Disney (DIS +2.26%) had a rough year wooing theme-park visitors last year. The media giant doesn't typically offer up annual theme-park numbers, but industry tracker Themed Entertainment Association has been offering up its estimates for years -- and on Thursday, it put out some bleak numbers for the House of Mouse.
All four of Disney World's theme parks, and even its two water parks, suffered slight declines in 2016. None of the six Florida parks experienced a decline worse than 0.8%, and the setback really isn't a surprise. Disney detailed how Disney World attendance declined in three of the four quarters during the 2016 calendar year as the past few quarters played out.
Declines are rare for Disney -- and potentially problematic since it keeps adding more hotel rooms and timeshare rentals to its massive resort. I already went over how Disney, by taking its brand for granted, is letting its biggest rival catch up. Let's go over why turnstile clicks won't be declining for a second straight year at Disney.
Image source: Disney.
1. Pandora changes everything
Disney officially opened Pandora -- The World of Avatar last weekend, and while there were concerns about the relevance of the dated and non-Disney-owned Avatar franchise, there's been no shortage at Disney's Animal Kingdom to check it out this week. The crowds will continue well into the summer -- and beyond.
The 12-acre expansion will transform Disney World's third most popular park into an all-day and all-night destination. Disney's Animal Kingdom used to routinely close at sunset, but now its operating hours have bumped up to an 11 p.m. close, with Disney resort guests able to stay an extra two hours. The only Disney park that used to close early on New Year's Eve has grown up, and all of the praise and attention that Pandora is generating will draw record crowds to its resort this year.
2. Don't snooze on Toy Story Land
No one's going to deny that Star Wars Land -- set to open in 2019 -- will be gargantuan. It's Disney's iPhone 8, and I'm not even including it in this article because its dramatic impact goes without saying. However, Disney is quietly building Toy Story Land right next to Star Wars Land.
There's no reason why it won't be ready before Star Wars Land, even if Disney hasn't announced an official opening date for the new Pixar-themed experience. My theory is that Disney's holding back on announcing the early arrival of Toy Story Land so it doesn't get in the way of tourists planning visits this summer to check out Pandora.
Disney needs something new in 2018, and wedging in the opening of Toy Story Land between the larger Pandora and Star Wars Land projects would be just enough to keep this year's momentum from fizzling out in 2018 as tourists start planning their 2019 trips.
3. Keeping greed in check
Disney let ticket pricing get ahead of itself last year. Switching to tiered pricing translated into single-day tickets going up as much as 18% for visits during peak summer and holiday seasons. Disney wasn't as greedy this February, when it added a milder annual increase to its one-day passes. It actually kept peak pricing intact, choosing, instead, to nudge prices higher for its two cheaper tiers by 2% to 5%.
It's unlikely that Disney will remain modest with its pricing approach when Star Wars Land opens in 2019, and it's also possible that it may let Pandora's big opening get to its head when next February's price hike rolls around. We'll see how it all plays out, but Disney learned a painful lesson about pricing elasticity last year. It's not going to forget the attendance drop of 2016 as it bounces back in 2017.
