As we have warned you on several recent blog posts, the leading indicators from local hotel occupancy stats were accurate predictors of the Disney Corporation’s earnings release today (1). Figures released today indicate that theme park/resort revenue had only dropped 4%, but due to heavy discounting partially at lower margins, overall segment profits dropped 24%. Although the theme park and resorts segment is only a small portion of overall earnings, today’s earnings news cannot help bolster confidence that business conditions will improve soon.

Perhaps most troubling from a company standpoint was the CEO’s comments relating to the entertainment sector of the company. Iger: “Competition for people’s time is increasing and the abundance of choice is allowing consumers to be more selective,” he told analysts on a conference call. “This clearly has had an impact on broadcast television and may have a long-term potential impact on the DVD business.” Although this comment was directed towards DVD business, the concern here is that this may also reflect changes in kids’ tastes for video games over attending theme parks. This also portends for more tightening of the labor market for one of Orlando’s largest employers and the major driver for the vacation home industry.