Disney World Is Bringing Back a Big Moneymaker
Character dining is returning to more locations at Disney's Florida resort, and that's big business for the House of Mouse.
Things have been gradually returning back to normal at Walt Disney's (DIS -1.61%) theme parks. But it's been a slow process. Disney World's gated attractions reopened two years ago after the initial COVID-19 closure. Disneyland opened nine months later. It wasn't until earlier this year that all of Disney World's hotels were back in business. Many popular shows, restaurants, and entertainment options have only come back online in recent weeks.
On Wednesday, Disney's resort in Florida announced that it will bring back three more character dining experiences in the coming months. If you know Disney's theme parks, you probably know that this is is a pretty big deal.
It's a character study
Meeting iconic characters at Disney World's theme parks and resort hotels is part of the travel experience. Costumed cast members are freely accessible to help and entertain folks once they click through the turnstiles, but things get taken up a notch when it comes to character dining. Families pay as much as $55 to $60 per person to have a meal at a restaurant as folks dressed up as the stars of Disney's animated classics make the rounds.
It's a sweet business model. The full-course meals or buffets would run about $20 less at a Disney restaurant without the character interactions, and they would be even half that price at eateries outside the massive Disney World complex. In short, it's a high-margin money machine. The themed meals may seem outrageously priced, but they are routinely the hardest reservations to square away for vacationers.
If character dining is such a big part of the moneymaking madness at the House of Mouse, why did it take this long to return? Well, it's only recently that Disney relaxed the pandemic-related restrictions keeping characters from close contact with park guests. There are also staffing issues, particularly for face characters that resemble the Disney princesses and other face-bearing characters.
It will only help Disney's bottom line at this point, and that will only make a great situation even stronger. Disney's theme parks have been resilient, recently returning to record revenue and operating profitability. Disney World and Disneyland have been prioritizing their more lucrative guests, introducing premium add-ons to enhance the visits. Per capita spending at domestic parks in its latest quarter was 20% ahead of where it was a year earlier. More importantly, per capita spending is a whopping 40% above where things were in the fiscal second quarter of 2019 -- before the pandemic shutdown.
Momentum is only getting stronger. A post-pandemic record number of passengers traveled through U.S. security checkpoints over the holiday weekend last week. A global recession or a more potent pandemic surge could derail the dramatic turnaround at Disney's theme parks, and as a bellwether among leisure stocks, Disney won't be immune to a worldwide setback. But for now, it's hard to bet against the renaissance at the world's largest theme-park operator. Things are going well, and in the coming months the dinner bell is going to be ringing even louder.
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