It’s happened again. Disney has raised its ticket prices for the parks. It’s an annual trend that has been going on since Walt opened up Disneyland in 1955. However the price hikes in recent years have been going up leaps and bounds more than they did in the early years when Walt was alive. So what is going on with these price hikes? Why is Disney raising the prices again? How much did the prices go up when Walt and Roy were in charge? How much did they go up after that era? I’ve sat down over the last few days to look into this issue from a few different angles.
Lets start by taking a look at the prices for Disneyland and Disney World over the past 60 years. The first thing you have to understand when dealing with the price hikes is that while it only cost $1.00 to get into Disneyland when it was opened to the public, it really cost about $3.50 to get in and get on the rides. (Or at least the 8 rides allowed by the best ticketbook you could purchase). So while I could start with the $1.00 price, its not really reasonable since the prices since 1982 included being able to ride all of the rides. So for the prices pre-1982 keep in mind that I’ve added the base price of admission with the price for the best ticket book.
Walt was the visionary behind the parks, but his brother Roy was really the man in charge of balancing the books (and I am sure that a small part of him would cringe every time his younger brother came in saying he had a swell new idea). When the two Disney brothers were in charge the price for a full day at Disneyland with the best ticket book available went from $3.50 for an adult to a grand total of $7.00. This era brought some of the most iconic expansions to the park including the opening of Alice in Wonderland, the Matterhorn, the Monorail, the Tiki Room, It’s a Small World and much more all for only a few cents more a year!
The prices continued their slow and steady (and fairly reasonable) increase until 1982 when the ticket book system was eliminated for the new all-inclusive day passes. But believe it or not, at that point the price for a full day at Walt Disney World actually went down. In Walt Disney World during the 1981 season, it would have cost you $9.50 to get into the gates at the Magic Kingdom and another $11 for the best ticket book. That’s a total of $20.50 per day and that didn’t even get you on every ride in the park! Then in 1982 Disney rolled out the day pass for $15, which is a decrease of over 25%.
Prices were going up still, however it was around 1984 when the increases began to jump more erratically before leveling off at a steady $2.00 a year increase regardless of park expansions or lack thereof. This was the Eisner era, and while we did see the dawn of MGM, California Adventure, Blizzard Beach, Typhoon Lagoon and Disney’s Animal Kingdom, we also saw prices go from $14.00 a day in Disneyland and $18.00 a day in Disneyworld to $53 in Disneyland and $59.75 in Disneyworld by 2005. That means the price to get in for one day more than tripled in the 21 years when Eisner was in charge. Some could argue that it was worth it considering that both American based locations doubled as far as parks to go to in this time. Also the worldwide parks were introduced in this era as well.
The price to get into any Walt Disney World park for one day only was $59.75 in 2005, but in the ten yeas since Bob Igar took the helm that price has jumped to $105 for a day in the Magic Kingdom and $99 for a day in any of the other parks. That’s about a 45% increase. During that time the Disney Company purchased Marvel, Pixar, the Star Wars Franchise and once again revitalized the flagging animation department. But considering that the revenue from the movies (now including Marvel) is the largest share of Disney Revenue, and that the Animations are once again pulling their financial weight it would be unreasonable to say that the ticket prices for the parks were still subsidizing those purchases. Also, while we did see the expansion of New Fantasyland in WDW and the inclusion of Cars Land in Disneyland, the parks here in the US haven’t really had much growth. Avatarland is growing by the day, and there is the hope of a newly redesigned Hollywood Studios in the near future, but we haven’t seen a new park in a while. In fact, the only place that is getting a new park is Disneyland Beijing.
Here’s another breakdown of the Disney ticket price increases for Disneyland for the past 60 years.
Why are the prices going up so much?
I’ve been doing quite a bit of research on this topic because I really wanted to know why it costs almost $40 more per day to get into the parks than it did during my first visit in 2006. Was inflation a factor? Is it really an attempt to quench the rising crowds? Or is it a way to please the stockholders by driving up revenue? I can’t tell you which one it is for sure. But I can show you some numbers that may help you make your own decision. Lets deal this these one at a time (or if charts aren’t your thing you can skip ahead)
[su_spoiler title=”Inflation Rates and the Price of a day at Disney” class=”my-custom-spoiler” icon=”plus-circle]
At first I had thought that the inflation rates in the US may have had something to do with the price of a ticket at Disney. But lets look at the inflation rate since the 1950’s. As you can see, Inflation went up during the seventies but went DOWN significantly into the eighties dipping again in the nineties. So while Inflation is currently up since the 50’s its still lower than it was during much of the time frame we are dealing with.
[su_spoiler title=”Price Hikes as Crowd Control” class=”my-custom-spoiler” icon=”plus-circle]
The second theory that I’ve seen is that the prices are going up to curb the ever increasing park attendance. If that is the case then it really isn’t working.
A you can see the park attendance is still going up at about the same rate as the price increases (the attendance chart starts in 1986). So either Disney is trying to find the point where people stop coming at all, or this isn’t the reason for the price hikes either. (Because the trend has been happening for years, the execs at Disney would have to be blind not to see that this strategy is not a crown curbing solution. In fact it seems to be doing the opposite)
[su_spoiler title=”Price Hikes as Value Indecator” class=”my-custom-spoiler” icon=”plus-circle]
- Another theory I’ve come across was posted by John Frost in the Disney Blog after the 2013 Price Hike. “Disney is also factoring perceived value into its decision to raise prices. The ‘brand’ of the Disney parks is that they’re the crown jewel of theme parks everywhere. So there is pressure to make sure your prices are higher than your competitors. This has created a bit of a pricing war between the three major theme parks in Orlando. Whenever SeaWorld or Universal raises their prices in order to say, “Hey look, we’re as good as Disney,” it forces Disney to raise theirs so they stay atop the perceived value pyramid.”
If this theory is true, then we are in a never-ending death spiral of price hikes. It goes against the basic economic principles of supply and demand (there are lots of amusement parks so it would seem that underpricing the competition would work better). But the theme park industry is a luxury industry, where prices aren’t based off of traditional market instruments meaning that Disney can set the prices wherever they like. And I admit that the value of the parks is high. However even in markets like this one there is an “optimum market price”, the point where they cannot raise prices any more without loosing revenue. I wonder how much further Disney can go before reaching that.
[su_spoiler title=”Price Hikes for Happy Stock Holders” class=”my-custom-spoiler” icon=”plus-circle]
Disney is a business and it has a responsibility to its shareholders to increase revenue
While this is true, I really hate to think that this is primary motivational factor behind Disney’s decision making. Not because I don’t want Disney to thrive as a business, but because that would mean that the company Walt risked everything to build is now motivated by money over all else. Here are some charts to go with this theory. The first is the price hike chart for both US based parks, the second is the revenue reported over the past few years and the third is the stock price. Keep in mind that I am not a financial analyst, and its also good to remember that the parks don’t account for the largest percentage of revenue. Again, I really hope that this isn’t the key motivation behind the price hikes in the parks. But the charts are alarmingly similar.
So the prices keep going up, is there anything Disney could do about it?
I never like presenting problems without trying to find possible solutions. And, yes, I do know that Disney executives probably won’t be taking these ideas into consideration. But here are two ways that I can see to lower the costs of tickets and annual passes while dealing with the overwhelming crowds in the parks (although only the second one deals with maintaining revenue at the same time).
- Lower the Maximum Capacity in the Parks
Contrary to Popular belief the Anaheim Fire Marshal does not control the Maximum Occupancy of Disneyland, nor does the Kissimmee Fire Marshal control the Maximum Occupancy of Walt Disney World. They can dictate how many people are allowed in a ride building or restaurant, but they can’t say how many people can mill about the rest of the property. But Disney Can.
Lets use Disneyland as an example in honor of its upcoming birthday. From what I’ve been able to find, Disneyland has a set capacity of 85,000 guests, and they stop selling tickets at 75,000. 85,000 is a whole lot of people, especially considering that 80,000 guests in the parks caused enough concern that the Anaheim County Fire Marshal came to the park back 1996 (even though they really couldn’t do much). Dropping that upper limit would cause the parks to close more frequently during the year, however it would also mean that those crowded days would be just a bit less claustrophobic. I’m not sure what the new limit should be though. But nowhere near the current 85,000!
I know this would make people angry, since some guests would arrive to find the parks closed on more than just the holidays, but the price hikes are already starting to do that (without actually curbing the massive crowds present in the parks!).
The other reason I like this solution is that it wouldn’t favor the wealthy fans over those who would have to save for months (or longer) for a single trip under the current pricing structure. Instead admission would come down more to being at the gates at the right time. And with the new ticketing system Disney has rolled out in the parks they could factor in how many resort guests they have and how many AP holders can be admitted and use that to determine how many tickets they would sell and accept during the day.
By the way, Tokyo Disney has a system like this one and their day passes cost closer to 50 USD a day. Yes their parks close much more frequently. But they are less crowded AND less expensive. What a wonderful idea that is.
- Overhaul the Annual Pass system
The Annual Pass system is decades old at this point and the passes have grown more and more expensive in that time. Granted paying a few hundred dollars for 300+ possible days is exceptionally cost effective but it isn’t helping with the rampant overcrowding and probably isn’t helping with the ticket costs for those who don’t go frequently enough to justify a pass. And think of all those days that you don’t use, or even worse the blackout days that you cant use. And while I’ve seen people who want to raise the prices on the passes, or increase the blackout dates, I’d like to see something else entirely.
What I’m suggesting here isn’t a price hike, but more of a ‘time-share’ system for the Annual Passes where Pass Holders could pay for batches of usable days. For example someone could pay something like $100 for 20 days, $200 for 50 days, $350 for 100 days etc, and while that is more expensive than the current prices per day its still only $5.00 for each day at Disney at the lowest tier. With the new My Disney System Disney could predetermine how many Pass Holders they would accept each day, adjusted to the expected crowds for the day. And the AP holders could use the system to check in a few days before a planned trip to the park, say, 3 days in advance minimum, 90 days Maximum.
This would also solve the problem of the vanishing lower tier passes in California. Pass Holders would only have to pay for the number of days they want per year. Meaning that residents could still have access to the parks for much less than the gate price without having to pay over $600 for the high end passes. But at the same time, guests who want to go to the park 300+ days a year would be paying much more than they are right now (and really even if the passes hit $1200 for 300+ days that still only $4 per day vs. the price at the gate!).
So at the same time Disney could cut down on the crowds in the park while increasing the revenue from the Annual Passes while still making them accessible. And the increased revenue from the AP system could be parlayed into lowered prices for standard park entry allowing families across the country access to something that has become a cultural rite of passage.
So what does all of this mean for you, the loyal Disney fan? It means that you will be spending more to get into the parks this year. However, if you are like me, and have to travel a bit to get into the parks, there are ways to minimize the impact on your wallet. The first is to go for more days rather than less. You will end up paying less per day this way.
So instead of taking two smaller trips, or a trip each year, try to consolidate your time in Disney down to one trip with more days. The other option is to purchase tickets through reputable ticket sellers like AAA, or Undercover Tourist. They give you genuine Disney Tickets at a discount. True it may only be a few dollars per day, but that alone could offset the latest price hike!
But even if you find a way to save, my issues with the price hikes stand. I’m not concerned so much with the expense but what the expense means for the families who really just want to take their kids to Disney. Disney was built for families. That was the original intent. Walt wanted to build a safe place where fathers could spend the day with their daughters by actually spending time WITH their daughters. If the company that carries Walt Disney’s name keeps raising their prices for their parks in the manner that they have been for the past years then those very families Walt designed his parks for won’t be able to afford even one trip to Disney let alone repeat trips.
There are other options for maintaining revenue and controlling crowds, options not based in greed, options that require a bit more effort than simply another Disney ticket price increase. Walt spoiled us, I’ll admit it, we expect the company to find the best solution, the most innovative solution, but instead they seem to ever increasingly seek out the simplest solution. The Simple solution may be the best solution in some cases, but there is a fine line between keeping it simple and just cutting corners. I always hope that Disney is leaning towards the first and not the second.
One last bit of food for thought before I close this issue: chances are that a Walt Disney himself wouldn’t have been able to afford a day ticket to Disneyland. Isn’t that a sad thought?