The Walt Disney Firm held its 2025 Annual Assembly of Shareholders on Thursday, and CEO Bob Iger highlighted a 12 months of successes on the field workplace, through the streaming providers, and on the theme parks–whereas additionally trying ahead on the billions of {dollars} of deliberate investments within the coming years.
In the course of the Q&A portion of the assembly, Iger fielded an investor’s query expressing concern in regards to the impression of worth will increase on affordability and attendance, and the necessity to additional enhance capability to forestall shedding followers in the long run. This line of questioning was anticipated, as Walt Disney World is Anxious About Its Excessive Costs has been an ongoing subject since bombshell reporting by the Wall Road Journal final month.
That report revealed considerations about Disney pricing out the center class, not simply amongst followers, however that alarms are additionally being sounded inside the corporate, as executives worry worth will increase are alienating followers and souring sentiment. In response to WSJ, “some inside Disney fear that the corporate has develop into addicted to cost hikes and has reached the bounds of what middle-class People can afford.”
Responding to a query that Disney’s home theme parks haven’t been in a position to sustain with rising attendance, want extra capability, and that this has created affordability points, Iger acknowledged that that is one thing he thinks about on a regular basis. “Actually, I used to be simply at Walt Disney World on a weekday in March, and the place was actually busy, actually throughout the entire property,” Iger mentioned. We talked about encountering heavy crowds in Pandora – World of Avatar, Star Wars: Galaxy’s Edge, Guardians of the Galaxy: Cosmic Rewind, TRON Lightcycle Run, Toy Story Land, and even at Disney Springs.
Iger indicated that “shopper demand for our parks and resorts stays extraordinarily excessive, as is the worth we provide, which is great if you evaluate it with different types of leisure equivalent to sporting occasions and live shows.” He identified that the additions made to Disney Parks worldwide, like these he referenced, present extra capability and extra worth to friends.
Iger additional harassed that these enlargement efforts are ongoing. “Actually, we’ve extra being designed, developed, and constructed at present than at some other level within the 70 years since we’ve been within the theme park enterprise.” On the identical time, he mentioned the corporate additionally appreciates that the parks create lifelong reminiscences for households.
With that in thoughts, Disney is consistently contemplating, growing, and implementing new methods to make the theme parks extra gratifying, however equally essential, extra accessible to friends on tighter budgets.
“We offer a number of choices for households trying to spend much less, together with our lowest price tag to Disneyland, which we’ve stored on the identical degree since earlier than the COVID pandemic,” Iger added. He added that since his return as CEO two years in the past, Disney tripled the variety of days that this lowest priced ticket is obtainable.
“So with sturdy visitor satisfaction scores and intent to go to metrics remaining very excessive, our parks stay the most well-liked providing within the business and a strong development enterprise for the corporate, as we proceed to introduce new experiences that I simply referenced,” Iger concluded.
Our Commentary
Most of what Bob Iger needed to say is wholly unsurprising, and completely “on script” with Disney’s Response to Rising Prices Criticism. As you may recall, the Walt Disney Firm put out a press launch on its company web site the day after the WSJ report that provided an oblique response explaining how the Disney’s theme parks supply nice worth for cash, inexpensive choices for households, and most friends consider that Disney park visits create reminiscences that final a lifetime and might’t get replaced or replicated.
As with the query about Figment, the corporate doubtless anticipated this query or one prefer it, and Iger was prepped on find out how to reply. That press launch doubtless served because the blueprint for his response given the great quantity of overlap. In different phrases, not a lot new “new” to report right here.
However, there are a pair issues I believed had been briefly price addressing.
The primary is Iger’s remark that he was simply at Walt Disney World final week and, even on a weekday in March, it was actually busy.
Late final week would’ve been the beginning of spring break season for Central Florida (and past) college districts. Even previous to that, it was early spring break for loads of different faculties, together with many schools. Positive, it’s not the guts of spring break season, but it surely’s additionally not as if these dates had been random weekdays throughout the low season when all faculties are in-session.
Furthermore, the primary few months of the 12 months have been outperforming even within the post-pent-up demand interval, which is presumably partially on account of vacationers with flexibility shifting visits to those extra comfy occasions of 12 months. I’d be curious to listen to Iger’s unfiltered ideas if he had been to go to Animal Kingdom on Might 22 or August 19. One thing tells me he wouldn’t really feel fairly as assured, even when he wouldn’t say as a lot publicly.
Second, this was a multifaceted query (a uncommon actually good one from the Q&A!) in regards to the intersection of capability and affordability.
In response, Iger pointed to a number of accomplished initiatives. I’ll fortunately concede that each single one in every of these was a significant addition that expanded capability. Even those that changed present areas, as nobody can argue with a straight face that the utilization of Camp Minnie-Mickey was the identical as Pandora. Ditto Universe of Vitality and Cosmic Rewind–and I say that as a fan of the previous!
I’m unsure if the identical could be mentioned for the entire upcoming initiatives. All will certainly enhance utilization, however aside from the Magic Kingdom initiatives, not practically to the identical extent because the final spherical of enlargement. Animal Kingdom desperately wants Tropical Americas and it’s an amazing begin, however that’s all it’s–a begin. The addition of Monstropolis at DHS is, on stability, a web of 1 new journey.
The larger difficulty right here is the purposeful throttling of capability. Look no additional than Disneyland, the place crowds are at present loopy (extra on that in a bit), however has a number of theaters sitting empty, a scarcity of nighttime leisure, no daytime parade, and many others. There are examples like this with virtually the entire parks (the #1 difficulty at Walt Disney World could be shorter hours at Magic Kingdom), and there are ample alternatives for the in a single day introduction of crowd-absorbing capability. In different phrases, the crowds and pricing are a alternative that they’ve elected to make, not one thing unavoidable.
Turning to pricing, Iger as soon as once more factors to the lowest-price 1-day tickets at Disneyland, which haven’t gone up in worth for a number of years. It’s been since at the least 2018, pre-COVID and pre-Star Wars: Galaxy’s Edge. Disneyland has shifted issues round and moved the $104 tickets to a brand new “Tier 0” a number of years in the past, however the beginning worth has not gone up.
It’s additionally true that, a few months after Iger returned, one of many main strikes made by Disneyland was to increase the calendar to supply practically two months’ price of $104 park ticket dates. At current, there are solely 20 such dates on the calendar for this 12 months by way of September 2025, but it surely’s doubtless extra can be added in November and December. Nonetheless, nowhere close to two months’ price in complete.
The corporate likes to tout this. It at all times comes up as a speaking level about their dedication to affordability, and makes its method into statements from the corporate to media shops in in any other case damaging items (just like the WSJ one) as a counterpoint. To their credit score, it’s an efficient argument.
Truthfully, I used to be actually shocked when 2025 Walt Disney World tickets had been launched and the beginning worth for single day tickets elevated for the primary time since October 2018. From then till final September, single day costs began at $109, which had been the bottom worth for the reason that introduction of the date-based system again in October 2018. Beginning this fall, these have now gone as much as $119.
As with the Disneyland’s $104 beginning worth, this made for an amazing speaking level. However for those who paid consideration, it additionally made for an amusing one. What Walt Disney World at all times declined to say was that the $109 minimal was just for a scattering of dates throughout the low season at Animal Kingdom, when the already sizzling park is surface-of-sun ranges of scorching. By no means talked about was that 1-day ticket costs have continued to skyrocket at Magic Kingdom, the park for which most friends are literally buying single-day tickets.
I nonetheless surprise what led to that change at Animal Kingdom. It’s not like DAK is promoting 1-day tickets throughout the low season like hotcakes. It’s additionally not like 2025 goes to be a powerful 12 months for Animal Kingdom, what with the development partitions and closed rides and all. Was it actually price it to surrender the speaking level and notion of cheaper tickets? Or was this worth enhance performed with out consulting the company communications of us, who may’ve stopped the thought, wanting to take care of the narrative of “no base ticket worth will increase for 7+ years working”? I can’t think about a lot cash was being left on the desk with $109 vs. $119 tickets to Animal Kingdom.
Then again, cash is completely being left on the desk with the $104 tickets at Disneyland.
That is hopefully going to return as no shock, however Disneyland is a a lot stronger park than Animal Kingdom. I don’t suppose even probably the most zealous “Nahtazu” proponents can argue that, objectively talking, Disneyland holds extra enchantment. I imply, c’mon, it has like quintuple the variety of rides.
It’s simply fascinating to see this tactic maintained at Disneyland, the place it actually doesn’t want to be, and deserted at Animal Kingdom, the place it most likely ought to’ve been stored. And for those who want “proof” that Disneyland is leaving cash on the desk, simply take a look at crowds in August and September on days when these $104 tickets make their return. There was a rising pattern for Disneyland to see vital spikes when tickets are cheaper, and a drop once they’re costlier. This was evidenced final August and September (cheaper months) versus October (the costliest month, on common).
It’s additionally evident proper now. As we identified within the newest replace to our 2025 Disneyland Crowd Calendar, the final 6 consecutive days have been 9/10 or 10/10 crowd ranges, as have 10 out of the final 13 days.
That is busier than we anticipated, and on some dates, considerably so. You may say that is unsurprising on condition that it’s the beginning of spring break season, and–positive–crowds had been anticipated to be elevated consequently. However not 9/10 or 10/10 crowd ranges.
Spring break is simply a part of the equation–and arguably the smaller element. Extra related is the continuing and aggressive Southern California Resident Ticket Deal in addition to the tip of the Youngsters’ Ticket Deal. In consequence, the final week has been busier than the height week between Christmas and New Yr’s Eve!
Bringing issues full circle, this illustrates a few factors. The primary is that Bob Iger’s feedback about crowds would’ve been extra apt if utilized to Disneyland (however as illustrated above, even that’s “solvable” with extra leisure). With few exceptions, it’s busy more often than not within the California parks–far worse than Walt Disney World.
The second is that the most important driver of attendance for Disneyland is decrease costs. Whether or not or not it’s ticket offers or Tier 0/1/2 costs, crowds usually exceed expectations when pricing is decrease and fall brief when peak pricing is in place and extra Annual Passes are blocked out.
You may even counsel that–regardless of the nearly-perpetual heavy crowds–Disneyland really has a little bit of a pricing drawback as a result of it’s so reliant on offers to realize its attendance. When there aren’t reductions or decrease costs, crowds underperform. With that mentioned, “a little bit of an issue” is fairly removed from a five-alarm fireplace. Disneyland is doing simply advantageous, and can be for the foreseeable future due to the seventieth.
Anybody who has set foot in Disneyland over the past year-plus may inform you that the corporate has nothing to be frightened about there, and contentions that it’s on the precipice of a significant slowdown are wishful considering at greatest. Then again, Walt Disney World is perhaps a special story due to the exhaustion of pent-up demand, slowdown in tourism and worldwide journey, and Epic Universe providing elevated competitors simply down the highway.
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YOUR THOUGHTS
What do you consider Disney CEO Bob Iger’s response to the considerations of worth will increase and a scarcity of capability will increase creating long-term affordability points and return visits? What would you prefer to see performed to enhance the dynamic at Walt Disney World or Disneyland? Suppose that runaway worth will increase are the large concern, or is the worth proposition an equally or extra vital matter? Do you agree or disagree with our evaluation? Any questions we can assist you reply? Listening to your suggestions–even if you disagree with us–is each fascinating to us and useful to different readers, so please share your ideas under within the feedback!
