Disney Shareholder Meeting Revelations – Loyalty Program to Replace Passholder Program at Disneyland

Bob Chapek led the Walt Disney Company’s shareholder meeting today. While these meetings always focus on earnings, there are almost always nuggets of information that Disney Parks fans will find interesting. Today’s meeting reveals that park capacity is increasing at Walt Disney World, masks will soon be going away, and the Annual Pass Program at Disneyland is being replaced with a “Loyalty/Affinity Program.”  


Disney Company Earnings

The good news for Disney investors is that the performance of the company has increased by 32% over the last quarter ($0.79 from $0.60 in the prior-year quarter). However, Disney Parks, Experiences and Products segment continued to be the biggest drag on the company as a result of closed parks, parks operating at reduced capacity, and a closed cruise line during the quarter.

“We’re pleased to see more encouraging signs of recovery across our businesses, and we remain focused on ramping up our operations while also fueling long-term growth for the Company,” said Bob Chapek, Chief Executive Officer, The Walt Disney Company. “This is clearly reflected in the reopening of our theme parks and resorts, increased production at our studios, the continued success of our streaming services, and the expansion of our unrivaled portfolio of multiyear sports rights deals for ESPN and ESPN+.”

Streaming continues to be a success story for Disney with 104 million paid streaming subscribers by the end of the quarter.  

Disney has transformed its business during the pandemic, notably through a change in distribution for its content. While some upcoming films will be released in theaters as in the past, many more will simultaneously be released in theaters and streaming at the same time, some will charge extra for “Premiere Access,”  and some will go straight to streaming.  


Disney Parks Performance and Updates

While Disney Parks, Experiences, and Products lagged the rest of the company, it wasn’t all bad news. Guests spending in open parks increased by double digits. The parks which were open were all able to make more than they lost. But, overall, revenues for the unit decreased 44% to $3.2 billion in the quarter, for a loss of $406 million. 

, Disney Shareholder Meeting Revelations – Loyalty Program to Replace Passholder Program at Disneyland

Losses in the parks were partially offset by the strong performance of Disney’s consumer products business, where increases in merchandise and games licensing revenues were fueled by Star Wars, Disney Princesses, and Mickey and Minnie. But there was a decrease in revenues from merchandise based on Frozen.

, Disney Shareholder Meeting Revelations – Loyalty Program to Replace Passholder Program at Disneyland
Minnie Floral beneath Shanghai Disneyland’s fake train station (they have the station, but no train)

Although Walt Disney World and Shanghai Disney remained open throughout the quarter, Disneyland Resort and Disneyland Paris were closed, along with the Disney Cruise Line. Hong Kong Disneyland Resort was open for approximately 30 days during the quarter. But even the parks which were open operated at significantly reduced capacities.

, Disney Shareholder Meeting Revelations – Loyalty Program to Replace Passholder Program at Disneyland
Walt Disney World gets ready for its 50th Anniversary Celebration this October.

One of the highlights of the call was Bob mentioning that after 412 days closed, Disneyland has reopened at long last. Bob Chapek and Bob Iger stood on Main Street USA welcoming guests back into the park on opening day and the energy was incredible. 

We captured both Bobs on Main Street and you could see the smiles under their masks. 

You can see the moment that guests returned to Disneyland for the first time in over a year, including the moment the Bobs greeted guests in our live video coverage of the reopening of Disneyland here: 

We also captured the moment Bob Chapek welcomed cast and crew back to the parks in a private ceremony on Main Street early on the morning of April 30th.  You can see that special moment here: 

Although Bob didn’t bring it up, the financial results for the parks show that capital expenditures (mostly construction of new attractions and facilities) decreased by almost one billion compared to the previous year – from 2.6 billion to just over 1.5 billion in the quarter completed April 3rd. 

, Disney Shareholder Meeting Revelations – Loyalty Program to Replace Passholder Program at Disneyland

, Disney Shareholder Meeting Revelations – Loyalty Program to Replace Passholder Program at Disneyland

During the question and answer session, some interesting details emerged about park operations. 

  • Bob mentioned that Walt Disney World has already raised its park capacity. So if Disney World feels more crowded to you, it is! He also mentioned that due to recent CDC guidance, he thinks capacity will increase even more. “I think you’re going to see an immediate increase in the number of folks that we’re able to admit into our parks through our reservation systems that we recently implemented. So we’re very, very excited about that.”
  • Bob mentioned the big news today from the CDC about mask guidance, stating that vaccinated individuals don’t necessarily need to wear a mask outdoors or indoors. He hinted that this will be a big deal to folks visiting WDW in the hot summer, which indicates he expects the parks (at least in Florida) to change their mask policy soon.

UPDATE: Disney followed up on Bob’s comments with an official statement: “Today’s guidance from the CDC allowing fully vaccinated individuals to remove masks and the removal of physical distancing requirements is extremely positive news and as soon as is practical we will implement updated guidelines across our businesses.” 

  • 80% of cast members who have been asked to return have done so. But that also means that 20% have not returned after being given the opportunity. That’s a huge amount of attrition during a tight labor market.  
, Disney Shareholder Meeting Revelations – Loyalty Program to Replace Passholder Program at Disneyland
Expect more discounts and perks, but not unlimited park access
  • Pricing and programming of tickets has been rethought. At Disneyland, the Annual Pass Program was killed prior to park opening. Rather than a new passholder program, Disneyland will implement a park loyalty/affinity program, as we had previously explained here on MiceChat (don’t believe those who tell you a “Pass Program” is returning).  
  • Finally, Bob says that the newest Disney Cruise Ship, the Disney Wish, is amazing and includes the AquaMouse “attraction at sea.” Tickets go on sale May 27th. MiceChat will be sailing on the Disney Wish on July 4th of 2022. If you are interested in joining us, please contact [email protected].  

 

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