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Theme park revenue key to Disney topping forecasts

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Theme park revenue for The Walt Disney Company increased 13% to $5.2bn in the first quarter of 2018. The increase played a key role in the company outperforming Wall Street forecasts as it was the only division to post a higher operating profit.  

The success of Disney parks and resorts was driven by new attractions such as Pandora – the World of Avatar in Orlando, which helped increase attendance by 6% across the company’s US theme parks. The Guardians of the Galaxy ride at Disneyland Resort in California also proved popular.

Increased attendance was seen at international parks, with Shanghai Disney Resort receiving between 65,000 and 68,000 visitors on one day in October, Disney CEO Bob Iger said in a conference call with investors.

Disneyland Paris also experienced higher attendance and increased average ticket prices, both of which benefited from the 25th Anniversary celebrations at the park.

“Guest spending growth was due to higher average ticket prices, food, beverage and merchandise spending and average daily hotel room rates,” the earnings report stated. The increase was partially offset by higher costs.

The $5.2bn in revenue is a record high for the theme park division, the company said. Analysts had predicted revenue of $4.87bn. The division also saw growth in its cruise business, contributing to an operating profit of $1.35bn, a 21% increase.

Iger said: “It deepens our confidence in the significant investments we’re making to grow the business around the world.”

In the call with investors, Iger did not reveal when Toy Story Land in Orlando would open but confirmed that the one under development at Shanghai Disney Resort is due to launch on 26 April 2018.

At 4-hectares, Toy Story Land in Orlando will be significantly smaller than Star Wars – Galaxy’s Edge, which will open at the resort in 2019, but he is still confident it will draw visitors.

“They’re large enough,” Iger said. “We feel good about that.”

Meanwhile, Disney’s other divisions all posted declines in operating profits. Cable TV fell 1%, Films 2%, Consumer Products 4% and Broadcast TV slid 25%.

Last month, Comcast, the parent of NBCUniversal which owns and operates Universal parks and resorts around the world, reported a 7% theme park revenue increase to $1.5bn in the fourth quarter of 2017.

Image: c. Walt Disney Company.

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