Weak Theme Park Attendance Fuels Fears of Impending Recession

Walt Disney World reporting a profit decline at theme parks signals a softening US economy.

Disney forecast more challenges for the theme parks business. The company said it expects operating income in the division to fall by mid-single-digit percentage points in the fiscal fourth quarter, because of continued softening of demand at its U.S. theme parks, competition for tourist dollars at Disneyland Paris from the Summer Olympics, currently being held in the French capital, and softening of demand in China.

This year, it became clear that the parks business was hitting some turbulence when Disney unexpectedly reported that operating income in the segment would likely be flat for the June quarter. The company said it was seeing “some normalization of post-Covid demand.”

Disney rival Comcast, which owns and operates the Universal Studios chain of parks, reported weak results in late July, mostly because of lower attendance at Universal’s domestic parks. The company said it expects lower attendance to continue into next year.

“Those Comcast numbers were scary,” said Doug Creutz, an analyst with TD Cowen. “Obviously, there’s been a slowdown in demand. Going to the parks is an expensive trip, so you’ve got to feel at least somewhat comfortable with your economic situation.”