Please ensure Javascript is enabled for purposes of website accessibility

You'll Never Guess How Much Walt Disney World Has Raised Ticket Prices Since Opening in 1971

By Jamal Carnette, CFA - Updated Feb 14, 2018 at 3:26PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Despite their high cost of entry, Disney's theme parks are enjoying record attendance and contributing a significant portion of the company's bottom line.

In what's become an annual tradition, Walt Disney (DIS 3.69%) has raised prices at its Walt Disney World theme park once again. Peak tickets to the Magic Kingdom now cost adults $129, up $5 from the prior year. Prices for the lowest-cost "value" ticket also went up $2 to $109. Passes have grown more expensive on some level every February since 2014, including the introduction of the tiered-pricing model, according to data compiled by AllEars.

That $129 fee is a far cry from the general admission price charged when the park opened. Those in line to visit the Magic Kingdom in October 1971, when the No. 1 song on the Billboard charts was "Maggie May" by Rod Stewart, would have paid the princely sum of $3.50, tax included, to be one of its first guests. Even adjusted for inflation, those visitors paid just over $21 for entry.

Disney's parks and resorts deserve more respect

Those who are bearish on Walt Disney tend to focus on its largest division -- media networks -- and the fact that operating income has fallen in that division in each of the previous two years.

Meanwhile, bullish investors tend to focus on the strong performance from the company's movie studio, which has increased operating income 37% per year from fiscal 2013 to 2017. Overlooked in the investment discussion is the company's parks and resorts division, which has consistently performed with little fanfare. As the chart below shows, Disney's parks and resorts has posted growth rates from the high-single digits to 20% over the last four years:

Chart of Disney's total operating income versus parks and resorts income.

Data Source: Walt Disney 10-K. Chart by author. Figures in millions of dollars.

Some people don't realize the parks and resorts business is the second-largest segment by operating income behind media networks. And unlike operating income from the Disney film studio, the business model of parks and resorts tends to be more consistent. For example, although studio entertainment has posted amazing growth rates over the prior four years, the division had a 13% year-over-year decrease in operating income last year, while parks and resorts posted steady year-over-year growth during that same period.

Disney is why you invest

In the short run, stocks can be volatile and risky. However, in the long run, they tend to be one of the best asset classes, as great businesses can control costs and outperform inflation, the silent killer of wealth. Perhaps there's no more tangible example than ticket prices for Walt Disney's Magic Kingdom.

From the numbers above, the company was able to increase ticket prices 3,586% -- approximately 8% per year -- over a period of nearly five decades. According to data from the Bureau of Labor Statistics, inflation was 503% during this period, or approximately 3.5% per year. That means Disney has been able to increase ticket prices at more than double the annual rate of inflation.

Of course, Disney wasn't able to accomplish this by resting on its laurels. The company has invested billions in its parks and resorts and poured billions more into characters and brands that have made their way into park exhibits, rides, and shows. Investors should look for the company to continue to post strong returns from this overlooked division.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$97.78 (3.69%) $3.48

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.