By now, fans should have gotten used to annual price increases at Disney theme parks. Disney raised ticket and annual pass prices at both the Walt Disney World and Disneyland Resorts last June, and with Disney World raising prices in February, a Disneyland increase was imminent. But let's take a closer look at the specific changes Disneyland has made, because they tell us some interesting things about how Disney's trying to change the direction of its Anaheim resort.
The big change that people are discussing is Disney's decision to suspend new sales of the Southern California Annual Pass. Disneyland offers five levels of annual passes. The cheapest level is the Southern California Select pass, which is valid for admission only on weekdays during the school year, and not during the summers and holidays. The Southern California pass is one step above that, also allowing park admission on non-summer Sundays as well as a few extra weeks of shoulder season around the summer and spring break.
As a result, many locals bought the SoCal pass and crammed the park on those non-summer Sundays. People who now have that pass may renew it (though at an increased price), but no one else can buy that pass, at least for now. If you want to get a new Disneyland annual pass, you either have to go with the more restrictive SoCal Select pass and visit on a weekday, or you need to spend more for a Deluxe or higher annual pass, which gives you the ability to visit on a Saturday instead of just on Sundays.
Of course, with a Deluxe or higher annual pass, you could visit on one of those crowded Sundays, but people who hold passes at that level know better than that. Deluxe, Platinum and Premier passholders long have known to restrict their weekend Disneyland visits to the less-crowded Saturdays, and stay away from Sundays, when the SoCal passholders crowd the parks.
With these changes, Disneyland's trying to hold non-summer Sunday crowds at their current levels, while driving new pass sales that will lead crowds to visit on other days of the week. More than that, though, the price changes at Disneyland suggest that the company is trying to further shift future growth patterns away from local day visitors and annual passholders toward out-of-market visitors buying multi-day tickets.
Take a look at the prices for those three-to-five day Disneyland Resort passports. They hardly changed, with the top increase coming in around two percent. That's just half the four percent increases for the annual passes and one-day, one-park ticket.
As we've written many times before, Disney is working to position itself as a lifestyle brand, and its ongoing changes in pricing to promote the value of multi-day visits over single-day trips at its theme parks reflects that. So why, then, would Disney discourage sales of a type of annual pass, if the company wants people to visit its parks more often?
Let's remember that Disney is not trying to reduce the number of its annual passholders. If Disney wanted to do that, it would do away with the monthly payment option on annual passes, and require customers to pay the full price up front. Pass sales would collapse! But Disney doesn't want that. It simply wants to move future sales of annual passes to its other products, instead, to alleviate the developing crowd problems on non-summer Sundays.
To do that, Disney had three options: 1) Jack up the price of SoCal passes relative to the other passes, 2) Reduce the number of days available to SoCal passholders, or 3) Stop selling new SoCal passes. Frankly, the third option — the one Disney picked — is the best one for current SoCal passholders, because it spares them from a substantial price increase on, or loss of value from, their passes.
Looking long-term, the massive demand for visiting Disneyland illustrates that Disney needs to commit to building a third gate in Anaheim, as well as adding hotel capacity at the resort. Disney is swimming in IP [intellectual property] with underutilized Marvel, Star Wars, and Pixar franchises, as well as a Frozen juggernaut that could drive much more than a parade float and a character meet-and-greet. But Disney doesn't have abundant empty space upon which to build in Anaheim, and a multi-billion dollar resort rebuild and expansion isn't the sort of thing that CEOs approve on the way out the door, as Disney CEO Bob Iger is supposed to step down within the next few years.
Pricing tweaks and suspensions of AP sales can help steer Disneyland's market growth in slightly different directions in the short term, but the long-term issue remains that Disney's leaving money on the table by not expanding resort capacity in Anaheim to meet large and growing overall demand. At some point, Disney will need to move beyond these small price changes and address the big development changes needed at the Disneyland Resort.Tweet
This article has been archived and is no longer accepting comments.
Walt Disney World
Tokyo Disney Resort