Economic woes not hurting Disney
Categories: Money & Work, Places To Go, In The News, That's Entertainment
It is common knowledge that the U.S. economy is in the toilet, right? Gas prices are sky-high, groceries are through the roof and we are all losing our homes because we can't pay our mortgage. To stretch our dollars, we are growing our own food and selling our unwanted gold. How, then, do you explain the fact that Disney Resorts are raking in more money than ever?
In the past, Disney theme park business has been an accurate indicator of the health of the economy in general. During previous recessions, business went down. But for their fiscal second quarter of 2008, Disney reported operating income in the parks and resorts division rose 33 percent on revenue of $2.7 billion. This is despite the fact that gas and airfare has increased significantly.
What does this mean? Are the reports of a looming recession greatly exaggerated? Are we not as poor and scared as we think we are? Are you planning to visit a Disney theme park this year?
In the past, Disney theme park business has been an accurate indicator of the health of the economy in general. During previous recessions, business went down. But for their fiscal second quarter of 2008, Disney reported operating income in the parks and resorts division rose 33 percent on revenue of $2.7 billion. This is despite the fact that gas and airfare has increased significantly.
What does this mean? Are the reports of a looming recession greatly exaggerated? Are we not as poor and scared as we think we are? Are you planning to visit a Disney theme park this year?
Recent Posts
- Canadian Hospital Offers Surgery for Obese Children (2/09/2010)
- Celeb Clan Close-Up: Brad Pitt, Angelina Jolie and Maddox Hit the Super Bowl (2/08/2010)
- Bob Dylan's 'All the Animals' Inspires Children's Book (2/08/2010)
- Drew Brees and His Son After the Super Bowl - Best Moment of the Big Game? (2/08/2010)
- Did ManBabies Help Start the 'Stupid Men' Trend? (2/08/2010)
Reader Comments (Page 1 of 1)
Victor Agreda Jr 5-19-2008 @ 5:58PM
What happened to Mickey's arms and legs??? Oh, right, background :)
I'd say Disney has both improved their margins and the marketing has done a great job. The "Year of a Million Dreams," for example, appeared to go really well, and the ads with the price point illustrating a full week for less than two grand probably helped.
that said, we plan to go in 2009, just like we did in 2007.
Reply
Jenni 5-19-2008 @ 5:32PM
I hate to say it, but much of it is budgeting and priorities and wanting it all. No, not the gas. That's oil companies setting too high of a price. How obvious is it that they have had their highest revenues? And really, we live in a capalistic society, so unfortunatly (or fortunatly depending on how you think of our freedom) they have that right.
However, off that point onto the real point with a huge disclaimer:
***I don't see this as ever single person or situation, but working in the non-profit, low income, field I see it more than not. So if it doesn't pertain to you, don't take offense.***
Now, I see people who want it all, but shouldn't have it all. People who have bought houses and really couldn't afford the payments. They should never have gotten themselves into these loans in the first place, but they got the I-want-and-I-think-I-deserve-it attitude. I also see families that have brand new cars and can't put food on the table. So, of course, they have to take their children to Disneyland because what childhood isn't complete with out it and while we are there we have to spend huge amounts on toys and prizes because how dare we tell a child no when they want something.
It doesn't surprise me that Disneyland is no longer a gauge to use for economics. We live in a world today where everyone thinks they can have it all right now. There's no limits to the spending.
Reply
Jan Bay 5-19-2008 @ 5:48PM
Disney World has become a "one stop shopping" vacation resource for parents. You can stay in or close to the park and be entertained for several weeks so it's pretty a relatively inexpensive family vacation destination.
It's my opinion that the recession is very real to people who bought homes and cars they really could not afford that now are being foreclosed on and repossessed by the bank. The baby boomers who are on fixed incomes watching their interest income go down to nothing and can't pay for their medicine probably would say we are in a bit of a slowdown as well.
The upper classes may not be feeling the pinch as much as the (practically nonexistent) middle classes or the lower classes. They are probably enjoying the discounts that are being offered to promote businesses. Also, with the exchange rates being what they are, we may be having more visitors from other countries.
Jan from http://www.unique-baby-gear-ideas.com/
Reply
ame s 5-19-2008 @ 5:52PM
We planned a trip to Disneyworld for the end of May back in December when we just thought gas prices were high ;) We saved and tightened our budget for quite awile so we could pay cash. I would hate to know a credit card bill with all the trip's charges would be arriving in June. I'd rather save for a year than spend 18 months paying off a credit card.
I read in another post recently where a family was going to give up most of their belongings and live a more simple life. They were paying $1600 a month to rent a small house in (I think Austin) Texas. I about spewed coffee through my nose! I live in TN in a 2 story brick, 3000 sq. ft., and my mortgage payment on a 5.75 loan is only half of that amount.
Reply
Shelly 5-20-2008 @ 9:19AM
I totally agree with you Jenni... our society has an "I deserve" attitude and its scary. I shudder to think how many of those families are charging these trips on their credit cards and paying the minimum payment each month!
Another point is that generally when people plan trips to Disney, they plan them about a year in advance. I would venture to guess that the people who traveled there in the 1st quarter of 2008 had booked their trips before the economy went so far south. It wouldn't surprise me if there is a decline in visitors as the year goes forward.
Reply
Amy 5-20-2008 @ 12:18PM
I would say that the state of the dollar has made it an even more attractive destination for foreign vacationers. When
I was at Disneyworld last (a few years back, in the fall after school had started) it felt more like I was at Euro Disney than in Florida. And I'm not complaining, please, visit with your kids and cute accents, our economy could use the extra cash flow.
Reply
Nicola 5-20-2008 @ 12:42PM
We will be going to Disneyland at the end of the year. We go once a year. But, then, my family lives in San Diego and so we combine it with a home visit. Stay only one night at an off site hotel. It doesn't cost us much more than a weekend in St Louis.
As for Americans in general, I do fear that people are going further and further into debt at the moment, determined to retain a certain standard of living when prices are rocketing and salaries are not. Unless they have a real plan for the future, as far as earning a whole lot more money in order to pay back the credit cards/mortgages AND retain that same standard of living in an increasingly expensive marketplace, I'm not sure where people are headed...
Reply
Tricia 5-20-2008 @ 4:30PM
I dabble as a travel agent and specialize in Disney travel. I'm having my best year ever. I have 6 clients booked for this year along with two others who are still deciding when to go.
Personally, I know people who cannot pay their car payments but are traveling this year - it's ridiculous. These are not my clients. Some people know how to save and others do not.
We are going this August. Paying for 75% of it using credit card reward dollars.
Reply