Attendance: Disneyland Up, Disney World Down – no surprise there

Major outlets are reporting that analysts believe Disneyland increased attendance this year, while Walt Disney World declined. It has to be inferred, because for the first time in recent years, The Walt Disney World company has not revealed resort attendance separately to investors and the press.

This shift in attendance is not unexpected. Disneyland is cashing in on good feelings generated by improvements it made for its 50th and 55th anniversary (those guests are coming back for their 3-5 year cycle) and actual improvements underway at California Adventure. Add to that the fact that it has 20 million people who live within a 2 hour drive to the resort, most of whom have been planning ‘staycations’ the last two years, and it makes sense.

Walt Disney World, on the other hand, suffers from a dearth of locals and instead has to rely on families traveling in via plane (which was down much of the year), train (which is slightly up), and internationally. With recent air travel and border crossing enforcement escalation being practiced by DHS and Customs you have to be really motivated to want to come to the US for a vacation these days. I’d also submit that while the Magic Kingdom has been doing a better job of building maintenance and is actually planning to add a new attraction (although the net will be zero while Dumbo is out of action), most of the other Florida parks haven’t done much recently and are even planning to close a few attractions/shows or continue the downsized versions of their popular festivals.

It used to be the case that theme park attendance was cyclical. Theme parks could plan to do refurbishments or lower hiring when crowds were not expected. There was both a 3 to 5 year cycle and an inner-year cycle. There has been a shift away from this in the last 10 years. You can no longer count on guests returning at their point in the cycle, instead you have to get out there and entice them to return. Disney World has been doing this cheaply through discounting and other methods of encouraging guests to stay on property. It involves no capital expenditure, which is a plus, but that’s outweighed by a couple major problems. The first it is that eventually someone will open a destination that will draw away your guests. The second is more discounts means less income, which means less money for expansion and show and higher costs around the margins (food, merchandise, DVC points). Guest will eventually internalize the decrease in value and quality of the experience. That’s very dangerous for Disney which has built its brand on a quality family vacation experience.

I know that some readers are tired of my playing this chord. But it keeps resounding in my ears every time I read a story like this. I’ll continue to play the music set in front of me. And right now the song is that Disney needs to come up with an answer for all four of its parks that doesn’t involve DVC (although it’s a proven money maker for Disney and should continue) or free meals that decrease meal choice and inflate prices for guests not on the ‘free’ plan (its not really free – guests are paying full rates to get it, pretty much everyone else travels at a discount).

Hint: new parades, shows (even little shows), giant promotional campaigns (free Chevy Volt, free disney furniture, clothes, etc), new attractions, and new lands/pavilions. This is what gets travelers excited enough to make them willing to forgive the increasing burdens of travel (airline fees, DHS groping and naked scanners, custom fees, increased gas prices, etc.). This is what will pull Disney out of the discounting feedback loop.

I’m hearing that Disney does have some answers in the system, but for the most part they’re still at the research stage with a few having already submitted budgets for approval. Changes to the announced Fantasyland expansion and a plan for a new land at DAK among them. I’ll continue my gentle buzzing on the topic until those plans are revealed.