Theme park enthusiasts weary of the rising costs for a getaway at Walt Disney's (DIS -2.61%) flagship Florida resort keep waiting for the pricing elasticity to snap. A new promo this week -- offering Disney+ subscribers a resort discount for the first time -- is turning heads. Disney World is offering overnight guests staying at an onsite resort a price break of as much as 25% for stays from July 8 through Sept. 30.
Wait a minute? Isn't the summer typically peak travel season for the House of Mouse as young families are out of school? With reports of Disney turning guests away in recent weeks as it runs out of park reservations, has Disney World finally hit its tipping point? If you're waiting on the sidelines for the collapse of Disney's controversial revenue-boosting moves over the past year, you're not going to like the answer.
Don't discount the discount
A markdown on rooms this summer initially sounds like a crack in Disney World's premium-priced armor. The promotion that was announced on Tuesday afternoon came a day after the resort revealed that the highly anticipated Guardians of the Galaxy: Cosmic Rewind roller coaster would open over Memorial Day weekend. Is a slim summertime deal on lodging the right move?
Are you a @DisneyPlus subscriber? For the first time, you can save on a @WaltDisneyWorld Resort stay select nights July 8-Sept. 30, 2022! ✨ 🏰 Read more: https://t.co/QwPzejAOOY pic.twitter.com/SDSGC6gckx-- Disney Parks (@DisneyParks) April 5, 2022
The world's most visited theme park resort won't have any problem filling its rooms this summer. Pent-up demand is making its gated attractions crowded now even with kids in school and Disney without its shiny new Marvel coaster. The promo is a smokescreen. It's only a 25% discount on a select number of the resort's most expensive lodging off an elevated peak summer travel rate. Disney+ subscribers are eligible for "lower savings" that "may" be available at some of the less pricey properties. Could the move be more about retention for its streaming service?
Could it be a bigger statement than it is a marketing action? Disney has typically offered its annual passholders resort markdowns when bookings are light, but that's not who Disney wants going through its turnstiles this summer. It wants folks spending more money at its parks than regulars that sandbag per capita revenue. Many of the nearly 130 million Disney+ subscribers might also be annual passholders, but most of them are not. This is a dinner bell for Disney fans to visit Disney World this summer, and it's as good a reason as any to keep the streaming subscription active.
The headline here is that this is the first time that Disney+ offers a park perk. In defense of the streaming service, it launched in November 2019, but Disney's domestic parks would be shuttered four months later in the wake of the COVID-19 crisis. It also bears pointing out that the tables were turned when the platform was launched, as Disney+ offered annual passholders three years at a deeply discounted prepaid price. It will be interesting to see if passholders get a new deal when the three-year price break ends come November. Disney may have to offer one in order to keep churn in check.
So what's the point in trying to read too much into a perhaps perplexing promotional push? We know Disney's domestic theme parks are doing just fine, coming off of record revenue and operating profits. If Disney's pulling levers that will make it smarter, shareholders may as well relish the opportunity. The conglomerate plays a starring role in the cast of the Big 6 media companies. Disney won't always get it right, but it knows what it's doing.