Disney's betting big on bad guys to bring fans back to its theme parks

A new area dedicated to Disney villains will bring a pinch of darkness to an expandedMagicKingdom at Walt Disney World,as the company injects billions into its theme parks.

Villains Land is among the new projects coming to the Orlando, Fla.,parkamid sagging attendance numbers that are also squeezing its competitors.

Few details were released about what attractions will be in Villains Land, save for a menacing looking concept image on the officialDisney Parks Blog that teases "A place where poison apples are aplenty and magic potions can ruin your whole day."Other major changes announced on the weekendincludeCars Land featuring the anthropomorphic vehicles from the popular animated films which will transform the longstandingFrontierland, replacing Tom Sawyer Island and the Rivers of America.

Disney also announced four new themed cruise ships and several additions to California's Disneyland, all part of a $60 billion USinvestment over 10 years that the company previously announced in April for its parks, cruises and experiences.

Disney sawlower than expected revenue from its theme parksin its last quarter, ending June 29, reporting an increase of two per cent from the previous year and a decline of threeper cent in operating profit.

Since the end of June, fans and bloggershave said Walt Disney World has seemedunusually empty on typically busy summer days.

According to the New York Times, the company's CFO Hugh Johnston said on a conference call earlier this monththat lower-income consumers are "feeling a bit of stress,"while higher-income consumers are travelling more internationally.

People looking for cheaper options

Disney's announcementcomes as economists say American consumers, fed up with a three-year inflation spike, are driving inflation down by increasingly seeking cheaperproducts and services, searching for bargains or just avoiding items they deem too expensive.

Len Testa, co-author of The Unofficial Guide to Walt Disney World and president of TouringPlans.com, a company that compiles themepark data and surveys Disney guests, saysDisney was facing a "money crunch"after making major purchases before the pandemic, including buying the Fox film library for $71.3 Billion US and launching the Disney+ streaming service.

The company has since hikedprices at Disney World and introduced new fees for things like reserving spots on popular rides. Their newest service, Lightning Lane, allows customers to reserve spots before their day in the park, but the prices may change from day to day.

"Coming out of the pandemic,Disney started charging people money a lot of money for things that used to be free," Testasaid, explaining thatfamilies can now spend a couple hundreddollars a day to get ride reservations, a service that cost nothinga few years ago.

"The bargain that we've all unofficially had with Disney is we pay a premium for your products, and in return, you build things on a regular basis. And for the last few years, Disney has not kept up that end of the bargain."

And the discontent fansare feeling isn't limited to just the rides.

The number of the park's four- and five-star reviews on Yelp havedropped from almost 52 per centin 2019 to 33 per centin 2022, according to Bloomberg, with customers complaining about long lines, expensive food and rude employees.

Jarrett Vaughan, an adjunct professor at the University of British Columbia's Sauder School of Business, says patronsare frustratedwith the higher costs of visiting the theme parks.

"Middle class people who are going there are mostly going in debt to go there," he said. "If you're flying there with hotels, you've got a couple kids in your family, it's probably like an $8,000 or $10,000 vacation, which is really expensive for five days or four days."

WATCH: Inside Disney's annual D23 convention

Inside Disney's annual D23 convention

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Duration 0:34

Fans flocked to Anaheim, Calif., last weekend for D23, Disney's annual convention that showcased the latest announcements in theme parks, TV, movies and merchandise from the company.

Competitor Universal readies new park

Disney has started to pull back on its price hikes, adding some discounted ticket packagesand cheaper hotels in the off season.

Drew Smith, a content creator also known as Drew the Disney Dude, told CBC he isconfident the new investmentswill, in time, draw back some visitors who have given up on Walt Disney World.

"I think that this team has heard our feedback," said Smith, who posts about Disney parks on platforms such as Youtube and Instagram.

But Walt Disney World's main competitor is a step ahead in ramping up its attractions.

Universal Orlando Florida is planning to open its Epic Universe park next year, with new attractionsbased on Harry Potter, Nintendo, How to Train Your Dragon and classic monster movies like Dracula and Frankenstein.

Universal is also fighting to win back customers,after facing an even bigger drop in theme park revenue than Disney.Its parent company,Comcast, posted that its theme park business revenue shrank $1.98 billion US in the second quarter of 2024, a 10.6 per cent dip compared to the same quarter in 2023.

Vaughan says these attendance dropsarepart of a trend affecting tourism experiences across the board, including where he lives in B.C.

Tourism operators elsewhere in Canada have also reported strugglesthis year.

Royal Bank of Canada said in June that surging inflation has meant travellers are paying more and getting less, and tourism in Canada in 2023 remained about 10 per cent below pre-pandemic levels.

According to Vaughan of UBC, there's a widely accepted view that tourism operatorsare pricing too aggressively due to the mistaken believe that inflation is stable and the economy is "still on fire." Instead, he suggested the public is looking for more reasonably priced options comparable to what they saw before the pandemic.

"People can't afford to do these types of things anymore," he said.