Why We All Hate Disney’s New Magic Trick
A recent Wall Street Journal story set the internet abuzz with new comments about Disney’s pricing structure.
Here’s the applicable quote: “These days, Walt Disney Co. has a new magic trick: wringing every last dollar out of each visitor to its profitable theme parks.”
(AP Photo/Matt Dunham, file)
See? You read that, and you’re already angry, right? So let’s discuss why we all hate Disney’s new magic trick and why it’s likely here to stay.
The “Magic” of Price Increases
This Wall Street Journal (WSJ) article summarizes a series of changes at Disneyland and Walt Disney World, all of which we’ve discussed here.
Photo: orlandoattractions.com
Effectively, the writer details all the ways that Disney has updated its policies to maximize per capita revenue.
As a reminder, Disney has increased guest spending by roughly 40 percent since 2019, which was just three years ago.
Photo: nbc.com
In other words, we’re all paying $140 today for stuff that cost $100 only three years ago. That’s less than ideal.
In fact, let’s extrapolate those numbers. The same vacation we paid $2,000 to enjoy in 2019 has increased to $2,800.
Photo: Disney
Is that a fair evaluation? Unfortunately, no. The thing about averages is that some people skew the curve, just like we learned in Algebra.
Some folks score so high that everyone else in the class feels like an idiot.
Photo: skillastics.com
With Disney vacations, if a few more people start paying $6,000, that pulls up the average price well above $2,000.
However, Disney’s recent changes encompass more than just enticing a few more whales to vacation at the parks.
Photo: Disney
Several services like Disney Genie+ and Lightning Lane have fundamentally changed the way that guests spend money at theme parks.
Disney had remained one of the final holdouts on free FastPass-style services, at least in the United States.
Photo: Disney
Since the change, more than half of park guests purchase Disney Genie+. So, that automatically raises the average price to visit the parks by 10-15 percent.
The answer depends on the day, as Disney also employs surge pricing for its admission tickets. You get the point, though.
Photo: travelandleisure.com
Disney has gently increased the cost most guests pay to enter the parks. And that led to a fascinating assertion by Parks Chairman Josh D’Amaro.
Photo: Walt Disney Company
Who Is to Blame for the Price Increases?
We live in an age where people parse two sentences and construct entire ideologies from what are, at heart, general statements.
I keep this in mind when I read comments like the recent ones D’Amaro made while speaking with WSJ.
Photo: MiceChat
The article resides behind a paywall, so most people cannot read it. However, I’ll quote this snippet to demonstrate why D’Amaro’s comments raised eyebrows:
“Mr. D’Amaro said he’s aware of the tension caused by rising prices and other changes, especially for annual passholders, but describes it as the inevitable result of progress, and insists that every change Disney has implemented at the parks is in service of improving visitors’ trips.”
Photo: Disney
I’ve added bold to two parts of that for emphasis. So the first question is, “Whose progress does D’Amaro mean?”
I doubt Disney fans would describe the current situation as something they describe as a positive forward step.
Photo: vecteezy.com
From Disney’s perspective, more revenue from the same customers is always better.
I mean, Coke used to sell two-liter bottles for $0.99 not that long ago. Then, they cleverly replaced the old product with one-liter bottles for $0.99.
That one move doubled their profit. Meanwhile, a two-liter bottle at my local Kroger costs $2.99, which means they’ve tripled the profit!
Companies are always searching for ways to get people to pay more for the same products.
D’Amaro’s comments reflect that this strategy has become Disney’s mantra during the pandemic.
Photo: MGN Online
The company was carrying far too much debt when the pandemic struck. Also, COVID-19 shut down three of Disney’s core businesses.
For you and me, Disney’s situation is equivalent to getting hospitalized and then laid off the day the first medical bill arrives. The timing was brutal.
Photo: CDC
Is Disney Better Today Than in 2019?
As to D’Amaro’s second point, well, he has a point. Disney Genie, a free product, enhances park visits.
Meanwhile, nobody has to buy Disney Genie+, just like nobody had to use FastPass+ back in the day.
Photo: Disney
Many people did, but not everyone did. In fact, cast members have regaled me with stories of people who simply could not understand the concept.
Some folks love the technological advances and believe that Disney vacations are easier than ever.
Photo:seoclerk.com
For people who know what they’re doing, that’s true to an extent. But, personally, I would argue that the system was superior at the start of 2020.
Disney’s tinkering has led to the 7 a.m. struggle, a situation so frustrating that the calmest person I know once yelled about it at dinner for an hour.
Frustratingly, Disney’s recent changes have turned a bad problem into an even worse one.
Anyone who wants to sleep in at Walt Disney World is operating at a disadvantage. Don’t get me wrong. You’ll still have a lovely time. You’re at Disney!
Photo: Disney
The opportunity cost of not being an early bird is that you’ll miss out on some of the most popular Disney Genie+ and Lightning Lane options. Those sell out.
Frankly, that part of guest trips has NOT improved. It’s gone backward instead.
Photo: Disney
I definitely wouldn’t describe this change as the justification for people paying 10-40 percent more at the parks, depending on which metric you use.
What’s Happening with Disney?
D’Amaro knows this, but he’s also in the sales business now. He’s the mouthpiece for the most popular theme park company in the world.
Photo: Disney
So, the extremely popular executive must introduce some adversarial arguments to justify what’s happening.
Effectively, D’Amaro is leveraging his popularity to ask for trust from Disney fans. That’s the real magic trick here.
(Richard Harbaugh/Disneyland Resort)
Disney wants vacationers to be okay with the fact that their trips cost more now.
The company has established a new bar for the price of a trip. However, executives sound like they realize this strategy only works if the economy is strong.
Source: Disney
Disney’s CFO has already acknowledged that fallback plans are in place should the economy suddenly struggle, which is a distinct possibility.
Europe is facing an energy crunch that has already caused park officials to shut down some unneeded features at Disneyland Paris.
Photo: Disneyland-Paris
The United States could face ripple effects as part of a joined international economy.
At that point, Disney’s magic trick can and will collapse. Currently, Disney is counting on the sustained interest in tourism as a post-pandemic behavior.
With school back in session across the country, we’ve already tracked a downturn in park attendance.
If that continues, the high cost of Disney can and will reset closer to 2019 standards. Disney’s banking a lot that it won’t, though. They’re hoping this magic trick lasts.
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Feature Photo: Disney
