Performance of both domestic and international parks and resort units
Disney’s (DIS) lucrative Parks and Resort segment continues to dominate the top-line growth of the company driven by the growing popularity in its international markets.
In the last five quarters, revenue from the other segments fell, whereas the Parks and Resort segment showed positive growth momentum during the same period. In 3Q17, the domestic business of this segment witnessed 6% year-over-year growth, while the international business, which includes Hong Kong, Shanghai (FXI), Japan (EWJ), and Paris Disney parks and resorts, achieved a whopping 41% increase on an annualized basis.
Strong growth from international parks and resort business
Although the international unit contributes around 24%, this share has gradually increased. Thus, the company isn’t solely dependent on the US for growth.
In 3Q17, the international attendance rate for parks was 72%, which is well ahead of its domestic figure of 8% for the same period. The company’s Shanghai resort, which was opened last year in June, is the key driver of the strong attendance rate. It’s drawing a huge number of tourists, and the hotel occupancy rate is also high.
Likewise, in the last nine months, the international attendance rate for parks stood at 64%, way above the domestic rate of 2%. Moreover, higher average ticket prices and increased food and beverage spending at Disneyland Paris also helped in boosting the company’s international operations.
Thus, the strengthening of the international business won’t just boost the company’s segment revenues, but could also position it well against players like Universal (CMCSA) and SeaWorld Entertainment (SEAS).