Walt Disney World Has a BIG Problem

Since reopening after the onset of the COVID-19 global pandemic in 2020, it seems that most things in Disney World have returned to “normal” (or at least the “new normal”).

Cinderella Castle

And, as more and more restaurants, hotels, and entertainment offerings return to the parks, more and more fans flock back for vacation. In fact, back in May 2021, Disney CEO Bob Chapek shared that demand was “flat” with pre-pandemic levels and that has only continued to grow. In August of 2022, Disney’s Chief Financial Officer, Christine McCarthy, shared that Disney Parks demand is EXCEEDING reservation availability and that they have not seen demand abate at all.

But Disney has one big problem: it seems to be struggling to meet that strong demand. Here’s why.

Demand for the parks is HIGH but park capacity is still being controlled

As COVID-19 cases have evolved over time, we’ve been seeing the travel industry recover to at or above pre-pandemic levels. And, with that has come a return of crowds to the Disney Parks, reflecting that strong demand that Disney executives have spoken about. And, while it may look like parks are back to full capacity limits based on how many people make their way down Main Street, U.S.A., capacity is still being controlled.

LOTS of People Here

At a March 2022 Q&A session with the Senior Executive Vice President and Chief Financial Officer for the Walt Disney Company, Christine McCarthy, it was revealed that the Disney Parks were still not operating at full capacity at that time, though they were approaching it. Capacity continues to be managed by Disney.

To manage this capacity limit, Disney has been utilizing the Park Pass Reservation system (which was introduced when Disney reopened in 2020). During the Q3 Earnings Call for Fiscal Year 2022 (held in August of 2022), McCarthy again noted that Disney is “purposefully” managing capacity through the Park Pass system, “versus simply increasing volume.” Chapek also noted that they’re working to improve the guest experience in part by “limiting capacity.”

Entrance to Magic Kingdom around 4PM

But demand is sometimes EXCEEDING the Park Pass limits. During the Q3 Earnings Call for Fiscal Year 2022, McCarthy said that Disney is seeing demand in excess of the reservations being made available to guests, and there are many days when guests cannot get Park Pass reservations.

The fact that these park passes are STILL filling up seems to suggest that there just isn’t enough room in the parks for all the people who want to visit.

Park Pass Reservation sign

This could be a problem for Disney (because they’re losing potential revenue), though it doesn’t seem to be one they’re particularly worried about. Instead, Disney executives continue to tout the benefits of the Park Pass system. During the Q3 Earnings Call for Fiscal Year 2022, Chapek noted that the reservation system gives Disney the power to change whatever factors they need regarding ticket packaging.

He also shared that the reservation system has done a great job at spreading out demand and providing a better experience for guests by limiting park capacity.

If Chapek’s comments are any indication, Park Passes could be here to stay for a long, long time.

Bob Chapek Filming in front of Cinderella Castle

But the system can pose a problem for park-goers. Now, those who choose to plan their Disney vacation closer to their departure date risk not being able to visit the parks that they want, and those who haven’t done their research on the new Park Pass Reservation system risk not being able to visit any park at all.

Click here to learn about the easiest Disney Park Pass reservations to make in 2022

Most Annual Pass sales are still paused

With park capacity still being managed, Disney has had to find another way to manage the demand they’re seeing — selling fewer tickets. And, the main group impacted by this? Disney World Annual Passholders.

Annual Passholder cards for the 50th Anniversary

At the onset of the pandemic, Disney suspended all annual pass sales. This ended up lasting for almost a full 18 months. And when sales finally resumed in September 2021 (with a brand new annual passholder program), they were quickly paused again for most annual pass types in November 2021.

Why? Well, it likely boils down to demand here — Disney likely won’t sell annual passes right now because they may not have enough space in the parks for BOTH annual passholders and regular day guests. And their priority is those regular vacationers because the thought is that they tend to spend more money in the parks.

There are several perks to being an Annual Passholder

In fact, during the Q3 Disney Earnings Call for Fiscal Year 2020, Chapek said, that different guests have different “relative values” in terms of how much they contribute as a guest. He continued, “typically, someone who travels and stays for five to seven days is marginally more valuable to the business than someone who comes in on an annual pass and stays a day or two and consumes less, you know, merchandise and food and beverage.”

©Orange County Register via Getty Images

But, Disney is still missing out on a huge revenue source by limiting annual passes. If locals or people who want to visit the parks often can’t get an annual ticket to get into the parks, then they’re not spending money on food, merchandise, etc.

Those who were able to secure a new annual pass or renew their pass may also pose a capacity management problem at Disney World. Currently, annual passholders are not punished for not showing up to the parks if they make a park pass reservation in Disney World (though this is done in Disneyland). So, the people who do have an annual pass could essentially be taking a spot from another park-goer.

Disney World Annual Pass Magnet

Could annual pass sales resume soon for more pass types in Disney World? Disney hasn’t shared any news on that yet. At the moment, only 1 pass type is available.

During the Q3 earnings call for Fiscal Year 2022, McCarthy commented that when it comes to “levers of demand” they had limited the number of annual passes that come into the parks. McCarthy shared that to the extent that they saw lightened demand in the parks, they could loosen up some of the annual pass blackout dates to “bring more people in the park.” But, she followed that up by noting that they haven’t seen demand abate yet. So it may be a while before anything changes.

There’s ONE Disney World Annual Pass for sale — can YOU buy it?

Disney may not be fully staffed yet

Why is it that park operations seem to have mostly returned to “normal” (mask requirements are gone, physical distancing measures have been eliminated, most locations have reopened, etc.) but park capacity is still being controlled?

While the health and safety situation may allow for the parks to return to full capacity limits (and other considerations encourage the continuation of capacity management), one thing that could still be impacting Disney is staffing shortages.

Ice Cream Cart closed

We know that Disney had been struggling with staffing shortages due to comments from Disney CEO Bob Chapek at the first-quarter earnings call for fiscal year 2022. At that time, he shared that the company had 195,000 employees which was still about 28,000 fewer employees than pre-pandemic numbers. The two areas that Disney was struggling the most to staff were hospitality and live entertainment.

These staffing shortages had an impact on park operations at Disney World.

Cast members at the Tower of Terror!

In discussing the Park Pass Reservation system (and the likelihood of it sticking around forever), in the past, Disney executives have mentioned how the system enables them to better manage the crowds and plan out where they need Cast Members most. For example, in early 2022, Disneyland Resort President Ken Potrock previously said that the park pass reservation system means that “we can better manage the labor scenario in a more efficient way.” This reinforced the thought that Disney wasn’t fully staffed in the parks just yet (though they were hoping to be by the end of 2021).

Along with the continued closure of many entertainment offerings and select restaurants, over the past several months we’ve also been seeing several unexpected closures of stores and snack kiosks that have reportedly been related to staffing shortages.

Disney World Cast Members

During the Q3 Earnings Call for Fiscal Year 2022, Disney did not directly address the issue of staffing, so it’s unclear what the current status is. But if Disney is still experiencing even just a fraction of what airlines and other hotels are still going through, then staffing issues may continue to be a big concern.

Staffing shortages could be another factor holding Disney back from allowing for even greater capacity and resuming more “normal” operations.

Supply shortages can mean there’s LESS merchandise

Along with the strong demand just to get into the parks, there’s also a lot of demand for Disney merchandise! Over the past year, we’ve seen several popular collections sell out FAST, with Disney needing to implement virtual waitlists and even purchasing limits just to manage the stock. But, we’ve been seeing supply shortages have a big impact on Disney’s ability to meet that demand.

Beverly Sunset Boutique has reopened!

For example, Beverly Sunset Shop in Disney’s Hollywood Studios and complete sections of the Mitsukoshi Department Store in EPCOT have previously been closed off due to lack of supply. That has changed over time though. Beverly Sunset Boutique reopened in August of 2022, and purchase limits have since been removed on most Disney items.

Other shortages have (in the past) impacted Star Wars lightsabers in Hollywood Studios and at times it was hard to find the scavenger hunt prizes for nearly the EPCOT festivals when they first began (though that wasn’t the case for the Food & Wine Festival in 2022).

Some Areas Are Still Closed

Not only can these stock shortages be really disappointing for guests, but it also means that people are spending less money in the parks because the things they want to buy simply aren’t available. And, with demand so high for the parks, Disney likely wants to be capitalizing on that.

Disney Merchandise

In May of 2022, Disney Executive Christine McCarthy noted that Disney is not immune to supply chain issues, but that they were working to diversity some of their suppliers, and work with shippers to expedite the time they receive things when being shipped. It appears that some of that may have worked, as one store that previously closed due to supply issues has reopened, but supply chain issues may not be gone just yet.

Click here to see all of the statements McCarthy made on inflation and supply chain issues

Of course, as the world continues to recover from the COVID-19 pandemic, things have and likely will continue to change. Disney’s efforts to recruit more staff could be more and more successful, supply issues may resolve (as we’ve already seen them start to do in some places), and they may be able to/choose to allow for greater capacity — we’ll just have to see! But, one thing that seems to be continuing to grow is demand for the parks and Disney will have to find a way to meet that demand or sacrifice revenue and guest satisfaction.

We’ll continue to keep an eye out for all the latest updates on park capacity, staffing, stock shortages, and more, so be sure to stay tuned to AllEars for the latest!

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3 Replies to “Walt Disney World Has a BIG Problem”

  1. Unfortunately they keep increasing hotel capacity…now building a large multi story level hotel on the grounds of Polynesian? So out of character with the long houses already there….Star Wars hotel etc…..yet they didn’t build an additional 5th park…they have admitted the room is there….so where is everyone to go? It was bad before but now insane….

  2. You state the parks are not at capacity. Then you describe conditions on the ground which seem to indicate they are above capacity (Such as not being able to handle annual pass holders and the daily description of hours long waits for some of the rides). The problem here is you have to take Disney’s word for it. You cannot state how far below capacity they are or what full capacity would be. Because Disney won’t tell you. So I would say Disney’s big problem isn’t what Disney can manage. The big problem is HOW Disney manages the existing problem, namely huge crowds. I don’t hear very many people that are happy after their visit or, more importantly, with how Disney manages their visit. So I would say the biggest problem Disney faces is finding a way to make people feel better about their visit. Their bread and butter is the return guest. And if people decide they can only tolerate so much, those guests won’t be returning anywhere near as often as they had in the past. And maybe not at all.

  3. Clearly, Disney has no limit to park capacity. They never publish any detail on park capacity. Based on the venue lines and increasing wait times, it is clear the numbers of park guests have far exceeded what would be considered normal and the safety of park guests is at risk. The Genie program is designed to keep park guests standing in lines … sometime for hours.