Update: [6pm ET] Disney will stop and waive the collection of annual pass payments while the parks are closed, starting April 5, and will refund payments collected between March 14 and April 4. Payments will resume once the parks reopen. However, passes will not be extended and will expire upon their original expiration dates. So, in effect, it’s a pro-rated discount.
In addition, passholders who have paid in full will be given the option of a pass extension for the number of days that the parks were closed, or a pro-rated refund on their pass price.
Update 2: Now Disney's changed it again, and is offering monthly payment passholders the option of having their passes extended for the amount of time that the parks are closed, with the remaining number of monthly payments restarting when the parks reopen. Payments won't be collected while the parks are closed, and there's no pro-rated discount. Just a hold on the payments for now.
Details still to come on how to select any of these options. For the latest, see the Disneyland and Walt Disney World travel information pages.
We have closed the poll below, now that the issue is settled.
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Original title: Should Disney Collect Pass Payments While its Parks Are Closed?
Is Disney doing the right thing by continuing to charge its annual passholders even while its theme parks are closed?
Many annual passholders at the Disneyland and Walt Disney World resorts are paying for their passes using Disney's 12-month, no-interest payment plan. It's a great deal to help make passes affordable, which in turn has helped drive the huge increase in the number of annual passholders at the Disneyland Resort over the past decade or so. But that deal does not feel so great when you are paying for a pass to a theme park that's no longer open, as my Orange County Register colleague Brady MacDonald detailed in his article, Disneyland passholders angry that company keeps billing them during coronavirus closure.
From a legal perspective, Disney has every right to keep charging passholders during this temporary closure. This is a payment plan, not a membership. Disney is, in effect, loaning you the money to buy its pass, then allowing you to pay Disney back over the next year. Whether you use the pass - or even can use the pass - is irrelevant. You agreed to buy the pass. You borrowed the money to buy it. You bought it. Now you owe the money you borrowed. Legally, this is pretty straightforward.
But "legal" and "savvy" are not necessarily the same thing. People are hurting right now. A great analogy here might be a mortgage. Even if you go off on vacation or move out for home repairs, you still owe your mortgage payment even if you're not actually occupying your house. But governments across the country are ordering banks to allow homeowners to forgo mortgage payments during this crisis, in an effort to help people from going broke while they are out of work. If we can change the rules for purchases as big as people's homes, surely a big company such as Disney can let some AP payments slide for a bit?
People aren't asking to get out of the payments they owe, only that Disney stop collecting them while the parks are closed. Disney already has promised to extend its annual passes by the number of unblocked days that the parks are closed. What's the harm in extending the loan repayment period by the same amount of time?
Actually, the harm to Disney could be substantial. Disney will be paying its theme park cast members through the middle of this month, even though the parks will have been closed for an entire month by then. Annual pass payments are pretty much the only income the parks are bringing in during this closure period. (Of course, this depends upon how Disney is accounting the payments.)
As tough as it is for Disney theme park fans right now, I'd wager that the average Disney theme park annual passholder is wealthier than the average Disney theme park cast member. As an annual passholder on a monthly payment plan, I'm more than happy to continue making my payments if it's helping to keep hourly park employees paid and covered by health insurance.
And if you'll allow me to express a tough thought for a moment, the phrase "you can't get blood from a stone" is about to become defining for our economy. Once the parks reopen, who knows how many annual passholders will have money left in the bank accounts or be under the credit limits for the cards they are using to make their Disney payments? If Disney wants to get paid back the money it loaned its guests, its best chance to do that in a crashing economy is to get that money now, while it's still available.
Yes, Disney blocks passholders from the parks if they miss a payment, but that doesn't help Disney get paid if people don't have the money to repay the company, does it?
All that said, people are struggling right now, and it's not exactly the best PR look for a multi-billion-dollar company to be charging them when it is not delivering the product that those customers thought they were buying. Even if people do owe the money.
So... it's complicated. Let's put this one to a vote.
TweetJust closed the poll, now that the issue is settled. Disney is no longer extending passes, but effectively discounting them by not charging people while the parks are closed. If you paid in full, your pass expiration date will continue to be extended by the number of days the parks were closed.
Disney says that it will give paid-in-full AP holders the option of a partial refund, if they prefer that over an extension. Details to come on selecting that option.
I think this was a smart way of handling it (after the second update). I'm a Disney AP, and being able to choose to basically "pause" my AP until the parks reopen and then resume with an extension is the best choice for me. I recognize others may be in even worse financial straights and want to cancel outright. Seems like a best of both worlds decision.
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This is a tough dilemma. I will say that a number of sports teams around the world have suspended season ticket installment payments even for sports that are not currently in season (like the NFL), so there is a precedent to suspend theme park season pass payments during this difficult situation. However, I completely agree with Robert that if Disney or other theme parks were to do that, it creates a tricky environment. What about the pass holders that paid in full when they bought their passes? What about those pass holders noted by Robert that may be financially unable to resume payments even when everything is back up and running?
I don't know what the right answer is, because it's always easier to spend other people's money. Personally, I have the ability to pay my obligations through this crisis, but realize that others may not. While we look at Disney Parks as a multi-billion dollar company, if we want it to survive, we can't cut off its only source of revenue right now and expect them to continue to pay salaries and benefits to its employees. Certainly Disney would benefit from the good PR by suspending season pass payments during the park closures, but that benefit is unlikely to outweigh the costs in red ink that continues to mount and could force other tough financial decisions like cutting staff, salaries, and benefits.