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Disney World Will Probably Raise Prices Soon

By Rick Munarriz - Feb 11, 2016 at 12:28PM

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Comcast jacked up prices to its Universal Orlando theme park, and Disney will probably follow suit.

Image source: Universal Orlando.

It will get a bit more expensive to plan your next trip to a couple of the popular theme parks in Central Florida. Universal Orlando parent Comcast ( CMCSA -1.80% ) (NASDAQ: CMCSK) boosted its admission prices yesterday. 

It will now cost day guests $105 plus tax to visit either Universal Studios Florida or Islands of Adventure, up from $102. The bigger pop comes in the one-day ticket that includes access to both parks, a necessity for folks that want to ride the Hogwarts Express since it connects one park to the other and requires entrance into both gated attractions to ride. Those tickets went from $147 to $155, up 5.4%.

Ticket price hikes are an annual tradition for Comcast and Disney ( DIS -1.90% ). The only real surprise is that Disney didn't do it first, more than likely paving the way for Disney World prices to push higher as soon as this weekend.

Disney World used to increase its admission rates just ahead of the seasonally potent summer, but that changed in 2014. Disney's hike happened in February, following suit in 2015. It would only make sense for Disney to stretch its streak of boosting ticket prices in February to three years in a row. Now that a resilient (if not outright cocky) Universal Orlando has jumped the gun, the only real surprise would be if Disney doesn't follow Comcast here. 

We know SeaWorld Entertainment ( SEAS -2.36% ) probably won't play along. Attendance across SeaWorld's parks barely moved higher in 2015 after back-to-back years of 4% declines. SeaWorld is finally starting to crawl its way out of Blackfish notoriety, and SeaWorld Orlando will probably wait until its new world-class Mako roller coaster opens in a few months before even considering an increase.

Disney and Comcast, on the other hand, are rolling. Comcast saw its adjusted theme park revenue soar 21% last year. Disney's theme park revenue rose 7% in fiscal 2015. Attendance at Universal Orlando has been growing substantially faster than Disney World since The Wizarding World of Harry Potter debuted, giving guests richly themed rides, dining, shops, and shows that have raised the bar in terms of theme park experiences. 

Operating margins have been widening for both companies, making these price increases seemingly less necessary but ultimately more rewarding for its shareholders. As long as guests keep paying -- and both operators are clocking in with record attendance -- Disney and Comcast will continue to test the elasticity of pricing. 

Disney will have some interesting decisions to make. It no longer charges the same price for all four of its Florida theme parks. Disney's Magic Kingdom -- the world's most visited theme park -- is at $105, but the other three parks are at $97 for a one-day ticket. 

However, with Epcot about to open a new Frozen ride and Animal Kingdom nearing the debut of a game-changing nighttime show -- at a time when Disney's Hollywood Studios is shuttering several attractions as it prepares for ambitious expansion that won't materialize for several more years -- it wouldn't be a surprise if this month's inevitable increase creates new pricing tiers.

Universal Orlando's move has its risks. It comes at a time when it has closed a couple of Universal Studios Florida attractions for replacements that won't open until next year. Over at the adjacent Islands of Adventure, its most popular roller coaster won't open again until this summer, but it does have a new King Kong ride set to open later this year.

With gas prices cheap and the economy holding its own stateside, tourists will still come in droves this summer. International tourists facing a strong dollar may not see it that way, but it's not as if this will be the price hike that makes or breaks that travel decision. Folks planning trips to Disney later this year may want to consider locking in their ticket purchases now, buying them online or at a nearby Disney Store. The only way to get ahead of the hikes is to get ahead of them, but either way, it will be shareholders that come out laughing at the end of the ride.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$142.15 (-1.90%) $-2.75
Comcast Corporation Stock Quote
Comcast Corporation
CMCSA
$49.08 (-1.80%) $0.90
SeaWorld Entertainment, Inc. Stock Quote
SeaWorld Entertainment, Inc.
SEAS
$57.60 (-2.36%) $-1.39

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