5 Reasons Disney World Attendance is Falling

Walt Disney World's attendance has really taken a big hit this year
When Disney reported that there was an attendance dip at Walt Disney for the March quarter, apparently it wasn't a fluke as Motley Fool is now confirming that June's attendance numbers are likely going to be worse for the Empire of Mouse. So apparently, this is a much stronger trend than anyone expected.

This shocking bad news comes nine days before Disney will again announce its earnings in a conference call to Wall Street investors on August 9.

According to Motley Fool, the economy is holding up and fuel prices are low, making airfares and other transportation costs affordable for destination vacationers. So these issues are not the reasons for the unexpected attendance dip at the Florida theme parks.

Motley Fool came up with five reasons for the attendance fall, but it appears they missed three of the most obvious reasons for crowds being lighter this year at Disney World, including:
  1. Scare from an imminent outbreak of the Zika virus, which is now a reality in the State of Florida and has also taken its toll on Disney Cruise Line. The U.K. recently issued a travel advisory to its citizens, warning them of the dangers of contracting the Zika virus in Florida.
  2. Anticipation of the Rio Summer Olympics in Brazil which opens next week and competes with destination travelers' dollars, especially from other Latin American countries.
  3. Fear of potential terrorists attacks and longer wait times and lines from implementing enhanced security measures.

Here's Motley Fool's reasons how Disney got itself into this mess:

1. International tourism has taken a hit
Often referred to as poor currency exchange rates, a strong dollar and political volatility overseas will make it much more expensive for Disney World's biggest sources of international visitors, particularly from Britain, Canada, and Latin America countries. Brexit has already taken its toll on the British Pound, but tourism from Brazil, Argentina, and Venezuela have plummeted 10%, 15%, and 34% compared to the same time last year.

2. Disney price hike means visitors are paying 18% during summer peak months
Steep price hikes that Disney implemented in its tiered pricing scheme of peak and off-peak season and price increases for its annual passes have taken a particular toll on the summer peak-season attendance numbers. During peak-season times, like summer, visitors are paying 18% more for single-day park tickets than they did the same time last year. The purpose of this tiered pricing system was to decrease attendance during crowded times of the year, and it seems to have worked too well at the expense of profits.

3. Annual passes are more expensive and more restrictive
Steep price increases for annual passes have made many locals opt for less expensive, lower tiered annual passes which have more block-out dates, including during the peak summer season. As a result, annual pass holders come to the parks less than in previous years. Disney has had to lift the blackout restrictions for the remainder of the summer, but it seems the damage has already been done.

4. New rides coming too slowly
Only one new ride was introduced at Disney World with the opening of Frozen Ever After replacing the Maelstrom boat ride in Epcot. The only other new addition was an program update of Soarin' Around the World. Many rides were shut down in anticipation of upgrades, particularly at Disney's Hollywood Studios, so the consolation of added temporary shows and fireworks displays have not made up for the difference.

5. Anticipation of new attractions have many guests holding out to visit later
Most of Disney World's newest anticipated attractions are still off in the distance and have visitors waiting in the wings for their completion. The River of Light nighttime show at Animal Kingdom is set to open later this year. The Pandora-themed land of The World of Avatar is expected to open next year in Animal Kingdom. And Star Wars Land and Toy Story Land are still in the early construction phases, shuttering many large sections of Disney's Hollywood Studios.

All in all, all factors, except the ones we listed particular to Florida, have together hammered attendance numbers in all the U.S. theme, including Disneyland California. We expect the earning call on August 9th for Disney to be brutal with the stock taking a big hit.


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