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Consumers may be fed up with high prices at the store, but they’re still willing to splurge on travel.
Disney’s parks and experiences revenue grew roughly 11% during the second quarter from the year prior. The company said that while attendance isn’t at the elevated levels seen following the end of Covid pandemic restrictions, it still rose at its US and Hong Kong Disneyland resorts.
“The bookings … indicate healthy growth in the business, so we still certainly feel good about the opportunities for continued strong growth,” said Hugh Johnston, Disney’s chief financial officer, during the company’s earnings call on Tuesday.
While the media conglomerate is homing in on its streaming business, it’s also making moves to improve its portfolio of theme parks. Disney is planning to bring an “Avatar”-themed experience to Disneyland in California and is expanding its Magic Kingdom in Florida as part of a $60 billion investment in parks, cruises and experiences over the next decade.
Other key players in the travel industry have reported a similar trend this earnings season. Americans, especially lower-income consumers, have pulled back spending at retailers as goods inflation outpaces wage growth. They’ve even become frugal with some experience-based spending like dining out, opting instead to eat at home.
But travel demand remains robust and is expected to ramp up in the upcoming months.
“Demand continues to be strong, and we see a record spring and summer travel season,” said Delta Air Lines CEO Ed Bastian during a call with analysts last month. “Delta’s core consumers are in a healthy position and travel remains a top purchase priority.”
United Airlines also said in April that it expects both the airline and industry as a whole to report record passenger volumes during the summer.
Marriott International raised its full-year earnings guidance in first-quarter results reported on May 1. The company saw its global revenue per available room climb 4.2% from the year before.
“Our 2024 outlook still assumes continued sturdy travel demand and a continuation of current macroeconomic trends,” said Kathleen Oberg, chief financial officer at Marriott, during a call with analysts.
Still, some executives including at Disney have warned that the appetite for travel doesn’t match the boom seen right after Covid pandemic restrictions were lifted, and that the boost from that period is fading.
Another source of potential woe is the uncertain economic environment. Pandemic-era savings have been spent, while sticky inflation and high inflation rates eat into household budgets. The labor market has shown remarkable resilience through the Federal Reserve’s interest rate hikes, but it cooled in April.
Expedia Group lowered its full-year guidance, citing in part the slower-than-expected growth in gross bookings during the first quarter.
“We saw a healthy but more normalized market environment for travel globally,” CEO Peter Kern told analysts on May 2. “We are largely past the pandemic-driven recovery.”
FTX has recovered enough assets to pay most of its creditors back in full, the failed crypto exchange said late Tuesday as it unveiled a proposed reorganization plan.
“The plan contemplates payment in full of all non-governmental creditors based on the value of their claims as determined by the (relevant) bankruptcy court,” FTX said in a statement.
The plan, which needs to be approved by the US court, would resolve disputes with governmental and private stakeholders “without costly and protracted litigation,” FTX added.
The once high-flying exchange imploded in November 2022, sending shockwaves through the crypto world, after depositors raced to withdraw their cash. Sam Bankman-Fried resigned as CEO and the company filed for bankruptcy, reports my colleague Olesya Dmitracova.
A year later, Bankman-Fried was found guilty on seven counts of fraud and conspiracy, including on stealing billions from accounts belonging to FTX customers and defrauding lenders to its sister company, the hedge fund Alameda Research. He was sentenced in March to 25 years in prison.
Read more here.
Tesla will shut its factory near Berlin to all employees Friday when crowds are expected to gather outside its gates to protest against a planned expansion, reports my colleague Anna Cooban.
A stoppage of the plant’s production lines this Friday was announced back in January, CNN affiliate RTL reported late Tuesday, quoting a Tesla (TSLA) spokesperson. But with the protests “in mind,” the electric vehicle maker has decided that all other workers at the factory should also stay at home, RTL said.
The assembly lines normally run Monday through Friday. Thursday is a public holiday in Germany, making Friday a so-called “bridge day” between the holiday and the weekend.
André Thierig, a senior manufacturing director at the Tesla factory, confirmed in a post on X Tuesday that there would be a “one-day planned production shutdown” Friday.
People opposed to CEO Elon Musk’s plans to more than double the production capacity of Tesla’s only factory in Europe are planning four days of protests, starting Wednesday.
Disrupt, a coalition of self-declared anti-capitalist protest groups, argues that the expansion would require clearing swathes of the surrounding forest and would further strain local water supply.
Read more here.
