Summer business at Disney World has spurred a great debate over whether the Orlando, Fla., landmark is a victim of a precipitous drop in recent attendance, prompting some to call it a “ghost town,” or a victim of a larger problem in a state roiled by atrocious weather, internecine politics and economic uncertainty.
The debate, which has boiled for more than a month, resurfaced Thursday with photos on the news site InsideTheMagic.com, showing an apparently deserted Magic Kingdom.
And while Walt Disney Co. DIS, -0.50% has been quick to offer a counter-narrative of its own, there is little argument that Florida is feeling the burn of a confluence of factors — ranging from extreme weather and bare-knuckled politics to pricing — that have thinned tourism in recent months.
One Orlando resident and frequent Disney World attendee blamed the state’s notoriously oppressive summer weather, escalating ticket prices, the political death match between Disney and anti-woke warrior Florida Gov. Ron DeSantis, and lingering COVID restrictions that require online reservations for entry to parks. There are too many rules, the resident said in an interview.
Disney World’s attendance woes were amplified in a Wall Street Journal report last month that deemed the crowd on the Fourth of July, which fell on a Tuesday this year, one of the slowest July 4 holiday weekends in nearly a decade. Citing data from travel company Touring Plan, the report described “significantly lower” wait times for rides at the parks, which industry experts say is the result of price hikes and changes to park operations.
Chief among the issues dogging Disney is climate change, which has led to floods, fires and heat waves. For example, this year was the hottest Fourth of July in Orlando in the past 25 years, according to online weather data.
Extreme weather conditions such as Hurricane Ian in late September 2022, for example, forced the closure of Disney World for two days. A typhoon warning in Hong Kong in July forced the Disneyland park there to shutter.
Disney, which has strongly disputed the Journal report, provided MarketWatch with local economic data, buttressing themes Disney Chief Executive Robert Iger has articulated in recent weeks.
“Florida opened up early during COVID, and it created huge demand. It didn’t have competition because there were a number of other places — states — that were not open yet,” Iger said in an CNBC interview in July. The Journal story, he argued, “was measuring attendance at Disney World on July 4, which didn’t really factor in temperature, which is about 100 degrees and 99% humidity on that day.”
Iger contends the pandemic created “huge demand” and the parks “didn’t have competition” since other states were still under lockdown at the time.
“So if you look at the numbers in Florida in 2023, or just recently versus 2022, where not as much was open and Florida was the only thing, the only game in town,” Iger told CNBC. “There’s a lot more competition today. So, against 2022, the state of Florida has been down.” He added that hotel tax revenue in some Florida counties is down by at least 6%.
Indeed, tourism tax collections in several major Florida counties are down, including the home of Disney, Orange County (7% lower in June from a year ago), Hillsborough (down 5.9% in July), and Palm Beach (down 5% in May).
Collections shrunk as the number of tourists visiting Florida decreased in the second calendar quarter from a year earlier, according to estimates released by the state’s tourism-marketing agency on Wednesday.
The broader entertainment climate in the state has prompted Comcast’s CMCSA, -0.22% Universal Studios Florida, home of the wildly popular “The Wizarding World of Harry Potter,” and SeaWorld SEAS, -0.92% Orlando to offer discounts to entice consumers. “It’s not just Disney,” an Orlando resident said in an interview. “It’s the damn weather.”
Despite the chatter about park attendance in Florida, Disney last week reported revenue for theme parks around the world and product-sales business increased to $8.3 billion from $7.4 billion a year ago. The average analyst estimate from FactSet was $8.1 billion.
During a conference call later with analysts, Iger said Walt Disney World is performing above pre-COVID levels, at 21% higher in revenue and 29% higher in operating income compared to fiscal 2019, adjusting for accelerated depreciation for its closing Starcruiser hotel.
“We saw softer performance at Walt Disney World from the prior year, coming off our highly successful 50th anniversary celebration,” Iger said on the call. “Also, as post-COVID pent-up demand continues to level off in Florida, local tax data shows evidence of some softening in several major Florida tourism markets.”
Still, in the days leading up to Disney’s quarterly financial results, analysts like Macquarie’s Tim Nollen expressed concern over “too many near-term” factors that include park attendance. Nollen reduced his price target on Disney shares 9% to $94 and downgraded Disney shares to neutral.