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1. Annual Passes

In 1984, annual passes were introduced. The idea was that guests could pay a large amount of money up-front and then get access to Disneyland for a full year. The program was a hit. Too much of a hit. Over time, Disney began to add blockout dates wherein passes became invalid on certain high traffic days, and consequently introduced higher tier passes that avoided those blockout dates – for more money upfront, of course. 

Just last year, Disney finally recoiled. The California resort systematically redesigned its annual pass program, hoisting prices even higher and designing new tiers with still more restrictions. But crowds didn't thin or calm at all. 

Image: Martin Lewinson, Flickr (license)

The culprit? Disney's monthly payment. Southern California residents purchasing annual passes can do so for a meager down payment of $99 followed by monthly installment payments of less than $20... FAR, FAR less than the average phone bill! Even the highest available tier - Disney Signature Plus, which carries literally no blockout dates, costs half of a cable bill.

Annual passes are a funny thing. The whole point of them is that they're inaccessible to most with their high initial cost being a deterrant to their sale. They're a premium product, available only to those who can afford to drop an extra rent check to Disney. And that's not many of us. But with Disney's monthly payment plan, that initial huge investment of an annual pass doesn't slow or stun locals at all. The sticker shock – which is the whole point – has no effect. Instead, Southern California locals simply see that for $19 more than a five-day ticket, they can get the whole year... PLUS, they can spread the cost over 12 months instead of paying all at once!

And Disney's plan to gradually and slowly increase pass prices every year has had absolutely no effect, either! Why? A $50 pass price increase equates to only a few dollars more in down payment, and a few dollars more a month or less. The gradual rise is too gradual to equate to a real difference. Until the monthly payment plan for locals disappears, annual passes will continue selling TOO well.

The light at the end of the tunnel is Star Wars land. In our recent feature, we discussed just how much Star Wars is going to change Disney Parks forever, and put simply, Disneyland cannot support the crowds Star Wars will bring. Something needs to change, and with almost 100% certainty, we can predict that all but the most expensive annual pass will disappear, and monthly payment plans will go away... and even more local vengeance and rage will descend upon the company.

2. Crowds

Image: Ming-yen Hsu, Flickr (license)

If you’re a Disney Parks fan, you’ve probably noticed that the parks are crowded. And yes, they always have been. But what we’ve seen in the last decade or so is that the number of people visiting Disney Parks in both California and Florida is outpacing the parks’ growth rate. At Disneyland Resort, 60-acre park footprints, tight paths dating to Walt’s time, and a shortage of parking means that those two parks can feel packed even on moderately busy days, with employees forced to park at a nearby baseball stadium to be bussed into work. The parks are packed. Uncomfortably so. 

Walt Disney World has its limiting factor, too: rides. You might be surprised to find which Disney Parks have the fewest actual rides. Epcot may be huge, but when a moderate sized crowd is dumped into the park, Epcot’s three major rides are instantly swamped and overrun; same with Animal Kingdom and Hollywood Studios. You might be able to spread out in the massive Animal Kingdom, but if Dinosaur, Everest, and Kilimanjaro Safaris are each a 2-hour wait, then the park is going to feel crowded. A different kind of crowded, but still.

As much as it doesn’t match Disney’s “magical” image, the truth is that raising prices thins crowds to a much more enjoyable level for those who can still afford it. It makes Disney a premium product: fewer people, so everyone has a better experience overall. Is it fair? Really, yes. Supply and demand, right? Everyone wants in, but to ensure the best experience, Disney has to limit admission. Raising prices does the trick. In other words, you can’t complain that the parks are too crowded while simultaneously complaining about price hikes. The latter is – in part – meant to help solve the former. And we all agree that Disney should cut down on crowds... until their method for doing so positions us to be within that cut group! 

Blame this one on the odd cultural notion we've developed in the last few decades that any "normal" American parents that love their children will take them to Disney World, even if they have to sell plasma to do it, and that children deserve to go to Disney. It's an odd sensation where folks who can barely afford a Disney vacation take one anyway, because that's what they're "supposed" to do if they want to live the American dream. Then factor in overseas tour groups that descend on the parks during what used to be the "off season," three month holiday windows around Easter, Halloween, and Christmas, Grad Nites all spring, and you arrive at a very new phenomenon where every day is packed. If it's not annual passholders, it's families or tour groups. Always.

3. Fans

By the way, the reasons that Disney ticket prices increase every year at this point is because they can. Sure, Annual Passes and huge crowd levels have necessitated price increases from a logistical point of view, but another reason they rise is because of you; me; our friends.

Every single year the price rises.

And cue the discussion board threads, the angry comments, the Facebook rage about how Disney is an evil corporation that priced itself out of the American dream. Write emails and comment on this article about how Disney will never get another dollar of yours. Tell all your friends that it's finally happened, and that you've decided not to renew your annual pass and that - unfortunately - you just will never go to Disneyland again. Check the comments on this article on Facebook and you'll find dozens of promises claiming "My family is never going to Disney again." It’s all righteous anger. It’s the same anger and promises and rage everyone displayed nine months ago. And then…

It passes.

And you’ll renew your pass.

And I’ll take my best friend to Disneyland with me, because she hasn’t seen Cars Land yet, and what am I, an evil villain? Of course I’m going to show her Cars Land.

And I wish I could say that the way to stop the ticket price from rising is to stand by what you say and actually stop going to Disney Parks. But 1) I know you can’t stop (because I can’t) and 2) even if you did, three more people would take your place.

As with any business, Disney will inch up the price every year until it finds a happy medium where it's maximizing profits and keeping guests happy. Just as Prince Ali turned out to be merely Aladdin, the glowing, magical, fairytale place you remember so adoringly from childhood turns out to be a business where money matters. And that shouldn't be as shocking as it is.

But rest assured that Disney will hit a pricing plateau. Eventually they'll edge over what people are willing to pay, notice that they have lost too many visitors, and they'll stabilize and rest for a while.

And until then, we’ll go back. We always do.

It's Not As Bad As It Seems!

Disneyland ticket

Here are a few realistic figures to keep in mind before letting your price-increase-indused anger get the better of you.

1. Inflation

While media outlets like to flaunt the astounding price increase for a day at Disneyland ($1.00 in 1955 and $100 in 2015), I hope you pay careful attention to the very simple inflation figures I’ve listed here. The truth is, a day at Disneyland hasn’t increased 100-fold. Rather, it’s tripled. And Disneyland in 2015 probably has ten times as much to do as Disneyland in 1955. Instead of rising gradually, the price stayed fairly constant until the late 1980s, then took off. And it's probably that sticker shock and that quick increase that catches people off-guard. But recognize that it's not as bad as the numbers would have you believe.

2. Multi-Day Tickets

As well, remember that, despite the sticker price, very few folks pay for one day at Disneyland and then go home. Media outlets can't get enough of headlines that point out that it's $99 to visit Disneyland. That's only half true, though... By far, MOST visitors to Disney Parks use Multi-Day tickets. It would be reasonable to get a four-day ticket to Disneyland, which carries a price of about $64 per day. Certainly an increase over the past, but not blindingly so. $64 a day, in terms of spending power, is twice as much as people were paying in the 1960s, and the parks today have exponentially more attractions. 

3. Class Warfare?

Folks in the comments here and on Facebook will no doubt decry that Disney has officially priced them out of a vacation and that Disney no longer caters to the middle class. It's true that Walt and Roy Disney recognized that the rise of a middle class post World War II had perfectly positioned Southern California as a tourist destination. But 60 years later, recognize that Disney Parks are not necessarily supposed to be accessible to anyone working 40 hours a week. 

Look at any photograph of the park in Walt's time and you'll see folks dressed to the nines in suits and heels. While that doesn't necessarily suggest wealth (people wore their Sunday best to such events back then, regardless of their social status), the fact remains: People who were struggling to pay their bills did not go to Disneyland back then, either. Even if the price was less, disposable income was even harder to come by back then. Only in modern times has this new notion emerged that any loving parent WILL take their children to Disney World, even if you have to take out a second mortgage to do so, and that is the real problem.

As much as the media today tells us that Disney is someplace that all "normal" families go to, the truth is that the park was always a premium experience... The fact that it had an admission fee alone was staggering in the 1950s, and eliminated many potential guests from having the disposable income needed to even see it.

Don't misunderstand: you have every right to take your family to a Disney Park, even if you're financially struggling. But Disney, in turn, will continue to raise prices to limit crowds. And unfortunately, that might mean you.

So no, Disney is not trying to destroy the American dream and ruin middle class childhoods. It's doing just what any reasonable company with a responsibility to its shareholders would: maximizing its profits. If, along the way, some families become unable to afford an annual trip, then so be it. Then they'll have solved the crowding issue at the same time. It's not a rosy fairytale, but it is a smart business decision and a way to increase guest satisfaction at the same time.

 
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Comments

What I have yet to see someone take into account is the billions spent on the California Adventures park. I looked it up the other day, 600 million initially, park was a failure. another 1.1 billion on a remodel, and its estimated that Cars Land cost another 1 billion. When a company spends that much money, they are looking to make it back up in the next couple years. I know its 2 separate parks... but the money all goes to the same pool. Essentially part of price raises have to be going to finish paying off California Adventures. Also... Minimum wage in California went up this year (and if I recall, its going up next year too), so that has to be factored in as well.

In reply to by gnattilly (not verified)

I get your point, but lets get the facts correct, shall we? BillionS!? It was quoted as 1.3 and also as 1.1 billion for the remodel INCLUDING Cars Land. A billion, not billions.

I'm laughing at those people who complain that they can't afford Disneyland anymore. Neither can I, but DISNEY DOES NOT CARE, it is a corporation and like all corporations its only purpose/goal/reason to exist is to make the best return on investment for its shareholders. That's what corporations are all about. You aren't entitled to go see Disney characters or to introduce your kids to Disneyland. Your "suggestions" about how to price the park are irrelevant. Disney employs a ridiculous number of MBAs and accountants and computer experts to predict and calculate what admission prices will result in the largest revenue stream. That's it. That's all that matters. Stop thinking that Disney is some friendly neighbor who feels bad that you can't afford to enjoy the parks.

Something that you missed is the payment plan. Had it not been for the payment plan a lot of locals likely would have opted for the lower tier pass because it would have been "money up front". The AP Blackout system is based entirely on sticker shock. You want more access you pay more. The problem is Disney removed that sticker price. Instead of being $500 "up front" it's "a down payment and $30 a month". You'd have to be an idiot to go for a lower pass when the higher tier was only $20 or $30 more... people pay more for a cell phone bill.

Disney ran the 50th promo which brought people in. Then they ran the "free on your birthday" which brought more people in. Then they allowed those birthday peeps to use the free ticket as a down payment for an AP. If you had an AP they gave you a gift card which a lot of people used to renew for another year... Around the same time the get in free bonanza was going strong they introduced the payment plan. It's heavily advertised, heavily utilized. $60 a month and you have unlimited access to the park. It's not the AP system itself that caused the crowds, it's the fact that the local community can pay it off like a cell bill, utility bill, gym membership etc. This isn't offered to out-of-state AP's, only to the locals who would be using it most.

Here is a crazy solution. Why not limit the number of tickets sold to an amount that the park can handle reasonably. You can make reservations a year or two in advance Just like camping in Yellowstone or Yosemite. Go back to a system where there are two price structures admission with out the E and D rides and limit the admission for the Big rides to keep lines no more than one hour

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