Disney World Is So Greedy, It's Brilliant

By Markets Fool.com

Source: Disney.

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It seems as if Disney is always coming up with new ways to separate its theme park guests from their money. The latest greenbacks-slurping scheme is Disney After Hours, a three-hour event that will take place at Disney World in Orlando on select nights through April and May, offering more exclusive access to rides, attractions, and character greetings for folks willing to shell out an extra $149 per person.

Disney announced the Disney After Hours events on Wednesday; they will take place on seven consecutive Thursday nights starting April 14.

It may seem outrageous at first glance. A one-day ticket to the Magic Kingdom on any of those Thursdays costs "just" $110. Folks using a multi-day or annual pass are paying a lot less than that. What makes those three hours after the world's most popular theme park closes more valuable than the 14 hours visitors can spend there during the regular operating day? It's promising to include bottled beverages and ice cream novelty treats, but surely drinks and frozen snacks won't be the motivating factors here.

Well, the company is limiting the number of Disney After Hours tickets that it's selling. The theme park giant isn't revealing exactly how many are available -- and the stiff price will be a limiting factor in and of itself -- but the online chatter suggests the ceiling will be just 3,000 guests a night. The Magic Kingdom averaged roughly 53,000 guests a night in 2014, according to industry tracker Themed Entertainment Association. This promotion is already schedule for school nights during the slow season, when the guest count is considerably below that average. Cut the numbers further down to just a few thousand guests in the massive theme park, and they'll enjoy plenty of elbow room, and much shorter lines to ride the Seven Dwarfs Mine Train family coaster or see Mickey perform personal magic tricks at Town Square's photo station.

Selling 3,000 tickets at $149 a pop would amount to an extra $447,000 a night in revenue, and that's before considering any of the additional purchases that guests will make. Even in a world of escalating labor costs, these events will be profitable if they fill up.

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The initial reactions haven't been kind. Even the comments on Disney's official parks blogare leaning toward disapproval. Then again, the very nature of an exclusive event is that it won't be accessible to the masses.

Disney is being painted as being greedy, again. Earlier this month it started offering some of its better Magic Kingdom parking lot spaces for a 75% premium. Last month, it introduced demand pricing, charging as much as 18% more for a one-day ticket to the Magic Kingdom during peak season. Now we're seeing another hard-ticket event that's pricing the theme park experience at nearly $50 an hour.

Disney After Hours will be a hit, even if it flops. That's not a flub. Disney already offers guests staying at its onsite hotels access to "Extra Magic Hours," when they get exclusive access to select theme parks either an hour before they open or for three hours after they close to the general public. It is testing Disney After Hours on Thursdays because those aren't nights when the park is made available for Extra Magic Hours. That justifies Disney's move in making everyone -- even resort guests and pass holders -- pay extra for this. However, it also improves the perceived value of the perk. Even if there are far more than 3,000 resort guests enjoying Extra Magic Hours on any given day, this places a perceived $149-a-person value on the "free" perk. That's a lot more than what a family of four is paying for most of Disney's lodging options. In other words, Disney After Hours is a stealth marketing play for its growing array of onsite hotels.

Well played, Disney. Staying up late pays off again.

The article Disney World Is So Greedy, It's Brilliant originally appeared on Fool.com.

Rick Munarriz owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.