Will Disney report positive (>0%) domestic parks attendance growth in Q2 FY2026 (January-March 2026), the first full quarter after Epic Universe's opening?

Q1 FY2026 showed +1% domestic attendance despite only partial Epic Universe overlap, and WDW bookings are +5% for the full year — the most forward-looking demand indicator available. Hotel occupancy at 87% (up from 85%) confirms strong demand. Historically, new theme park attractions EXPAND the total market rather than displacing share — when Islands of Adventure opened in 1999, both Disney and Universal benefited. Disney's 25,000-acre WDW ecosystem (hotels, dining, transportation, cruise integration) creates fundamentally different multi-day vacation experiences that Epic Universe cannot replicate. The >0% threshold is a low bar; even modest market expansion keeps Disney positive. Q2 seasonal softness is a real concern but partially offset by spring break traffic patterns.

Epic Universe is the largest theme park opening in decades, bringing genuinely compelling IP (Nintendo, Harry Potter, Classic Monsters) that appeals to overlapping demographics. Q2 is the first FULL quarter with Epic Universe operational — Q1 only partially captured the competitive impact. The +1% Q1 attendance was partially aided by Hurricane Milton comparisons; the organic trend may be flat or slightly negative. Per capita spending deceleration from +8% to +4% is an early warning of normalization or competitive pressure. Q2 is seasonally soft — families planning spring break trips may choose Epic Universe novelty over a return Disney visit. However, WDW bookings +5% for the full year is a strong counter-signal, and the >0% threshold is relatively low. The market expansion vs. share displacement debate is genuinely unresolved.

Disney's Experiences revenue hit $10B+ for the first time in Q1 — a business executing at unprecedented scale. Domestic parks OI grew +8% YoY with 33% operating margins, demonstrating both pricing power and demand resilience. The 25,000-acre WDW moat isn't just about rides — it's a vertically integrated vacation ecosystem (hotels, dining, transportation, cruise lines) that Epic Universe fundamentally cannot replicate. Disney's cruise fleet expansion (Destiny delivered Nov 2025, Adventure due Mar 2026) adds vacation demand that feeds into park visits. The $8-9B annual parks capex signals aggressive investment in new attractions. Epic Universe may actually drive MORE total tourism to Orlando — the city's total tourism infrastructure benefits from having more world-class attractions, and Disney captures ancillary spending through its hotel and dining network. The low >0% bar means even modest market expansion resolves YES.

The balance of evidence leans moderately toward positive attendance. Positive factors: +1% Q1 attendance already demonstrating resilience, +5% WDW bookings for the full year, 87% hotel occupancy, $10B+ Experiences revenue, strong per capita growth. Negative factors: Epic Universe first full quarter of competition, seasonally soft Q2, Hurricane Milton comparison flattering Q1, per capita spending deceleration from +8% to +4%. The booking data (+5% full year) is the most forward-looking indicator and suggests continued demand through Q2. Historical precedent favors market expansion when new attractions open, but Epic Universe is larger in scale than prior additions. The >0% threshold is a relatively low bar — Disney doesn't need strong growth, just any growth.

The market expansion vs. share displacement debate is the key uncertainty. Q2's seasonal softness means the marginal tourist is choosing between Disney and Universal, not doing both — budget-constrained families may split time or choose Epic Universe for novelty value. The +1% Q1 attendance had a favorable Hurricane Milton comp; without it, growth was likely closer to flat. If organic Q1 was ~flat and Q2 faces MORE competitive pressure from Epic Universe, attendance could approach zero or go slightly negative. However, Disney's advance booking system and WDW's ecosystem lock in demand months ahead — the +5% booking figure covers the full year including Q2 and is hard to dismiss. Disney's multi-day vacation model means guests committed to WDW trips months ago are unlikely to cancel for Epic Universe.

Demand elasticity analysis supports a moderately positive view. Epic Universe targets a somewhat different demographic — Nintendo appeals to younger/gaming audiences, Harry Potter to a distinct fandom segment — which may limit direct cannibalization of Disney's core family audience. The Orlando tourist market is massive (75M+ annual visitors); there's structural room for both parks. Disney's cruise line expansion (Destiny delivered Nov 2025, Adventure due Mar 2026) adds vacation demand that feeds into park visits — families combining cruise and park trips are incremental attendees. The per capita spending deceleration from +8% to +4% could reflect early pricing moderation in response to competition, but attendance is the question here, not pricing. Disney's IP portfolio (Star Wars, Avatar, Frozen, Toy Story) and 25,000-acre ecosystem create a fundamentally different value proposition than Epic Universe.

WDW bookings +5% for the full year is the strongest forward indicator — demand is clearly there through Q2. Q1 showed +1% even with partial Epic Universe overlap. The >0% bar is low. History shows market expansion when new attractions open. Disney's ecosystem (hotels, dining, cruise) creates sticky multi-day demand that resists competitive displacement. $10B+ Experiences revenue and +8% domestic OI growth demonstrate execution strength.

Q1's +1% was flattered by Hurricane Milton comps — organic trend is closer to flat. Q2 is the first FULL quarter of Epic Universe competition in a seasonally soft period. Per capita spending deceleration from +8% to +4% suggests early pricing pressure or normalization. Spring break tourists with limited budgets may substitute Epic Universe days for Disney days. However, >0% is still a low bar, and WDW bookings running +5% provides a meaningful floor. Near coin-flip leaning slightly toward YES.

Positive booking trends (+5%) and first-ever $10B+ Experiences quarter signal strong underlying demand. Epic Universe is a real headwind but likely expands the total Orlando tourism market based on historical precedent. Q2 seasonal softness is partially offset by spring break traffic. The low >0% bar favors YES, but genuine uncertainty from the first full Epic Universe quarter keeps this from being high conviction. Disney's 25,000-acre ecosystem and IP differentiation limit substitution risk.