One of the crucial largest proceedings about each Walt Disney Global and Disneyland is crowds. There may be the belief amongst lovers that the parks are at all times packed, there’s no such factor as an low season, and wait occasions are at all times so unhealthy that purchasing Lightning Lanes is non-negotiable.
Disney CFO Hugh Johnston addressed this factor on the Morgan Stanley Era, Media & Telecom Convention in March 2026. This yr’s tournament revolves across the transformational affect of AI and new frontiers of innovation, masking a very powerful topics shaping the generation, media and telecom industries.
Previous to tackling Disney’s meant provide vs. call for imbalance on the finish of the Q&A, the above is most commonly what Johnston mentioned throughout the TMT convention. He defined how AI is a game-changing generation that’s thrilling to Disney, and the corporate is exploring 5 rather simple AI platforms: video introduction, extra personalised visitor reports, Solid Member control, connecting higher and extra individually with customers within the streaming provider, and making the again administrative center serve as extra successfully and successfully.
All the way through the interview, Johnston additionally defined how the arena’s greatest leisure corporate is evolving its strategy to streaming and movie-making. He spent the majority of the interview discussing the corporate’s built-in streaming products and services, mergers & acquisitions, the price of ESPN, Disney’s partnership with the NFL, plus a host of alternative issues. There was once additionally an emphasis on Zootopia 2, and the way that had a “multiplier impact” for the Disney flywheel, benefitting the entirety from client merchandise to parks.
Johnston additionally spoke extremely of the corporate’s succession making plans, which was once a multi-year procedure that was once undertaken meticulously, pushing onerous on plenty of inside and exterior applicants.
Right here’s an excerpt of what he stated in regards to the management exchange, new CEO Josh D’Amaro and President/CCO Dana Walden:
“You’ve got Josh, who’s an amazing growth-oriented govt. You’ve got Dana, who’s an amazing growth-oriented govt at the inventive facet. The truth that now not best do we have now Josh in position and having a look ahead to his management, however we have now all the group staying in combination is one thing that’s a bit of bit ordinary for company CEO successions. And admittedly, within the corporate, either one of the ones leaders have super followership they usually paintings extremely nicely in combination. So I feel it’s going to be an unbelievable mixture, and we’ll have numerous contemporary eyes on what we do.
Folks [inside Disney] are excited. As a result of each other people in reality do lower throughout companies they usually do have sturdy followership, now not simply inside their very own companies, however extra widely, there’s numerous power there on the subject of other people being fascinated with Josh, being fascinated with the truth that this procedure was once additionally treated so easily. You all know one of the crucial historical past of Disney and CEO successions going the entire as far back as Michael Ovitz. This couldn’t had been extra other than that. It was once a in reality easy, well-run procedure with minimum drama.”
It’s now not sudden that Johnston would say one thing like this. What’s he going to do, solution that he’s upset about who was once selected as CEO? That it will have to’ve been him?!
I nonetheless sought after to percentage this as it mirrors what I’ve heard from other people within the corporate. It’s now not the similar sense of pleasure as when Iger returned to exchange Chapek, however there’s for sure numerous optimism in regards to the long run and most likely equivalent portions reduction that Disney didn’t bungle succession making plans once more. The present viewpoint appears to be that this was once the most productive imaginable (lifelike) end result.
Truthfully, maximum the entirety else lined throughout the panel was once a retread of what Iger or Johnston have stated throughout different fresh interviews or profits calls. Or even what’s new most likely isn’t all that related or attention-grabbing to you. However if you wish to pay attention about ESPN’s fable soccer industry, imagine paying attention to the entire query and solution consultation.
Related to our functions, as teased on the best, is crowds, means, and Disney’s meant provide and insist imbalance. An imbalance that I’d agree exists, albeit now not within the path claimed.
Johnston was once requested about how AI has driven other people to gravitate much more in opposition to actual reports, and to discuss what makes Disney’s Stories phase distinctive throughout the broader experiential market? And why hanging $60 billion of capital into this can be a just right factor?
Right here’s his reaction:
The explanation I’ve self belief that the incremental capital going into the Stories industry is in reality going to pay again effectively is 2 issues. Primary, if I have a look at call for and means usage for our Stories belongings, whether or not it’s cruise ships or whether or not it’s parks, it’s tremendous excessive. There’s extra call for than there’s provide…So I do know we will fill the means if we construct it.
The second one explanation why is the go back profile of all the Stories industry. The returns are slightly excessive in that industry. And if I have a look at the go back profile of the initiatives that we’re starting up, that places us in a spot the place I’ve were given excessive, excessive self belief that this perception of turbocharging reports is one thing that’s going to pay again for now not simply years yet to come, however most likely a few many years to return.
Specifically, there’s simply such a lot call for outdoor the U.S. for Stories. After which within the uspeople are in quest of extra in-person bodily reports. And there’s in reality not anything like a Disney park or a Disney cruise send. The dimensions of the ones operations, the characters and the IP, the standard of the provider and execution, it’s beautiful nicely unequalled. So on the subject of layers of merit, I’d argue that those have extra layers of aggressive merit than virtually the rest that exists throughout the Walt Disney Corporate. So I’m tremendous, tremendous constructive on the place that may cross.
Presently, as a result of the character of the means scenario we have now, there’s much less alternative for attendance development as a result of we’re filling up the parks beautiful nicely. That stated, as we upload increasingly more thru 2027 and into 2028 and 2029, I’d be expecting some steadiness of value realization along side attendance development is what’s going to force that industry.
One of the crucial constraints that we’ve had this yr, and we mentioned it on our fresh profits name is global visitation to home parks has been a bit of bit softer than what we’ve up to now skilled. However on account of that, and that’s been occurring for a few quarters already, we’ve in reality pivoted our advertising extra to a home target market. And by means of distinctive feature of doing that, we’re doing a just right task in reality filling up the park and discovering different assets of call for. I do be expecting that can persist thru 2026. Past that, I’m hopeful that issues will slightly renormalize.
This may occasionally definitely resonate with many lovers described within the opening who really feel that the parks are overcrowded, that there’s no such factor as an low season, and so on. I disagree. My take is that that is in large part spin. It sounds just right to Wall Boulevard, however falls aside with even the slightest little bit of scrutiny.
That is one thing we’ve already lined at period in our listing of the “Best” 10 Tactics Walt Disney Global Fanatics Are Incorrect About Crowds. However suffice to mention, there are for sure giant variations in crowd ranges, and also you will have to plan accordingly. Regardless of how onerous Disney may check out, there are occasions that trip is slower. There completely continues to be an low season, or even maximum top dates have wait occasions nicely under their historic highs.
So far as “proof” of this is going, Disney’s personal 10-Ok confirmed that attendance was once down 1% yr over yr on the home theme parks for the final fiscal yr, which will have to be offering a ‘sneak peek’ at subsequent yr’s model of the once a year theme park attendance file (see Walt Disney Global Attendance Rises Reasonably as Common Orlando Deepens Drop).
Talking of that file, it unearths that Walt Disney Global attendance is nonetheless some distance under 2019 ranges. In equity, so much has been stated about overcrowding throughout that length, and by means of all cheap accounts, Disney has ‘recalibrated’ to scale back crowds with the intention to build up visitor pleasure, spending, and so on. They’re optimizing another way, and the method has in large part been vindicated. Nonetheless, if we’re speaking about call for supposedly exceeding provide, attendance being tens of millions of visitors under 2019 is honest sport.
If you want extra evidence, simply have a look at park reservations for Walt Disney Global Annual Passholders, which might be virtually at all times to be had, the loss of means closures, and so on. Some lovers might understand crowds as being too heavy for his or her liking, however they don’t seem to be objectively unhealthy by means of historic requirements. There is extra bandwidth within the parks. Convenience is a unique tale, however that’s a subjective one. The excess means does exist.
Failing that, have a look at all the price tag reductions that Walt Disney Global has introduced within the final year-plus. By way of sparsely making the most of the reductions that have been to be had over the summer time on tickets & motels, we noticed the bottom costs for Walt Disney Global holidays in over 6 years. (See Learn how to Get the Most cost-effective Walt Disney Global Go back and forth Since 2019.)
It’s a near-certainty that those offers will go back for Summer season 2026, particularly with the above-referenced global slowdown. Talking of which, if call for is outpacing provide, why would the global slowdown even topic? There’d be no want to pivot and in finding different assets of call for if call for exceeded provide.
We’d additionally upload that Disneyland is recently providing its very best price tag deal in a decade to California citizens. Disneyland arguably does have extra provide constraints, however even the ones are manufactured–the results of planned choices relating to reductions, operations, and the (excessive) tolerance of locals to position up with the reservation machine.
Walt Disney Global is providing those reductions exactly as a result of call for is down and there’s unutilized provide, which is a perishable just right. Don’t pay attention to what they’re pronouncing, have a look at what they’re doing. The Walt Disney Global parks do have extra bandwidth many of the yr, which is why there’s been larger discounting–to assist fill that to be had area.
If call for was once exceeding provide, Disney would haven’t any explanation why to incentivize visitors by means of providing competitive reductions. As was once the case throughout the pent-up call for length. I’d argue that what Disney is doing is extra successfully leveraging its current means with pricing and discounting, particularly at the lodge facet the place occupancy continues to climb.
If the rest, Disney’s lodge industry does extra to end up Johnston’s level, as occupancy reaches historical highs and motels are offered out a lot of the time. However as soon as once more, they’re the usage of reductions to do so. That isn’t a foul factor–upper fill charges at decrease room charges is a win-win for visitors and Disney! It’s simply now not the similar as natural call for exceeding provide.
It’s additionally value noting that there’s been a functional throttling of means. Disneyland crowds can also be loopy, however there are more than one theaters sitting empty, diminished atmospheric leisure, no daylight hours parade, and so on. There are examples like this with virtually all the parks; the number one factor at Walt Disney Global could be shorter hours. There are considerable alternatives for the in a single day advent of crowd-absorbing means with out selecting up a unmarried shovel.
In different phrases, the present crowds and pricing are possible choices that the corporate has elected to make, now not one thing unavoidable. And it’s arguably a just right industry choice, as a needful degree of crowding is helping promote Lightning Lanes, VIP excursions, and so on., and guarantees a minimal period of keep. If sky-high call for exceeding provide have been really a subject matter, the straightforward resolution could be a lot more competitive value will increase than what we’ve observed within the final 2 years, along side diminished discounting. Nevertheless it isn’t a real factor.
The present crowds are a characteristic, now not a trojan horse. And in equity, it is a subtle steadiness that Disney has in reality accomplished beautiful nicely (file effects from profits calls toughen this). However as soon as once more, that’s completely now not the similar as performing like there’s this overwhelming call for that Disney simply can not stay alongside of. That’s natural spin, aimed toward buyers and analysts who haven’t visited Walt Disney Global between Would possibly and October.
This isn’t to mention Tropical Americas, Monstropolis, Piston Top and Villains Land received’t build up attendance. They completely will! That’s the entire explanation why Disney is construction them! As a basic topic, new points of interest induce call for, and to a better extent that they upload means.
It’s now not a question of serving to soak up the crowds which are already coming. It’s about attracting a brand new target market and lengthening visitor spending, and so on. If the corporate have been involved essentially with construction out means to soak up present crowds, they’d focal point on high-capacity points of interest on par with the Little Mermaid darkish trip or a flurry of flat rides, versus marketable blockbuster additions.
If Johnston have been claiming that there’s a number of runway for Walt Disney Global and Disneyland to additional develop their companies, I wouldn’t disagree. Making an investment within the parks goes to be extraordinarily profitable for Disney, which is strictly why they’re spending $60 billion to “turbocharge” the phase. However for one ultimate time, this is other than announcing that the parks received’t or can’t see attendance development in 2026 as a result of they’re already “filling up the parks beautiful nicely.” That’s flatly false.
Frankly, the follow-up that I want Johnston would’ve been requested is set his line that there’s particularly sturdy call for for Disney Stories outdoor the US. There are a variety of instructions that would’ve been taken, from how the corporate recently feels about its plans for Disneyland Abu Dhabi (my wager is that the park nonetheless occurs, however that it quiets down as a part of the D’Amaro succession narrative) to how the cruise ships issue into this to plans for brand spanking new gates around the world. Given the luck of Shanghai Disneyland and this yr being its tenth Anniversary, I wouldn’t be stunned if we get a 2d gate announcement there quickly.
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YOUR THOUGHTS
What do you recall to mind Disney CFO Hugh Johnston’s feedback throughout the Morgan Stanley convention? Ideas on the rest he stated–or didn’t say? Ideas on his feedback about AI or ESPN? What in regards to the perception that call for exceeds provide on the parks? Do you are feeling that the parks are overcrowded, or is there extra bandwidth? Do you compromise or disagree with our evaluation? Any questions we will assist you to solution? Listening to your comments–even whilst you disagree with us–is each attention-grabbing to us and useful to different readers, so please percentage your ideas under within the feedback!
