Disney Parks and Resorts brought in a whopping $4.5 billion in operating profits for fiscal 2018, rewarding its visitors with two price increases in the same year that could make the park inaccessible for many in 2019.
As the rich get richer, Disney World is no longer targeting the regular middle class—it’s going where the real money is.
It’s also using dynamic pricing to try to force visitors to visit all year around—not just in the summer and holidays when the children it caters to are out of school.
And no one can say it’s not working, so far. Disney is a behemoth that takes on its competitors with no holds barred.
It’s got a brilliant setup, and 2019 will prove that it has the advantage from the box office to the theme park, not to mention consumer licensing of its characters. This year alone, gives Disney seven of the year’s most anticipated movie releases from Fandango. It total, Disney has 10 new movies coming out this year.
This year will also see it launch its Star Wars-themed attraction—Galaxy’s Edge--at Disney World and Disneyland. It will also see Disney’s answer to Netflix, with the launch of its Disney+ streaming service.
Each service leverages the other, building a monster of entertainment.
While Disney Parks and Resorts saw $4.5 billion in operating profit in fiscal 2018, Marvel movies accounted for more than half of Disney’s $7.3 box office earnings.
So, Disney is clearly not worried about shutting out the middle class with its theme park pricing hikes—even if it means movies for the middle class and parks for the wealthy.
Speaking to Business Insider, Theme Park Insider editor Robert Niles, is using dynamic pricing and promotions to equalize crowds year round, and while the middle class “early adopters” may “feel frustrated that they put a lot of loyalty into this brand” the fact is that “if Disney’s going to grow, it’s got to go where the money is”. Related: Morgan Stanley Predicts First Slump In Global Auto Sales In 10 Years
That’s why Disney World raised prices on its platinum pass in February from $779 to $849 and then again in October to $894—a 15-percent hike in a single year.
Disney is following the demographics, says Niles. “They understand what’s happening with income and economic inequality. They know that the money is in the upper level, the top 10%, the top 1%,” he said.
The game now is to squeeze as money out of the elite as possible. And for now, it seems that the elite are more than happy to keep pumping money into Disney parks. On New Year’s Eve, Disney World in Orlando was so packed the park had to turn people away from the Magic Kingdom, and the wait to ride the Space Mountain and Big Thunder Mountain roller coasters was three hours.
With crowds of wealthy willing to stand in lines all day to feed Disney’s earnings, raising prices isn’t likely to hit at the bottom line at all. The middle class may feel shunted and tire of using credit to fund line-standing, but demographics seems to show that Disney’s profits don’t depend on them anymore.
By Josh Owens for conil.me
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