It's starting to get easier to visit one of Walt Disney's (DIS -1.01%) domestic theme parks. Select annual passes returned to Disneyland for new buyers this week, giving enthusiasts year-round access to the original California resort. Out in Florida, Disney World is offering a big promotion for its costliest lodging experience. The new deal for Star Wars: Galactic Starcruiser follows several guest-friendly changes that were announced last week.
Theme park fans are applauding. Access and discounts make it easier to spend a day at Disney World or Disneyland. Shareholders may be seeing this from a different angle. The world's leading operator of theme parks has spent the past couple of years raising prices and restricting visits in response to booming demand, resulting in record financial results. If it's going the other way now, does this mean that the turnstile clicks are slowing?
Let's take a closer look. You may be surprised by the fairy-tale ending, where both guests and investors wind up living happily ever after.
Whistle while you work
Let's do what Walter Elias Disney himself did and start with Disneyland in California. The resort reopened the window for the sale of annual passes that it calls Magic Key to new accounts on Tuesday. Disney is making it clear that it will only be offering a limited number of passes, and it's only making them available for purchase online during certain hours of the day.
Is this a sign that Disney World will dust off its annual passes for new users soon? For now, the Florida resort is only making its least expensive plan available. Disney World's Pixie Pass offers park access only on non-peak weekdays. It's only available for Florida residents. Existing pass holders on both coasts are able to renew their plans without interruption right now, but Disney keeps tweaking prices higher.
Image source: Disney.
Turning to a galaxy far, far away, Disney World's Star Wars: Galactic Starcruiser is turning heads on Thursday with a price break on longer getaways. The immersive two-night lodging experience where guests take active roles in the Star Wars-themed adventure starts at $4,809 for a party of two. It's not for the weak of wallet. However, a new deal gives guests as much as $700 off two additional nights at a high-end Disney World hotel.
Throw in some of the announcements that were made last week -- including the elimination of parking fees for resort guests at Disney World and kinder park-hopping rules on both coasts -- and the motivation seems clear. Guests have been clamoring for these changes, but it's also a way to woo potentially disgruntled fans back at a time of weaker demand.
It makes sense. The holiday season has run its course, making this a typically sleepy period at the year-round resorts until the spring break and summertime holidays come around. However, these recent moves go beyond the next few weeks. These are annual admissions being sold again at Disneyland. The Starcruiser promotion runs through the end of September, even though the lodging deal for many of the two-night "voyages" is not available during the Easter week break and several summertime dates.
Are the inflationary and recessionary fears finally taking a toll on Disney's gated attractions? Is the international travel market cooling off, forcing Disney to cater harder to locals to fill up rooms and ride queues?
Disney is a consumer-facing behemoth, so it naturally isn't immune to a wobbly economy. It will rise and fall with the best of the travel and tourism stocks. However, it's also been quietly and efficiently building up the other end of the demand equation. Supply is coming back. Disney continues to bring back parades, meet-and-greets, and character meals now that it has a better handle on initial staffing shortages. Something as simple as bringing back the Walt Disney World Railroad last month gives the Magic Kingdom a high-volume transportation attraction to boost its capacity.
It will no longer be a surprise if Disney World brings back its annual passes. They will be more expensive, and they may be more restrictive. The unpopular park reservations system will continue to be a way to funnel those guests into coming during the slowest times of the year, but all bets will be off if the economic funk gets worse. Disney is hungry, but it's not desperate, and that's the way that both pass holders and shareholders can win.
