Disney parks' profits have reached record numbers — even before major expansions

All is well in the Magic Kingdom.

Disney The theme parks division posted record revenues and profits for fiscal 2024, with revenue up 5% for the full year to $34.15 billion and operating income up 4% to $9.27 billion.

Experiences, which includes parks, resorts, cruises and consumer products, was the second-largest revenue driver after Disney's entertainment division, which reached $41.18 billion in fiscal 2024. However, the entertainment division's operating profits were smaller, collecting just $3.92 billion.

Revenue growth at Experiences has been the strongest of any Disney division, and company executives expect the good times to continue.

Disney expects to see earnings growth of 6% to 8% for experiences in fiscal 2025 — and that's before it begins work on a slew of planned land expansions, new rides and redesigned attractions.

As part of Disney's 10-year, $60 billion investment in the industry, guests will finally be able to see what lies behind Big Thunder Mountain at the Magic Kingdom, visit the Land of the Dead with the cast of Disneyland's “Coco” movie and battle King Thanos. Inside the Avengers Campus at California Adventure.

Many of these plans were revealed during the company's D23 Expo in August, however, it will be a few years before Disney park guests have the opportunity to explore the new additions.

In the meantime, the company is working to increase revenue through higher ticket prices as well as in-park entertainment and limited-time offers to encourage guests to return.

Disney has a wide range of park guests, from locals who visit frequently throughout the year to once-in-a-lifetime visitors who may travel from afar.

“You have these different groups of guests, all interested in having a great day at Disney Parks, but they're motivated by different elements or different factors,” said Gavin Doyle, founder of MickeyVisit.com.

For those who venture to the parks less frequently, new attractions and lands can serve as an incentive to book tickets and stay at hotels.

In the past five years, Disney has added two Star Wars-themed lands and a Marvel land as well as opening new rides like the Cosmic Rewind at Epcot, which features characters from the “Guardians of the Galaxy” movie, and the “Tron” roller coaster at Magic. Kingdom. Disney also recently redesigned the popular Splash Mountain attraction with characters from “The Princess and the Frog.”

At the other end of the spectrum, those who visit the country annually or several times during the year only need “the smallest push,” Doyle said. This can come in the form of new live shows, character meet-and-greets, holiday food specials, seasonal festivals, as well as spectacular nightly parades and shows.

“There are things that happen all year long that make every day of the year different,” Doyle said. “There are festivals throughout the year…time-limited parades and fireworks celebrations. That leans into the Disney vault strategy, where you have something that's very exciting and has a timer on and a ticking clock that drives people to come and enjoy. I think the time they have to make their trip is… “It's very important here, and it's what makes people come to the parks more.”

It's these more frequent guests who are crucial for Disney to reach its projected 6% to 8% earnings growth in fiscal 2025, even as it expects to take a $130 million loss due to the impact of Hurricanes Helen and Milton, on top of a $90 million impact. US$ of pre-launch costs for cruises during the first fiscal quarter.

As Disney works on larger, longer-term projects like revamping its Florida-based Frontier Land to be themed around “Cars” and a new Avatar-based land in California, among others, it has daily live entertainment options as well as unique features. Seasonal menu items can help increase revenue.

“It's little things that add up to big things,” said David Lightbody, senior vice president of Disney Live Entertainment.

The company is also looking to capitalize on the upcoming competitor opening worldwide A new Epic Universe theme park in Florida, which is expected to stimulate travel and tourism to the area and give a boost to local Disney parks as well.

Guests who visit the parks frequently have some of the strongest emotional connections to the parks and have more purchasing opportunities when it comes to merchandise and concessions.

Disney does not announce food and merchandise sales within its parks, but it noted that during the last quarter guests were spending more money at its local parks.

Many guests will use seasonal offerings, such as limited-time food and drinks around the holidays, as an excuse to go to the parks and scavenger hunts to try all the new foods, Doyle said.

This also extends to Disney Festivals, which often feature unique menu items that can't be obtained at any other time of the year.

Park patrons themselves are likely to purchase limited-time merchandise, such as exclusive popcorn buckets, spirit T-shirts, mugs and pins, which have become popular collectibles for the company's biggest fans.

Likewise, there are guests in this group who come solely for Disney vacation experiences — like California Adventure's Oogie Boogie Bash or Mickey's Very Merry Christmas Party at Walt Disney World — which cost an additional fee on top of the day pass.

Throughout the year, Disney offers a variety of live entertainment for guests including musical performances, character meet-and-greets, parades, and nightly fireworks displays.

These events can change seasonally, with character costumes, music or colors tailored to the time of year, catering to new surprises in the parks, while maintaining the nostalgia of their brand.

“The amazing nighttime parades and shows play a very important role in Disney Day,” Lightbody said. “Because they're these two occasions where everyone comes together, and it's kind of the collective experience of the day, and they kind of permeate the day.”

To celebrate Disneyland's 70th anniversary next year, the company will bring back the beloved “Paint the Night” nighttime show. The show, which debuted in Hong Kong in 2014, made its way to the United States in celebration of Disneyland's 60th anniversary in 2015 and ran intermittently until 2018. It featured more than 1.5 million LED lights and paid tribute to the long-running electric display in Main Street, another fan-favorite spectacle.

“This show is one of the best shows Disneyland has ever done, and is beloved by so many,” Lindsay Brookshire, director of content at MickeyVisit.com, wrote when Disney first teased the show's return in October.

Disney has not confirmed the show's start date, but social media has been filled with park-goers eagerly awaiting its return.

Another major benefit of nightly live events is that they keep guests in the park longer, which means increased sales of drinks, snacks and other merchandise well into the evening hours.

Lightbody referred to Disney's nighttime shows as “kiss goodnight,” a way to close out the day and give guests a flowery show.

For most local parkgoers, festive fireworks are often limited to holidays like the Fourth of July and New Year's. He said that spending these moments at Disney highlights the special nature of the trip.

“When a show or special does well, it tends to make you nostalgic for a past visit or a childhood that you may have had, or not have but just imagined,” Doyle said. “It will also focus on that specific moment, creating a moment in time for your family…so it plays on nostalgia while also creating a new experience in that moment. It's a place and a reflection of a special time.”

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is opening its Epic Universe theme park next year.