It's been a wild week for news if you're a fan of Walt Disney's (NYSE:DIS) industry-leading theme parks. It kicked off the week by announcing that it was suspending Disney's Magical Express, a complimentary shuttle bus service that resort guests in Florida can use to get to and from the Orlando International Airport during their stay. And on Thursday, it turned its light sabres to Disneyland, where it announced the end of its annual-pass program.
The social media court of public opinion isn't happy with either move. Folks flying in for a Disney World getaway will miss the free service that whisked them and their luggage to and from the massive Central Florida resort. Disneyland fans will now have to buy single-day tickets when they need their pixie-dust fix until a new membership-plan offering is unveiled. It's not always easy being a theme-park enthusiast.
A world of tears
Right now, neither event may seem to matter. Disney's Magical Express will run through the end of 2021. The free transportation offering isn't going away until next January. As for Disneyland, the original theme-park resort isn't even open right now. Holders of active passes will receive pro-rated refunds to clear them from the books, so they'll be receiving some money (granted, their own money) now.
The problem is that these two moves could weigh on the resolve of Disney's biggest fans. On Disney World forums, some are vowing to stay at a non-Disney resort when they plan a trip for 2022 or beyond. In Disney's defense, you could've read the same "I'll say offsite" rhetoric three years ago when Disney World began charging for overnight parking at its hotels. Spoiler alert: They didn't stay offsite. Occupancy levels would remain strong through the Disney-owned lodging properties with higher price rates, too.
Disneyland regulars now feel as if they've been punched in the gut, but the writing was on the wall. When Disney World opened six months ago, it prioritized hotel guests and folks buying single-day admissions over annual-pass holders when it came to securing the now required park-pass reservations. On a per-day basis, annual-pass holders will always be the least lucrative group, outside of fence-hopping freeloaders.
Disney World and Disneyland will be fine. In Florida, Disney World turns 50 in October, and Disney is planning a massive celebration that will run through 2022. With COVID-19 hopefully a distant memory by then, the company's not going to have a problem filling its rooms and parks. If a free airport bus was the last incentive needed to win you over as an on-site guest, Disney's better off giving that room to an out-of-towner who's going to spend a lot more money.
Over in Disneyland, let's wait until we see the terms of this promised membership plan that will attempt to fill the annual-pass void. If the ramp-up process in California is the same as we've seen in Florida, it's going to want folks paying market prices for single-day admissions over the old all-you-can-click turnstile buffet.
Disneyland would rather have no annual-pass holders at first than angry ones. If you don't like what I'm saying, check with your Disney World fans on the East Coast.
You don't have to like these moves, but Disney has thought them through for a lot longer than you've been fuming about them. Disney's a well-diversified media stock. It can succeed without its theme-parks segment at its best. Disney shares are up 80% since Disneyland closed. Think about that.
In an ideal world, Disney does right by its park fans, but it's ultimately a business that needs to succeed financially. Losing a shuttle service on one coast and its annual-pass program on the other isn't the end of the world. And it's not the end of either Disney World or Disneyland.