Walt Disney (DIS 0.45%) is boosting prices for some of its Disneyland and Disney World tickets and annual passes this week. The increases are minor compared with last year, when it raised some admissions by as much as 25%. But this week's 5% increase for some tickets isn't going over too well on social media.
One pricing milestone Disney crossed with Tuesday's move is that the most expensive single-day ticket for Disneyland can now set you back more than $200. The ticket that allows you to visit both the original Disneyland and the adjacent Disney's California Adventure rose from $199 to $209 during peak high-demand days. Tack on MaxPass -- a mobile add-on that includes digital access to on-ride photos and the ability to make expedited FASTPASS reservations on a smartphone -- which went up by 33% to $20 a day, and you're talking about paying as much as $229 for a full-featured day at the Disneyland resort.
It's a small world with a big price tag
The obvious reason Disney is raising some prices at both of its stateside resorts is that it can. Disney routinely bumps its ticket prices higher, and folks keep coming. Disney doesn't put out its actual attendance figures, but industry tracker Themed Entertainment Association estimates that Disneyland and Disney's California Adventure saw a 2% to 3% increase in 2018. The association should put out its 2019 numbers in May.
The increase in guest traffic may not seem like much, but Disney's higher ticket prices along with strategic price boosts for in-park food and merchandise items sprinkle pixie dust on the business. The end result is that Disney's theme parks segment is growing a lot faster than just by the uptick in guest headcount.
Every increase is still a risk, of course. Disneyland shocked investors last year by posting declining attendance for its California attractions during the second and third fiscal quarters of 2019. The dip in traffic was a surprise because it started in the quarter in which Disneyland opened Star Wars: Galaxy's Edge, the resort's most ambitious expansion since the opening of Disney's California Adventure more than two decades ago.
Disneyland attendance did turn positive during the holiday-containing fiscal first quarter of 2020, and perhaps that was what persuaded the world's leading theme park operator to push through the admissions increase. It would've been hard to see Disney gambling with an increase if it was working on three quarters in a row of year-over-year declines in turnstile clicks.
It remains to be seen whether Disney visitors will accept the latest price increase. The global travel market has cooled lately, and all bets are off if we have to brace for a recession. Disney has earned the right to test its pricing elasticity, but even Mickey Mouse doesn't have infinite flexibility when it comes to ticket prices.