Theme parks remained a fiscal bright spot for Disney in its latest quarter, though the division that includes its Florida and California parks did not escape the media giant’s company-wide spending cuts now targeting $7.5 billion in savings this year.
Burbank, California-based Disney reported continued post-pandemic recovery at its domestic and international theme parks for its fourth quarter and full fiscal year that ended Sept. 30. But company executives added $2 billion in planned cuts to a previously announced goal of $5.5 billion, as Disney faces lingering challenges, especially in its streaming entertainment, cable and broadcast TV operations amid declining advertising revenue.
“We have a solid foundation of creative excellence and innovation built over the past century, which has only been reinforced by the important restructuring and cost efficiency work we’ve done this year, and we’re on track to achieve roughly $7.5 billion in cost reductions,” Disney CEO Robert Iger said in a statement Wednesday. Officials did not provide divisional breakdowns for upcoming planned cuts.
Disney’s theme parks are big generators of nearby hotel and retail demand, and most of the past year’s layoffs and other cost cuts have come from divisions outside of its park operations, where new developments have recently opened with others in the works. But in late September, the company shut down Galactic Starcruiser, an interactive Star Wars-themed hotel, about 18 months after it opened at Walt Disney World near Orlando, Florida.
Announcing the pending closure in May, Disney officials cited lower-than-expected sales at the attraction, which was marketed as a luxury hotel with ride and role-playing elements.
Company executives did not cite specific numbers Wednesday but said the hotel closure, combined with lingering cost inflation, cut into revenue and net income for the company’s parks and experiences division. But that division still posted $8.1 billion in total revenue for the quarter, rising 13% from a year earlier as domestic park revenue rose 7%.
The parks division’s net operating income rose 31% for the quarter to $1.8 billion, including a 9% bump for the domestic parks in Florida and California.
Disney officials have not said how future cuts might affect plans announced earlier this year, calling for the company to spend $17 billion over the next decade on construction projects at Walt Disney World in Orlando.
Not far from the theme park, Disney earlier canceled plans to build a $1 billion office complex in Orlando, which some analysts said was spurred by factors including Disney’s feud with Florida Gov. Ron DeSantis over laws restricting the teaching of gender issues in public schools.
Disney previously announced plans for a significant expansion at Disneyland Resort in Anaheim, California. In late August, it opened San Fransokyo Square, a new attraction with stores and restaurants blending elements of San Francisco and Tokyo, including a 54-foot-tall stylized “San Fransokyo Gate Bridge.”
Disney’s total company revenue for its fourth quarter that ended Sept. 30 topped $21.2 billion, rising 5% from a year earlier. Net income was $264 million, up from $162 million a year earlier.
For its full-year fiscal 2023, Disney posted total revenue of $88.9 billion, up 7% from a year earlier, and net income of $2.4 billion, down from $3.1 billion a year earlier.