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Disneyland Does the Unthinkable

By Rick Munarriz - Jan 15, 2021 at 9:35AM

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Disney's original theme park ends its annual pass program. It doesn't make sense, until you realize that it does make cents.

Disneyland in California has now been dark for more than 10 months, and it's about to get even darker. Walt Disney's (DIS 1.64%) original theme park resort announced that it was ending its annual pass program indefinitely. Like so many of Disney's recent moves with its gated attractions, everything is bigger than it seems to the people noticing the most.

Outside of Disney's fanbase, Disneyland suspending its pass program may not seem like a big deal. The parks will have been shuttered for more than a year by the time it opens at some point in 2021. Why keep the charade of annual passes going when there will be bigger fish to fry the moment that Disneyland and Disney's California Adventure unlock their turnstiles? Having to shell out refunds now makes it easier to charge more per visitor that enters one of its parks. For Disney fans -- a group that the Los Angeles Times estimates is roughly a million Disneyland passholders -- it's personal. 

Donald Duck sweeping Main Street U.S.A. in Disneyland.

Image source: Getty Images.

Emotional whirlwind

Disneyland isn't alone in altering how it handles annual passes in the new normal. Disney World in Florida has suspended the sale of new passes since reopening this summer. Outside of a few isolated cases, annual pass sales in Florida are currently limited to the renewal of expiring passes or young children of families with current year-round admissions. 

The move makes sense at Disney World. The media stock's Florida parks are operating on limited capacity. The price of a Disney annual pass breaks down to between $2 and $4 a day. Disney World collects at least $109 for a guest on a single-day ticket. Now that it allows guests to visit more than a single park on the same day, park-hopper single-day tickets start at $169. Families staying at one of Disney's resorts will also naturally spend a lot more money beyond the park admissions. Disney's not dissing its most loyal fans. It's simply making the better financial decision at a time when it needs to make as much money as it can with its limited pitch count. It has cast members to feed, and theme park magic it can't conjure without maximizing its monetization per visitor. 

The world's largest theme park operator learned at Disney World that there comes a time -- as painful as it may sound -- that passholders have to come last. Instead of stirring that pot of discord in Disneyland later this year, Disney has gone for a pre-emptive strike. Cash out the passholders. Rip the bandage off in one hard tug now when fans can't fathom when they will coast by a Matterhorn yeti on a bobsled or race through Radiator Springs again.

When Disneyland reopens, it will be with people paying top dollar. If supply exceeds demand then it will turn to its soon-to-be former passholder base, but this time offering a new membership plan that it has no need to elaborate on just yet. It won't make everybody happy, but it will make financial sense -- and right now that matters. Disneyland is closed. Disneyland is waiting. Disneyland is hungry.  

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