Domestic revenue was up a weak 4.6%. For reference, it averaged 10.0% from 2012 to 2015. The slow grow is a bit deceptive since last year’s number included an extra week. Still, even taking that into account, it’s the weakest performance since the last recession despite the most favorable consumer market in nearly a decade. Operating income was up 14.7%, better but still below its recent annual average of 21.3%.
Domestic attendance was down 1%, the effect of an announced strategy to increase prices to ease overcrowding through higher prices. Again, last year included an extra week. Over a comparable period attendance was up by about 1%. Really though, the goal was to improve margin by driving away low-value customers. It’s a tactic employed by many businesses today, where total profit is less important than return on investment. Some will point to attendance as a sign that Disney has overreached but, in doing so, they’ll miss what Disney is really trying to achieve: higher margin. Per Capita Guest Spending (PCGS) was up a healthy 7%, roughly where’s it’s been since 2012; Guests are still spending.
Hotel occupancy improved to 89%, up considerably from a few years ago when it averaged 81%. There’s a little smoke-and-mirrors here. The actual number of occupied rooms fell slightly from last year when the occupancy rate was 87%. (The number of available room nights decreased by 2.5%. Again, last year included an extra week, accounting for most but not all of the decline in available room nights.) Whether its 88% or 89%, it’s still a very good number. Per Room Guest Spending (PRGS) was up a weak 3.4% compared to the previous 4 years when it averaged 5.2%. Let’s see what happens with next year’s unusually steep 4.5% rack rate increase.
