Don't Blame Covid - Disney's Changes Were Inevitable

January 19, 2021, 1:05 PM · After all the changes that Disney's theme parks have announced this month, I think we can excuse fans for asking... "What on Earth is Disney thinking?"

First the company announced that it was parking the Disney Magical Express shuttle bus between the Walt Disney World Resort and Orlando International Airport. Then it replaced the paused Extra Magic Hours program with 30-minute early entry across all WDW theme parks. (That might seem like a plus for hotel guests, but it's a huge loss for other visitors, who no longer will be able to enter any "empty" WDW parks at opening.) Finally, Disney announced that it is terminating its annual pass program entirely at Disneyland, canceling and refunding passes for potentially hundreds of thousands of Disney's most loyal fans.

Why?

The obvious answer is the 'rona ruins everything. Disneyland's theme parks have been closed for more than 10 months now, and Walt Disney World continues to operate at sharply reduced capacity. Everyone's trying to stay afloat right now and making whatever changes are necessary to do that.

But the economics of Disney visits were evolving even before the pandemic hit. The steps that Disney took this month to alter its theme park operations might have happened anyway, even if "Covid-19" had turned out to be nothing more than the name of a teenage EDM DJ on a side stage at Coachella.

Let's start with Disney's Magical Express. Disney contracted with Mears transportation to provide a "free" airport bus shuttle for its hotel guests in order to keep them from having to rent cars to get to the Walt Disney World Resort. Without rental cars, those guests would be dependent upon WDW transportation during their stays. And WDW transportation do not serve off property destinations. That meant no side trips to restaurants on 192, to shops on I-Drive... and especially not to theme parks at the Universal Orlando Resort.

The service worked well for years and fans loved it. Magical Express strengthened fans' loyalty to Disney, just as the service was designed to do. But when Uber provided another means for Disney's hotel guests to leave Disney property, the economics of Disney's Magical Express changed. With more and more DME users leaving WDW property anyway, the value to the company of paying for the shuttle service was diminishing.

Disney tried to head off Uber by offering its own "ride sharing" service, the Minnie Vans. But while Minnie Vans provided generally superior service on property - including properly installed car seats - they still would not take people off property (except, at one point, to the airport). And the price often cost more than a regular Lyft or Uber ride to the same destination.

Under normal economic conditions, maybe Disney could have justified the diminishing returns on DME in order to hold on to some number of guests who would not be using Uber or Lyft. But not with Covid crippling resort income. Still, the rise of app-based taxi services (which is what Uber and Lyft ultimately are) meant the eventual end of Disney's Magical Express as a free perk for hotel guests. The service now ends with 2021, on December 31.

But without that perk, what else could Disney offer to entice more guests to stay on site? That brings us to our second issue - the official end of Disney's Extra Magic Hours. EMH gave Disney's hotel guests an extra hour of access to select theme parks on give days, either before or after the park's official closing time. Starting later this year, Disney's hotel guests will get 30 minutes of early entry to all four Disney World theme parks every day.

That gives Disney's hotel guests extra flexibility, as they can choose where to start their day, and it distributes the load of early risers across the four parks, rather than concentrating it on one. But it leaves guests not staying in a Disney hotel no options for even footing with hotel guests when the parks open. Hotel guests will have a head start everywhere, making it harder for offsite guests to walk on popular attractions at the beginning of the day.

With capacity limited at the park, Disney wants to make up resulting revenue losses by maximizing the income it earns from each guest who does visit. The best way to do that is to ensure that as many of those visitors as possible are staying on-site. A new perk that provides extra incentive to on-site hotel guests while penalizing off-site guests does double duty in encouraging Disney visitors to book a Disney hotel.

Disney always wants to maximize income from its guests. But until the pandemic, its hotel capacity never came close to matching its theme park capacity. Now that ratio is much higher, changing the math that influences how Disney structures its incentives. Yet without the pandemic, Disney was committed to expanding its hotel stock, putting more and more pressure on the EMH park each morning. Eventually, Disney was going to have to relieve that pressure by extending early entry to all parks, in order to keep its lucrative on-site hotel guests happy. Like with Disney's Magical Express, the pandemic just brought that eventual decision forward.

And so it is, too, with the end of Disneyland's annual pass program. One thing to keep in mind here is that Disney is not abandoning annual passes. It's just canceling its existing program - hitting a reset button that allows it to develop a new program. Disneyland officials do not yet know exactly what that program will look like, but they knew they had to make changes.

As I explained in my Orange County Register column this week, Disneyland's AP program was broken, and "Disney needed more control over the flood of annual passholders that was inundating the parks and washing away too much of the magic."

Covid made the prospect on reopening Disneyland with reduced capacity impossible without creating conflict with hundreds of thousands of Disneyland passholders. Yes, Disney had introduced a Flex Pass system that required advance reservations to use., but thousands of fans had bought higher-priced passes that had promised on-demand access without reservations. Disneyland was going to have to at least partially refund those passes when it implemented a reservation system. Once Disneyland started down that path, it quickly became evident that the easiest decision was just to refund everyone and start over.

With Flex Pass, Disneyland was taking a first, small step toward reinventing its annual pass program. Covid provided Disney with a convenient reason to accelerate that process and just hit the reset button that it probably could not have gotten away with doing so cleanly under normal operation.

Each of these decisions took away benefits and access that loyal Disney fans had come to cherish over the years. While that no doubt made these decisions difficult emotionally, they were becoming more evidently simple from a business perspective. The market was evolving, even before the pandemic, and at some point, Disney simply was going to need to make some potentially disturbing decisions in order to adapt to that.

* * *
We wanted you to read this article before we make our newsletter pitch, unlike so many other websites. If you appreciate that — and our approach to covering theme park news — please sign up for our free, twice-a-week email newsletter. Thank you.

Replies (21)

January 19, 2021 at 1:32 PM

From what I’ve read in the past, I’m all but certain that these changes have been on the cards, before anybody had even heard of the word ‘Covid’. What I’m most curious about, is whether they’ll use this pandemic to overhaul the FastPass+ system at WDW. Perhaps we’ll finally see their version of MaxPass introduced, as has long been the rumour.

January 19, 2021 at 2:26 PM

Airport transportation, cleaning the room, magic band, parking, magic hours, extended opening times of the parks are not free, they are included in the ridiculous high price of the hotelroom.
A lot of these "perks" are still paid for and Disney didn't lower the price for a lesser experience.

January 19, 2021 at 2:45 PM

OT: "A lot of these "perks" are still paid for and Disney didn't lower the price for a lesser experience."

Me: How is it a "lesser experience"?

January 19, 2021 at 3:18 PM

I really never understood why folks stay the the Disney Hotels.

For a room with two beds in it for $400 per night?

We always stay at a resort like the Sheraton Vistana Resort on rt 535. (#ad)
For 189.00 per night, I get a full Two bedroom, two bathroom suit with kitchen and washer/dryer. 1200 sq feet. Plus 7 pools...

I know what you are thinking, I miss out on the magical express ride from the airport and the extra magic hours, Oh, what, they are taking all that away??

Plus the Magical buses do not take me to Universal..... Which is our favorite park..

January 19, 2021 at 3:53 PM

We stay at the hotels to get the extra time on the reservation system and to enjoy the perpetual theming. The Magical Express is nice going to the park and bad/sad on the way out. Not really going to miss it, but... what perks to stay on site? Looks like they are moving somewhat in the right direction for hotel perks. The extra hours was a way to decide where NOT to go due to crowds. Now it will be everywhere. This means MK and DHS will be bad every day. 30 minutes should be an hour. Hopefully, hopefully, they will move to the Disneyland system and ditch FP+. It is a hindrance to a family of four than enjoys spontaneity. I can think of a Kylo Ren quote from the Last Jedi that just about sums it up with FP+. Keep the dining if you have to. The problem is WDW keeps on building hotels without adding a fifth gate. Disney used to be solely about customer satisfaction even if the product was still super expensive. They know they have a problem with some systems and that money is tight. They have the perfect excuse to change the systems that have been causing some to have a less than perfect time. Universal’s Unlimited Express Pass is the best thing in the world, but their numbers allow for that to work. Not sure that 30 minutes early at all parks with the number of hotels will work, but any movement to a different system is good news to me. I have said this 1000 times, I can experience two to three times the attractions at DL than MK on capacity days. Usually much closer to three times.

January 19, 2021 at 4:02 PM

The biggest perk with staying on site at Disney is the convenience.

After a long day of walking around a theme park, perhaps on a hot summer day - with a family with small children, it’s a huge plus not having to walk to your car, then fight traffic on International Drive or I-4 back to your hotel. (Some of the hotels even within a mile outside of main gate can get HIGHLY congested with horrible traffic)

You’d also be more likely to take a break in the afternoon and visit the hotel pool when staying on site as well.

I can understand for some, that driving yourself to and off property to a 3rd party hotel isn’t that big of a deal - but for others, being able to use the Skyliner, monorail, or bus system makes the extra cost worth it.

January 19, 2021 at 5:37 PM

Mr. Emery: "I really never understood why folks stay the the Disney Hotels."

Me: Because of the quality og CM service and accommodations. Because they are close to the parks. Because being in and around the signature Disney resorts is as exciting for them as being in the parks. And because they plan on staying at WDW and not heading to the Universal parks.

January 19, 2021 at 10:59 PM

I was wondering if anyone realized the whole point of DME was to make it so people can't leave lol. Now that they can easily get uber/lyft/instacart/grubhub etc it has no use for Disney anymore.

January 20, 2021 at 4:02 AM

As someone who has never used DME I would simply say that we would choose a Disney resort over an off-site one because it's about more than an airport transfer. We've always felt free to head to the Universal parks (and Seaworld and Busch Gardens) but the level of immersion of the Disney reports, the convenience, the feeling of being encased in the Disney 'bubble', these things more than mitigate the cost for us. If you don't understand then there's really no point trying to explain it as clearly Disney ain't for you. There's plenty of off-site accommodation available and good on those who enjoy it. What I don't get is why those people feel it necessary to criticise those of us for whom the choice is clear and obvious. It's simply a personal preference - respect it please.

January 20, 2021 at 8:11 AM

Well said @David. Agree on your points.

My family has often stayed at the on-property Disney Springs resorts. This goes back to the early 80s when there were only two Disney options. Those hotels have offered some, but not all, on site perks like early entry. They have bigger rooms, walking access to Disney Springs so you still feel immersed, if not to the same level of theming. And some are part of big chain loyalty programs. So when I can’t stay at my fav spots around the boardwalk resort area, it may be back to the B resort (which we still think of as the Royal Plaza).

January 20, 2021 at 12:26 PM

There are a lot of layers to this, but I think that the heart of the matter is that Disney doesn't have to offer any perks to get people to stay on site. All of these moves boil down to Disney essentially saying that people will do what we tell them for whatever we decide to charge them. They know they have a dedicated fanbase that will empty their bank accounts for the Disney experience, and are well aware of the tens of thousands of people around the world that have been putting off a trip to WDW and Disneyland because of the pandemic. They also know that taking away the costly Magical Express and reworking their Magic Hours will do little to dissuade the flood of guests that will be flocking to WDW the moment the pandemic is declared over.

When it comes to Disneyland APs, Disney took advantage of the pandemic to develop a new system to maximize their revenue while reducing the chances of overcrowding in the space-constrained park. Disney can either eliminate or strengthen the limitations on lower cost APs that will shift many into higher tier APs that generate more revenue.

At the end of the day, people can whine and complain and cry poor, but every single critic in California will want to be first in line when Disneyland reopens, and WDW critics will happily accept any changes to on-site resort privileges.

January 20, 2021 at 12:53 PM

You said it, Russell. We had as pricey a Disneyland trip as we've ever taken planned for April of 2020 (park-view room at Grand California for five nights, wheee!) and when that bizness got cancelled we were sick, still are.

"Colonel, you just received your covid vaccine, what are you going to do now?"

WE'RE GOING TO DISNEYLAND!!

January 20, 2021 at 2:02 PM

When it comes to DLR now, out precovid I guess, the biggest deterrent to coming to the park is crowds. It's far less enjoyable when you attend and you get stuck in queues walking around the park, let alone trying to get onto rides.

If the least profitable people in the park are locals on APs who attend and spend very little in the park, it makes sense to reformulate the system that allows that.

If it means less time stuck in queues at the park, even if I'm spending a little more, I welcome the changes. I have to fly halfway around the world to get there, I want it to be the best time possible.

January 20, 2021 at 2:37 PM

@David Brown, completely agree. I was supposed to be staying on site for the first time, last year (hopefully 2022, now). I was still planning on spending plenty of time at the non Disney parks, but I also wanted the experience of being in the “Disney bubble”, as you put it. If other people don’t understand that, then fine. It’s their issue; not mine.

January 20, 2021 at 3:36 PM

I agree with David Brown as well. I'm old enough to remember stuff like how folks would drive to a Disney resort to park there and use their transport system for stuff (something Disney had to stop). My family has almost always stayed on-site and we've seen the major differences when we don't. Yes, it's an extra cost but it's not just the transport or amenities, it's just the...feeling.

You know, even when not at the parks, you're still in Disney magic, even for places like Dolphin and others. It feels great to see have the Disney touch when returning to your room or just a break for a swim and dinner before going back. That's what many people pay for, the entire Disney experience so I'm sure many will just roll with these changes like they have so many times in the past to enjoy the full experience.

January 21, 2021 at 2:30 PM

As a frequent guest, these changes are meaningless compared to the huge jump in cost to stay onsite. Travel agents & media are incorrectly tracking this by only looking at rack rate which does steadily rise, but the actual cost is much higher when you factor lack of discounts. Over the last 5 years it has nearly doubled for us. Just 5 years ago we were getting Deluxes for $200 after taxes... then the next year it was $250... then $300... now I'm lucky to find $400. Moderates have nearly doubled as well, no more $130 rooms. Now $230 is considered good. And Pop is almost $200 now when you add parking. Oh but you get X offsite property for $180 - no you don't - you aren't including $50 in resort and parking fees! Oh then maybe DVC is a better deal? Let me pay off my first mortgage and get back to you.

January 22, 2021 at 8:50 AM

@ThatMouse - We stay all the time at Sheraton's resorts and that $189 is including any resort fees, Plus there is no parking fees..

Like I said we get a lot of resort for $189 per night. Full suit, 2 bathrooms, two bedrooms, balcony, kitchen, 7 pools, lush grounds, activities.... Not a small room with two beds in it for $400.00 a night.

@Th creative - " Because of the quality og CM service and accommodations."
My Reply- Hahahahahahahahahaaha... A room with two beds is not quality accommodations.

Look, Disney hotels are way overpriced. The best parts were just taken away, no more free bus ride from the airport (after Dec 2021) extra hours cut down... What is next, extra charge to use your room key....hahahahaah



January 22, 2021 at 10:01 AM

"What is next, extra charge to use your room key....hahahahaah"

I guess you missed that one Brian. Disney is no longer giving guests free Magic Bands (which double as room keys), but they'll happily sell you one if you don't have a smart phone with an NFC chip to open your room with the MyDisney App. So yes, they are charging you for a room key.

Reasonable people understand that staying on site at WDW isn't as great as it seems, but so many are brainwashed and reflexively stay on site out of habit even as the advantages of staying on WDW property are slowly being stripped away.

January 22, 2021 at 10:59 AM

"I really never understood why folks stay the the Disney Hotels."

We always stay at a different Disney Resort each time we visit, we're trying them all! We always used DME and didn't have to worry about our luggage, didn't have to get a rental car, didn't have to drive anywhere. We travel to Disney without children and like to drink around "the World" and we don't have to worry about getting a DUI at the end of the night because Disney would drive us to our Disney Resort. We also used their Package Pickup service so we didn't have to carry purchased Disney items around with us all day. We also don't want to go to Universal Studios during a Disney trip, yuk! That's why some of us "folks" stay at a Disney Resort as opposed to one off-site. Looks like we'll be making some changes the next time we head down, but it will still be awesome, I can't wait.

January 22, 2021 at 11:03 AM

DanElfmanFan is the case study for why Disney can do what it does, and slowly erode the advantages that their on-site hotels used to have. There are tens of thousands of people around the world that are just like him, so it doesn't matter what Disney does (they could double or triple their rates), these core fans/customers will come no matter what.

January 22, 2021 at 11:07 AM

There is a limit to what we will spend. We're not millionaires. But we do enjoy a fun-filled, lavish vacation when we take one.

This article has been archived and is no longer accepting comments.

Buy Tickets

Plan a Trip

Get News, Discounts