A trip to Disney World isn't cheap, and it's not going to get any cheaper despite problematic attendance trends. Disney (NYSE: DIS)has increased its one-day ticket prices in February for three consecutive years, and all signs point to that streak stretching to four later this month.
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The House of Mouse has jacked up its Disney World admissionsevery year since 1988 according to AllEars.net, and that was when the resort had just two theme parks and a lot fewer on-site hotel rooms than it has now.Disney didn't flinch as it pushed through annual increases through the Persian Gulf war-fueled recession in the 1990s and the global banking crisis of 2008. Do you really think a few quarters of soft traffic will bury this 28-year streak of annual hikes?
The timing of the move is the only thing that's truly open for speculation. Disney boosted its single-day rates in February of 2014, 2015, and 2016, but it was three straight increases in June before that. August was the month of the choice for the five previous increases.
February makes the most sense. It captures the meaty spring break season. It also doesn't make summertime visitors feel as if they were bamboozled with a last-minute spike that could disrupt their budgeting plans. It's going to happen. I'll bet my mouse ears on that.
Image source: Disney.
It's not a coincidence that Disney just announced the May 27 opening of Pandora -- The World of Avatar, the ambitious Avatar-themed expansion at Disney's Animal Kingdom. It's not mere chance that Disney's website now has Rivers of Light, that park's nighttime lakefront show that's been delayed for 10 months, finally opening next weekend. When the price hike comes -- spoiler alert: it will -- folks will be able to point to the new additions at the resort.
The competition won't mind. Comcast's (NASDAQ: CMCSA) Universal Orlando has typically followed suit with annual increases of its own, and last year it even led the way by beefing up its rates first. Comcast's resort has experienced larger attendance increases than Disney in recent years, justifying the cable giant's ticketing response.
Smaller parks may or may not follow Disney's and Comcast's lead, but they will benefit from the market value of a theme park experience moving higher.
Some will wonder if Disney World would be brazen enough to juice up its one-day tickets when attendance has fallen in three of the past quarters. Disney announced on Tuesday that it suffered a 5% year-over-year decline in domestic attendance during the holiday quarter. However, the fact that Disney was still able to increase its theme parks segment's revenue by 6% and operating profit by 13% is exactly why it's going to go trough with this month's inevitable hike. Disney is learning to make more with less, and it won't stop until revenue and earnings suggest otherwise.
Most Disney World guests aren't buying one-day tickets. They're buying multiday or annual passes that go through different hike cycles. However, if you plan on going to Disney World for a single day later this year, you'll thank me later if you buy your ticket now.
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