The Disney parks just got hit with a LOT of price increases — snacks, drinks, merchandise, park tickets, and more all got more expensive in the last few days. Many fans are upset by the changes and understandably so — Disney is already a pricey vacation, and this only adds to the strain on the budget.
But all of these price increases didn’t necessarily come out of the blue. We’ve seen this happen before, even earlier this year. And if past patterns aren’t enough of a clue, we also can look at some not-so-subtle comments from Disney CEO Bob Chapek, who has spoken about price increases and the potential that more are on the way. In fact, Chapek has warned several times Disney is going to keep getting more expensive.
In interviews, earnings calls, and other announcements, Bob Chapek has foreshadowed several different price increases on merchandise, park experiences, and streaming services.
Let’s take a look at a few of the warnings he’s given over the last few months.
Price Increases in the Parks
Most of the price increases we saw recently happened in Disney World, and a lot of them applied to food and beverage items. However, we also saw some classic merchandise get more expensive, like Minnie ear headbands.
Just a couple of months ago, Chapek indicated that this wave of price increases was coming. In an interview with CNBC, he was asked about why Disney kept increasing prices. Chapek responded, “We always watch demand. When you’re playing a yield game like we are right now and you have the flexibility with our reservation system, we can move on a dime. We read demand, and if demand goes up, then we have the opportunity to do that. ”
And it seems that demand has remained at the level where Disney is comfortable bringing the prices up more. Chapek has said, “For all visibility, we have into the future, we’re not seeing any softening of our demand.”
Although we’ve noticed a definite drop in crowd levels in the Disney World parks, Park Pass Reservations have continued to be in high demand, especially for Magic Kingdom. For several days in October, that park and Disney’s Hollywood Studios are already sold out.
This demand is what Chapek cites when he defends Disney’s decision to raise prices: “It’s all up to the consumer. If consumer demand keeps up, then we act accordingly. And if we see a softening (which we don’t think we’re going to see) then we can act accordingly as well. We’re very flexible.”
It sounds like, as long as Disney World keeps selling park tickets, we’ll continue to see more price increases in the parks.
See more of Chapek’s comments about price increases in the parks here.
Genie+ Price Increases
Another major price increase that happened recently was on Genie+. Genie+ is the new (paid) system that replaced FastPass+. It allows guests to skip the line at some attractions in Disneyland and Disney World.
Click here for our full guide to Genie+.
In Disneyland, Genie+ increased from $20 per person, per day to $25 per person, per day. In both Disneyland and Disney World, surge pricing was introduced to Genie+, meaning the service will cost more on days when Disney expects the parks to be busier.
We’ve already seen that surge pricing in effect, as Genie+ in Disney World (which has a base price of $15 per person, per day) has been $20 per person, per day for the last few days.
So when did Chapek tell us this change was going to happen? If you look at a few different comments that he’s made over the last few months, you can see the foreshadowing. First of all, Chapek commented on an “unfavorable attendance mix” in Disneyland, which many took to mean that Disney saw Annual Passholders (called Magic Key Holders in Disneyland) as less profitable than other guests.
This indicates that Disney has been looking for ways to increase revenue brought in by guests to Disneyland. In the same comment, Disney noted that “the increase in average per capita ticket revenue was due to the introduction of Genie+ and Lightning Lane.” So Disney knew that Genie+ was pulling in money, which means that a $5 increase on the popular service would certainly add to profits.
In addition, Chapek noted in the most recent earnings call that almost half of Disney World and Disneyland parks guests were buying Genie+: “Now about 50% of the people who come through the gate, buy up to that Genie product.” This was an increase from the previous earnings call, when Disney reported that about a third of guests were buying the service.
From these comments, we can see that Disney was looking for a boost in profits, especially from Disneyland visitors. They knew that Genie+ was both profitable and popular, so it makes sense that increasing the price was the next move.
Read more about the “unfavorable attendance mix” here.
Disney+ Price Increases
Disney has already announced a price increase for its streaming service, Disney+. Beginning on December 8th, ad-free Disney+ will increase from $7.99/month to $10.99/month. A new ad-supported version will cost $7.99/month. Price increases have also come to Hulu and ESPN+.
But these may not be the last of the streaming price increases. Since Disney announced these changes, Chapek has said that the initial launch price for Disney+ ($6.99/month) was “pretty absurd.” He noted that the initial value to the consumer plus the addition of new content made the price very attractive to customers but far too low for what it was worth.
The new prices will take effect soon, but will there be MORE price increases in the future? Chapek says, “I think we’ve got a long way to go still” when it comes to increasing the cost. He claims that Disney is still “significantly under where our competitors are” in terms of pricing for streaming services.
Future price increases will be determined by “what the market will bear, which is a direct reflection of price and value.” Chapek says that Disney+ is still “way underpriced relative to the value that we provide.” He said, “We have a lot of room on the price value range.”
Learn more about Chapek’s comments about the Disney+ prices here.
Previous statements from CEO Bob Chapek have pointed to price increases that we’re seeing now, and it looks like more are on the way in the future.
Interested to read more about what Bob Chapek has said? Check out these posts:
- Disney CEO Bob Chapek Will “Start Balancing” Who Is Let Into the Theme Parks
- Why CEO Bob Chapek Wants Disney to Avoid the “M-word”
- CEO Bob Chapek Says “No Other Entertainment Company Can Touch” Disney’s Content
- How CEO Bob Chapek Plans to Turn Disney Into the Ultimate Experiential Lifestyle Brand
Stay tuned to AllEars, and we’ll let you know when we hear more from Disney’s CEO.
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What do you think of Bob Chapek’s recent statements? Let us know in the comments.
Chapek is a blight on Disney. Every week there’s a list of price increases and Chapek struts around in his arrogance blaming the consumer for his greed. He “predicts” prices are going up and low and behold they do. It’s easy to predict price increases when your fingers are running the cash register. Get rid of chapek.