Last week several investors lashed-out at Disney, painting a less-than-flattering image of the immediate future of its theme parks division should the US economy continue moving toward recession. On Tuesday Disney issued a report on its first quarter 2008 performance, and cited DVC as just one reason that the theme parks are in better condition than they were back in 2001.
Company-wide, profits fell from the same quarter last year largely due to an increase in operating costs. Revenues were actually up 9% to $10.45 billion from the first quarter of the 2007 fiscal year. Regarding the parks and resorts division, revenue increased 11% and profits 25% from the same quarter last year.
In reporting these results, CEO Bob Iger and CFO Thomas Staggs highlighted a number of ways in which they believe Disney is better positioned to deal with a recession than they were back in 2001. According to the Orlando Sentinel:
Staggs noted that Disney's experience with the 2001 recession showed it can adjust theme-park hours, entertainment offerings and other labor-related costs to "dial up and down" the parks' expenses. He also noted that the parks-and-resorts division is more buffered now by a larger offering of less-expensive hotel rooms, and the resiliency of its cruise-ship and time-share sales. And, he noted, advance hotel bookings are running ahead of last year's pace -- a good sign.
It is no secret that Disney has viewed the Disney Vacation Club as a means of guaranteeing a consistent revenue stream during periods of economic uncertainty. Hundreds-of-thousands of DVC owners can be counted upon to continue to patronize the theme parks, restaurants and gift shops as they spend their annual allotment of vacation club points.
With the addition of the Beach Club Villas, Saratogs Springs Resort and Spa and Disney's Animal Kingdom Villas, DVC membership has roughly doubled in size since 2001.
Source: Orlando Sentinel
