The Walt Disney Co. (NYSE:DIS) grew income 20% last year in its theme park segment, which already makes up about a third of the company's total revenue. Even though Disney opened its first U.S. theme park in 1955, excitement over Disney's theme parks isn't slowing, and during the 2014 holiday season, Disney parks in Florida and California had to turn guests away when the parks on both coasts reached capacity.
However, it's not just U.S. theme parks setting visitation records. In 2014, parks in Tokyo and Hong Kong also set records, not to mention that Hong Kong Disneyland is potentially going to double in size. Meanwhile, Disney fans in China are awaiting Disney Shanghai, which is expected to be the most-visited park in the world and is slated to open in less than a year. Here's why this international theme park growth is so important to Disney and its shareholders.
Disney sets records in Japan and Hong Kong
Disneyland Tokyo and DisneySea Tokyo welcomed a combined 31.8 million guests in 2014, marking the third year in a row of record visitation at Disney Tokyo. Disneyland Tokyo on its own had around 17 million guests in 2014, which was only 1.6 million fewer guests than Disney's current most-visited park, Magic Kingdom in Orlando.
Hong Kong Disneyland also recorded a record number of visitors in its most recent fiscal year (7.5 million), the fifth consecutive year of record revenue, attendance, and guest spending. Because Hong Kong Disneyland has become an integral part of Hong Kong's overall tourism, Hong Kong officials want to ensure the park keeps up with a growing number of visitors.
The government of Hong Kong, Disney's partner in building the park, now wants to double the size of Hong Kong Disneyland from 1.1 square kilometers (currently the smallest Disney park). However, even doubled in size, it would pale in comparison to its coming counterpart north in Shanghai.
The biggest international expansion yet
Disney Shanghai will be Disney's largest expansion out of the U.S. yet. While the company has already done very well in Hong Kong, Disney Shanghai will be the company's first resort to open on the Chinese mainland. With a massive $5.5 billion price tag and covering nearly 4 square kilometers (1,000 acres), it is going to be much more impressive than Disney's other Asian parks to date.
Disney Shanghai is expected to be the most-visited theme park in the world. Magic Kingdom in Orlando, Fla., might draw as many as 20 million guests in 2015. Disneyland Shanghai is expected to have 25 million guests during its first full year. The park was initially planned to open in late 2015, but is now planned for an early spring 2016 opening, hopefully in time for Chinese new year in February.
Prices are increasing, too
While Disney parks continue to record record visitation worldwide, ticket prices are also going up. Entry ticket prices have steadily increased in the last few years, not only at Disney's U.S. parks -- where the most recent price increase put an adult ticket over $100 for the first time -- but also at Tokyo Disney, which jumped this year from 6,400 yen (about $54) to 6,900 (about $58) for a single-day adult pass.
And yet the theme is the same: Even with rising entrance prices, these parks admit more guests then ever. With an expected $11 billion in theme park revenue from Disney's U.S. parks alone in 2015, total segment revenues could be around $18 billion or more. When Disney Shanghai is open in 2016, expect that number to shoot up even further.
Editor's note: This story has been updated to correct the year when Disney's first theme park opened.
Bradley Seth McNew owns shares of Walt Disney. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of 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.
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