It's a poor and peculiar time for Comcast (CMCSA 0.23%) to be raising prices at Universal Orlando for its higher-end annual passes. The hikes happened on Thursday, the same day that Walt Disney's (DIS 0.80%) Florida resort brought back its full slate of year-round admissions. Disney World hasn't sold its high-end passes to new buyers since 2021.
These weren't modest upticks for Disney World's top competitor. Universal Orlando bumped the Florida-resident discounted Preferred and Premier tiers -- the only two passes it offers with free parking and no blockout dates to Universal Studios Florida and Islands of Adventure -- by 20% and 23%, respectively. The higher-priced equivalent passes for out-of-state buyers saw an increase in the high teens.
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Price hikes for theme park tickets aren't a surprise. They are typically justified, too. Comcast and Disney have been investing in improving and expanding their offerings. They have both pushed employee compensation sharply higher at this end of the pandemic. Gated attractions provide whimsical escapes from reality, but inflation is all too real for the operators.
You still have to wonder what Universal Orlando is thinking with the timing and severity of this week's move. Comcast has been able to push through a few price hikes since Disney World stopped selling annual passes to new buyers in November 2021. The only pass that Disney World was selling before Thursday was the entry-level Pixie Pass that limits visits to select weekday admissions. Universal Orlando was really competing only with SeaWorld Entertainment (SEAS +0.12%) with true year-round passes.
Disney's priciest annual pass is still more expensive than Universal Orlando's Premier pass, which now retails for $904.99 plus tax. Disney World's Incredi-Pass has a $1,399 cover charge, but it also includes twice as many theme parks as Comcast's offering. Will Central Florida's theme parks price themselves out of year-round visitors?
Image source: Comcast's Universal Orlando.
In the near term, the pricing flexibility appears to be there. Some Disney World enthusiasts waited hours in virtual online queues to grab fresh annual passes on Thursday. Demand isn't a problem. However, this week's hikes at Universal Orlando could backfire if the global economy starts to wobble.
Comcast increasing prices this week and Disney resuming annual pass sales at both Disneyland and Disney World this month are welcome developments for investors. The two leading travel and tourism stocks with strong media empires were already benefiting from record performances at their theme park segments in their latest quarterly updates.
They're not the only winners. SeaWorld Entertainment could also find a way to squeeze in yet another increase in this climate, though maybe Comcast bit off more than it can chew this time. Disney World rivals may want to wait until Disney World hits the limit on the number of annual passes it's willing to sell this time before getting too greedy. With the peak summer travel season now two months away, it may not be long before we find out if the industry in general and Comcast in particular overplayed its hand this time.
