Disney theme parks have seen strong financial performance despite the challenges of the pandemic. The parks, experiences, and products segment of the company generated an impressive revenue of $28.7 billion in 2022, surpassing the pre-pandemic revenue of $26.8 billion in 2019. According to Disney's September report, the segment's revenue over the last 12 months amounted to $32.3 billion.
In line with its continued growth and commitment to providing exceptional experiences, Disney (ticker: DIS) has decided to adjust ticket prices for certain park admissions and passes. These changes will go into effect starting Wednesday.
Among the price adjustments, the most noticeable is an 8.4% increase in the cost of the most expensive Disneyland ticket for high-demand days. This ticket will now be priced at $194, reflecting the park's popularity and offering exclusive experiences.
The cost of multi-day passes has also been updated, with a five-day pass now priced at $480. This represents a 16% increase from its previous cost, ensuring that visitors have ample time to enjoy all the attractions and entertainment offerings.
For those planning to hop between Disneyland parks, the price of a five-day park hopper pass has increased by 25% to $75. Additionally, on-site parking fees have risen by $5, aligning with the operational costs involved in providing a seamless visitor experience.
It's worth noting that while adjustments have been made to certain ticket prices and passes, the lowest ticket price for one-day, one-park admission remains unchanged at $104. This fair pricing has remained consistent for four years at Disneyland, allowing guests to enjoy the magic within their budget.
Meanwhile, at Walt Disney World in Florida, the price changes primarily focus on parking fees and annual passes, rather than date-based passes.
Disney remains dedicated to offering new attractions and entertainment options across its parks. The company believes that the value of a theme park visit is reflected in the unique experiences it provides, backed by a wide range of pricing options. A spokesperson from Disney stated, "We are constantly adding new, innovative attractions and entertainment to our parks, and with our broad array of pricing options, the value of a theme park visit is reflected in the unique experiences that only Disney can offer."
Apart from the theme parks, Disney has also announced price increases for its streaming service, Disney+. Starting October 13, the Premium subscription plan will be priced at $13.99. These adjustments come as the company navigates the challenges of a costly streaming business and high operating expenses.
In conclusion, while there have been some price adjustments at Disney theme parks, these changes are intended to maintain the high-quality experiences and attractions that guests have come to expect. Disney continues to innovate and explore new ways to provide magical moments for visitors of all ages.
Disney Faces Cost Pressures and Price Changes
Disney Chief Financial Officer Kevin Lansberry reported that the company is experiencing continued cost pressures in the fourth quarter. These pressures primarily stem from labor wage rate growth and an additional $150 million in accelerated depreciation for the Galactic Starcruiser. The Galactic Starcruiser, a simulated outer space cruise in Florida, was permanently closed by Disney after less than two years of operation.
In an interview with KeyBanc Capital Markets analyst Brandon Nispel, it was revealed that Disney recently increased the minimum wage for park employees, resulting in increased costs for the company. Moreover, Disney plans to significantly increase its investments in its parks, experiences, and products segment over the next decade, aiming to reach approximately $60 billion.
Nispel emphasizes the need to find a way to pay for these investments. He states that while per capita spending at Disney parks may increase as guests spend more, there could potentially be a decline in park attendance. This is attributed to customers facing inflation and rising interest rates. Some customers may opt for less expensive local theme parks instead of the premium Disney locations.
Overall, Disney intends to maintain its reputation as a premium priced product. As Angela Palumbo reports, the company continues to face cost pressures and navigate price changes in order to secure its place in the market.