When Disney announced yesterday the reopening of the Shanghai Disneyland Resort, executives made clear that they are planning a "go slow" approach for all of their park reopenings around the world, whenever they might be. Reopenings at resorts such as Disneyland, Disneyland Paris, and Walt Disney World will come in phases, with limited guest capacities.
That's great and should help keep the public safe, but what happens when thousands of annual passholders want to come back as soon as the parks reopen? How will they react if limited availability keeps them from being able to use their passes?
For years, Disney and other theme parks have been pushing annual passes as a hedge against the variance of daily ticket sales, which can suffer with bad weather, rising gas prices, and competing events in the area. Annual and seasonal pass sales allow parks to get their money upfront while giving passholders an incentive to keep visiting throughout the season, since they've already paid for their ticket.
With monthly payment plans, theme parks have taken their annual and seasonal pass sales to a new level. Now you don't need to pay the full cost of a pass upfront, just the cost of a daily ticket and then relatively low pro-rated monthly payments after that. Six Flags even has extended the monthly payment concept to an open-ended membership plan, giving its theme parks a similar business model to your local gym.
Cheap monthly payments have driven record attendance throughout the industry, as many fans who feel priced out of daily tickets end up (somewhat ironically) finding annual passes a more affordable deal. That's especially true at Disneyland, where reportedly more than a million Southern Californians have bought Disneyland Resort annual passes.
The crush of annual passholders led Disneyland last year to introduce its new Disney Flex Pass, which required its passholders to make advance reservations online to come to the park on most days instead of simply showing up whenever the pass was valid. Disney likely will use that reservation technology for all of its annual passholders as it looks control park attendance in the first phases of its reopenings.
But what happens when all those other passholders who bought their passes with the understanding that they would be able to use them whenever they are valid have to make reservations - and possibly find them unavailable - instead? It's one thing to restrict the sale of date-specific tickets when you're trying to hold down attendance. It's something else entirely to effectively rescind admissions that you've already sold.
If you read the fine print when you buy any Disney annual pass, you'll see that it notes that admission is subject to park capacity. So, legally, Disney's in the clear telling annual passholders who don't make the capacity cut in an advance reservation that they can't use their pass that day. But, as Disney found out in the furor over collecting monthly AP payments during its parks' closures, being right legally doesn't earn you a win in the court of public opinion.
Cedar Fair, SeaWorld, and Six Flags have avoided this issue by extending their passes through the entire 2021 season, upgrading people's pass and membership levels, or even both. For passholders to those parks, anything they get in 2020 is a bonus, so I'd bet that those passholders are likely not to take a denied advance reservation that badly.
Disney's taking a different approach. Essentially, Disney is trying, quietly, to dump as much of its annual pass base as it can.
Disney has stopped collecting monthly payments on its passes, but unless passholders tell Disney otherwise, it's not extending those passes. That gives those passholders what amounts to a pro-rated discount on their passes. And it also means that many passes are expiring each month that the parks remain closed, reducing the Disney's annual pass base if those passhodlers do not renew, which many cash-strapped passholders are not.
Fewer annual passholders means less pressure on Disney's advance reservation system when the parks reopen. That's not that big of a deal in Florida, where a smaller local population and annual pass base can have the parks to themselves when they reopen, as international and even interstate travel looks to remain pretty much nonexistent this summer and into the fall... and maybe even beyond that.
But in California - where attendance at Disneyland typically soars when travel goes south, as the resort becomes the vacation getaway for millions of locals - advance reservations to get into the parks are going to become the hottest ticket in town as soon as they become available. With all the headaches that Disney is facing in preparing its theme parks for the social-distancing era, the last thing the company wants is PR blowback or even a lawsuit from frustrated annual passholders who can't get in.
So that's Disney's annual pass problem. Being in charge of Disney's AP program right now must feel like being a passenger on one of those theme park ride where it's all gone terribly wrong. But with a reopening in California months away, according to the state's governor, Disney has plenty of time to find a way out.
Perhaps Disney offers to straight-up cancel passes, offering struggling passholders the "flexibility" to avoid having to make any remaining payments when the parks reopen or to get a cash refund on paid-in-full passes. Perhaps it decides to continue not collecting monthly payments during a capacity-controlled reopening, declaring that APs won't be valid until the park is open to all. Or perhaps it decides to allow passholders to take their chances on getting reservations, but doesn't collect a payment or start the clock on those passes until the passholder gets a reservation.
Lots of options here. As we approach the parks' eventual return, annual passholders will be eager to hear how their passes will, or will not, figure into Disney's reopening plans.Tweet
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