If there was one thing that didn't come as a surprise in Disney's (NYSE:DIS) quarterly report on Tuesday afternoon it's that its theme parks are hurting for turnstile clicks. The media giant confirmed that it experienced lower attendance for the quarter. It went on to elaborate during the call, revealing that its domestic theme parks suffered a 4% dip in attendance.
Disney didn't break out how deep the decline was at Disney World relative to Disneyland, but it wouldn't be a shock if Disney World guest counts were off by more than 4%. Three months earlier it was lighter crowds at Disney World offset by a gain at Disneyland. SeaWorld Entertainment (NYSE:SEAS) announced last week that attendance across its parks were off by 4% through the first half of the year, but it was the result of a decline in Florida that ate into overall attendance growth outside of the Sunshine State.
I offered up five reasons why attendance is down at Disney World last month. Now let's dive into the reasons why the crowds will come back.
1. The perfect storm will pass
There are so many things working against Disney this summer. The Pride nightclub shooting, Grand Floridian alligator attack, and Zika virus outbreak have all kept enthusiasm about visits to Florida in check. Turmoil through Latin America and the Brexit vote have strengthened the U.S. dollar, making it more expensive for international tourists to hit up Florida.
There will always be challenges, but there are unlikely to be so many roadblocks to a trip to Disney World in the future.
2. Single-day tickets will get cheaper in the offseason
If you buy into the thesis that skyrocketing ticket prices kept guests away this summer you may want to circle Aug. 22 on your calendar. Disney shifted to tiered pricing earlier this year, a move that finds folks buying single-day tickets paying as much as 18% more this summer than they did a year earlier. Annual passes and multi-day tickets also moved higher, but not as dramatically as one-day admissions. A single-day ticket to the Magic Kingdom in June and most of July that would set you back $125 dropped to the regular season price of $110 two weeks ago. Come Aug 22. -- when local students return to the classroom -- we enter value season pricing of $105.
Let's frame this in a mind-blowing perspective. Disney has increased its single-day ticket prices every year since 1998. The shift to tiered pricing filled in as this year's increase, but it comes with an odd wrinkle during value season since it remains the same as the year-round rate from before. Outside of a few days in February and early March, Aug. 22 will be the first time that single-day ticket prices are the same as a year earlier in 28 years.
3. Annual passes blackout dates are coming to an end
Another day to circle is Thursday, because that's when the summer blackout period for most of Disney's annual passes expire. Disney introduced new annual passes late last year, and most of the more economical options come with lengthy periods of time when that are not valid. That includes the peak summer season that began in early June, but that restriction is now lifted.
If the weak attendance trends continue it wouldn't be a surprise if Disney World eases the blackout restrictions on its passes. Crosstown rival Universal Orlando did this last month, and it's holding up better than Disney World these days.
4. New rides and lands will bring folks back
If you visited Disney World last summer or even two summers ago there isn't a lot that you haven't already experienced. Shows and parades may be different, but outside of the downtime-riddled Frozen Ever After boat ride and the globally updated Soarin' Around the World attraction (with its own issues involving realism shattering CGI and warped projections if you're not sitting dead-center) there isn't a lot to woo tourists looking for incentives to return to the House of Mouse.
That will change, and soon. A Pandora-themed expansion will open at Disney's Animal Kingdom next year, and even the long-neglected Typhoon Lagoon water park will get a new slide. A few years later we'll see the rebirth of Disney's Hollywood Studios -- likely rebranded under a new name -- when Star Wars Land and Toy Story Land open.
New rides will always have more drawing power than the cheaper shows, parades, and fireworks displays that Disney has been leaning on lately.
5. Even SeaWorld is bouncing back
Attendance across SeaWorld's parks rose 4% in July, the marine life park operator revealed last week. Disney didn't offer a glimpse on improving guest counts at its parks since the end of the fiscal third quarter, but it wouldn't be a shock to see it start to recover. If SeaWorld is regaining visitors, the world's most popular theme park resort surely must be making some headway on that front.
Rick Munarriz owns shares of SeaWorld Entertainment and Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.