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Walt Disney Would Approve of Disney's Price Increases

Source: Rick Munarriz.

It was the price increase heard around the world -- and the World. Disneyjacked up the annual pass prices for its Disneyland and Disney World resorts last weekend.

The family entertainment giant nudges its prices higher on a seemingly annual basis, but this was a pretty dramatic shakeup to how it prices admissions for its most frequent visitors.

Disney's California resort saw its priciest annual pass skyrocket 35% to $1,049. Folks on the East Coast didn't see that kind of spike, but all Disneyland and Disney World pass holders will be facing double-digit percentage increases the next time they have to upgrade if they're hoping to secure comparable passes to what they had before.

It's not just the regulars who will have to pay more for a day at the one of Disney's six stateside theme parks. Parking rates went up at both resorts. Parking continues to be included for annual pass holders.

There is an uproar among Disney fans, and that's understandable. The cover charge for a year of whimsy got a lot more expensive. Some took to social media, arguing that Walt Disney himself must be doing backflips in his cryogenic chamber. (That's a joke. We all know he's buried in California, and that Disney on Ice is just a traveling show.)

Walt Disney is turning over in his grave seeing these prices pic.twitter.com/Bx262SOoK5- nicky nicks (@_nickylou_) October 4, 2015

Here's the thing, though: Disney himself wasn't the type to give things away. In fact, the annual passes allowing folks to have a run of the place didn't roll out until long after he was gone. He preferred to charge a modest single-day admission to enter Disneyland, and guests would then buy five different types of tickets that would be used to enjoy individual rides and attractions. It's how the "E-ticket" term came about to describe a top-of-the-line Disney diversion.

A big part of the new annual-pass pricing is pushing its fan base into tickets that offer cheaper passes that come with blackout dates, something that rival Comcast has been doing for ages at Universal Orlando.

Comcast offers cheaper passes with which guests can't go during peak travel periods, and that's what Disney is pushing now. Disney Weekday Select is the cheapest option that includes all of the parks, limiting admission to weekdays and blocking out the peak travel periods of summer, Christmas, and Spring Break. Disney Silver has similar high-traffic date restrictions, but comes with weekend access. Disney Gold merely blocks access during the two final weeks of December and the two weeks most commonly used for Spring Break.

Disney is no dummy. It realizes that peak travel dates will fill up. It has suggested that it may move to variable seasonal pricing -- charging more for day guests during busy holiday periods. Why add more bodies to the park in the form of annual pass holders? They don't spend as much at the parks in food and merchandise as folks that are there just once or twice in their lifetimes. Annual pass holders are the smart ones that snap up the right FastPass and dining reservations, shutting out the uninformed one-time visitors.

This doesn't mean Disney doesn't want annual pass holders. It wouldn't be selling the passes in the first place if that were the case. However, it makes sense to try to push the regulars into the lighter parts of the operating calendar.

At the end of the day, folks will keep coming. Disney World saw its attendance climb 3% to 51.5 million guests across the resort's four theme parks, according to industry tracker Themed Entertainment Association. That's far less than the growth experienced at Comcast's rival resort a few miles away, but Disney managed this growth even as it phoned it in . If some parks are operating at capacity during peak holiday periods, how crazy will things get when needle-moving attractions themed to Pixar, Star Wars, and Avatar arrive in the coming years?

Last Sunday's increase may not be popular with annual pass holders, of course, but smoothing out the flow of guests through different pass tiers and inevitably variable one-day pricing is just what Walt himself would've done -- or at the very least what his brother Roy would have suggested.

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The article Walt Disney Would Approve of Disney's Price Increases originally appeared on Fool.com.

Rick Munarriz owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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