Walt Disney (DIS) operates its Florida theme parks like a discount airline. The basic price of admission goes up or down based on demand and buying a ticket gets you in the door and that's it. If you want any extras -- everything from food to the ability to cut the line at popular rides -- you will pay extra.
It hasn't always been like this at Disney World and the company's three other Florida theme parks. Dynamic pricing -- where tickets cost more on days with higher demand -- began in 2016 and that kicked off a slow change in how the parks operate.
Most recently that involved the company getting rid of its free FastPass+ program, which allowed everyone to cut the line at a few rides per day in favor of the paid Lightning Lane and Genie+ programs.
Those paid programs have clearly benefited the company's bottom line, according to Chief Executive Bob Chapek's remarks during Disney's first-quarter earnings call.
"In the quarter, more than a third of domestic park guests purchased either Genie+, Lightning Lane, or both," he said. "That number rose to more than 50% during the holiday period. While demand was strong throughout the quarter at both domestic sites, our reservation system enabled us to strategically manage attendance. In fact, their stellar performance was achieved at lower attendance levels than 2019."
Disney can make more money with fewer visitors and that bodes well for the company when the impact of the pandemic fully goes away and guest counts return to normal. Disney, however, hasn't stopped rolling out new ways for park visitors to spend even more money.
Dan Kline/TheStreet
Disney Wants Guests to Have (and Pay for) a Moment
If you have visited Disney World with your family, you know that sometimes there's a disconnect between your memories of your trip. Nobody remembers the waiting in line, the crying, and kids pushed to the edge of exhaustion while the adults just want someplace to sit down.
Nobody takes pictures of the frustrating parts of a Disney vacation. Vacationers want to remember the good parts and capture photos that show smiling faces in front of idealized backdrops. Disney now has a new way to make that happen and it's another revenue opportunity for the company.
Disney has expanded its "Capture Your Moment" private-photo session from Magic Kingdom, where it was first introduced, to Epcot and Disney's Hollywood Studios. Basically, the program lets visitors to those three parks book a photographer to take some special pictures.
The company website explains how it works:
"Reserve a personalized 20-minute photo session that captures the fun and excitement of your special day — and your own unique style! We’ll get everyone in the picture and give you lots of different shots to choose from. Then just purchase your favorites to download and share!"
You can book Capture Your Moment photo sessions at Magic Kingdom now and at Epcot and Disney’s Hollywood Studios, beginning Feb. 24 and March 21 respectively. The company has raised the price for the photo sessions from $50 to $79, and there's a catch if you actually want to get access to your photos.
"While photos are not included in the price of your personalized photo session, Guests who have Memory Maker, Memory Maker One Day, a qualifying Walt Disney World Annual Pass with a Disney PhotoPass benefit, or a Walt Disney World Annual Pass with the Disney PhotoPass Downloads add-on can download these Capture Your Moment photos at no extra cost."
Basically, you need to buy a photo package to make use of the added-charge photo session. That's some true Disney magic (at least for shareholders).
Disney Wants Every Dime -- and Gets Most of Them
Disney has realized that it has limited inventory with its theme parks (and even more limited inventory until the company fully goes back to prepandemic capacity limits).
Because of that, it understands that most visitors -- people already shelling out over $100 per day or over $2,000 for a family of four visiting for four or five days -- probably won't pass on add-ons that enhance their trip.
Yes, you can be the family that packs snacks or eats only off the property, but the success of Genie+ and Lightning Lanes suggests that most guests won't do that.
"As we return to a more normalized environment, we look forward to more fully capitalizing on the extraordinary demand for our parks, along with the already realized yield benefits that took shape this quarter," Chapek added.
Some of this money will, of course, go into improving the parks, which have a slew of new rides planned over the next few years.
But Disney has realized that as long as its theme parks are a can't-be-skipped vacation for many families, price doesn't matter. That's something very few businesses can say, but it's clearly true for Disney World.
Rising interest rates, inflation and market volatility are on the horizon. You don’t want to miss out on this exclusive opportunity to unlock Action Alerts PLUS at our lowest price of the year.
