Walt Disney World Reports Strong Per Capita Guest Spending During Reopening; Chapek Sees Greater Value in “Regular” Visitors than Annual Passholders

The Walt Disney Company presented its Q3 2020 earnings report to its investors and the public today in what can only be described as an attempt to impart a sense of normalcy within the company and the entertainment industry as a whole. The conference call discussing the results of the quarter focused mainly on the company’s DTC or Direct-to-Consumer division, largely bypassing most “elephant in the room” questions regarding the parks, such as the mostly still-shuttered Disneyland Resort, and the abrupt, government-imposed closure of Hong Kong Disneyland.

However, there was some good news about Walt Disney World, with the resort operating at a meager profit, or at the very least exceeding variable costs, despite heightened cancellation rates.

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Disney Park Pass availability at Disney’s Hollywood Studios has been in strong demand amongst Annual Passholders, with weekends already booked through October. (Featured Image: Guests purchase bags upon bags of Splash Mountain merchandise at Splashdown Photos in the Magic Kingdom.)

The surge of COVID-19 cases in Florida limited the amount of inbound travel that the company had originally anticipated, but Disney is confident that numbers will pick up once regular travel patterns into Walt Disney World resume. During the conference call, numbers on hotel pricing and occupancy were not released due to the lack of resorts currently open.

Despite the lack of hotels, though, Disney reported that per capita guest spending is “very, very strong”. This was tacked up to pent-up demand from guests who haven’t been to the parks in a while, and further boosted by relatively new additions like Star Wars: Rise of the Resistance, which guests are eager to experience. During our coverage of the park reopenings, we’ve seen merchandise continuously fly off the shelves:

Between sold-out merchandise and long-gone Disney Park Pass availability, you could say Annual Passholders are holding down the fort at Walt Disney World as the main guests visiting and filling up capacity at the parks each day. However, it seems the company longs for the return of the traditional guest due to the higher spending values that are attributed to guests who stay on-property for longer periods of time. When asked about parks metrics, Bob Chapek emphasized the fact these guests are “marginally more valuable” than Annual Passholders due to general spending habits:

As you know, different guests—depending on where they’re coming from—have different relative values in terms of their contribution as a guest to the park. Typically, somebody who travels and stays for 5 to 7 days is marginally more valuable to the business than someone who comes in on an Annual Pass and stays a day or two and consumes less merchandise and food and beverage. So the way I would look at it, as our constituency changes a little bit, so do our overall margins.

Bob Chapek, Chief Executive Officer, The Walt Disney Company

Due to the impacts of the COVID-19 closure and the implementation of the new Disney Park Pass system, Walt Disney World Annual Passholders were given an additional month on their Annual Passes. Annual Passholders can also take advantage of a generous 30% discount on merchandise throughout the parks and resorts until August 14.

Disney stock was trading up 2.3% in after-markets after the earnings were released earlier today. You can review the full Q3 2020 Earnings Report by clicking here and read our full analysis and break-down here.

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Drew
Drew
1 month ago

I thought Tom did enough shopping for the rest of the APs to skew the numbers in our favor.

Doug
Doug
1 month ago

I wish they would limit what people buy. It’s obvious they are just buying up the merchandise to sell online for a jacked up price. For those of us who cannot go all the time, it is upsetting to see things bought up that we would like to have available when we get there. I cannot justify paying the jacked up prices online and do not want to support what those crooks are doing.

Marvin
Marvin
1 month ago

Sure the occasional visitor spends more per visit… they come once every few years and splurge. AP holders spend much more over several visits per month over the year. While Disney squeezes AP holders out (look at the availability calendar), Universal is sweetening the pot for UOAP.

Joyce C
Joyce C
1 month ago

Dont assume that regulation guests spending exceeds annual passholders . Their are some passholders like us who stay at a Disney Resort for 5-8 nights several times of year , purchase tours , special event tickets and reserve table service restaurants. And make a variety purchases .

Nancy
Nancy
1 month ago

I agree about Uni- they do seem to be pushing hard to attract APs- while WDW is pushing this family away…

Zack E
Zack E
1 month ago

If the passholders need discounts to spend in park, then you’re obviously not as valuable on a per capita basis as overnight guest. If passholders want to up their value to the company they need to up their in park spending without a bunch of discounts.

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