Disney hikes theme park prices — necessity or confidence?

August 4, 2009

Magic, Disney’s way, just got a little more expensive, as it does every year around this time when Walt Disney World raises its admissions prices.******WIth its prices generally tracking the national economic exuberance or lack thereof, the fact that Disney raised prices this week for, among other things, its “Magic Your Way” multi-day tickets, appears to reflect expectations for some recovery at least in consumer spending somewhere on the horizon.******With the recession still weighing on family vacations, Disney hiked the resort’s most popular multi-day passes by a relatively gentle 2.5 percent to 5.3 percent this week, compared with a rise of more than 16 percent in the boom year of 2006, according to data compiled by Pali Capital analyst Rich Greenfield.******This price hike, whatever its size, may simply be aimed at mitigating a 7 percent lag in hotel bookings at its domestic parks in the current quarter, as well as margin-gouging discounts at its Walt Disney World hotels, which boosted attendance but saw revenue drop by 9 percent last quarter.******Disney CEO Bob Iger himself expressed a glimmer of optimism on a conference call to analysts  last week, saying he say signs of ”economic stabilization”, but would not commit to ending the hotel discounts that have been propping up park attendance since last year’s market crash.******A spokesman for Disney Parks and Resorts said the price increases resulted from the company’s “continuous monitoring” of park prices relative to other forms of entertainment like football games, skiiing or concerts – and by that calculus, a park visit, at $79 for a one-day, one-park adult ticket was still “great value for the money.”******So if having fun is getting pricier again, that’s a good thing. Right?

3 comments

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This price hike, whatever its size, may simply be aimed at mitigating a 7 percent lag in hotel bookings at its domestic parks in the current quarter.Is this the way to go? What if even more people stay away because of this price hike, in a few months they’ll have to raise ticket prices again to mitigate those effects.

This appears to be an act of desperation, and I believe it is an act of over confidence in their estimate of the elasticity of demand for their services.

Posted by Alan Lezak | Report as abusive

Walt is probably turning over in his grave. His idea was to have a place families could take their children that was fun and INEXPENSIVE. I love Disney World, but am unable to afford the fun anymore.

Posted by Marianne Gaskill | Report as abusive