Disneyland Increased Its Prices. Was It the Wrong Decision?

Earlier this week, the Walt Disney Company (NYSE:DIS) announced that Disneyland admissions fees would increase by roughly $10 USD per individual ticket.

Parking fees also saw some changes, increasing from their original price by $30 USD.

This is not a new move for the company. They elevate their prices every year, with the last price increase taking place in February 2020.

Disney has to compensate for low entry numbers.

The pandemic took a toll on amusement parks around the globe. Not only for the Disney ones, mind you, but for all of them. With such a recent emphasis on social distancing and health measures, how could any park remain as it was before?

That being said, Disney has made several efforts to bring its parks to their former glory. By now, these efforts have been going on for almost two years. And they went from decreasing maximum capacity to installing better health installations, to lots more.

Sadly, none have been as successful as the company initially intended. To simply put it, the number of attendees is just not increasing that much. So what was the next logical step? That’s right, increasing the price tag per attendee.

Managing an amusement park is an expensive thing to do. That’s a fact. But let’s think about Disney’s case for a moment. They’re one of the market’s biggest chains. Plus, Disneyland is an excellent source of revenue for the company.

In other words, Disney can’t just wait around for things to improve pandemic-wise. It has to compensate for low performance as soon as possible. And right now, it can only do this by focusing on fewer daily guests as their primary source of income.

This has been a reason for investors to worry. Will people attend now that they’re expected to pay even more? In their eyes, this is too much of a gamble.

Believe it or not, people will still go.

This has not been the first time that Disneyland increased its prices. People still attend the masses, regardless of the situation. 

Plus, the annual passes for next year have been sold out. So there are plenty of attendees to be expected in the year 2022. 

Not to mention that these lacklustre numbers have been exclusive to domestic customers for the most part. Remember, the pandemic severely limited people’s ability to travel internationally. That being said, things are improving in that regard. 

This means that we could add extra international attendees we hadn’t seen. People love what the park has to offer, and they’ve got no problem in paying for the experience.

For us, the fact that Disney increased its prices is not so much a gamble as it is charging fairly. So yes, we believe that elevating their prices was the right call.