Is Disneyland Making Its Attendance Even More 'Unfavorable'?

August 17, 2022, 4:31 PM · Disneyland hasn't fixed its "unfavorable" Magic Key problem. In fact, the resort may have made the relationship with its most loyal fans even worse.

Disneyland created its new Magic Key annual pass program one year ago. That means the passes of the first people who had bought Magic Key passes were about to expire. For weeks, those pass holders have been begging Disneyland for information on how to renew their passes, since Disneyland had stopped selling all tiers of Magic Key months ago.

This week, Disneyland finally shared that information, announcing that Magic Key renewals would start tomorrow morning... and oh, by the way, the prices are going up between 7% and 16%. And Magic Key's top tier is now gone, replaced by a new top tier that is blocked out for the fist time during the week between Christmas and New Year's.

All this follows last week's social media dust-up over Disney mentioning "an unfavorable attendance mix" at the Disneyland Resort, in its most recent quarterly financial report. Many Disneyland fans saw themselves as being labeled "unfavorable" by Disneyland executives, even though what Disney meant was that Disneyland's per capita ticket revenue suffered when the parks' attendance skews toward Magic Key holders instead of daily ticket buyers.

In a TikTok video last week, I shared my suspicions that the company's desire to skew that mix back toward daily ticket sales was one of the reasons why Disneyland took so long to figure out the terms for Magic Key renewals. And that Disneyland executives were trying to walk a fine line between discouraging Magic Key sales while not further angering loyal pass holders who were already frustrated by having to make sometime-hard-to-get reservations to use their passes. (Some pass holders even sued Disneyland over the new Magic Key program.)

The renewal details announced this week by Disneyland portray a company trying to tiptoe on that line. A mild (in this economy) price increase, coupled with a swap of benefits - new blockout dates for some couple with minor parking discounts for others. And everyone gets a modest discount on the new Disney Genie+ upcharge, even though more useful Maxpass was included at no extra charge in the top tier of the old Disneyland annual pass program.

But Disneyland is never going to change the mix of guests at its California theme parks by tiptoeing around the annual pass problem that Disney itself has created. If the company thinks that too much of its Disneyland attendance is going to Magic Key holders, this week's program changes are only going to make that problem worse.

Increases to daily ticket prices might reduce the number of people who buy daily tickets. But price increases on Magic Key (and Disneyland APs before them), actually end up incentivizing pass holders to use those pass more often. Sure, some pass holders drop out of the program, but even among those who drop a tier, everyone who stays wants to visit the parks more to make up for the price increase and get value from their pass. That ultimately leads to more pass holders visits to the parks.

Disneyland has seen this with almost every price increase over the past two decades. Yet the company seems to behave as if it believes that the next price increase will somehow turn out differently. Yes, reservation requirements allow Disneyland to control the number and mix of visitors coming into the parks on any given day. But the harder it becomes for Magic Key holders to get the reservations they want, the more (justifiably) angry they become. So unless daily ticket buyers show up to sell out available inventory, Disneyland relents and opens spots for more Magic Key holders, pushing the mix back to what Disneyland was trying to avoid.

The only solutions I see to this "unfavorable" problem are these:

1) Give up and admit that Disneyland is not Walt Disney World. Admit that Disneyland is a locals' park and go all in on adjusting the business model for the park to accommodate the majority of visits will be coming from pass holders.

2) Drop Magic Key and stop trying to offer any form of traditional annual pass program. Honor loyal visitors with a bulk discount or rewards program. (Remember when you could buy a 10-day ticket where the days never expired?) Make everyone buy date-specific tickets or open-ended ticket packages with required reservations to use the tickets.

Pick one of these two extremes, then deal with it. Maybe the new total blockout on Magic Key during the busy Christmas week is Disneyland's first step toward option 2. We'll see.

But trying to play to both sides of a dilemma - like Disneyland otherwise seems to be doing now - is only making everyone frustrated with this whole process. And Disneyland should be the place where we can go to escape frustration - not to have to wallow in it.

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Replies (10)

August 17, 2022 at 7:25 PM

I guess the accountants can spin this to Chapek that Magic Key guests are spending more for their passes, so as long as they keep the Park Pass system tight, the per cap spending for those guests will increase. However, as Robert notes, when pass holders are charged more, they tend to try to visit more frequently to increase the pass’s value.

That’s where parks really misread the market on season passes. Guests have a per visit price they’re willing to spend to visit their favorite park(s), and will calculate how many visits it takes to get to that price point. Parks can increase pass prices, but as long as guests think they can reasonably get the minimum number of visits to come out ahead, they’ll keep buying. In the end, a season pass is essentially a guest betting on themself to make that minimum number of visits, and every visit beyond that number is gravy.

It’s possible that the negatives revolving around Park Pass and the inability of some guests to get reservations will cause some Magic Key holders to drop out, but even those people might stick with the program knowing that it won’t be reopened to new members, and the possibility that they can make up those lose visits/value in the next year.

Ultimately, I think all parks need a base of pass holders to fill in days when tourists don’t visit. I think DL should instead use a system where Magic Key holders have a set number of visits per year based on the tier they buy, and simple make reservations in advance. Having unlimited visits where people are more or less encouraged to pop in for an hour or 2 is what is killing DL’s crowd control systems. Points systems like the ones used for timeshares could easily be adapted for a season pass program, and even allow for twilight admissions.

August 18, 2022 at 6:15 AM

What’s unfavorable is the stipulation Disney put in place waiving Magic Key holders from being able to file a class action lawsuit.

August 18, 2022 at 7:45 AM

Robert’s first suggestion seems the most reasonable. I just don’t see how Disneyland will be more than a locals’ park. This way Disney execs can allow more park reservations since there would be more capacity for AP holders.

August 18, 2022 at 11:10 AM

This is one of the busiest parks having one of the dumbest dilemmas. "Oh no people love our product!" What any normal company would do is respond by providing more product. Build that third gate Disney. Yes I know that takes time, but they should have started decades ago when this problem was looking inevitable.

August 18, 2022 at 4:27 PM

"Replaced by a new top tier that is blocked out for the fist time during the week between Christmas and New Year's."

The way Chapek treats loyal Disney fans, it seems like every week is fist time.

August 18, 2022 at 10:58 PM

I do agree that Disney must pay attention to disneyland unique nature as a mostly local park. A mixed model migth be weekdays passes, where you can buy a set of say, 10, 20, 25 tickets, that offer good discounts on Food and merchandise, to promote per capita spending, and on weekends and holidays a first come first served ticket reservation system.

August 18, 2022 at 10:59 PM

Oh. And kill genie plus.

August 18, 2022 at 11:18 PM

Seriously, doesn’t anybody in Disney’s PR department coach Chapek and his senior execs on what they should and shouldn’t say in front of a hot mic?

As to Robert’s question, I’d go with the second option, although I’d suggest WDPEP create a rewards program that includes Disney movies, home video/streaming, and merchandise purchases through Disney-owned retail outlets like ShopDisney and the remaining Disney Stores. (Why not? Disney Movie Insiders already exists, and everyone else is under WDPEP anyway.) I’m not sure how they shoehorn in D23, but I’m sure someone in Burbank who’s smarter than me can figure it out.

I know the folks at Team Disney love the fans being able to plunk down large amounts of money up front on Annual Passports, but in the case of Disneyland, they lost control of the monster a long time ago. Disney will never retool Disneyland to make it more of a locals’ park.

The Tokyo Disney Resort is probably the world’s most successful regional theme park based on the mix of guests they have, and they seem to have things mostly under control. Maybe Chapek and his minions should fly to Tokyo and take some lessons from OLC?

August 18, 2022 at 11:31 PM

As long as few Disneyland guests are paying what Disney wants them to, Disneyland will always have an unfavorable attendance mix. While Keyholders are most certainly part of that, I think those visiting on discounted tickets are even more so. It often gets overlooked that Disneyland has been running their SoCal discount tickets during the summer this year just to maintain attendance because very few people are visiting from outside the region. Part of that is definitely the higher cost of travel this year, but the reality is that not many people from outside of driving range are going to pick Disneyland.

What is the best option to solve their problem, then? I'd say they need to drop regular ticket prices down to a level where those in Southern California will actually buy them, then eliminate unrestricted passes or make them prohibitively expensive. Disneyland's prices currently start at $104 for a one day, one park, but a majority of days are in the $130-170 range (plus $60 for park hopping). Especially with all the upcharges Disney now wants to sell you, I'd knock the admission down to around $100 most days (with hopping an extra $40 or so). For frequent visitors, sell 5, 10, 15, and 20 visit tickets at a discounted per day rate, with guests having 12 months to use them. If there's demand for a truly unrestricted pass, I suppose one could be kept, but it would be fair to charge a premium for that ($2k+) with so many other options available. It might cause some to leave out of frustration, but I think the result would be a much more favorable mix of guests when it comes to revenue.

August 19, 2022 at 12:08 AM

"The Tokyo Disney Resort is probably the world’s most successful regional theme park based on the mix of guests they have, and they seem to have things mostly under control."
Tokyo Disney, at least pre-pandemic, was almost always jam packed and often had insane wait times...like you're walking around and see a wait time posted at 60 you would get in line just because it was the shortest wait. Every time i've been there they even had queues at the Fastpass machines themselves just to get a Fastpass. I grew up visiting DLR and WDW pretty regularly and even I was taken back by how crowded TDR was the first time I went there. The only reason they don't get the kind of publicity about overcrowding problems like the American parks is because Japanese people just wait and don't complain.

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