A vacation at Disneyland or Walt Disney World isn’t cheap, but in recent years, it feels like prices have gotten absolutely out of control. A Disney Parks price jump last year made nearly every single thing in the parks more expensive and park tickets are back to seeing jumps yearly. But Disney CFO Christine McCarthy says that when it comes to tickets, the reason for increases is inflation, and when it comes to everything else, it’s “consumer choice” to spend that extra money.
Speaking at a media conference in New York City yesterday (via Deadline), Disney’s CFO Christine McCarthy responded to the idea that Disney’s Parks, Experiences, and Products division is seeing such financial growth primarily due to theme park admission increases. She claimed that ticket increases have been rising only alongside inflation, and no more, saying…
We are in an inflationary environment. We are very aware of that, as inflation impacts everybody’s life.
It’s certainly true that inflation is a constant pressure, and in the last couple of years, inflation has been worse than previously. And perhaps it's true that in recent years ticket increases have matched inflation, but the overall trend in price increases on Disney World tickets over the last few decades has arguably exceeded inflation, so it still costs quite a bit more to get inside the gates than it once did.
The primary issue with tickets being the source of theme park success is that growth there has a limit. If you keep raising prices, presumably you’ll hit a point that people can’t afford, though Disney certainly has yet to find that point. But McCarthy says that the place where the Parks division has seen real profit growth is when it comes to additional spending. It’s merchandise and other experiences that cost money, but consumers choose to spend that money. She continued…
It’s t-shirts and hats, but also build your own Lightsaber. Not cheap. But people tend to spend the money. That is consumer choice.
It’s almost refreshing to hear Disney’s CFO refer to the lightsaber building at Star Wars: Galaxy’s Edge as “not cheap.” That’s certainly the case, but you sometimes wonder if people in positions like hers actually realize that’s the case. And for what it’s worth I guess she’s not wrong. Once in the park, people decide where to spend their money, and lots of people do choose to do the lightsaber building, which is almost like a small theme park show where you leave with a piece of merchandise.
The one place where Disney World and Disneyland certainly have seen a financial boost is Genie+. The previous line-skipping system at Disney Parks was free, but it now costs money, meaning every dollar spent is new to Disney. And by all reports, a lot of people are using Genie+. McCarthy says that for guests it’s simply a question of how much money their time is worth, she explained…
Yes, you pay for it, but some people have a limited amount of time.
Whether or not Genie+ really qualifies as “consumer choice” is a real question. While the service is certainly optional, there are likely a lot of guests who feel that they need to spend the money if they want to ride most of a park's key attractions and not spend their entire day in line.
Even Disney seems to have realized that the price increases have gotten a little out of hand in some cases. Bob Iger admitted that recent price increases were “too aggressive.” And over the last few months, we’ve seen a series of new benefits added, in an attempt to increase value for the higher prices. In the case of the lightsaber building we even saw Disneyland’s recent price increase reversed entirely.
