-From Theme Park Tourist
By Amanda Kondolojy, Saturday, September 17, 2016 06:58
Though Walt Disney World raises prices on things likesouvenirs, events, and food all throughout the year, the resort is rather methodical with its ticket price increases. Every spring, prices for single and multi-day tickets go up, and then in the fall, annual pass price hikes for the upcoming year are announced.
While longtime Disney fans have come to expect this unfortunate annual tradition, this year has been far from typical, and it may be in Disney’s best interest to hold off on price increases for annual passholders this year for some very practical reasons, the first of which is probably still too fresh in the minds of annual passholders…
Annual passholders are still recovering from the dramatic price hikes of 2015
Last year’s annual price hike was more than just your standard 2-5% cost increase, and brought with it a brand new “tiered” structure that implemented blackout dates for all but the most expensive annual passes, in addition to the higher prices. Fans were definitely shocked by this turn of events last fall, with many expressing outrage that Disney was not only charging much more for annual passes, but giving guests less in return by implementing block-out dates for almost every level of pass.
However, though some damage has already been done thanks to the implementation of this new system, by giving annual passholders a break in 2016, Disney might win back some goodwill from passholders who were considering either downgrading or not renewing their annual pass in response to these changes. And while this may be the most obvious reason for Disney to not raise prices this year, there’s an even more practical consideration at play here as well that has nothing to do with keeping annual passholders happy and everything to do with Disney’s bottom line…
Attendance is already down in 2016, and is projected to go lower in the near future
Disney has already confirmed that attendance at Walt Disney World during the first half of summer has been much lower than originally anticipated, and when the fourth quarter (and year ending) results are released in November, many are expecting to see yet another downturn for the resort, as the end of summer has not exactly been busy. However, the slow summer of 2016 might just be the tip of an attendance crash iceberg, if recent reports are to be believed.
Earlier this week Bloomberg reported that a recent survey performed by a third party found that “about half” of a sample size of 800 potential Disney guests said they have recently decided not to visit Walt Disney World specifically due to the threat of the Zika virus in central Florida.
Now while Disney was quick to refute this story (and Bloomberg later amended their piece to reflect Disney’s comments saying they had not seen any ill effects from fears about the virus), the fact is that the forecast for attendance later this year and into early 2017 isn’t looking good. While Zika isn’t totally to blame here (rising costs play a part too), the fact is that attendance will likely get worse before it gets better. Which brings us to our next point…
Annual passholders are going to be even more critical in the months ahead
With (potentially) fewer people traveling to Florida in the coming months due to a number of factors, annual passholders (especially the ones who live locally) will be even more critical to keeping Walt Disney World’s attendance numbers at least stable year over year. And while you might not think Disney’s annual passholders make up a significant enough proportion of the resort’s total guests to make a difference, recent history shows us that this isn’t actually true.
Back in 2009, after the global economic crash stalled domestic and international travel, Disney wisely implemented an aggressive marketing strategy that included tons of freebies for passholders (including a $60 merchandise gift card for passholders on their birthdays) as well as “Limited Time Magic” experiences that brought special entertainment, characters, merchandise and more to the parks. As you might expect, annual passholders responded well to this initiative, and in return helped keep Walt Disney World’s attendance figures in the positive year to year. While it’s obvious that the broader economic issues that were happening in the world around this time still affected attendance, annual passholders kept it from becoming a truly catastrophic event.
It’s probably too late for Walt Disney World to change course and bring back passholders in a meaningful way in 2016 (though they were successful with therecent PhotoPass Day event), but if Disney is truly worried about attendance declines in 2017 and beyond, incentivizing passholders is a tried and true way to make sure that guest levels stay healthy, even in the face of economic uncertainty, rising prices, and even the Zika virus. Simply declining to raise prices this year could go a long way towards gaining some goodwill from these guests, and ensure that passholders are ready to hit the parks in 2017.
In a surprising move earlier this fall, nearby Universal Orlando Resort raised prices for its annual passholder program this past August, instituting a complex tier systemsimilar to what Disney implemented last year, complete with double digit percentage price hikes across the board. And while increases at Universal Orlando Resort typically mean that Walt Disney World will be raising its own prices soon, Disney has yet to follow its neighbor, which is an interesting development all by itself. While we’ve still got a few months to go before Disney’s annual price hikes generally take effect (last year’s increases came at the beginning of October), perhaps this is a sign that prices for Walt Disney World annual passholders will stay where they are, at least for the immediate future.
Do you think Walt Disney World will actually hold off on raising prices for annual passholders this fall? Should they? Let us know what you think in the comments below!
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