Over the past a number of months, there have been a number of indicators that Walt Disney World is more and more reliant on excessive earnings visitors to gasoline the parks & resorts’ robust efficiency and development. This covers client spending information, statements from Disney’s CFO, how the wealthy rescued the theme parks business from a spending hunch, our commentary about this sample.
Let’s begin with the newest growth, which is that Disney CFO Hugh Johnston has confirmed that Walt Disney World and Disneyland had a powerful yr because of visitors at larger earnings deciles, as these customers “proceed to do effectively.” He went on to clarify attendance and per visitor spending tendencies, and the way Disney elevated the latter whilst the previous was down.
Johnston made these feedback whereas talking on the 2025 Wells Fargo Expertise, Media, and Telecom Summit–the identical occasion the place he confirmed that Dynamic Pricing is Deliberate for Walt Disney World and Disneyland. Johnston is considered one of Disney’s senior executives, and is instrumental in setting and guiding the corporate’s enterprise methods. He came to visit from Pepsi a few years in the past, and is beloved by Wall Avenue.
Through the Wells Fargo Summit, Johnston was requested questions in regards to the firm’s most up-to-date earnings name, throughout which he beforehand shared that Walt Disney World Nonetheless Isn’t Fearful About Epic Universe Amid Attendance Lower & File Outcomes. The moderator pointed to the downtrend in attendance, and requested in regards to the well being of the American client that Walt Disney World and Disneyland are seeing, and the general story of demand for the parks?
Johnston revealed that the core client for Walt Disney World and Disneyland “tends to be on the larger earnings deciles, and people customers proceed to do effectively. So we actually broadly be ok with the place the patron is.”
Johnston went on to clarify that the Disney Parks & Resorts had a powerful yr final yr. The corporate initially issued steerage for six% to eight% working earnings development, and delivered 8%. The parks hit $10 billion of working earnings for the yr, which was the primary time they’ve ever reached the $10 billion milestone.
Johnston pointed to that quantity to underscore why the corporate felt “very, superb” in regards to the Parks & Resorts. As for the home parks, he stated that these parks (which, as a reminder, consists of Disney Cruise Line) grew earnings 8% for the yr and 9% within the fourth quarter.
He reiterated that, attendance for the home parks was down 1% final yr. Once more, that is one thing we’ve already mentioned at size within the commentary to final week’s earnings report. (We additionally mentioned the overperformance on the lodge aspect, which is arguably the larger story that Johnston didn’t contact on on the Wells Fargo Summit.)
Johnston identified that there was “a whole lot of concern going into the yr” for Epic Universe, and that he felt Disney had managed it effectively. He stated the parks’ efficiency post-Epic Universe got here in inside our expectations. He additionally added that the attendance decline could possibly be defined virtually fully by the hurricane scares within the first quarter of Disney’s fiscal yr.
That is additionally one thing we’ve coated beforehand. These storms had been so impactful that the corporate straight addressed them on a number of earnings calls over the past yr, warning that Walt Disney World working earnings could be adversely impacted by roughly $130 million because of storms. Hurricane Milton prompted the parks to shut and had a protracted tail of decrease crowds because of cancellations within the days and weeks afterwards.
And actually, primarily based on the wait instances information we noticed, October 2025 was up pretty significantly year-over-year, suggesting that the majority (if not all) of the destructive attendance could possibly be attributed to Hurricanes Helene and Milton. Each of these occurred lengthy earlier than Epic Universe; that means that Common’s new theme park has, to date, had no affect on attendance at Walt Disney World.
Johnston defined, basically, that basically flat attendance was regular in a yr with none main new additions. That in years when Walt Disney World or Disneyland add new sights, you’ll see “attendance jumps.” However after they’re not, attendance is mainly about stage.
He added that, over the long term, Disney balances attendance development with pricing development. Though in any given yr, development “could possibly be extra geared in the direction of one versus the opposite.”
Regardless of flat attendance, Johnston defined that per visitor spending (or per caps) had been “really fairly good” final yr, with home development of 5%. He stated that Disney “felt very, superb about that.” On the threat of (re)stating the apparent, that is exactly how Disney achieved file income regardless of decrease attendance (and why this subject is such a sizzling one). It’s a simple arithmetic downside–a smaller pool of individuals spending extra cash.
Johnston additionally dropped a statistic that I hadn’t heard shortly however actually shall be utilizing in future posts: “It’s necessary to appreciate is just about 40% of the individuals who attend our parks really keep on considered one of our properties.”
The final I had heard, it was about 50/50 on-site versus off-site. It’s good to have an up to date quantity for future use when making my level that, really, Walt Disney World must construct extra motels–that room stock is not the issue relating to crowds.
That is one thing we coated just lately within the aptly-titled Why Walt Disney World Resort Motels Nonetheless Promote Out Regardless of Decrease Crowds. It was additionally one of many factors in What Walt Disney World Followers Get Mistaken About Crowds. Extra on-site room stock could be a internet optimistic for visitors, particularly relating to pricing. However I digress.
The moderator then circled again to the query about higher-income customers being the core constituency for Walt Disney World and Disneyland, asking in regards to the notorious yield administration strategy to enhancing margins.
Johnston defined that the corporate “very a lot” focuses on learn how to generate incremental income, by way of ticket costs, in addition to on meals & beverage, merchandise, and upcharge choices, resembling Lightning Lanes and VIP excursions.
He added that the crew has gotten more and more higher at getting that yield up, notably in years the place we’re not including capability in a specific park that’s going to be the first development driver is all of that yield focus.
This was the place the dialog segued into dynamic pricing, as a solution to improve yield sooner or later. (As we identified, that is the purpose with dynamic pricing–they’re not investing a ton of cash in new infrastructure to make costs cheaper, on common. However all of you already knew that. I’m preaching to the choir.)
Truthfully, Johnston’s feedback on the Wells Fargo Summit on their very own wouldn’t be all that attention-grabbing or worthy of a standalone article. Not like Walt Disney World’s core viewers being larger earnings is breaking information–simply worth out a trip package deal for the Average or Deluxe Resorts!
Nevertheless, they comply with up a few attention-grabbing tidbits from final week’s earnings calls, in addition to articles over the past a number of months about how theme parks are more and more reliant on the wealthy. When pieced collectively, all of this does paint an enchanting story.
For one, that is an ongoing ‘dialog’ (and trigger for concern). Final August, Johnston conceded that there there was “softness within the home parks.” At the moment, he added that the decrease earnings client is “feeling stress,” whereas larger earnings customers are touring internationally extra.
That is comparable sentiment to what quick meals chains and retailers have reported throughout their earnings requires the final year-plus. There’s a purpose why McDonald’s introduced again Further Worth Meals and different eating places are aggressively courting their downmarket prospects. If McDonald’s and different quick meals chains are shedding lower-income customers, it stands to purpose that premium-priced theme parks are dealing with the identical challenge.
Throughout a few of these similar earnings calls, Johnston has indicated that Disney has tried to carry costs regular for lower-priced choices on the parks and that a lot of the worth will increase have been concentrated amongst premium packages or throughout high-demand dates. He added that the corporate desires to “faucet in to these households and construct the behavior of coming to Disneyland or Disney World, not one time, however a number of instances.”
On the newest earnings name, in November 2025, Johnston reiterated that Epic Universe has been in-line with expectations for Walt Disney World. He added this: “If something, it appears to be impacting the remainder of the competitors down in Florida greater than it’s impacting us. From a client perspective, we actually be ok with it.”
This implies that the “rising tides” thesis is likely to be appropriate, at the least for the 2 huge gamers in Central Florida. The true casualties is likely to be the downmarket choices, that are already feeling the squeeze in Orlando and past, particularly as extra price-sensitive customers reduce on spending.
We’ve puzzled whether or not this would possibly really be the case for some time. That it wouldn’t be Common or Disney that take successful, however moderately, the smaller gamers that exist and subsist (kind of) by selecting up the desk scraps. It’s fully doable that each Common and Disney develop stronger, whereas additionally transferring additional upmarket.
As that occurs, the marketplace for different Central Florida sights would possibly dry up. Prosperous visitors have fewer days to spare given the compelling causes to spend extra time at Common and Disney. And decrease earnings visitors aren’t drawn to Central Florida within the first place, since Common and Disney priced them out.
There was additionally an illuminating piece in Forbes titled Don’t Blame the Wealthy for Theme Parks’ ‘Lackluster’ Summer time.
That shared new information illustrating how decrease and middle-income People spent much less at regional theme parks this summer time, whereas prosperous vacationers spent greater than earlier than at pricier Disney and Common locations. This divergence revealed a premium product fault line that has come to outline the journey business.
General spending at U.S. theme parks was down 5% this summer time in comparison with the identical season final yr, based on Client Edge, which analyzed year-over-year bank card spending information from Could by way of August for Forbes. That demonstrated that weak spot was attributable to visitors incomes beneath $100,000 per yr.
Nevertheless, that general development didn’t apply to the Disney and Common theme parks. Customer spending over roughly the identical timeframe elevated 8% at Disney parks and a whopping 22% monthly this summer time at Common, pushed by Epic Universe park in Orlando, based on information from Bloomberg Second Measure. (Price mentioning that Common “traded” pricier packages for larger attendance–which turned out to be the right transfer–thus explaining that 22% leap.)
It was a really completely different summer time for parks that focus on visitors on the decrease finish of the earnings spectrum. United Parks & Resorts, whose portfolio consists of SeaWorld, Busch Gardens and Sesame Place properties, noticed a 4% year-over-year decline in customer spending, based on that very same information from Bloomberg Second Measure.
Six Flags Leisure Group, which owns a portfolio of 27 regional amusement parks, 15 water parks, and 9 motels throughout 17 states, noticed an 8% year-over-year decline in spending this summer time, per Bloomberg information.
All of this information paints an image of spending that’s bifurcated amongst earnings ranges, with low to center earnings customers spending lower than final yr and prosperous People spending greater than ever earlier than. That is hardly distinctive to theme & amusement parks.
This sample echoes the remainder of the journey business, the place main airways and lodge corporations downgraded their monetary outlooks for 2025 within the spring. Of their quarterly earnings experiences, main U.S. airways repeatedly famous softening demand for essential cabin seats with continued strong demand for premium seats.
The hospitality business has seen the identical cut up in demand, with funds and mid-range lodge manufacturers faring worse than luxurious manufacturers on this financial system.
On Marriott’s latest earnings name, its CFO famous pointedly that regardless of “ongoing financial uncertainty,” the corporate was “extraordinarily effectively positioned” within the luxurious phase, which accounted for almost all of Marriott’s rooms and had been “anticipated to proceed to properly outperform lower-end chain scales globally.”
Because of this cut up, the journey business has adjusted its technique to chase higher-spending prospects. Airways are lowering their stock of financial system seats and changing them with fewer premium cabins, whereas motels are changing commonplace rooms with suites.
Walt Disney World has been much less aggressive in doing this, usually as an alternative changing lodge rooms to Disney Trip Membership villas. Comparable animating thought, completely different means to that finish. The truth is, regardless of the entire new lodge building, Walt Disney World’s lodge stock is definitely decrease right this moment than it was a decade in the past.
With out having any supporting information, it’s most likely protected to imagine that new DVC patrons are largely from the highest 20%. There’s a purpose that Disney Lakeside Lodge is full steam forward on building regardless of a number of different properties in lively gross sales, and direct DVC gross sales proceed to point out robust development. In the meantime, Disneyland has been increasing its stock of premium suites and is including extra Membership Stage stock to its resorts.
By way of commentary, I don’t actually know what to say that hasn’t already been stated. We coated this subject at size again within the spring in Walt Disney World is Fearful About Its Excessive Costs and its progeny of posts.
We took {that a} step additional in Is Walt Disney World Too Costly for Center Class People? by digging into information. That coated the common prices of a Disney trip, typical client spending on journey at completely different earnings brackets, and extra.
That additionally coated information indicating that the highest 10% of People account for 50% of all client spending in america. This can be a file going again to 1989, based on U.S. Federal Reserve information. Three many years in the past, the highest 10% accounted for about 36% of client spending. Households making about $250,000 a yr or extra are spending freely on every part from luxurious items to extravagant holidays, whereas decrease earnings households will not be.
Based mostly on all of that–every part from McDonald’s prospects being priced out and the chain needing to deliver again the Further Worth Meal to Walt Disney World’s feedback and actions–it appears clear that that is extra of a bigger-picture downside and never a distinctly Disney challenge. When the CEOs and CFOs of numerous corporations are saying kind of the identical factor and altering their methods accordingly, that implies one thing systemic.
In fact, our focus right here is Disney, so it is sensible that we’d analyze this by way of a Disney lens. There are additionally the general public feedback of the businesses founder, and his unique intentions for his theme parks.
Disney is arguably among the many most distinctly American corporations, and it’s one thing of a bellwether for center class People because of this. And for mainstream media just like the New York Occasions or Wall Avenue Journal, utilizing Disney parks as a proxy for financial anxiousness (and so forth.) performs effectively with its prosperous viewers for quite a few causes.
Finally, if you need extra considerate evaluation about this, we’d once more refer you to Is Walt Disney World Too Costly for Center Class People? That is an attention-grabbing development, however it’s positively not a brand new one!
We’d additionally as soon as once more reiterate that it’s seemingly that Walt Disney World and the journey business as an entire will proceed to goal upmarket. The entire information and earnings calls and every part else since we final tackled this subject within the spring suggests that is essentially the most viable enterprise technique within the near-term, particularly with rising financial uncertainty and declining client confidence. If there’s a recession or downturn, Disney and different corporations appear to consider that the easiest way to climate it’s searching for out prosperous customers.
For our half, we proceed to consider that Walt Disney World’s bread and butter is the center class (realistically, most likely the higher center class). That regardless that rich visitors will not be the corporate’s core clientele in the long run, Disney will nonetheless proceed focusing on that phase with new and differentiated product choices as a result of, that’s clearly the place the cash and development potential lie. For now.
This upmarket technique will work…till it doesn’t. There are numerous causes as to why that might occur, however it might pose issues for the corporate. The potential for these points will increase within the long-run as client perceptions more and more view Walt Disney World as a vacation spot for the rich. (One thing additionally mentioned comparatively just lately in Disney’s Popularity Falls to Solely “Truthful.”)
As soon as that center class reputational injury is finished, it’s laborious to undo. That is exactly why we’ve repeatedly emphasised the significance of enhancing the visitor expertise and satisfaction, in addition to the massively destructive long-term ramifications to pricing out households and alienating longtime followers. Wealthy People have extra money to spend on fancy one-off rite-of-passage holidays, however it’s nonetheless center class households which are the lifeblood of Walt Disney World.
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YOUR THOUGHTS
Stunned Disney is publicly admitting that its key demo is larger earnings visitors? What do you consider Walt Disney World and Common seeing their outcomes over the past a number of months buoyed by rich customers? Can Walt Disney World maintain itself with these big-spenders? Or do you agree with our evaluation that Walt Disney World is inherently a center class vacation spot, and it wants this bread & butter demo? Any questions we may also help you reply? Listening to your suggestions–even if you disagree with us–is each attention-grabbing to us and useful to different readers, so please share your ideas beneath within the feedback!
