The covid pandemic forced Disney World and Disneyland to make a lot of changes. Some of those, like health checks at the gate and socially distanced line queues, went away as the virus faded as a public concern.
That did not mean that Walt Disney (DIS) left behind all the lessons it learned during its darkest covid days. The company, for example, kept digital ordering and advance ordering at quick-serve restaurants as a standard. It has also held onto a reservation system that many visitors don't like.
To manage limited capacity during the covid pandemic, both Disney World and Disneyland moved to a system that required guests to have not only tickets but also reservations at their parks of choice. Since capacity was limited, a customer could have a valid admission ticket (or annual pass) and still not be able to get into the park they wanted to visit.
That was something a lot of longtime park visitors -- especially local annual passholders who were used to being able to visit on a whim -- have been unhappy about. Disney has maintained the reservation system even as all pandemic-related restrictions ended.
Many Disney World and Disneyland visitors had expected that to change, but the company has made clear that it wasn't going back to the old system.
Disney Chief Executive Bob Iger did, however, explain a big reason that the company has kept this system in place, and it's actually a very big positive for Disney theme-park visitors.
Disneyland
Disney Gives Theme Park Visitors a Gift
While Disney has raised ticket prices, raised food prices or cut portion sizes, and turned the free FastPass+ into paid Genie+ and Lightning Lanes, it has also done something theme-park visitors should appreciate. Chief Financial Officer Christine McCarthy spoke about the matter during the company's first-quarter-earnings call.
"At Domestic Parks and Experiences, significant revenue and operating income growth in the quarter was achieved despite purposefully reducing capacity during select peak holiday periods by approximately 20% versus prepandemic levels in order to prioritize the guest experience," the CFO shared.
That's actually a pretty impressive capacity cut. It shows that Disney understands that higher prices come with the expectations of an improved experience. It's a very fine line that the company appears to have done a good job walking.
"Per-capita guest spend at our domestic parks also showed strong growth. Quarter to date, park attendance at both Walt Disney World and Disneyland Resort are pacing above prior year. And based on reservation bookings, we expect to see this trend continue," McCarthy said.
Disney Can Make More Money With Fewer Guests
Cutting maximum capacity at Disney World and Disneyland's theme parks matters a lot on the busiest days. A prepandemic capacity crowd meant that guests had to pick and choose just a few experiences, and doing those would involve standing in long lines.
Disney does not want people to pay top dollar to visit its theme parks and have a bad experience. Cutting maximum capacity by 20% does not mean that DIsney World and Disneyland aren't crowded. It just means that they're not so crowded that guests remember only being packed in, not the brief moments of fun in between waiting in line.
Iger also commented on capacity during the earnings call.
"Demand on the parks is extraordinary right now," he said. "Now, we could lean into that demand easily by letting more people in and by more aggressively pricing. We don't think either would be smart. Because we let more people in is going to reduce guest experience. That's certainly not what we want."
The returning CEO made clear that a lower capacity is good not just for park visitors but for the company.
"And in fact, if you looked at our results this past holiday season, we actually reduced capacity, certainly improved guest experience, and we're able to maintain profit -- not just profitability, but a very, very successful or robust bottom line," he said.
We're going to continue to look at opportunities like that, which is essentially to simply get more creative in terms of managing the capacity that we have."
