- Disney actively discouraged people from visiting the new Star Wars: Galaxy's Edge area in Disneyland in California last quarter, pushing domestic park attendance down by 3%.
- "Helped in part by some of our efforts, there was tremendous concern in the marketplace that there was going to be huge crowding," CEO Bob Iger told analysts on a call in August.
- The owner of Marvel, Pixar, and Lucasfilm said it hiked ticket prices while local hotels raised room rates and competitors offered discounts.
- "Star Wars" fans may have postponed their trips to Disneyland until the launch of a "Star Wars" ride in January or held off on visiting Disney World in Florida until Galaxy's Edge had opened.
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Disney makes billions of dollars by persuading people to watch its movies and TV shows, play with its toys and games, and visit its theme parks. Yet the entertainment titan did its best to discourage "Star Wars" fans from visiting the new Galaxy's Edge area in Disneyland in California earlier this year, pushing attendance at its domestic parks down 3%.
The owner of Marvel, Pixar, and Lucasfilm "managed demand" for the first few weeks after opening the space-themed area at the end of May, its finance chief, Christine McCarthy, said on Disney's third-quarter earnings call in August.
In other words, it took reservations, restricted the days that annual passholders and workers could visit, and raised prices to avoid a swarm of "Star Wars" fans overwhelming staff and facilities and ruining the experience for everyone.
"Helped in part by some of our efforts, there was tremendous concern in the marketplace that there was going to be huge crowding when we open Galaxy's Edge," CEO Bob Iger said on the call. "And so some people stayed away just because they expected that it would not be a great guest experience."
Other forces played a role too. Disney hiked the cost of a one-day ticket "substantially" compared with a year ago, Iger said. And local hotels, anticipating a rush of visitors, raised their room rates, pricing some people out of staying in the area.
Moreover, the company opened Galaxy's Edge with one ride, Millennium Falcon: Smugglers Run. Fans may be postponing their visits until a second ride, Star Wars: Rise of the Resistance, opens in January. People also held off on visiting Disney World in Florida until Galaxy's Edge had opened, McCarthy said.
Meanwhile, competitors including Universal Studios in Florida dropped their prices, potentially luring people away from Disney's theme parks.
"All of those factors contributed to attendance that was below what we would have hoped it would be," Iger said. Coupled with higher costs tied to Galaxy's Edge, the upshot was a decline in operating income from domestic parks and resorts.
The drop in domestic park attendance was driven by fewer visits from annual passholders, while paid visits rose, McCarthy said, adding that average spending per guest jumped by 10%, reflecting steeper ticket prices and higher sales of food, beverages, and merchandise.
Occupancy rates at Disney's domestic hotels also climbed 2 points, to 88% from 86%, and spending per room rose by 3%, she said.
Moreover, guest satisfaction and interest in the Galaxy's Edge attractions remains "extremely high," and they rank "among the most popular things at the park," Iger said, adding that it would take time "for things to work themselves out in terms of how the marketplace is reacting."
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