A theme park isn't exactly a cheap date these days. Prices keep inching higher for admissions, food, and keepsakes at Walt Disney's (DIS -0.83%) domestic gated attractions. New premium add-ons to enhance the experience have only gotten more expensive. The typical guest is spending 40% more for a day at a Disney park than pre-pandemic times, but the turnstiles keep clicking.
Don't expect pricing relief anytime soon. One of the more notable post-pandemic add-ons at Disney parks on both coasts -- Genie+, where guests pay for access to reserve return times for expedited attraction queues -- experienced its first sellout at Disney World over the holiday weekend. Genie+ rolled out at the Florida resort at $15 a day per guest 16 months ago. It shifted to variable demand-based pricing late last year.
Sunday's sellout of the line-shortening platform came at a record-high price of $29 for the offering. It wasn't a fluke. Genie+ sold out again on Monday.
The pricing on the cake
Pricing decisions often boil down to supply and demand, and clearly there's no shortage of demand for a storybook getaway to a Disney theme park. Even in an iffy economy at a time of global upheaval, there's a premium customers are willing to pay for the escapism that the House of Mouse delivers.
There are so many people willing to pay retail single-day prices for a Disney World or Disneyland experience that it continues to limit annual pass sales. Guests must make park reservations to secure access on any given day. Most of its peers that followed similar restrictive approaches in the early days of the pandemic reopening process have gone back to business as usual. Disney is defying gravity, but it's somehow working.
Image source: Disney.
Theme parks remain the driver of the media giant's financial results. Costs to operate a tourist haunt are haunting in today's climate, but revenue is growing even faster. Disney doesn't have to increase prices, but as long as demand keeps outpacing supply, you can't blame it for making the most of the situation.
Even the return of Bob Iger as CEO -- despite introducing some guest-friendly changes last month -- isn't going to make a day at Disney markedly cheaper than before. If anything, Iger's return is making people more excited to visit a resort, as Disney celebrates its founding 100 years ago with special events and new experiences.
Raising prices in any environment will bring out the boo birds, but Disney now has the scapegoat to keep aiming higher with its price gun. Rival Comcast announced last week that it's bumping starting wages for its staff at Universal Orlando from $15 to $17 an hour. With Disney World unions pushing for $18 an hour as a minimum wage, what do you think the leading theme park operator will do if and when it agrees to those demands? It can probably justify lifting prices again in areas where it feels there is the flexibility to do so.
The leader of travel and tourism stocks knows what it's doing. Per-capita spending will keep climbing until the economy and consumer demand softens.
So don't be surprised when the next pricing move is higher instead of lower. It's not personal. It's just House of Mouse business.
