Disney's Florida theme park. Photo: Disney.
Visitors to The Walt Disney Co. (NYSE: DIS) theme parks in the U.S. this year will have to pay as much as $105 for a single-entry adult ticket. Ticket prices have steadily increased in the last few years and are now about twice as expensive as they were 13 years ago. These higher prices don't seem to be dissuading visitors from coming to Disney parks, with so many visitors last holiday season, the parks actually had to turn people away at parks in both Florida and California.
Disney has been quick to remind guests that they can still buy multiday passes and pay closer to $63 a day for a five-day ticket, that children's tickets are still slightly cheaper, and that a single-day ticket is worth 16 hours of world-class entertainment. But while guests are now paying more for entry into the parks, Disney is busy building cool new attractions that look like they'll make those increased prices worth it.
Why those high prices will be worth it: The coming attractions
The coming attractions that are most exciting for guests (and investors) include a new major attraction around the movie Avatar, as well as some hints about Star Wars attractions in coming years.
The Avatar attraction, which Tom Staggs -- the former Disney head of theme parks, who is now COO and seemingly the most likely candidate for future CEO -- pitched to movie creator James Cameron, will allow guests to experience what it would be like to live in Pandora, the world of the characters in the film. The creations for this attraction have been extensively researched, designed, and tested, and are now finally in production.
Disney and its "imagineers" have already been releasing videos and updates about its coming Avatar attraction, which is slated be opened in Orlando's Animal Kingdom park by 2017. According to Disney Chief Creative Executive Bruce Vaughn: "This project is really pushing the boundaries of what is possible ... We're having a lot of fun dreaming up ways to bring to life the land's iconic elements from the magnificent floating mountains to the interactive bioluminescent forest, and even to the soaring banshees."
Other than this Avatar attraction, the company's coming release of Star Wars VII, following the company's 2012 acquisition of LucasFilms, is sure to inspire a host of new attractions at Disney's theme parks. While there hasn't been much released about what the Star Wars attractions will look like, guests can probably expect there to be impressive technology that allows riders to feel like a part of the movie -- and hopefully the attraction will be even better than Universal Studios' amazing 4-D Transformers ride.
Higher ticket prices, more guests, even more earnings
Studio entertainment, the segment responsible for movies, makes up only about 15% of Disney's overall revenue. By comparison, theme parks and resorts make about twice as much revenue as studio entertainment. In its fiscal 2014, Disney's theme parks led growth for the company with 20% income growth year over year. Disney's annual revenue from theme parks worldwide is about six times as high as the second-place runner-up, Comcast 's (NASDAQ: CMCSA) Universal Studios theme parks.
Much of Disney's theme-park growth in the last year came from increased per-guest spending, as well as record-setting visitation rates. In fiscal year 2014, a record number of guests visited Disney's U.S. parks at 77 million. More importantly, average guest spending has increased to $131 per day, up nearly 40% in the last five years.
However, while the domestic parks were the main growth drivers in 2014, it will likely be the international theme-park segment that will drive the most growth in the years to come, led by Disney's newest theme park, which is slated to open in Shanghai, China, in early 2016.
Image: Disney.
Disneyland Shanghai, the first Disney resort to open on the Chinese mainland, at a cost of $5.5 billion and covering nearly 1,000 acres of land, is going to be even more impressive than Disney's biggest park to date, Magic Kingdom in Orlando, Fla. While the Magic Kingdom draws nearly 20 million visitors a year, Disneyland Shanghai is expected to have 25 million guests during its first full year.
There's a reason why Disney has been able to raise ticket prices and still see record numbers of visitors. With better and better attractions always in development, those increased ticket prices are worth it.
