Disney theme parks make subtle price hikes for huge profits

waltz disney (SAY) – Get The Walt Disney Company Report has lost billions in revenue from its theme parks during the pandemic. The company has had to deal with closures around the world and closed theme parks still cost money to operate, especially when the company hoped to be able to resume operations quickly once the impact of the pandemic subsided. .

It was a dark time when “the happiest place on Earth”, nickname given to Disneyland in California, became one of the saddest. There was no one lining up to take walks, take pictures, or happily pay for expensive meals and snacks.

After a year of far too many Americans failing to hug Mickey Mouse or complain that the Rock ‘n’ Roller Coaster is just too intense, Disney’s theme parks have bounced back to hit an attendance record the last year, COVID-19 variants are cursed. While some fans complained about the price increases, many people were apparently willing to pay extra because they had waited too long to come back and wait in other queues.

How have Disney theme parks performed?

Disney’s national parks (i.e. those based in North America such as Disneyland in California and Walt Disney World in Florida) closed for a time in 2020 when COVID-19 hit, then reopened later in the year with strict capacity restrictions and other security measures. protocols, including mask mandates.

The public was understandably nervous about going to a theme park, but attendance rebounded as vaccines became available and restrictions eased. Disney Parks, Experiences and Products generated a profit of $356 million in the quarter ending July 3 last year, “compared to a loss of $1.87 billion in the same period in 2020 “.

It was a major turnaround, but it was just the beginning.

Even with the emergence of new variants of COVID-19, attendance continued to increase as the year progressed, with revenue in the last quarter of 2021 increasing to $7.2 billion from $3.6 billion. in the prior year quarter, as reported in Disney’s latest results. report. In total, increased park attendance accounted for a third of Disney’s $22 billion in total sales.

More importantly, the theme park segment posted a profit of $2.45 billion, compared to a loss of $119 million a year ago. It’s not the division’s first benefit since the pandemic, but it’s a decided return to pre-Covid returns.

“In fiscal year 2022, our national parks and experiences generally operate without significant mandatory capacity restrictions related to COVID-19, such as those that were in place during the prior year quarter; however, we continue to manage capacity to respond to ongoing COVID-19 considerations regarding the health and safety of guests and cast,” Disney noted in the appeal.

On the sales call, CEO Bob Chapek said pent-up “demand” was the reason for the surge in sales (a lot of people just want life back to normal, after all) as well as a recent increase in ticket prices (with more to come) and increased option for guests for more expensive ticket options such as Disney Genie and Disney Genie+ as well as Lightning Lane.

What are Disney Genie+ and Lightning Lane?

The cost of a regular, or Tier 1, ticket to any of the Disney parks hasn’t changed, as $104 will get you into a park for one day, meaning you can attend Disney World but you can’t take the monorail. Epcot, for example.

But the prices for tiers 2 through 6 have gone up to $119, $134, $149, $159, and $164. Tiers become more expensive based on popularity at the time of visit. So if you want to go on a level 4 day, you need a level 4 ticket, which also gives you access to a level 3 day, etc.

In addition to the different tiers, Disney Genie, Disney Genie+, and Lightning Lane are all add-ons that customers can purchase to help them navigate the park more easily and reduce their waiting time.

Disney Genie, which is free, is an app that will help customers create an itinerary for the day. Disney Genie+ costs $20 per person per day, and it allows guests to reserve arrival times to skip the regular line on some popular rides, but not all rides. Think of it as the modern equivalent of the park’s old FASTPASS system.

Lightning Lane is a Genie+ add-on at $20 per person per day. It’s an even faster service, and it applies only to each park’s most popular rides, such as Star Wars: Rise of the Resistance at Disneyland, WEB SLINGERS: A Spider-Man Adventure, and Radiator Springs Racers at Disney. CaliforniaAdventure.

A third to half of park visitors choose to upgrade to Genie+, which Chapek says is “well above what we expected.”

While things are looking up for Disney’s America theme parks, the company is still encountering challenges and headaches around the world.

Hong Kong Disneyland recently closed after a resurgence of the virus, while attractions such as Tokyo Disneyland and Disneyland Paris continue to face capacity and travel restrictions related to COVID-19, as these two countries have some of the protocols COVID-19 strictest. in the world.

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