The Walt Disney Company has decided to considerably raise admission prices at its iconic Disneyland theme parks in California and Walt Disney World in Florida, reports the Wall Street Journal. These price hikes come amidst a difficult economic context for the entertainment giant.
Why Disney is Increasing Prices
This decision to raise prices is no accident. It is part of Disney’s overall strategy to boost revenues for its Parks and Cruises division, which has become essential since the company is facing difficulties in other sectors.
- Accelerated cable cutting has hurt its traditional television channels
- The costly transition to streaming via Disney+ and Hulu is weighing on finances
- Park attendance decreased after the pandemic
Disney is therefore relying more than ever on its theme parks to drive growth. Hence the desire to optimize revenues by increasing prices.
The increases vary according to packages, but reach up to 25% for some tickets and services:
- +8% for a 1-day ticket at Disneyland
- +25% to hop between parks
- +15% for a 5-day pass at Disneyland
- Parking and annual passes also more expensive
Disney justifies these increases with the new attractions and unique experiences offered. The company also claims to maintain affordable rates, especially for children.
Disney seeks to finely tune its price increases so as not to deter visitors, while optimizing profits. The American giant had been criticized in recent years for its pricing policy deemed too aggressive.
The return of Bob Iger as CEO seems to mark a slight change in direction, with a stated desire to preserve the accessibility of Disney parks. These additional revenues are crucial for Disney, which plans to invest $60 billion in its parks over the next decade, twice as much as the previous one. The goal: further enrich the experience with new innovative attractions and ever more immersive fairy-tale events.
These investments should also help boost attendance, which decreased at Disney parks after the pandemic. Although demand for annual passes remains strong, summer crowds were down this year, prompting Disney to launch unprecedented promotions.
Raising prices without discouraging visitors is the perilous balance Disney must strike. Its new CEO is aware of criticism over the parks’ growing inaccessibility. He has to reconcile the necessary profitability of these strategic assets for Disney, with the desire for magic and dreams of millions of fans worldwide. The Disney brand carries a unique emotional promise, far beyond a simple theme park.
Image credit: Dall-E with Tout Disney