Disney Continues Aggressive Pricing, Raises Admission at Southland Parks
Mickey Mouse wants a bigger allowance.
Walt Disney Co. raised admission prices Monday at its two Southern California theme parks by $2 to $47, following a pattern of annual price increases regardless of attendance trends.
Disney has hiked ticket prices for visitors 10 and older 24% since 1998. During that time, annual attendance at the world’s most famous theme park has dipped by more than 1 million visitors and now stands at about 12.5 million, according to industry estimates.
Disney is known as the most aggressive pricer in the industry and its actions are scrutinized by competitors, which often follow Disney’s moves in this area.
Over the holidays, Disneyland and its sister park, California Adventure, experienced a strong bump in attendance, according to people familiar with the closely guarded statistics.
The parks sold more than 100,000 admissions combined over two days in late December. And they posted a combined record of 108,000 visitors on Dec. 27, the Friday after Christmas.
But in general, the attendance trend for Disneyland and most other theme parks has been down, especially since the Sept. 11 terrorist attacks.
As a result, the industry has become more reliant on locals, and discounting admission prices has become the primary lure to get people through the main gate.
Even with its latest price hike, Disney is offering a promotion through mid-May for the local market. When Southern California residents purchase a full-priced ticket to one Disney park, they will receive a free ticket to the other for use by May 14.
The plan is seen as an effort to boost attendance at California Adventure, which has not been a big hit with visitors, in part because it is much smaller than Disneyland and has fewer attractions.
Although Disney has previously offered discount programs to attract local residents, this is its first two-for-one offer. In last year’s promotion, adults could purchase a Disneyland admission for the children’s price, which was $35 at the time.
By raising its main admission price, Disney seems to be trying to maintain the perception of its parks as the “premium ticket” in the industry despite its discounting, said Michael Kupinski, an entertainment industry analyst with A.G. Edwards & Sons in St. Louis.
“They really want to hold on to that pricing integrity ... and then remove the discounts as the market strengthens,” Kupinski said.
Disney officials said the higher ticket price reflects increased operating expenses and more investment in the two parks. Disneyland will open the Many Adventures of Winnie the Pooh ride in April. And this month, California Adventure will debut an elaborate Aladdin stage show.
“We think the one-day admission price to our parks is well in line with the entertainment experiences our guests receive,” said Tom Brocato, spokesman for the Disneyland Resort.
According to some industry estimates, only 10% to 20% of theme park visitors pay the full admission prices by the time local promotions, annual passes and discounts from travel packages are taken into account.
Knott’s Berry Farm in Buena Park has launched a $12.95 admission promotion for visitors who bring a canned food item for a local food bank. Full-price tickets sell for $42.
SeaWorld San Diego is offering a one-year pass with only 15 blackout dates to visitors who purchase a one-day ticket for $44.95. Universal Studios Hollywood has a similar deal, although it carries 32 blackout dates.
Whether other theme parks will follow Disney’s lead in raising their main ticket prices remains to be seen.
“We have no plans to raise prices at this time, but we continuously monitor market conditions,” said Eliot Sekular, a spokesman for Universal Studios Hollywood.
Meanwhile, locals who take advantage of Disney’s current discount offer will find that some of their favorite attractions are not operating because the company uses the slower winter and spring seasons to refurbish its rides. A visitor later this month would probably find Matter- horn Bobsleds, King Arthur’s Carousel, It’s a Small World and Haunted Mansion all closed for maintenance.
Shares of Walt Disney rose 89 cents, or 5%, to close at $18.25 on the New York Stock Exchange on Monday.
