During the last a number of months, there were a number of indicators that Walt Disney International is an increasing number of reliant on excessive revenue visitors to gasoline the parks & hotels’ sturdy efficiency and enlargement. This covers client spending information, statements from Disney’s CFO, how the wealthy rescued the theme parks trade from a spending stoop, our observation about this trend.
Let’s get started with the most recent building, which is that Disney CFO Hugh Johnston has showed that Walt Disney International and Disneyland had a powerful yr because of visitors at larger revenue deciles, as the ones customers “proceed to do smartly.” He went on to give an explanation for attendance and in keeping with visitor spending tendencies, and the way Disney larger the latter at the same time as the previous used to be down.
Johnston made those feedback whilst talking on the 2025 Wells Fargo Era, Media, and Telecom Summit–the similar tournament the place he showed that Dynamic Pricing is Deliberate for Walt Disney International and Disneyland. Johnston is one in every of Disney’s senior executives, and is instrumental in atmosphere and guiding the corporate’s industry methods. He came visiting from Pepsi a few years in the past, and is liked through Wall Side road.
All the way through the Wells Fargo Summit, Johnston used to be requested questions concerning the corporate’s most up-to-date profits name, right through which he up to now shared that Walt Disney International Nonetheless Isn’t Anxious About Epic Universe Amid Attendance Lower & Document Effects. The moderator pointed to the downtrend in attendance, and requested concerning the well being of the American client that Walt Disney International and Disneyland are seeing, and the whole tale of call for for the parks?
Johnston printed that the core client for Walt Disney International and Disneyland “has a tendency to be on the larger revenue deciles, and the ones customers proceed to do smartly. So we indubitably widely be ok with the place the patron is.”
Johnston went on to give an explanation for that the Disney Parks & Accommodations had a powerful yr ultimate yr. The corporate initially issued steerage for six% to eight% working revenue enlargement, and delivered 8%. The parks hit $10 billion of working revenue for the yr, which used to be the primary time they’ve ever reached the $10 billion milestone.
Johnston pointed to that quantity to underscore why the corporate felt “very, superb” concerning the Parks & Accommodations. As for the home parks, he stated that the ones parks (which, as a reminder, contains Disney Cruise Line) grew profits 8% for the yr and 9% within the fourth quarter.
He reiterated that, attendance for the home parks used to be down 1% ultimate yr. Once more, that is one thing we’ve already mentioned at period within the observation to ultimate week’s profits document. (We additionally mentioned the overperformance at the resort facet, which is arguably the larger tale that Johnston didn’t contact on on the Wells Fargo Summit.)
Johnston identified that there used to be “numerous fear going into the yr” for Epic Universe, and that he felt Disney had controlled it smartly. He stated the parks’ efficiency post-Epic Universe got here in inside of our expectancies. He additionally added that the attendance decline might be defined nearly totally through the typhoon scares within the first quarter of Disney’s fiscal yr.
This may be one thing we’ve lined up to now. The ones storms have been so impactful that the corporate without delay addressed them on a couple of profits calls over the past yr, caution that Walt Disney International working revenue can be adversely impacted through roughly $130 million because of storms. Storm Milton brought about the parks to near and had a protracted tail of decrease crowds because of cancellations within the days and weeks afterwards.
And actually, in line with the wait instances information we noticed, October 2025 used to be up reasonably significantly year-over-year, suggesting that the majority (if no longer all) of the unfavorable attendance might be attributed to Hurricanes Helene and Milton. Either one of the ones took place lengthy prior to Epic Universe; that means that Common’s new theme park has, up to now, had no have an effect on on attendance at Walt Disney International.
Johnston defined, necessarily, that necessarily flat attendance used to be standard in a yr with none primary new additions. That during years when Walt Disney International or Disneyland upload new sights, you’ll see “attendance jumps.” But if they’re no longer, attendance is principally about stage.
He added that, over the long term, Disney balances attendance enlargement with pricing enlargement. Even if in any given yr, enlargement “might be extra geared in opposition to one as opposed to the opposite.”
Regardless of flat attendance, Johnston defined that in keeping with visitor spending (or in keeping with caps) have been “if truth be told somewhat just right” ultimate yr, with home enlargement of five%. He stated that Disney “felt very, superb about that.” On the chance of (re)pointing out the most obvious, that is exactly how Disney accomplished file income regardless of decrease attendance (and why this subject is one of these sizzling one). It’s a simple arithmetic downside–a smaller pool of other folks spending extra cash.
Johnston additionally dropped a statistic that I hadn’t heard shortly however indubitably can be the use of in long run posts: “It’s vital to appreciate is simplest about 40% of the individuals who attend our parks if truth be told keep on one in every of our homes.”
The ultimate I had heard, it used to be about 50/50 on-site as opposed to off-site. It’s great to have an up to date quantity for long run use when making my level that, if truth be told, Walt Disney International must construct extra motels–that room stock is no longer the issue relating to crowds.
That is one thing we lined not too long ago within the aptly-titled Why Walt Disney International Lodge Inns Nonetheless Promote Out Regardless of Decrease Crowds. It used to be additionally some of the issues in What Walt Disney International Fanatics Get Improper About Crowds. Extra on-site room stock can be a web sure for visitors, particularly relating to pricing. However I digress.
The moderator then turned around again to the query about higher-income customers being the core constituency for Walt Disney International and Disneyland, asking concerning the notorious yield control option to making improvements to margins.
Johnston defined that the corporate “very a lot” specializes in the way to generate incremental income, by way of price tag costs, in addition to on meals & beverage, products, and upcharge choices, comparable to Lightning Lanes and VIP excursions.
He added that the crew has gotten an increasing number of higher at getting that yield up, in particular in years the place we’re no longer including capability in a selected park that’s going to be the principle enlargement driving force is all of that yield focal point.
This used to be the place the dialog segued into dynamic pricing, to be able to build up yield one day. (As we identified, that is the purpose with dynamic pricing–they’re no longer making an investment a ton of cash in new infrastructure to make costs less expensive, on reasonable. However all of you already knew that. I’m preaching to the choir.)
Truthfully, Johnston’s feedback on the Wells Fargo Summit on their very own wouldn’t be all that fascinating or worthy of a standalone article. No longer like Walt Disney International’s core target market being larger revenue is breaking information–simply payment out a holiday bundle for the Average or Deluxe Accommodations!
Then again, they apply up a few fascinating tidbits from ultimate week’s profits calls, in addition to articles over the past a number of months about how theme parks are an increasing number of reliant at the wealthy. When pieced in combination, all of this does paint a captivating tale.
For one, that is an ongoing ‘dialog’ (and purpose for fear). Closing August, Johnston conceded that there there used to be “softness within the home parks.” At the moment, he added that the decrease revenue client is “feeling pressure,” whilst larger revenue customers are touring across the world extra.
This is identical sentiment to what rapid meals chains and shops have reported right through their profits requires the ultimate year-plus. There’s a reason McDonald’s introduced again Further Price Foods and different eating places are aggressively dating their downmarket shoppers. If McDonald’s and different rapid meals chains are shedding lower-income customers, it stands to reason why that premium-priced theme parks are going through the similar factor.
All the way through a few of these identical profits calls, Johnston has indicated that Disney has attempted to carry costs stable for lower-priced choices on the parks and that lots of the payment will increase were concentrated amongst top rate applications or right through high-demand dates. He added that the corporate desires to “faucet in to these households and construct the addiction of coming to Disneyland or Disney International, no longer one time, however a couple of instances.”
On the newest profits name, in November 2025, Johnston reiterated that Epic Universe has been in-line with expectancies for Walt Disney International. He added this: “If the rest, it kind of feels to be impacting the remainder of the contest down in Florida greater than it’s impacting us. From a client standpoint, we indubitably be ok with it.”
This implies that the “emerging tides” thesis may well be right kind, no less than for the 2 massive avid gamers in Central Florida. The actual casualties may well be the downmarket choices, which might be already feeling the squeeze in Orlando and past, particularly as extra price-sensitive customers reduce on spending.
We’ve questioned whether or not this would possibly if truth be told be the case for some time. That it wouldn’t be Common or Disney that take successful, however moderately, the smaller avid gamers that exist and subsist (roughly) through choosing up the desk scraps. It’s totally conceivable that each Common and Disney develop more potent, whilst additionally shifting additional upmarket.
As that occurs, the marketplace for different Central Florida sights would possibly dry up. Prosperous visitors have fewer days to spare given the compelling causes to spend extra time at Common and Disney. And decrease revenue visitors aren’t interested in Central Florida within the first position, since Common and Disney priced them out.
There used to be additionally an illuminating piece in Forbes titled Don’t Blame the Wealthy for Theme Parks’ ‘Lackluster’ Summer time.
That shared new information illustrating how decrease and middle-income American citizens spent much less at regional theme parks this summer season, whilst prosperous vacationers spent greater than prior to at pricier Disney and Common locations. This divergence printed a top rate product fault line that has come to outline the shuttle trade.
General spending at U.S. theme parks used to be down 5% this summer season in comparison to the similar season ultimate yr, in keeping with Shopper Edge, which analyzed year-over-year bank card spending information from Might via August for Forbes. That demonstrated that weak point used to be due to visitors incomes underneath $100,000 in keeping with yr.
Then again, that total development didn’t practice to the Disney and Common theme parks. Customer spending over kind of the similar time frame larger 8% at Disney parks and a whopping 22% monthly this summer season at Common, pushed through Epic Universe park in Orlando, in keeping with information from Bloomberg 2d Measure. (Value declaring that Common “traded” pricier applications for larger attendance–which grew to become out to be the proper transfer–thus explaining that 22% jump.)
It used to be an overly other summer season for parks that focus on visitors on the decrease finish of the revenue spectrum. United Parks & Accommodations, whose portfolio contains SeaWorld, Busch Gardens and Sesame Position homes, noticed a 4% year-over-year decline in customer spending, in keeping with that very same information from Bloomberg 2d Measure.
Six Flags Leisure Workforce, which owns a portfolio of 27 regional amusement parks, 15 water parks, and 9 motels throughout 17 states, noticed an 8% year-over-year decline in spending this summer season, in keeping with Bloomberg information.
All of this knowledge paints an image of spending this is bifurcated amongst revenue ranges, with low to center revenue customers spending lower than ultimate yr and prosperous American citizens spending greater than ever prior to. That is rarely distinctive to theme & amusement parks.
This trend echoes the remainder of the shuttle trade, the place primary airways and resort firms downgraded their monetary outlooks for 2025 within the spring. Of their quarterly profits studies, primary U.S. airways time and again famous softening call for for primary cabin seats with endured powerful call for for top rate seats.
The hospitality trade has observed the similar break up in call for, with finances and mid-range resort manufacturers faring worse than luxurious manufacturers on this economic system.
On Marriott’s fresh profits name, its CFO famous pointedly that regardless of “ongoing financial uncertainty,” the corporate used to be “extraordinarily smartly situated” within the luxurious phase, which accounted for almost all of Marriott’s rooms and have been “anticipated to proceed to effectively outperform lower-end chain scales globally.”
On account of this break up, the shuttle trade has adjusted its way to chase higher-spending shoppers. Airways are lowering their stock of economic system seats and changing them with fewer top rate cabins, whilst motels are changing same old rooms with suites.
Walt Disney International has been much less competitive in doing this, steadily as a substitute changing resort rooms to Disney Holiday Membership villas. An identical animating concept, other manner to that finish. If truth be told, regardless of the entire new resort development, Walt Disney International’s resort stock is if truth be told decrease nowadays than it used to be a decade in the past.
With no need any supporting information, it’s most definitely secure to suppose that new DVC patrons are in large part from the highest 20%. There’s a reason why that Disney Lakeside Hotel is complete steam forward on development regardless of a number of different homes in lively gross sales, and direct DVC gross sales proceed to turn sturdy enlargement. In the meantime, Disneyland has been increasing its stock of top rate suites and is including extra Membership Stage stock to its hotels.
Relating to observation, I don’t truly know what to mention that hasn’t already been stated. We lined this subject at period again within the spring in Walt Disney International is Anxious About Its Prime Costs and its progeny of posts.
We took {that a} step additional in Is Walt Disney International Too Pricey for Heart Magnificence American citizens? through digging into information. That lined the common prices of a Disney holiday, conventional client spending on shuttle at other revenue brackets, and extra.
That still lined information indicating that the highest 10% of American citizens account for fifty% of all client spending in the US. This can be a file going again to 1989, in keeping with U.S. Federal Reserve information. 3 a long time in the past, the highest 10% accounted for roughly 36% of client spending. Families making about $250,000 a yr or extra are spending freely on the whole thing from luxurious items to extravagant holidays, while decrease revenue families don’t seem to be.
According to all of that–the whole thing from McDonald’s shoppers being priced out and the chain wanting to convey again the Further Price Meal to Walt Disney International’s feedback and movements–it kind of feels transparent that that is extra of a bigger-picture downside and no longer a distinctly Disney factor. When the CEOs and CFOs of numerous firms are announcing roughly the similar factor and changing their methods accordingly, that implies one thing systemic.
In fact, our focal point here’s Disney, so it is smart that we’d analyze this via a Disney lens. There also are the general public feedback of the corporations founder, and his authentic intentions for his theme parks.
Disney is arguably a number of the maximum distinctly American firms, and it’s one thing of a bellwether for center magnificence American citizens consequently. And for mainstream media just like the New York Occasions or Wall Side road Magazine, the use of Disney parks as a proxy for financial anxiousness (and so on.) performs smartly with its prosperous target market for a variety of causes.
In the long run, if you wish to have extra considerate research about this, we’d once more refer you to Is Walt Disney International Too Pricey for Heart Magnificence American citizens? This is a fascinating development, nevertheless it’s certainly no longer a brand new one!
We’d additionally as soon as once more reiterate that it’s most probably that Walt Disney International and the shuttle trade as an entire will proceed to try upmarket. All the information and profits calls and the whole thing else since we ultimate tackled this subject within the spring suggests that is probably the most viable industry technique within the near-term, particularly with emerging financial uncertainty and declining client self assurance. If there’s a recession or downturn, Disney and different firms appear to consider that one of the simplest ways to climate it is looking for out prosperous customers.
For our phase, we proceed to consider that Walt Disney International’s bread and butter is the center magnificence (realistically, most definitely the higher center magnificence). That even supposing rich visitors don’t seem to be the corporate’s core clientele in the longer term, Disney will nonetheless proceed concentrated on that phase with new and differentiated product choices as a result of, that’s obviously the place the cash and enlargement possible lie. For now.
This upmarket technique will paintings…till it doesn’t. There are numerous causes as to why that would occur, however it will pose issues for the corporate. The potential of those problems will increase within the long-run as client perceptions an increasing number of view Walt Disney International as a vacation spot for the rich. (One thing additionally mentioned quite not too long ago in Disney’s Popularity Falls to Most effective “Honest.”)
As soon as that center magnificence reputational harm is completed, it’s exhausting to undo. That is exactly why we’ve time and again emphasised the significance of making improvements to the visitor enjoy and pride, in addition to the massively unfavorable long-term ramifications to pricing out households and alienating longtime lovers. Wealthy American citizens have more cash to spend on fancy one-off rite-of-passage holidays, nevertheless it’s nonetheless center magnificence households which are the lifeblood of Walt Disney International.
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YOUR THOUGHTS
Stunned Disney is publicly admitting that its key demo is larger revenue visitors? What do you take into consideration Walt Disney International and Common seeing their effects over the past a number of months buoyed through rich customers? Can Walt Disney International maintain itself with those big-spenders? Or do you believe our overview that Walt Disney International is inherently a center magnificence vacation spot, and it wishes this bread & butter demo? Any questions we will be able to allow you to resolution? Listening to your comments–even whilst you disagree with us–is each fascinating to us and useful to different readers, so please percentage your ideas beneath within the feedback!
