Photo by Bayley Clark
The Walt Disney World Resort is a global vacation destination that attracts millions of visitors each year. Among its parks, Magic Kingdom Park stands as the most visited in the world, followed by Epcot, Hollywood Studios, and Animal Kingdom.
With numerous revenue streams from parks and media ventures, Disney is able to generate substantial profits. In this article, we will explore how the company earns and allocates its money. While the specifics of Disney’s financials may not always be crystal clear, we will rely on public earnings information combined with insider insights to uncover the ways Disney World generates revenue.
It is important to note that the COVID-19 pandemic significantly impacted Disney’s attendance and profits in 2020. Although Walt Disney World parks were closed for only four months, other parks worldwide experienced longer closures. Additionally, guests’ health concerns have prompted Disney to adapt its business model, prioritizing digital enterprises such as Disney+.
Previously, Disney’s parks aimed to attract as many guests as possible to its resorts. In the fourth quarter of 2019, right before the pandemic hit, the parks segment brought in $6.6 billion in revenue, with operating costs of approximately $1.3 billion. It’s worth mentioning that Disney cruise line earnings are included in the overall revenue figures of Disney Parks.
During peak holidays, some parks reached their maximum capacity, accommodating around 95,000 guests in Magic Kingdom and 105,000 guests in EPCOT. The attendance numbers for Disney’s Hollywood Studios and Animal Kingdom are unknown but are likely lower due to park size and attraction capacities.
Currently, Disney focuses on maximizing guest spending at the resorts rather than on maximizing total guests. In the most recent quarterly earnings report, Disney posted revenues of $7.4 billion, with operating costs of $2.1 billion, successfully executing their strategy.
Disney World generates an estimated $20 million per day through a combination of revenue sources, including resort stays, ticket sales, and food and merchandise purchases. When considering the entire Walt Disney Company, the figure increases to close to $60 million per day.
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How does Walt Disney World make money?
The average daily attendance at Magic Kingdom is around 50,000 people, with the average ticket price being approximately $100. Guests often purchase tickets bundled for multiple days, reducing the cost per day slightly.
As part of efforts to boost per-capita spending, Disney introduced Genie+, a paid service that replaced the previous FastPass+ system. Genie+ costs $15 per person per day. Additionally, guests can opt for skip-the-line privileges on individual attractions for an extra cost of around $10 to $15 per person per ride. It is estimated that about 40% of guests opt for these add-ons.
Parking fees can be a significant source of earnings for Disney. In addition to theme park parking, Disney now charges resort guests for parking their vehicles. With more guests driving to the parks following the discontinuation of Disney’s free Magical Express transportation, daily parking fees generate substantial income.
With the goal of maximizing guest spending, Disney has increased food prices. On average, guests may purchase a coffee, a snack, and two quick-service meals during their park visit. Sit-down dining experiences can significantly increase spending. Despite costs associated with buying and serving food, Disney enjoys substantial profit margins, particularly due to its agreement with Coca Cola, which provides their products at no cost.
Disney resorts contribute to overall earnings by charging for hotel rooms on the property. Many visitors book 3 to 5 nights on-site once they purchase their park tickets. The average daily hotel room rate varies depending on the time of year but generally starts at $75 or more.
Souvenir sales contribute significantly to Disney’s revenue. Guests encounter gift shops throughout the parks, making it easy to find an item of interest. Whether it’s a bubble wand, Mickey ears, or a toy, merchandise sales provide high-profit margins. While Disney keeps its merchandise figures undisclosed, it is estimated that each guest spends at least $10 on merchandise per day.
Combining these estimated guest spending figures, a conservative estimate suggests that a single guest spends around $160 per day at a Disney park. This translates to Magic Kingdom earning approximately $8 million per day. When considering the other parks at Walt Disney World—Epcot, Hollywood Studios, and Animal Kingdom—the total revenue amounts to around $25 million per day. Taking operating costs into account (approximately 25% of revenues), Walt Disney World generates approximately $20 million each day.
It’s important to note that Disney also operates five other parks worldwide and owns a cruise line, further bolstering its earnings in the Disney Parks and Experience segment.
How much money does the Disney Company make as a whole?
As a massive media company, Disney owns significant entertainment assets beyond its parks. Recent acquisitions of 20th Century Fox, Marvel, Star Wars, and others have expanded Disney’s reach in the global entertainment industry. ESPN, ABC, Disney+, National Geographic, Disney Channel, and other properties contribute to the company’s revenue. The shift towards digital products is expected to increase earnings, although Disney’s box office performance has faced challenges in recent years.
Disney’s quarterly revenue in media, studio, and direct-to-consumer ventures reached approximately $13 billion before the pandemic. Even with movie theater revenues declining, television distribution and subscription fees help cushion the impact. Streaming services play a crucial role in maintaining Disney’s overall revenue.
Altogether, Walt Disney World’s theme parks generate around $20 million per day, contributing to Disney’s total quarterly revenue of over $20 billion. However, the company faces significant debt due to recent acquisitions and stock market challenges, which have caused its stock to decline by over 40%.
While Disney strives to maximize profits and balance customer expectations, it will be interesting to see how the return of former CEO Bob Iger impacts future strategies. Disney’s financial statements provide further insights into its annual income, which has fluctuated over the years.
As Disney continues to evolve and adapt to a changing industry, its ability to generate substantial revenue remains evident. The magic of Disney World, combined with its vast media empire, ensures that the company remains a top player in the entertainment industry.