Yahoo Finance Disney World Finds a New Way to Milk Early Risers
It's been more than two years since Disney (NYSE: DIS) started opening its most popular park 75 minutes early for guests willing to pay a premium to get a leg up on other day guests, and now the theme park giant is raising the event's cover charge. Disney Early Morning Magic will bump its price to $79 come December, a 14% increase from its debut price in the springtime of 2016.
Disney Early Morning Magic finds Disney World opening the Magic Kingdom on select mornings at 7:45 a.m. to guests who can enjoy a few Fantasyland rides. When the park officially opens at 9 a.m., they can head over to a counter-service restaurant for a complimentary breakfast. Disney is increasing the price of the event, but it is adding a few new nearby attractions to enhance the value proposition. The move makes sense, and Disney shareholders won't be upset to see Disney expanding capacity for an event while also boosting its rates.
Image source: Disney.
It all adds up
Theme parks are a big part of the Disney media empire. Its parks and resorts segment was the only division to grow its revenue in fiscal 2017, accounting for a third of Disney's total revenue and more than a quarter of its segment operating profit. It's a safe bet that the division will continue to become a bigger part of Disney's business. It's inched its way up to a 34% slice of the revenue mix pie through the first nine months of fiscal 2018, and that's with the seasonally potent summer quarter coming up next to wrap up the fiscal year.
Adding these hard-ticket events -- to its resorts on both coasts -- gives Disney more ways to cash in on its industry-leading attractions. Unlike most regional amusement park operators, Disney keeps its parks open year-round. If it's going to milk more out of its costly fixed assets, it has to get some more juice out of the typical operating day. Disney Early Morning Magic does exactly that.
Disney World regulars may not appreciate the event's higher price tag, and that's if they weren't already angry at the House of Mouse for hosting these premium experiences in the first place. It doesn't matter. Disney will keep running these events until folks stop coming. It apparently hasn't priced park goers out of these high-end experiences just yet.
It's October, and Disney is already pumpkin-deep in hard-ticket events with its Mickey's Not-So-Scary Halloween Party at the Magic Kingdom on select nights. Folks are paying more than $79 for that event, and the characters-rich costume party has even sold out on some nights. Disney knows what it's doing.
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Rick Munarriz owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool has a disclosure policy.
