All Disney theme parks' attendance numbers are down, industry study reports

The bar graph above from Bloomberg shows that attendance has declined in all of Disney's U.S. theme park operations
The annual Global Attractions Attendance Report from the Themed Entertainment Association (TEA) and AECOM has been released for 2016, and it's bad news all around for the Walt Disney Company because every single one of their theme parks around the world, including in the U.S., saw a dip in attendance for fiscal 2016.

The TEA survey shows a not so bright picture of Disney's theme parks operations
Attendance at Walt Disney World's Magic Kingdom, in Orlando, Florida, was down 0.5% from 2015. California's Disneyland fared far worse with attendance dipping 1.8% compared to 2015. Epcot in Orlando, Florida was down 0.7% from the previous year. Attendance at Walt Disney World's Animal Kingdom was down 0.7%. Disney's Hollywood Studios in Florida was down 0.5%. And attendance at Disney California Adventure in Anaheim, California was down 0.9% from 2015. (See bar graph above on changes in attendance number in all the major U.S. theme parks above and the numbers below.)

Disney's domestic waterparks were not immune to the sagging interest seen in Disney's Florida theme parks and resorts operations.


Attendance at Walt Disney World's two waterparks, Typhoon Lagoon and Blizzard Beach, were down 0.7% and 0.8%, respectively, despite the fact that attendance at the top 20 waterparks in the world grew by 3.6% from the previous year.

It's official: Mickey Mouse is depressed
In its international operations, Disney theme parks and resorts around the world is where Disney's attendance numbers from visitors really flopped.

Disneyland Shanghai only drew 5.6 million visitors, from the world's most populous country, in its first year of operation, landing it only 21st on the TEA/AECOM list. These anemic numbers are less than stellar from the second richest economy on earth.

Attendance at Tokyo Disneyland slid 0.4% from 2015, while its sister park Tokyo DisneySea saw a 1.0% dip in attendance last year. Disneyland Paris fared far worse, dipping more than an immense 14.2% in attendance from the previous year, while its sister park Walt Disney Studios Paris saw a more modest 1.6% decline in attendance during the same period last year. And rounding out Disney's disastrous 2016 attendance numbers, Hong Kong Disneyland saw a whopping 10.3% dip in its attendance numbers compared to the previous year.

There's no doubt that Disney's international theme parks and resorts operations were a complete flop and tanked overall in attendance, revenue and profits last year which would give any investor pause for concern regarding the financial health of the Walt Disney Corporation in the larger scheme of its many different synergistic business operations.
   
   
While Disney is boasting a 9% increase in revenues year-to-year in its theme parks and resorts operations, this number is misleading because, for fiscal year 2015, Disney did not have the benefit of a sixth theme park resort in the form of the new Shanghai Disneyland to contribute to additional revenues.

Visitors to Disney theme parks were down across the board especially in its
international theme parks and resorts operations
By this argument if we apply simple mathematics to the equation, Disney's sixth theme park resort should have increased its segment revenues by at least 1/6th or 16.7%, if the segment was truly prospering as Disney executives want you to believe, instead of the sluggish 9% increase Disney is touting from the year before.

Thus, by this reasoning, Disney's theme parks operations underperformed by about 6.7% year to date.

This assumption is fair given the fact that their newest theme park in mainland China opened to a great deal of hoopla and publicity in the most populous and second most richest country on earth.

Thus, the downturn in overall attendance numbers in theme park attendance—especially in the international theme park operations—is quite concerning if we factor out the contributions from even the disappointing numbers from Shanghai Disneyland.


To give perspective to Shanghai Disney's "much-touted success" in drawing 11 million visitors in its first year of operation in the most populous country in the world, those numbers would rank Shanghai Disneyland alongside Disney World's least popular theme park, Disney's Hollywood Studios, in terms of popularity, whose admission ticket prices are 20-25% higher than in Shanghai.

Shanghai Disney cannibalized a large number of Hong Kong Disney's visitors in 2016
Thus, it appears that Shanghai Disney was not the runaway success that Disney hoped that it would be. The major reason for the failure appears to be Disney's inability to promote its theme parks and business endeavors inside China's tightly-controlled media outlets.

After all, the only way that Disney is allowed to promote the park inside Communist China is through its unorthodoxed but very bizarre English-language educational schools, which they opened inside the mainland as a veiled and desperate attempt to promote its business interests without any media support.


Last time we checked, Disney was known only to be an entertainment company, not an philanthropic educational enterprise. Really? Where's the money in that kind of endeavor? We don't see these same kinds of schools in Japan, Hong Kong, or France, where Disney Channels were allowed to broadcast.

We're not quite sure why Disney chose a region known for summer Monsoon rains
Also, it never made sense to us why Disney would open up a theme park in a region where the anticipated busy summer months are constantly drenched by Monsoon rains.

Disney has always picked locations for its theme parks based on it being a travel destination for tourists and, more importantly, having good weather all year round, especially during the crucial summer months which is considered all theme parks' traditional peak season.

Given the fact that the opening of Shanghai Disneyland in Red China also cannibalizing significant mainland business from one of Disney's many other major struggling international theme parks in Hong Kong, it appears that Disney's theme parks and resorts operations had a significantly off-year in 2016.

In fact, taken together with the complete collapse of Euro Disney in Disneyland Paris, it was a complete disaster on the international front for the House of Mouse.

Thus, it appears Disney's own crafted narrative about its runaway success in theme parks business in fiscal 2016 was all just smoke and mirrors.

   
While the New York Times has suggested that increased prices may have been the reason for the concerning drop in visitors across all Disney theme parks, that argument does not hold water given the fact that the same increased ticket prices did not affect Disney's direct competition, who seemed to have thrived last year in Disney's business fumbles and missteps.

Markets reacted swiftly to the surprising news that
attendance at all Disney theme parks were down last year
For instance, Disney's biggest competitor, Universal Studios, saw a jump in theme park attendance at their major theme parks around the world as they stayed lock-in-step with Disney in raising ticket prices.

Universal Studios Hollywood saw increased attendance numbers of 13.9% compared to the previous year. Universal's Islands of Adventure saw a 6.5% increase in attendance. Universal Studios Orlando jumped more than 4.3% in attendance from 2015. While Universal Studios Japan jumped more than 4.3% in attendance compared to the previous year.

The real reason for the declines, especially in Disney's international theme park operations, was that Disney's offerings in their theme parks became a bit stale and blase for many tourists, who preferred to look elsewhere, and for a better bang for the buck, than what Disney was offering.


Disney did make a very big mistake in increasing its ticket prices when they had very little that was new to offer in their theme parks, especially given the fact that they had put all their eggs in one basket in concentrating on the massive, but disappointing grand opening in their newest theme park and resort in Shanghai, China.

Disney's losses were Universal/Comcast's gains
So it appears Disney's losses were Universal/Comcast's—and other Disney competitors'—gains.

Disneyland competitors in Southern California, such as Knott's Berry Farm and Six Flags Magic Mountain, also saw a rise in attendance, compared to the previous year. Knott's attendance rose 3.8%, while Magic Mountain saw 200,000 more visitors from the previous year, representing a 7.3% increase in visitors.

On the whole, Universal Studios parks in the U.S. saw a 7.5% increase in visitors, while attendance at Six Flags parks were up 4% and Cedar Fair parks were up 2.7%.

SeaWorld is still seeing some repercussions from its "Blackfish" scandal in Florida; however, its location in San Diego may have started seeing some recovery with a flat change in attendance from the year before.


This directly contradicts what Disney officials have been saying on quarterly earnings calls this past year with record profits in its theme parks and resorts division, so what exactly is going on with this apparent contradiction in the fortunes of Disney's second largest business segment?


Well, the truth is: Disney has never been transparent with investors about its attendance numbers, which they have always willingly hidden during their quarterly earnings calls. So that gives them a great deal of license and latitude to play around with revenue and profit numbers to make their theme parks and resorts operations look better when the numbers really don't support the company's claims of such exaggerated and misleading success.


Disney can very swiftly reduce employee work shift hours of its parks and resorts employees and reduce hirings at a moment's notice to make their numbers look good, especially if one of their other business segments are not doing so well (e.g., media networks, movie studios, consumer products and digital interactive.)

Disney theme parks appear to be more empty, especially in Paris and Hong Kong
Thus, the revenue or profit numbers for the theme parks and resorts operations always look good even when attendance numbers are significantly down; however, this artificial manipulation does not reflect how well or how poorly business is doing in Disney's second largest business segment.

That's apparently what's been going on for last year when Disney's media networks and consumer products and digital interactive segments were under-performing Wall Street expectations. Disney tried to make its theme parks and resort operations look good to offset the bad news from the other two sagging business segments.

However, Disney's theme parks and resorts operations were in line with these underperforming numbers, but Disney executives quickly manipulated its staffing needs to make its second largest business segment look like it was performing better than it actually was.
     


But now that we have a more truthful glimpse of their actual attendance numbers, the rosy picture at Disney's theme parks and resorts operations is not that rosy as Disney executives want it to appear after all. We anticipate the news will cause a rough trading day for Disney on Wall Street tomorrow.


Here are the top 25 theme parks worldwide in 2016 and their percentage attendance changes from the year before:
  1. Walt Disney World Magic Kingdom, 20,395,000, -0.5%
  2. Disneyland, 17,943,000, -1.8%
  3. Tokyo Disneyland, 16,540,000, -0.4%
  4. Universal Studios Japan, 14,500,000, 4.3%
  5. Tokyo DisneySea, 13,460,000, -1.0%
  6. Epcot, 11,712,000, -0.7%
  7. Disney's Animal Kingdom, 10,844,000, -0.7%
  8. Disney's Hollywood Studios, 10,776,000, -0.5%
  9. Universal Studios Florida, 9,998,000, 4.3%
  10. Islands of Adventure, 9,362,000, 6.5%
  11. Disney California Adventure, 9,295,000, -0.9%
  12. Chimelong Ocean Kingdom, 8,474,000, 13.2%
  13. Disneyland Paris, 8,400,000, -14.2%
  14. Lotte World, 8,150,000, 11.5%
  15. Universal Studios Hollywood, 8,086,000, 13.9%
  16. Everland, 7,200,000, -3.0%
  17. Hong Kong Disneyland, 6,100,000, -10.3%
  18. Ocean Park, 5,996,000, -18.8%
  19. Nagashima Spa Land, 5,850,000, -0.3%
  20. Europa Park, 5,600,000, 1.8%
  21. Shanghai Disneyland, New 5,600,000 (Opened in June)
  22. Walt Disney Studios Paris, 4,970,000, -1.6%
  23. Efteling, 4,764,000, 1.8%
  24. Tivoli Gardens, 4,640,000, -2.0%
  25. SeaWorld Orlando, 4,402,000, -7.9%

    

Sources:

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