A lot of people planning a trip to a Walt Disney (DIS) theme park look for that mythical time on the calendar when Disney World and Disneyland won't be quite as crowded. The reality is that such a period does not really exist, at least in way you can plan for.
The Disney theme parks have times -- like the major holidays -- when they're packed to capacity, but even "slow" days generally feature pretty big crowds. That's partly because Disney manages its crowds through variable pricing. Tickets are a little cheaper during less attractive days to visit the parks which makes those days more attractive to some visitors.
And with the Centers for Disease Control (CDC) dropping the covid testing requirements for international travelers, Disney World and Disneyland should only get busier. But, some travelers have hoped that the economic uncertainty and higher prices facing Americans might lead to lower crowds at Disney's theme parks.
CEO Bob Chapek made it clear that you should not get your hopes up.
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Disney Parks Still Have Strong Demand
Chapek fielded a question about whether the economy was impacting demand for Disney's theme parks during his company's second quarter earnings call.
"So we continue to see really strong demand, and we're encouraged by the trends that we're seeing, particularly as we're going to get some improvements to international visitation," Chapek said.
The good news for would-be vacationers, is that Disney continues to cap attendance at its parks.
"But we're controlling our attendance, as Christine mentioned in her comments, using our reservation system to optimize the guest experience. But that domestic yield strategy, and we're also seeing it in Paris, is really exceeding our expectations," he said.
It's worth noting that "capped attendance" is relative. Disney has effectively raised its prices (without raising the price of admission) by dropping the free FastPass+ system in favor of the paid Genie+ and Lightning Lane systems. That produces more revenue while also making a Disney theme park visit more of a premium experience.
"For example, that sign-up for Genie+, plus the willingness to come to our parks with our balanced reservation system, which really helps us sort of manage our price per day, if you will," the CEO added.
To make that a better value for visitors, Disney has capped attendance. That does not mean parks won't be crowded -- they are nearly every day -- but it does mean crowds are more manageable.
"So that domestic yield strategy has really structurally allowed us to increase that per-capita spending meaningfully without having to rely solely on raising ticket prices, and we don't see any end in sight for that," Chapek said.
Disney World, Disneyland Are Not Priced for Everyone
So far, Disney has been economy proof at its domestic theme parks. That's because the company has focused (without saying so) on customers that are better off economically. A Disney World or Disneyland vacation simply isn't something every family can afford.
That's not an accident. Disney has to balance attendance and in-park spend to earn the most money while delivering a tolerable experience for visitors. The people who can spend more on a ticket will almost certainly spend more on food, merchandise, and enhanced experiences.
Disney is not, however, immune from inflation and that could lead to further price increases (or lower margins.)
"We do pay close attention to all the recent inflationary pressures, and it covers everything from merchandise to food and beverage,' said CFO Christine McCarthy. "...We do have the labor impacts. Rising wages is something everybody is dealing with and a tighter labor market."
