The good news for Walt Disney (DIS +0.12%) theme park buffs on the West Coast is that Disneyland is bringing back its annual passes this week. The bad news is that they are only available as renewals. Oh, and they're priced 8% to 16% higher than they were when the resort briefly reintroduced the year-round admissions last summer. And on top of all that, they are more restrictive in some ways.
The higher price points aren't a surprise. Most of the country's gated attractions have jacked up their prices over the past year to keep up with rising labor costs and other inflationary pressures. Not selling the passes to potentially new annual pass holders -- for now -- also makes sense. Disney makes more on a guest with a one-day ticket than it does that day from an annual pass holder paying $1 to $4 a day over the course of a year for access. The restrictions part is where things start to get thorny, and this is why regulars at Disney's much larger resort in Florida have to be wondering if some of these changes are coming to Disney World.
Image source: Disney.
Sweeping changes
One of the more brow-raising elements of the new Magic Key annual pass pricing at Disneyland is that it got rid of the highest-priced pass that didn't have any blockout dates. That tier is being rebranded -- going from Dream to Inspire -- and now it restricts visits during the peak two-week holiday break that includes Christmas and New Year's Eve. The pass is also 14% more expensive than last year's Dream pass.
Disneyland annuals now run between $449 and $1,599. The cheaper the tier, the more blockout dates and fewer advance park reservations. The in-park discounts are also smaller. An interesting wrinkle here is that only the new Inspire tier includes complimentary parking. Most of Disney World's passes include free standard parking.
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Key Data Points
A positive change for the renewals is that all of the Disneyland passes now include a 20% discount to the Genie+ digital offering, where guests pay $20 (or $15 in Disney World) to be able to reserve access to expedited Lightning Lane queues throughout the park's rides and attractions. Disney mentioned in last week's earnings call that up to 50% of its visitors are paying for the premium perk, but it's probably not a compelling option for annual pass holders who can sidestep the busiest experiences and hit them up later in the year on a slower day. Giving them a discount may help spur interest in the time-saving platform, or at the very least make the Magic Key holders feel that they are appreciated.
Appreciation is a theme that is front and center these days. In a CNBC interview last week, CEO Bob Chapek irked some Disneyland regulars while taking a victory lap over his company's blowout earnings. He referred to an "unfavorable" attendance mix at Disneyland, as revenue per guest wasn't as robust as it was a year ago when there were no annual pass holders as the California parks reopened during the fiscal third quarter. He's not wrong in terms of per-capita revenue, but it was a poor choice of words.
Are some of the Disneyland changes coming to Disney World, which -- like its sister resort in California -- is also limiting annual pass sales solely to renewals (except for the entry-level pass that's available only to locals)? Will most Disney World pass holders have to start paying for discounted parking at the four theme parks? Will the higher tiers see a return of complimentary PhotoPass digital snapshots? Will all Disney World annuals have a crack at cheaper Genie+ purchases?
Disneyland and Disney World have different annual pass bases, and each program has been run independently from the other. What happens in Anaheim might stay in Anaheim. The much larger Florida resort with a much larger slate of on-site hotels is more susceptible to global economic swings, so it will probably be the first to bring back annual passes for new buyers and be more price sensitive if it feels that attendance is starting to languish. These are interesting times for the travel and tourism stocks bellwether. Then again, they're always interesting times at the House of Mouse.
