There are few certainties in life, and one of them is that a trip to Walt Disney's (DIS -0.98%) theme park resort in Florida isn't cheap. The "Disney World is too expensive" chant is making the rounds again, after social media and now major news outlets are rebroadcasting a deceptive chart showing how daily admissions at Disney World have far outpaced wages, rent, and gas.
It's true -- as a New York Post headline claims -- that a one-day ticket to Disney World has soared 3,871% since the Magic Kingdom first unlocked its turnstiles more than 50 years ago. However, that's not an accurate representation of changes in admission prices.
Yes, the first guests to enter the self-proclaimed "most magical place on Earth" paid just $3.50 in 1971. However, that ticket didn't include access to most of the rides and attractions, the way it does now; guests had to buy additional booklets with five different graded categories of experiences. If you've ever heard Disney fans talk about an "E ticket" (top-tier) attraction, the term hails back to the original pay-per-ride system at Disney World and Disneyland, where most of the in-park attractions came at a premium.
The other headline-debunking fact is that a single day at Disney World is intentionally expensive. As the complex expanded to include four theme parks and several other resort experiences, the game plan for the House of Mouse became to get folks to stay longer. A day guest ticket may start at $109 -- but pay for 10 days, and the starting price drops to $55 a day. Buy an annual pass, and you're paying only $1 to $4 a day for year-round access.
Image source: Disney.
Listen to demand
Disney World isn't cheap, even if the visual depictions going viral last week exaggerated the reality. But it's not the only theme park raising prices these days, offsetting surges in commodity, labor, and other costs. The only reason Disney is getting away with it is because folks keep coming.
Is Disney putting the pedal to the metal in terms of pricing elasticity? Sure. Its domestic theme parks are delivering record revenue and operating profits, and they're doing so despite turning guests away to keep attendance below pre-pandemic levels.
Is the world's largest theme park operator playing a dangerous game with a polarizing premium queue platform and a park reservation system that skews in favor of its most lucrative patrons? Perhaps.
The major thing that Disney has to fear now is a global recession. Consumers have gone from spending on experiences in the springtime to allocating more funds to food this summer.
And that's not the only headwind. The rising U.S. dollar is making a Disney World or Disneyland holiday that much more expensive to international visitors. The coast isn't clear for stateside fans either, with gas prices sharply higher this summer.
However, it's hard to deny Disney's momentum on a level playing field. It's a luxury brand in the theme park universe, and it's not as if its rivals aren't jacking up their own cover charges.
Disney will get a chance to talk about the state of its gated attractions worldwide later this week, when it reports its fiscal third-quarter results. The quarter itself should be spectacular for its fully recovered theme parks business. The real test for the popular leisure stock will be how it's holding up in the new quarter.
Disney hasn't priced itself out of record results just yet, and until that happens, it's hard to say that it's become too expensive.
