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Is Disney World Trying to Price Out Its Annual Passholders?

By Rick Munarriz – Oct 20, 2018 at 2:32AM

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It costs 15% more to buy a year-round pass for Disney World than it did when the year began. Something's afoot.

There was plenty of mouse-eared cap-stomping this week after Disney World chose to boost prices for its annual passes and theme-park parking.

Disney (DIS -1.83%) routinely pushes its prices higher; one-day tickets have gone up every year since 1989. But this week's move stands out because it's the second time this year that Disney World has jacked up its annual-pass price.

This is only the fourth time that Disney has increased prices on its annual pass twice in the same year. If you back out 2015 (when the annual passes were repositioned with new perks including free digital photos), you have to go back a dozen years to find the last time that the world's most-visited theme park resort kicked in with a double hike. There's a method to the mouse-ness.  

Spaceship Earth at Disney World's Epcot.

Image source: Disney.

Clearing the way for the headliner

Disney's move this week lifts prices between 3% and 9% across its four tiers of annual passes. That's not necessarily outlandish or exorbitant, but when you combine the updated pricing with February's hike, things start to seem a bit more extreme.

Disney World's Platinum pass -- the standard option that includes access to all four theme parks without any blackout dates -- went from $779 to $849 in February before this week's push to $894. We're talking about a nearly 15% increase -- or $115 -- and that's a decent chunk of change when you multiply it by every member in your family.

Stretching pricing elasticity is part of the game, but you can't dismiss the timing of this week's increase. Disney World will open Star Wars: Galaxy's Edge at Disney's Hollywood Studios in late 2019, the resort's most ambitious expansion since Disney's Animal Kingdom opened in 1998. It's no coincidence that the first year in which Disney twice hiked prices for its annual passes was 1997, the year before the animal-themed attraction opened. 

Disney World is going to be a hotbed of tourists next fall or early winter, when the new attraction debuts. It wouldn't have made sense to wait until February to increase annual passes again, leaving money on the table with folks looking to buy or renew passes in the coming months in the hope of being among the first guests to check out Star Wars: Galaxy's Edge.

Pricing some passholders out of the picture might be an unsavory by-product of this week's increase, but Disney's going to have enough guests converging from all points on the planet to check out the new area with its two signature attractions. It doesn't need its passholders as much as it does during the lulls when it doesn't have anything new and exciting to offer.  

The situation will naturally change if attendance starts to suffer. But in the past, Disney's turnstile clicks have been held back more by global economic setbacks than by its pricing strategies. Disney will lose more than a few passholders with this week's hike, but no one is expecting attendance to decline at Disney World next year. The math is cruel, but it works. 


Rick Munarriz owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool has a disclosure policy.

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