Disney Parks Have Supply vs. Demand Imbalance.
One of the biggest complaints about both Walt Disney World and Disneyland is crowds. There is the perception among fans that the parks are always packed, there’s no such thing as an off-season, and wait times are always so bad that buying Lightning Lanes is non-negotiable.
Disney CFO Hugh Johnston addressed this issue at the Morgan Stanley Technology, Media & Telecom Conference in March 2026. This year’s event revolves around the transformational impact of AI and new frontiers of innovation, covering the most important themes shaping the technology, media and telecom industries.
Prior to tackling Disney’s supposed supply vs. demand imbalance at the end of the Q&A, the above is mostly what Johnston discussed during the TMT conference. He explained how AI is a game-changing technology that’s exciting to Disney, and the company is exploring 5 relatively straightforward AI platforms: video creation, more personalized guest experiences, Cast Member management, connecting better and more personally with consumers in the streaming service, and making the back office function more efficiently and effectively.
During the interview, Johnston also explained how the world’s largest entertainment company is evolving its approach to streaming and movie-making. He spent the bulk of the interview discussing the company’s integrated streaming services, mergers & acquisitions, the value of ESPN, Disney’s partnership with the NFL, plus a bunch of other things. There was also an emphasis on Zootopia 2, and how that had a “multiplier effect” for the Disney flywheel, benefitting everything from consumer products to parks.
Johnston also spoke highly of the company’s succession planning, which was a multi-year process that was undertaken meticulously, pushing hard on a number of internal and external candidates.
Here’s an excerpt of what he said about the leadership change, new CEO Josh D’Amaro and President/CCO Dana Walden:
“You have Josh, who’s a terrific growth-oriented executive. You have Dana, who’s a terrific growth-oriented executive on the creative side. The fact that not only do we have Josh in place and looking forward to his leadership, but we have the entire team staying together is something that’s a little bit unusual for corporate CEO successions. And frankly, inside the company, both of those leaders have tremendous followership and they work incredibly well together. So I think it’s going to be a fantastic combination, and we’ll have a lot of fresh eyes on what we do.
People [inside Disney] are excited. Because both people really do cut across businesses and they do have strong followership, not just within their own businesses, but more broadly, there’s a lot of energy there in terms of people being excited about Josh, being excited about the fact that this process was also handled so smoothly. You all know some of the history of Disney and CEO successions going all the way back to Michael Ovitz. This couldn’t have been more different than that. It was a really smooth, well-run process with minimal drama.”
It’s not surprising that Johnston would say something like this. What’s he going to do, answer that he’s disappointed about who was chosen as CEO? That it should’ve been him?!
I nevertheless wanted to share this because it mirrors what I’ve heard from people inside the company. It’s not the same sense of excitement as when Iger returned to replace Chapek, but there’s definitely a lot of optimism about the future and perhaps equal parts relief that Disney didn’t bungle succession planning yet again. The prevailing point of view seems to be that this was the best possible (realistic) outcome.
Honestly, most everything else covered during the panel was a retread of what Iger or Johnston have said during other recent interviews or earnings calls. And even what’s new probably isn’t all that relevant or interesting to you. But if you want to hear about ESPN’s fantasy football business, consider listening to the whole question and answer session.
Relevant to our purposes, as teased at the top, is crowds, capacity, and Disney’s supposed supply and demand imbalance. An imbalance that I’d agree exists, albeit not in the direction claimed.
Johnston was asked about how AI has pushed people to gravitate even more towards real experiences, and to talk about what makes Disney’s Experiences segment unique within the broader experiential marketplace? And why putting $60 billion of capital into it is a good thing?
Here’s his response:
The reason I have confidence that the incremental capital going into the Experiences business is actually going to pay back successfully is two things. Number one, if I look at demand and capacity utilization for our Experiences assets, whether it’s cruise ships or whether it’s parks, it’s super high. There’s more demand than there is supply…So I know we can fill the capacity if we build it.
The second reason is the return profile of the entire Experiences business. The returns are quite high in that business. And if I look at the return profile of the projects that we’re initiating, that puts us in a place where I’ve got high, high confidence that this notion of turbocharging experiences is something that’s going to pay back for not just years to come, but probably a couple of decades to come.
In particular, there’s just so much demand outside the U.S. for Experiences. And then inside the U.S…people are seeking more in-person physical experiences. And there’s really nothing like a Disney park or a Disney cruise ship. The scale of those operations, the characters and the IP, the quality of the service and execution, it’s pretty well unmatched. So in terms of layers of advantage, I would argue that these have more layers of competitive advantage than almost anything that exists within the Walt Disney Company. So I’m super, super optimistic on where that can go.
Right now, because of the nature of the capacity situation we have, there’s less opportunity for attendance growth because we’re filling up the parks pretty well. That said, as we add more and more through 2027 and into 2028 and 2029, I would expect some balance of price realization along with attendance growth is what’s going to drive that business.
One of the constraints that we’ve had this year, and we talked about it on our recent earnings call is international visitation to domestic parks has been a little bit softer than what we’ve previously experienced. But as a result of that, and that’s been going on for a couple of quarters already, we’ve actually pivoted our marketing more to a domestic audience. And by virtue of doing that, we’re doing a good job really filling up the park and finding other sources of demand. I do expect that will persist through 2026. Beyond that, I’m hopeful that things will somewhat renormalize.
This will undoubtedly resonate with many fans described in the opening who feel that the parks are overcrowded, that there’s no such thing as an off-season, and so forth. I disagree. My take is that this is largely spin. It sounds good to Wall Street, but falls apart with even the slightest bit of scrutiny.
This is something we’ve already covered at length in our list of the “Top” 10 Ways Walt Disney World Fans Are Wrong About Crowds. But suffice to say, there are definitely big differences in crowd levels, and you should plan accordingly. No matter how hard Disney might try, there are times that travel is slower. There absolutely is still an off-season, and even most peak dates have wait times well below their historical highs.
As far as “evidence” of this goes, Disney’s own 10-K showed that attendance was down 1% year over year at the domestic theme parks for the last fiscal year, which should offer a ‘sneak peek’ at next year’s version of the annual theme park attendance report (see Walt Disney World Attendance Rises Slightly as Universal Orlando Deepens Drop).
Speaking of that report, it reveals that Walt Disney World attendance is still far below 2019 levels. In fairness, a lot has been said about overcrowding during that period, and by all reasonable accounts, Disney has ‘recalibrated’ to reduce crowds in order to increase guest satisfaction, spending, etc. They are optimizing differently, and the approach has largely been vindicated. Still, if we’re talking about demand supposedly exceeding supply, attendance being millions of guests below 2019 is fair game.
If you need more proof, just look at park reservations for Walt Disney World Annual Passholders, which are almost always available, the lack of capacity closures, etc. Some fans may perceive crowds as being too heavy for their liking, but they are not objectively bad by historical standards. There is excess bandwidth in the parks. Comfort is a different story, but that’s a subjective one. The surplus capacity does exist.
Failing that, look at all of the ticket discounts that Walt Disney World has offered in the last year-plus. By carefully taking advantage of the discounts that were available over the summer on tickets & resorts, we saw the lowest prices for Walt Disney World vacations in over 6 years. (See How to Get the Cheapest Walt Disney World Trip Since 2019.)
It’s a near-certainty that these deals will return for Summer 2026, especially with the above-referenced international slowdown. Speaking of which, if demand is outpacing supply, why would the international slowdown even matter? There’d be no need to pivot and find other sources of demand if demand exceeded supply.
We’d also add that Disneyland is currently offering its best ticket deal in a decade to California residents. Disneyland arguably does have more supply constraints, but even those are manufactured–the result of deliberate decisions concerning discounts, operations, and the (high) tolerance of locals to put up with the reservation system.
Walt Disney World is offering these discounts precisely because demand is down and there’s unutilized supply, which is a perishable good. Don’t listen to what they’re saying, look at what they’re doing. The Walt Disney World parks do have excess bandwidth most of the year, which is why there’s been greater discounting–to help fill that available space.
If demand was exceeding supply, Disney would have no reason to incentivize guests by offering aggressive discounts. As was the case during the pent-up demand period. I would argue that what Disney is doing is more effectively leveraging its existing capacity with pricing and discounting, especially on the hotel side where occupancy continues to climb.
If anything, Disney’s hotel business does more to prove Johnston’s point, as occupancy reaches historic highs and resorts are sold out much of the time. But once again, they’re using discounts to accomplish that. That isn’t a bad thing–higher fill rates at lower room rates is a win-win for guests and Disney! It’s just not the same as organic demand exceeding supply.
It’s also worth noting that there’s been a purposeful throttling of capacity. Disneyland crowds can be crazy, but there are multiple theaters sitting empty, reduced atmospheric entertainment, no daytime parade, etc. There are examples like this with almost all of the parks; the #1 issue at Walt Disney World would be shorter hours. There are ample opportunities for the overnight introduction of crowd-absorbing capacity without picking up a single shovel.
In other words, the current crowds and pricing are choices that the company has elected to make, not something unavoidable. And it’s arguably a good business decision, as a requisite level of crowding helps sell Lightning Lanes, VIP tours, etc., and ensures a minimum length of stay. If sky-high demand exceeding supply were truly an issue, the simple solution would be much more aggressive price increases than what we’ve seen in the last 2 years, along with reduced discounting. But it isn’t an actual issue.
The current crowds are a feature, not a bug. And in fairness, this is a delicate balance that Disney has actually achieved pretty well (record results from earnings calls reinforce this). But once again, that’s absolutely not the same as acting like there’s this overwhelming demand that Disney just cannot keep up with. That’s pure spin, aimed at investors and analysts who haven’t visited Walt Disney World between May and October.
This isn’t to say Tropical Americas, Monstropolis, Piston Peak and Villains Land won’t increase attendance. They absolutely will! That’s the whole reason Disney is building them! As a general matter, new attractions induce demand, and to a greater extent that they add capacity.
It’s not a matter of helping absorb the crowds that are already coming. It’s about attracting a new audience and increasing guest spending, etc. If the company were concerned primarily with building out capacity to absorb current crowds, they’d focus on high-capacity attractions on par with the Little Mermaid dark ride or a flurry of flat rides, as opposed to marketable blockbuster additions.
If Johnston were claiming that there’s plenty of runway for Walt Disney World and Disneyland to further grow their businesses, I wouldn’t disagree. Investing in the parks is going to be extremely lucrative for Disney, which is precisely why they’re spending $60 billion to “turbocharge” the segment. But for one final time, that is different than asserting that the parks won’t or can’t see attendance growth in 2026 because they’re already “filling up the parks pretty well.” That’s flatly false.
Frankly, the follow-up that I wish Johnston would’ve been asked is about his line that there’s especially strong demand for Disney Experiences outside the United States. There are a number of directions that could’ve been taken, from how the company currently feels about its plans for Disneyland Abu Dhabi (my bet is that the park still happens, but that it quiets down as part of the D’Amaro succession narrative) to how the cruise ships factor into this to plans for new gates around the globe. Given the success of Shanghai Disneyland and this year being its 10th Anniversary, I wouldn’t be surprised if we get a second gate announcement there soon.
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YOUR THOUGHTS
What do you think of Disney CFO Hugh Johnston’s comments during the Morgan Stanley conference? Thoughts on anything he said–or didn’t say? Thoughts on his comments about AI or ESPN? What about the notion that demand exceeds supply at the parks? Do you feel that the parks are overcrowded, or is there excess bandwidth? Do you agree or disagree with our assessment? Any questions we can help you answer? Hearing your feedback–even when you disagree with us–is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!
We went to the parks during Thanksgiving week 2025 (2 of my kids were in HS bands playing on Thanksgiving morning). BY FAR the most difficult thing to manage was the park hours- trying to plan around Magic Kingdom and Hollywood Studios holiday parties was awful. Park-hoppers are pretty much required, but transportation between parks takes too long. Back in 2022 we went to Disneyland with no park hoppers, it was easy to take a mid-afternnoon break and not have to worry about a park closing early.
Offering discount on hotels may mean hotel occupancy is down, but that doesn’t necessarily translate to lower park attendance. Room rates are ridiculous. I am in the top 2% of wage earners in America. I won’t stay in a deluxe resort because there is no value there. $800/night for what amounts to Little more than a bed is unconscionable to me. There was a time i made less than $75k a year and i happily splurged for deluxe resorts, but no more. I suspect more people are staying off site in Airbnbs, VRBOs and hotels and Disney is offering discounts to try to get them back.
It looks like nothing changes. The biggest complaint and obvious problem is too many people and too few things for them to do. Instead of adding more things to do that would spread out the people and reduce the long lines they remove something and replace it with something else. This doesn’t spread out the people thus reducing lines. It doesn’t address the problem. What’s needed is expansion not just changes. Prime example is removing the paddle boat and island attraction, during construction it’s absence will add the people who ride the boat and visit the island to the already long lines and when the replacement attractions are open it just puts it back to the same long lines. Rather than change it they could have left it alone and build another attraction on another spot without taking something out you would spread out the people and shorten the lines.
It does not make much sense in what they are saying. If that is the case, then why aren’t operational hours increased? Where are the many, many special experiences at each park gone to? There used to be desert viewing parties at Epcot, gone. There used to be more tour experiences at AK and HS, gone. Bring the stuff back and people will pay and do it.
I can tell you that the international attendance from Canada has defintely affected the numbers at WDW. Many Canadians (not me) will not travel to the US at all because of the “political climate”. The hateon they have for Trump is ridiculous.
I say, good. Leaves me room when I go for MNSSHP.
p.s. Thanks Tom for all your insight. Hope you and Sarah are enjoying being parents. Megatron must be growing like a weed. What? 6? by now. lol ; )
“The hateon they have for Trump is ridiculous.“… no, when Trump threatens our sovereignty, that’s a hill I’ll die on.
A Canadian ridiculing Canadians for standing up for their country… now that’s ridiculous.
Power to Disney that demand is high… for now. They could expand a ton making a much better experience, but that wouldn’t make them as profitable. Profitability and stock price is their #1 goal. Nothing wrong with that sadly. Our only hope is more competition… let’s go Universal and SeaWorld!!
I agree that much of this is a choice leadership has made. As you pointed out, reduced hours, less entertainment, and other operational decisions are clearly intentional.
With Disney’s continued decline as a “trusted” company and the erosion of goodwill among longtime fans, I do wonder what type of guest Disney is trying to attract.
We were lucky enough to rediscover Disney in 2018 with our daughters and have visited at least once a year since. But with the increasing cost and declining perceived value, it has become harder to recommend those “rite of passage” trips to friends and family. Those that have gone in the past couple of years complained about the cost, and did not see the value in returning.
Those of us with nostalgia for Disney tend to give the company a lot of grace. First time families do not. Their experience has to stand on its own.
So I keep wondering if Disney has an “ideal guest” in mind. As you have mentioned before Disney absolutely needs repeat guests who pass the love of the parks to the next generation. They also need first time families to leave feeling like it was a magical experience their kids will want to recreate someday.
When the guest experience supply is being reduced, it should not be surprising if demand eventually softens as well.
I swore off Disney and especially Universal. I can go on a cruise and get fed and entertained everyday for a week for the price of a day at the park due to perks.
I won’t even consider going there with my grandkids. They have ruined the off season with heavy local discounts that bring in a party crowd you don’t want kids near or older adults for that matter. As long as people show up, corporate will squeeze them dry. I had one great uncrowded evening with my two young kids that we did all of Disneyland. I hold on to that memory as it will never happen again.
So this change in administration has eliminated all the woke emphasis that WDW was doing the past few years? Also was anything said about what is being done for the 250th anniversary of the USA and dates?
My god, you people really are the easiest group to manipulate. As long as someone tells you that your half-baked views of the world are secretly genius, you’ll give them your undying loyalty, won’t you?
If I were as shameless as the monsters you worship, I’d start making piles of cash off of your cattle-like predictability. If I tore the label off of a bottle of Jergens and told you it was a magical lotion that repelled the gays, I bet you’d by 12.
Oh, and that word “woke” that makes your brain go nuts? “Woke” people are trying to make sure you still have a safety net in your decrepit years. But yeah, keep pretending the billionaires are hard-working warriors for Christ that only want the best for you.
Been to all 12 Disney parks around the world. Maybe half of them are true full day parks. Three out of the four Florida parks are half day parks. Yet they keep replacing instead of truly expanding. Sure, there’s Villains Land. But that’s the outlier, not the rule of thumb. I’ll believe Disney is serious about expansion when they stop replacing things and actually add to the park footprint and attraction count.
I 100% agree with this. Disney keeps advertising this all as expansion. In reality most is just replacing. The exception is villains. Animal kingdom is all replacing rides. Dinoland is being replaced. Tropical America is not a true expansion.
I get this frustration, but I think there’s something to be said for the efficiency of replacing underutilized capacity. It spreads budgets further and helps revitalize dated/bad areas of the parks. Now, I don’t agree with that characterization of the Rivers of America or Muppets Courtyard, but as a general matter, it makes sense.
Tropical Americas will absolutely expand the effective (non-theoretical) capacity of Animal Kingdom. So will Monstropolis at DHS (especially since that is a true expansion–at least the roller coaster portion).
As labor costs continue to increase, I’d expect more of this. It’s also yet another reason why we’re never getting a 5th gate.
I think you need data showing how many people entered the parks each day. Too much generalization. To say demand is down because otherwise there would be no need to discount prices is not that great of an argument. I spend just as much on food, drinks, toys, etc. then on the actual park tickets. The want people in the parks because thats where the margins are high. Also the tickets are really high to begin with so Disney is not slashing prices to get people in. Also looking back at crowds being down 1% compared to 2019 isnt that impressive. Perhaps back then the crowds were worse but that doesnt mean its not over crowded now.
Beyond what’s mentioned, supporting data is linked to in the post.
Attendance was down 1% YoY, not since 2019. Numbers vary by park, but they’re down 3-5 million guests since that peak.
Supply and demand is an issue of timing. People all want to go at the same time. Too much capacity when the crowds are lower at certain days of the week, but Disney has effectively altered crowds artificially while not solving it. Thus, summers are now effectively the slow season while winter is the high season. Disney has also increased prices to the point where most people can’t afford to go unless there’s a discount even if the discount is perceived and not real. What’s factual is their theme parks lack capacity for more guests especially their minor parks. I’m a Disney super fan that became a casual fan. I no longer feel the need to do everything especially mediocre experiences. Disney has became an expensive dumpster fire.
I agree that WDW has too many “mediocre experiences”. Some attractions such as Peter Pan’s Flight and The Many Adventures of Winnie the Pooh should have been updated decades ago. To make a crazy analogy, it’s like paying today’s new car prices ($40K) to buy a 1995 Toyota Corolla.
We have gone every year since 1981 to WDW or Disneyland. So we know the parks and how work them. We have never used Lightening lanes. Never needed them. We just got back from Disneyland and rode everything with 20 minutes being our longest line. Of course some things were down due to being off season but Grizzlies River Rapids was the only one we missed.
Clearly Disney can handle Christmas week crowds, because they do it every year. But is that sustainable? Would crowds that size put too much stress on physical infrastructure and cast work schedules? You can tell the troops to buckle down for 10 days, enjoy the OT and get through it. But you can’t do that 52 weeks a year. Is the actual cap each park can handle, really what they should be operating at everyday? Doesn’t Disney need some down weeks to do “secret” maintenance, and let cast members take vacation days etc.? Nevermind the customer experience when crowds hit 8/10 or so.
The crowds over the last few weeks of the year are not sustainable. I can’t speak to stress on the physical infrastructure, although I suspect you’re right about that.
The big issue of which I’m aware is guest satisfaction and intent to revisit or recommend. That took a huge hit in 2019 (and into early 2020) when crowds skyrocketed and the experience suffered.
With that said, there are still 45+ weeks per year that have plenty of excess bandwidth.
They should have built that 5th park instead of a Target at Flamingo Crossing. MK used to be 75K for capacity and with the park expansion it was raised to 90k or more. With this new Villainsland it will easily surpass 100k capacity. How is that enjoyable? Same with DHS, raising that park capacity won’t make it more enjoyable.
What’s the difference between adding 30k capacity to the existing parks over the next decade versus building a brand-new one with that same capacity?
At least this way, they aren’t burning money on infrastructure costs and ongoing opex.
I would guess that the difference is if you build a 5th park those 60-75k people will be at that park instead of walking around MK? As much space as those new rides will take up, those added guests will be in walkways or in line making wait times longer. That’s not enjoyable. Unless the lines can hold 10k people at a time, they have to go somewhere
I think you’re absolutely right that this was Wall Street spin, and I agree with your conclusions that the supply demand imbalance statement made was false (even though Disney Parks seem too crowded every time I visit, haha). What I’m curious about, however, is why it was made. Was it to temper stockholder expectations in case profits fall over the rest of the year, or something else?
My guess it’s partly about tempering expectations, especially since this is the second time recently they’ve mentioned international travel headwinds. Between those comments and the discounts we’ve seen already, forward bookings are probably slightly weaker than they’re letting on.
I’d also imagine it’s partly about selling Wall Street on the $60 billion…or a potentially larger number.
My thoughts on the WDW parks not having enough park capacity is based on the amount of repeat guests who visited since the 1990’s. There are lots of dated attractions that I don’t wait in line for anymore (examples at Epcot include The Seas with Nemo …, Imagination, Mexico boat ride, Mission: Space!, the Land Boat Ride) that contribute to longer lines at newer experiences. When newer attractions open at the international parks (such as the Beauty & the Beast at TDL, Mystic Manor at HKDL), I think parks leadership should be brining these attractions stateside within five years. If the parks offered more interesting attractions, then I hope this would spread out the guests and offer a better park experience.
Watch it now… don’t bring Living with the Land into this!
That’s an interesting take. I’m not saying you’re wrong, but Disney trades heavily on nostalgia. When I go to the WDW parks Living with the Land and the Gran Fiesta Tour are ‘must rides’.
I think the issue with the other rides you mentioned are… they aren’t good (although I do have a soft spot for Nemo). Not to downplay your idea of bringing successful new attractions from other parks to the States after a certain period of time – which I’m all for – but I also think Disney needs to recognize when rides don’t work and ‘fix’ those quicker (I’m looking at you Imagination Pavilion). If Disney aspires to be the high water mark for themed entertainment, their worst rides need to be better.
+1 to everything Loyal Reader said.
I teach economics. We’re in the middle of our supply and demand unit. I’m going to turn this into a lesson somehow. Thanks for the idea! Anything to incorporate Disney
OK, who had “renormalize” on their Buzzword Bingo card?
“Followership” isn’t on my card either!