Park attendance may not rebound for years

Mike Schneider

Tuesday, Dec. 18, 2001 | 9:44 a.m.

ORLANDO, Fla. -- If history is any indication, it may take at least two years before attendance at Disney's Florida and California theme parks returns to pre-Sept. 11 levels.

Merrill Lynch analysts Jessica Reif Cohen and Andrew T. Slabin point to a number of parallels between what happened to the Disney parks after Sept. 11's terrorist attacks and the effects in 1991 after a recession and the Persian Gulf war.

"Although not an apples-to-apples comparison, we believe the attendance trends into and out of the Gulf War and accompanying recession shed light on how Disney's theme park performance may unfold over the next year or so," the analysts said in a report issued last week.

Walt Disney World's four central Florida theme parks -- Magic Kingdom, Epcot, Disney-MGM-Studios and Animal Kingdom -- had an attendance of 43.2 million people last year, according to estimates by Amusement Business, a trade magazine. Disneyland in California had 13.9 million visitors.

The Disney parks faced slow attendance even before the attacks because of the growing recession. The analysts have predicted a 40 percent decline in operating income for the company's theme-park division in fiscal year 2002.

After the Sept. 11 attacks, attendance at the Walt Disney World Resort's parks plunged by 25 percent. Attendance at Disneyland Resort was slightly up because of the new addition of the California Adventure theme park and increased pricing promotions.

By comparison, in the quarter after the Persian Gulf War in 1991, attendance at Walt Disney World and Disneyland declined respectively by 24 percent and 20 percent, according to the Merrill Lynch analysts.

For the full fiscal year 1991, attendance at Walt Disney World declined by 18 percent and at Disneyland by 10 percent.

It wasn't until the second half of the following year did the parks experience attendance increases of about 9 percent at Disney World and 5 percent at Disneyland.

But it took four years after the Persian Gulf War, in 1995, before attendance at the Disney parks reached fiscal year 1990 levels.

At Disney World, part of the attendance recovery was derailed by tourist shootings in Florida in 1994. In addition, Disney opened its third park, Disney-MGM Studios, in 1989 and Universal Studios opened its first Orlando park in 1990, increasing the competition for theme park visitors.