It is going to become more expensive to visit The Walt Disney Co.’s (DIS) Disneyland theme parks on its busy days. The House of the Mouse has raised the prices of its tickets based on demand, with higher-demand tickets costing more.
Disney Has Hiked Prices for Disneyland
The entertainment giant has kept the entry-level ticket for its Disneyland theme park unchanged at $104. However, it has raised the prices for its other ticket tiers in the range of $7 to $12, indicating an increase between 5.9% and 6.5%.
Disney has different ticket tiers to manage demand. The lowest tier, Tier 0, remains at $104, while Tier 6, the highest demand tier, will now cost $206, an increase of $12 per ticket. Additionally, the company has bumped up the price of its Magic Key (annual passes) to Disneyland. Disney offers four different Magic Key pass tiers: Inspire, Believe, Enchant, and Imagine.
The new price hikes means that the Imagine pass will now cost $599 per year, an increase of $100. The Enchant pass will rise by $125 to $974, while the Believe pass will now cost $1,374, a hike of $125. The top-tier Inspire pass will now cost $1,749, an increase by $100.
Disney Is Trying to Offset the Price Hikes
However, in a bid to offest these price hikes during high demand periods, the company is offering discounts for visitors during off-peak times. In fact, last week, the company introduced a kids’ ticket offer of $50, available starting October 22 for use beginning January 7. Additionally, Disney is offering up to 20% off hotel stays starting in January.
Why Has Disney Increased the Ticket Prices?
Disney is raising its ticket prices amid declining demand at its theme parks. In fact, in the Fiscal third quarter, Disney’s theme parks in the U.S. saw a 6% decline in operating profits, despite its revenue increasing by 3% year-over-year.
According to a CNBC report, Disney’s management blamed a “softening consumer environment” for the fall in demand. This has led inflation-weary consumers to consider other cheaper options when it comes to theme parks in a competitive environment.
Disney’s new price hikes appear to be an attempt by the company to capitalize on high footfalls to its theme parks during the peak holiday periods and at the same time, make its theme parks more appealing to visitors during off-peak periods through discounts.
What Is the 12-month Price Target for DIS?
Analysts remain bullish about DIS stock, with a Strong Buy consensus rating based on 15 Buys and four Holds. Over the past year, DIS has increased by more than 10%, and the average DIS price target of $113.36 implies an upside potential of 22.5% from current levels.
