Sluggish attendance trends continue to mar Disney's (NYSE:DIS) domestic theme parks for the second year in a row, and now that summer is winding down the media giant is hoping that its passholders will bring their friends to turn things around. Disney recently began offering a one-day park-hopper ticket for $79, available through the end of next month. The catch with the discounted admission is that it can only be purchased by an existing annual passholder.
If $79 sounds like a lot for a day at Disney World, you probably haven't been paying attention to the park's cover charges in recent years. A one-day park-hopper -- a ticket that allows park-to-park access across Disney World's four theme parks -- costs as much as $142.50 this time of year.
It's probably not a coincidence that the new promotion runs until Sept. 30, just as Disney's fiscal quarter -- and fiscal year -- come to a close. With growing turnstile clicks proving challenging and Disney experiencing a surprising dip in occupied room nights in its latest quarter, it makes sense to try to boost its numbers. Unfortunately for the House of Mouse it isn't likely to work.
It's a smaller world
Disney stock is already trading at its lowest levels of 2017. The last thing it needs is another disappointing quarter to keep the downticks coming. Getting its biggest fans to go ambassadorial by inviting their family and friends -- something that's required with this promotion as they can only be purchased by passholders at ticket windows the same day that they are used -- seems like a smart approach in theory. Things aren't likely to play out that way in application.
Let's start with the actual process of securing the tickets. Passholders relish waltzing through turnstiles the moment they hit any of the four theme parks, but this promotion forces a stop at Guest Relations or a ticket window where lines can be interminably painful in the morning. Passholders looking to secure tickets for their non-passholder friends typically turn to pre-purchased tickets or online orders so the entire party can just head to the gate, but that's just not possible with this particular markdown.
Another issue with the $79 promotion is Disney's proprietary FastPass system. Disney lets passholders reserve access to expedited FastPass queues as far as 30 days out, a window that stretches to resort guests. You need a ticket to square away as many as three FastPass reservations a day, and that obviously isn't possible by requiring same-day ticket purchases. Many of the more popular attractions are unlikely to have same-day FastPass availability.
There's also the timing of the deal. Obviously Disney is getting aggressive with its pricing now that it's the slow season, but it also means that passholder families have kids that are back in school making a visit less likely. Regulars also know that there are fewer things to do at many of its parks as Disney builds out new rides and shutters seasonal attractions.
Disney's heart is at the right place, throwing passholders a bone with a smart-priced promotion. Disney's brain is what might not be at the right place given the obstacles and limitations of the actual $79 one-day park-hopper sale.