Disneyland ticket prices went up dramatically over the weekend, and it's a fair bet that Walt Disney's (NYSE:DIS) larger theme-park resort in Florida will follow suit in the coming weeks. Disney World has increased its prices 30 years in a row, and for the last five years, we've seen hikes kick in on a sleepy Sunday morning in February.
Park-goers will groan. Shareholders will cheer. Park-going investors will groan and cheer. Absent an economic collapse or global catastrophe, it's a fair bet that Disney stretches its streak of making a day at its parks more expensive to 31 years. There's a method to the mouse-ness.
Turnstiles at every turn
Disneyland ticket rates rose 7% to 10% on Sunday, with annual pass prices moving 8% to 10% higher. That's more than just a token nod to inflationary adjustments, and with Star Wars: Galaxy's Edge set to open as early as June, the big increase isn't a surprise. The 14-acre Star Wars-themed expansion will be the resort's most ambitious update in 20 years.
Disney World will also be getting Star Wars: Galaxy's Edge, but it will open several months later. Disney's Hollywood Studios in Florida is expected to debut its similar 14-acre expansion in the late fall. It's not the only thing that Disney World is introducing this year: Mickey & Minnie's Runaway Railway -- the resort's first Mickey Mouse ride -- will also open in 2019. The Skyliner gondola transportation system, to whisk guests between Epcot and Disney's Hollywood Studios and select hotels, will also launch in a few months.
Disney World did inch some ticket prices higher back in October as part of a larger move that made annual passes and parking more expensive, but that won't delay the inevitable. A day at Disney World will get more expensive, and recent history tells us that it will happen on one of the four Sundays in February.
There's no reason for Disney to hold back: Attendance hit record levels in fiscal 2018 despite 30 years of increases. After years of simply phoning it in, Disney's next few years of hikes will be well-earned. The company will spend the next three years opening up a lot of major new rides and attractions ahead of Disney World's turning 50 in late 2021. An increase in Disney World ticket prices next month comparable to the 7% to 10% boosts at Disneyland over the weekend will not be a surprise, and that may even prove to be conservative, since Disney World is getting a lot more than just the Star Wars-fueled experience.
There will be an uproar on social media. Folks will argue that Disney has finally gone too far, and your Winnie-the-Pooh-loving cousin will say that he's done with the parks. He won't be. Disney knows what it's doing. It's investing a lot of money into its parks in the next few years, and it's going to get a healthy return on those outlays of capital.
Check out the latest Disney earnings call transcript.