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We'll know soon ifDisney's(NYSE: DIS)most popular theme park has to close for some of its potential guests today. Disney's Magic Kingdom had to turn some guests away on Christmas morning in 2014 and again in 2015. It's time to find out if it can stretch that streak to another year, but there are a couple of reasons to believe that things might be different this time.
Disney limited admissions to Florida's Magic Kingdom and California's Disneyland shortly after they opened on Christmas Day last year. In Disney World, guests with single-day tickets were turned back shortly after 10 a.m., the first phase of its park closure policy. Guests staying at a Disney resort or in possession of annual or multi-day passes were let in, as well as those with restaurant reservations. If guest counts would've kept ticking higher, even more guests would've been transported to one of the resort's three other theme parks.
If Disney's Magic Kingdom doesn't close its high-tech turnstiles later today, it would be disappointing, but it may not be a surprise. For starters, the same single-day ticket buyers who were shut out last year have to pay a lot more this time around. Disney shifted to demand-based pricing in February, and in a nutshell that means folks visiting during peak season -- now -- have to pay $124 for a one-day ticket to the Magic Kingdom, 18% more than the $105 they had to shell out last holiday season.
The increases have also started to catch up to Disney, with year-over-year attendance at Disney World declining in two of the past three quarters. Guest counts started to recover during the summer quarter, but the real test will be how things play out during this peak week between Christmas and New Year's Day.
Blame it on the calendar
There's also something peculiar about the timing of the school holidays with Christmas falling on a Sunday. Some school districts got out late last week for the two-week holiday, making it challenging for families to get to Disney World in time for Christmas.
I was at Disney's Hollywood Studios on Friday, and it certainly didn't feel as crowded as it's been two days before Christmas in recent years. It could be that folks are staying away from that particular park, with so many attractions closing over the past year and change. It probably didn't help that this is the park's first year without the Osborne Family Spectacle of Lights, gone to make room for the Star Wars Land and Toy Story Land expansions that will open in a few years. This doesn't mean things will end badly for the House of Mouse this season.
Disney doesn't have to hit capacity at the Magic Kingdom to win. We saw how revenue grew at Disney's theme-parks division even when attendance went the wrong way in the March and September quarters. Operating income grew even faster. The media giant is making things work with fewer guest counts by squeezing more out of its premium experiences, so hitting capacity at its gated attractions isn't a requirement for Disney to come through with record financial results for the holiday quarter. It would be encouraging for shareholders if the parks fill up, but it's not the end of the world -- or World -- if that isn't the case this time.
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