Disney had its 2019 Q1 earnings call earlier this week, and Disney CEO Bob Iger elaborated on the rising cost of admission to Disney Parks. With very little warning, Walt Disney World switched to (what some believe to be a very complicated) date-based ticket pricing system last Fall. And many Disney fans haven’t been very happy about it.
According to Iger, the ticket price increases are for the good of the consumer, as they would like spread out park attendance throughout the year.
“We know that crowding can be an issue and when our parks are at their most crowded, the guest experience is not what we would like it to be,” Iger said. “So we are leveraging the popularity to increase pricing and to spread demand — to get much more strategic about how we are pricing, so that the parks are still accessible but in the highest peak periods we are trying to manage the attendance so that the guest experience isn’t diminished.”
While Disney’s Studio revenue fell off considerably compared to last year, Parks and Resorts were up 5%. Since last year, Disney has implemented a new date-based pricing structure for tickets and upcharges at hotels, such as paying for parking — which could account for at least some of the upswing in revenue.
On actual park attendance, Disney CFO Christine McCarthy says…
“Attendance at our domestic parks was comparable to the first quarter last year, however per capita spending was up 7% on higher admissions, food and beverage and merchandise spending. Per room spending at our domestic hotels was up 5% and occupancy was up three percentage points to 94%. So far this quarter, domestic resort reservations are pacing up 4% compared to prior year, while booked rates are up 1%.”
With Star Wars: Galaxy’s Edge coming soon, you can almost bet on more price increases going forward. Supply and demand. And according to Bob Iger, Star Wars will be so popular it won’t even require any marketing.
I don’t know about that, but it will likely boost attendance significantly — and park revenue, if prices continue to rise.
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