Disney’s Tourism Perception Catch-22

Walt Disney World faces a delicate balance on a daily basis.

The Walt Disney Company has created THE most popular paid tourist destination of its kind on the planet.

While that’s an amazing asset to possess, it comes with some downside.

In a way, the parks sometimes become too crowded for their own good, which causes customers to complain.

Then, when Disney takes measures to reduce theme park traffic, analysts worry that the parks have grown less popular.

Now, the Orlando Sentinel has written an article discussing a disturbing trend with Florida theme park attendance.

So, let’s discuss Disney’s tourism catch-22.

The Worst of Times, the Best of Times

Disney’s current story begins in March 2020. That’s when Disneyland Resort and Walt Disney World suddenly closed.

Over the years, I have written a handful of articles about the rare occasions when either of those parks had closed.

The list consisted of hurricane weather, incidents like 9/11 and the JFK assassination, and a weird thing with Yippies.

Then, the COVID-19 pandemic forced both parks to shut down for months.

At the time, I read wave after wave of headlines swearing that Disney theme parks would never be the same.

Here’s the thing, though. A giant, almost parental psy op was occurring around the world.

Governments were telling human beings that they couldn’t go anywhere for their own safety.

What happened when you were a child and your parent(s) told you not to do something?

That became the most tantalizing thing you could imagine, didn’t it?

That same logic applies to tourism. The instant that vacationers received the all-clear that they could safely travel, everything changed.

Suddenly, tourists swarmed theme parks as part of the “revenge travel” era, which drove Disney to record heights in 2022 and 2023.

An absolute tragedy in 2020 and 2021 placed Disney in financial peril.

Then, the company clawed its way out of debt thanks to the exploding popularity at the parks.

Walt Disney World enjoyed the added bonus of celebrating its 50^th anniversary, while Disneyland became the hub for Disney’s centennial birthday.

Disney Experiences Chairman Josh D’Amaro became the belle of the ball as that division reported record margins for several straight quarters.

D’Amaro achieved this remarkable task even as Disney suffered the turmoil of the last days of Bob Chapek and the shaky first days of Bob Iger.

Throughout the chaos, guests flocked to the parks.

The Normalization Begins

During the second half of 2023, a trend emerged. After a comically long run of strong numbers, the tourism industry has cooled.

In Central Florida, the most useful data point is hotel occupancy, as that information indicates how much out-of-town traffic is visiting.

We’ve discussed this data many times on MickeyBlog, and what I can say with confidence is that all the reports in 2021 and 2022 were strong.

At the time, I suggested that both totals were a bit misleading. Remember that there was little by way of tourism in 2020.

So, the 2021 numbers contrasted with barebones ones from the previous year. Therefore, they were exponentially better.

“Some travel” is better than “no travel.” Still, vaccine rollouts only began in earnest in 2021.

Many people were unwilling to travel that year for myriad reasons, including theme park requirements that involved personal safety.

Thus, 2022’s numbers were vastly superior to 2021’s. That’s because people could more readily travel without constraint in 2022.

The same logic applied during the first half of 2023, but we still tracked an ever-so-slight slowdown in some areas.

Fast forward to today, and the story has changed. The slippage we identified in 2023 has turned into a legitimate pullback in travel.

Well, it has at Florida theme parks and really just the Sunshine State in general.

People can travel the world again, which hadn’t been true until the past 12 months.

So, we’ve circled back to the whole, “I’m going to Paris because you told me I couldn’t!” psy op. Also, The Olympics were in Paris.

Anyway, the 2024 hotel occupancy data has been eye-opening, especially the summer numbers.

Nobody Goes There Because It’s Too Crowded

Dewayne Bevil of the Orlando Sentinel recently noted the following:

“In Orlando, June 2024 occupancy was down 2% compared with a year earlier. In July, it was a 3.1% decrease.”

That trend has remained in play for a while. In fact, it started in April 2023.

One of the least reported but relevant hospitality stories of last year was that Orlando’s hotel occupancy rates declined.

That was true from April through November, except for September, which was up by less than one percent.

People overlooked it because Orlando officials understandably downplayed the story, which they should have.

Let’s use a baseball analogy here and say that Aaron Judge hits 50 homers next season.

That’ll be a stunning feat since so few baseball players can claim a 50-homer season, but it’s also less than what he managed by August 31^st this season.

Matching a historic pace is nigh impossible, and that’s the challenge Orlando’s tourism bureau faced in 2023.

In 2024, the wheels have come off a bit as most months have fallen back from 2023, which was already down from 2022.

As strange as the statement sounds, 2022 may have been the bar-setting year for tourism despite the pandemic.

We are a stubborn, determined people who don’t like being told what we can and cannot do.

Orlando’s tourism data reinforces this fact.

Disney’s Tourism Catch-22

Of course, few people are talking about how Universal Orlando Resort’s tourism numbers have dropped from last year.

In fact, very little had been made of the Themed Entertainment Association’s 2023 attendance report.

According to their research, both Universal Studios theme parks in Orlando suffered precipitous attendance drops last year.

So, they were already down in 2023 and now they’ve dropped even more in 2024.

How much does that matter? Honestly, it’s wholly unsurprising.

Casual tourists know that Universal Epic Universal is opening next year. Therefore, they’ve decided to wait until 2025.

Disney doesn’t have that excuse, but it also doesn’t need any excuses.

The Experiences division is performing stunningly well, even as its record-setting profits have slowed a bit recently.

That’s because D’Amaro solved two problems at once.

By introducing tiered offerings like Lightning Lane Multi Pass and Lightning Lane Single Pass, he gave consumers options.

We can pay more to spend less time in line, or we can stretch our vacation budgets a bit by standing in the standard attraction queues.

Similarly, the tiered admission ticket approach balances park attendance by incentivizing guests to visit during the off-season.

Remember which month was up last year? Yes, it was September, which doesn’t make much sense if you know Disney history.

Historically, that’s been one of the slowest months, and it will be again this week.

However, the parks will have more crowds than they would have just ten years ago because fans know it’s an inexpensive time to visit.

Meanwhile, Disney makes more money because of those expensive add-on options and things like Disney After Hours. 

Thus, Disney better compensates for attendance lulls because its theme park finances remain profitable.

The Complaint Is the Solution

Have you seen or heard anyone saying that Disney attendance is down?

As you can tell from the above data, that’s true of all Orlando businesses relying on tourism.

From Disney’s perspective, it’s a feature as much as a bug. That’s because of how Disney strategists operate.

Disney wants to make the most money while hosting the smallest number of tourists.

I realize that sounds counterintuitive, but it’s the reality of hosting guests in an enclosed space.

At a park like Magic Kingdom, people can visit several different themed lands, which maintains effective traffic distribution.

As we’ve seen at Disney’s Animal Kingdom and Disney’s Hollywood Studios, that same logic doesn’t apply.

Tourists congest the same areas, usually Pandora – The World of Avatar and Star Wars: Galaxy’s Edge.

This behavior causes an overcrowding problem, which Disney has solved with its Lightning Lane offerings.

Now, the parks make more money while serving fewer guests.

You should be grateful for that because Disney Park survey scores suggest guests are happier when it’s less crowded.

So, Disney sacrifices a bit of money to guarantee customer satisfaction.

That’s why Wall Street was more worried about the meta part of Disney attendance being stagnant than about the company itself.

Smart people know that Disney discourages attendance in some instances to protect the guest experience for all.

The only concern with the data is that Disney serves as a bellwether for the economy as a whole.

When Disney is stagnant, some fear that an economic slowdown is underway. But that’s a side issue.

Final Thoughts

Overall, at the moment, Walt Disney World is behaving exactly like it should.

A steady flow of guests arrive daily, spend lots of money, and express their enjoyment on park surveys, thereby increasing the odds of return visits.

So, while Orlando in totality is suffering from the impact of the end of revenge travel, Disney has firewalled itself from such concerns.

Disney is an island unto itself that is fairly difficult to disrupt, at least in the theme parks division.

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