An annual report on theme park attendance trends is rattling industry watchers. Walt Disney (DIS +2.30%) has historically run the world's most popular gated attractions, but it seems that last year some Comcast (CMCSA +1.00%) parks outpaced the House of Mouse in terms of turnstile clicks.
There's more to the third-party admission tallies than meets the eye, but this isn't a winner-takes-all battle anyway. Disney and Comcast's Universal Studios have done a great job of recovering from pandemic-related closures in early 2020, but they've also excelled by pulling different levers. Attendance counts? That's so 2019.
Image source: Walt Disney.
Thank queue
Let's talk about the report. Every year the Themed Entertainment Association teams up with market researcher AECOM Economics + Advisory for a global attractions attendance report. This month's update covers the industry's performance in 2021. Theme parks worldwide increased their guest counts by 72% last year. That was a big jump, but totally understandable. All operators were closed for at least a few months in 2020, with California parks not restarting until the spring of 2021.
The last several years typically ended with five of Disney's six domestic theme parks -- all outside of Disney's California Adventure Park in Anaheim -- on top, followed by Comcast's Florida attractions. Last year was different. Disney World's Magic Kingdom was the top draw in the U.S. in 2021, but the silver and bronze medalists were Universal's Islands of Adventure and Universal Studios Florida.
Has Simba been dethroned? Is Comcast the new Disney?
Not so fast. Both companies have been posting record revenue and operating profits at their theme parks in recent quarters, but this is about more than just a guest headcount. When Disney reopened its parks, it did so with a strict policy requiring guests to make park-pass reservations. The policy initially coincided with Disney World capping daily attendance levels at 25% to 30% of each Florida park's capacity, but even now, when the leash is a little looser, we still see the media giant turning guests away with its reservations policy.
NYSE: DIS
Key Data Points
You won't find too many fans who like Disney's requiring advance passes to ride Space Mountain or spoon into a pineapple Dole Whip. But it's a way to prioritize higher-paying guests paying triple-digit prices for a single day at the park, as well as those staying on-site, over annual pass holders who pay between $1 and $5 a day for year-round access. Financially speaking, the plan is working. Attendance levels are intentionally down, but per capita spending earlier this year was 40% ahead of where it was in 2019.
It's not just about shifting the guest mix to more lucrative infrequent visitors. Disney has also introduced new premium add-ons to get folks on popular rides even faster. New products and higher prices across most offerings give Disney the ability to make more money with fewer guests. Leaning on turnstile clicks instead of average revenue per user is a matter of choosing quantity over quality. Disney's approach is working -- for now.
Comcast's theme parks segment delivered an impressive 65% year-over-year increase in revenue in its latest quarter ending in June. Over the same three months, Disney fared a lot better: Revenue in theme park admissions more than doubled, as did its resorts and vacations segment; merchandise, food, and beverage sales soared 85%.
Neither company is hurting, and in the next few days both should post a blowout summer performance for their theme park segments. Comcast will get there through sheer volume and strategic price increases. Disney will get there by overhauling its pre-pandemic approach to monetizing its iconic attractions.
Disney and Comcast are leaders in the realm of entertainment stocks. It's only right that they prove to be just as entertaining in the way they operate their theme parks.
