Time is money when you're on vacation, and Walt Disney (DIS -1.04%) is ready to join most of its theme-park peers in monetizing access to expedited queues. The world's largest theme-park operator unveiled Disney Genie+ and Lightning Lane this week, a pair of premium-priced offerings that will be incorporated into the Disney World and Disneyland app experience in a few weeks.
The new platform is a hybrid of MaxPass -- Disneyland's pre-pandemic platform where guests would pay a flat daily rate to use their app to secure FastPass reservations -- and the pay-per-ride update that rolled out at Disneyland Paris earlier this summer. A grumble rumble broke out on the socials when the new plans were announced on Wednesday afternoon, largely from Disney World fans who have never had to pay for app access to the expedited lines.
Many regular visitors to Disney World and Disneyland aren't thrilled with the move. Shareholders, however, are going to love what this means in terms of ramping up the average revenue per user.
It was just a matter of time
Enthusiasts hate paywalls, and it's only natural for Disney fans to shake their heads at new line items to budget for in planning their next Disney World or Disneyland getaway. Before the pandemic, Disney World visitors could reserve -- months in advance -- up to three daily FastPass hourly return windows to enter a fast-moving line that in the fall will be rebranded as a Lightning Lane.
Lightning Lane access is no longer included in the price of admission. Guests can pay $15 a day per person at Disney World or $20 at Disneyland for Disney Genie+, giving them the ability to make one expedited queue reservation at a time. Other perks are included in the upgrade, but access to Lightning Lanes is the real draw.
So far, this sounds a lot like MaxPass at Disneyland, which was also bumped up to $20 per day weeks before the pandemic closed down the California resort. A big difference this time is that some of the more popular rides with the longest wait times will not be part of Disney Genie+. Taking a page out of last month's Disneyland Paris playbook, visitors will have to pay an additional premium that will vary by ride every time they want to access the Lightning Lane for a top-tier attraction.
Change is inevitable in the amusements industry, and it's not as if theme-park fans didn't see this coming. When Disney World stopped selling new annual passes last year and Disneyland outright refunded all existing pass holders earlier this year, everyone knew that change was afoot.
There's a great big beautiful tomorrow
If you hate Disney for doing this, you may want to skip the next few paragraphs to spare you some stress and the time it will take you to peck out a rage tweet. Disney knows what it's doing and has more data behind this move that any of us will know.
You can go back five years ago to when Disney shifted to variable demand-based pricing, with single-day admissions changing based on expected seasonal guest counts. It was the first step in optimizing how much it could make in periods of peak demand.
Disney World and Disneyland visitors didn't flinch. They paid up, and the resorts would go on to break annual attendance records.
The new move will be hated more by annual-pass holders than infrequent visitors, and that's also by design. If this is a once-in-a-lifetime trip -- and you're spending thousands to go to Disney World or Disneyland -- you're not going to hesitate to spend $15 or $20 a day for a more efficient experience.
You're going to click on the button to spend another $16 or so per person for fast access to Avatar's Flight of Passage or Rise of the Resistance. The math will be different for regulars, regardless of their means, because they're going to be back soon.
The big winner here is Disney's bottom line, and with that, its shareholder returns. Average revenue per guest will inch higher, and even more so on a day when the park is crowded and the standby lines are long. With international tourism still a work in progress, Disney isn't going to be setting attendance records on either coast. This is the reality that every investor in travel and tourism stocks has to accept for now.
Disney needs to optimize its monetization, and this is a high-margin, revenue-expanding trick practiced by nearly every other major player in this industry. You don't have to like it, but no one will blame Disney as a business when operating margins for its theme-parks segment start to move higher.
Folks paying up for Disney Genie+ and Lightning Lane will be subsidizing the cheaper days for everybody else. Disney is just doing what everybody else is doing. It just has the advantage of following suit on a much grander scale.