sign autographs.
As we followed the tram tracks to the statue of founder Walt Disney, D’Amaro spoke about the future of the company’s parks in upbeat, but practical terms. The road ahead, he noted, was not going to be smooth. Presence caps, mask requirements and mandatory temperature controls were the cost of reopening. For five quarters, Disney’s parks division had experienced a loss of operating income, which would have continued if the gates were not reopened. If D’Amaro was worried, he didn’t show it.
While much of the focus of Disney’s earnings over the past couple of years has been on Disney + and the company’s streaming efforts, the resurrection of the theme park industry is critical to Disney’s bottom line. On Wednesday, the company will update shareholders on its latest results and trends when it announces its second-quarter fiscal earnings. Disney shares have fallen roughly 30% since January.
In 2019, the segment, which includes cruises and hotels, accounted for 37 percent of the airline’s $ 69.6 billion total revenue. Typically, theme parks make up the bulk of this revenue.
New theme parks like Avengers Campus and the opening of Star Wars Galactic Starcruiser have enticed guests to travel to Disney’s home amusement centers, but other expansions, including new additions to Disney World’s Epcot, are on the horizon.
A year after that walk with D’Amaro, Disney parks have rebounded significantly. The division, which also includes Disney experiences and consumer products, reported revenues in excess of $ 7.2 billion during its fiscal first quarter, double the $ 3.6 billion generated in the prior-year quarter. The segment saw operating results jump to $ 2.5 billion compared to a loss of $ 100 million in the same period last year.
The company said in February that its national parks have not yet seen a significant return from international travelers, whose prepandemics accounted for 18% to 20% of guests. Also, not all of its international parks opened full-time in the last quarter. As Paris Disneyland celebrates its 30th anniversary, Shanghai Disneyland has temporarily closed its doors due to local Covid spikes.
“As miserable as the pandemic was, we had this opportunity to not just reopen those gates again, but to start over, in a way,” D’Amaro told CNBC last week. “You don’t get much of these opportunities in life where the world stands still for you for a moment.”
The technology that was put in place or updated during the pandemic remains an important part of the Disney experience. While the rides, restaurants, and character encounters are often what get people through the park gates, shorter waits, faster service, and the vibe keep visitors coming back.
Virtual queues, which help maintain social distancing, and an online booking system, which helps control crowds are not disappearing, D’Amaro said. The company relies on data from these services to help staff in high-traffic areas of the park and redistribute traffic to less crowded places.
Mobile ordering and payment, available before the pandemic, has become increasingly popular with guests. Prior to the pandemic, Disney saw the single-digit adoption of its mobile ordering system. Now, around Nine out of 10 guests choose to use it.
One advantage is that consumers tend to spend more when shopping via mobile ordering and payment options than traditional in-person purchases with cash or credit card.
Chewbacca is seen at Disneyland Park on July 14, 2020 in Anaheim, California. Disneyland plans to reopen on April 30, 2021.
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A recent addition to Disney’s suite of tech innovations is Genie, which is something of a digital concierge. First announced in 2019 during Disney’s D23 Expo, the service creates customized itineraries for guests based on the attractions they want to visit the most and the restaurants they want to dine at.
A paid version, called Disney + geniusreplaces the national park’s FastPass, FastPass +, and MaxPass offerings, which were suspended during the pandemic.
For $ 15 per day ticket to Walt Disney World Florida and $ 20 per day ticket to Disneyland, guests can use the new Lightning Lane at select attractions. Visitors can select one at a time to bypass the main line at a set time for rides such as Haunted Mansion, Big Thunder Mountain, and Millennium Falcon: Smugglers Run.
D’Amaro said the adoption rates of Genie, Genie + and Lightning Lane have exceeded expectations.
“We haven’t taken our foot off the pedal as far as investments are concerned,” D’Amaro said. “We have had a chance to look much more clearly into our future and start laying the foundations for a future that is not bound by what we did before the pandemic or what we did 10 years ago or 20 years ago, but it is , in fact, boundless. “
In addition to smoother operations, Disney has been providing guests with new places to explore in and around its parks over the past year.
Avengers Campus opened in June 2021. The new area, located within Disneyland’s California Adventure theme park, has replaced A Bug’s Land. Includes the pre-existing Guardians of the Galaxy: Mission: Breakout ride on the edge of Hollywood Land.
It also houses a new Spider-Man attraction, a dining spot called the Pym Test Kitchen, and a portal to Doctor Strange’s shrine. At the center is the Avengers complex, the home of Marvel’s most powerful heroes. On the rooftop launch pad is a ladder quinjet that turns on and cranks the engines for guests.
Avengers Campus is a popular destination for Disneyland guests who can spot and interact with their favorite heroes, anti-heroes, and villains from the Marvel Cinematic Universe.
And for theme park junkies looking for more than just a photo shoot, Disney recently opened its own new experience of Star Wars the galactic star cruiser. Referred to as an “immersive adventure,” the Star Wars Galactic Starcruiser combines elements of the company’s resorts, cruise lines and theme parks into a 48-hour space adventure.
Ouannii, a Rhodian musician, is aboard Halcyon with galactic superstar Gaya.
The experience comes at a high price – around $ 1,200 per person per day – but has generally been well received by guests since it opened in March.
The upcoming fiscal second quarter results will include the first month of these trips and provide shareholders with insight into what they can expect in terms of revenue from this attraction going forward. The two land-based expansions of Star Wars Galaxy’s Edge cost around $ 2 billion, but it’s unclear what Disney has invested in other recent upgrades to its parks.
The next Disney park expansion will arrive at the end of May. Xandar’s Pavilion of Wonders at Disney World’s Epcot is the latest piece in the massive Disney transformation of the nearly 40-year-old park, which has long been known for its unique gastronomic offerings and parties.
The former Energy Universe Pavilion is now the Xandar 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 roller coaster: Guardians of the Galaxy: Cosmic Rewind.
“We have a lot to do here at Epcot,” Kartika Rodriguez, Epcot’s vice president, told CNBC in February during a media tour of the new attraction.
Epcot has already expanded its French pavilion to include Remy’s Ratatouille Adventure, a trackless ride that takes guests through a Pixar version of France. He also added a new space-themed restaurant called Space 220, which takes patrons hundreds of miles above the park to eat among the stars. Still on the way is a detailed “Moana” inspired attraction called Journey of Water.
“I think ours [Walt Disney Imagineering] partners have found that they are a truly unique way to ensure that Epcot stays true to what it is about … it’s about growing, about being connected, “Rodriguez said.” And that’s what Epcot is, dreaming of what it will be. the world of tomorrow. “
Refreshing its parks is one way Disney keeps its goers excited about returning and elevates its storytelling and experiences. D’Amaro said the company is far from being innovated.
The company will launch its latest cruise ship, the Disney Wish, this summer and is working to complete the Tron: Lightcycle Run roller coaster at Magic Kingdom.
However, perhaps more exciting is the promise of something new on the horizon. Disney’s Galactic Starcruiser is a project that could easily be applied to other company-owned franchises as well innovations in animatronics and artificial intelligence could bring fan-favorite characters, big and small, to parks.
“There are so many things we can do and so many places we can go,” he said.