Disney World Buries Its Controversial $149 After Hours Experiment

By Markets Fool.com

Image source: Disney.

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Thursday was the final night ofDisney'scontroversial Disney After Hoursevent. Guests paying as much as $149 a ticket had after-hours access to roughly two dozen of the Magic Kingdom's most popular attractions for three hours after the park closed to day guests.

Through six Thursdays in April and May -- and an seventh night on Mother's Day -- Disney was hoping that affluent theme park buffs would pay up for access to rides, attractions, and complimentary ice cream novelties and soft drinks with minimal wait times. The theme park giant lived up to the promise of exclusiveness, but largely because most park goers flinched at the stiff price tag.

That was probably by design, but two things happened to suggest that Disney overestimated consumer demand. The first sign that things were going to be bumpy was that it had to give away tickets to theme park bloggers, travel agents, and select Disney Vacation Club members to achieve a sellout on the first night. Disney often has previews for bloggers and travel pros of new events and attractions, but it's rarely on the same day as the actual grand opening.

That sellout was also suspect, as tickets that had been sold for about a month were still available the day before the inaugural night. Most social media reports from folks that did attend also commented on how empty the park was.

The second sign that things weren't going well came three weeks into the event when Disney buckled on pricing. The event was still listed at $149 for the public, but Disney park holders and members of the Disney Vacation Club timeshare program were being offered $75 tickets for any of the remaining nights.

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One can also argue that a third sign of the event's failure is that it wasn't immediately extended following its six-week run, but that's not fair. Memorial Day weekend kicks off the busy summer travel season for the theme park operator. The parks close later on those nights, making an after-hours event more of a logistical challenge for the sake of attracting dawn-seeking night owls.

We'll know for sure if it won't be extended when the tourism lull returns in the fall, though it wouldn't be a surprise if the House of Mouse gives up on the event in its current form.

Good ideas can be bad for business

Disney After Hours may have seemed great on paper, but there are ramifications to publicly offering a VIP experience that only few fans can afford. The media giant has introduced double-digit percentage price hikes to its annual passesand one-day ticketsin recent months, so even visiting during the day isn't as easy as it used to be. The notion of a $149 pass for three hours of near-exclusive access painted Disney as greedy, and the irony there is that there's a good chance that Disney After Hours wasn't profitable.

Having a couple thousand people paying $50 an hour may seem like a slam dunk, but keep in mind that there are a lot of staffing, utility, and maintenance costs associated with keeping a park open with more than two dozen attractions in operation. Disney may have calculated a modest profit with 5,000 people paying $149, but it's a far different model when you only attract roughly half as many people with many of those paying half as much.

Disney's theme parks will be fine. Attendance was actually lower at Disney World during the first three months of the year relative to the prior year's March quarter, but the media giant's operating profit exploded. We're also heading into the peak summer season and Disney has a couple of new attractions opening in the coming weeks that should prove magnetic to tourists.

Disney After Hours was a dud, but Disney after After Hours doesn't have to be. A strong summer at the theme parks could be just the ticket to push the stock back up to revisit last summer's all-time highs.

The article Disney World Buries Its Controversial $149 After Hours Experiment 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.

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