News Disneyland cancels Annual Pass program

[Vegas Disney Fan]

LOL. So how did Disneyland exist for 30 years without passes. Why do people think annual passes are the only solution when you can have dynamic pricing.

APs aren't the lifeblood, they are the filler and arguably Disneyland was a better place before APs came into existence.

I don't blame people for taking Disney up on discounted admission passes, the company created a business model that made attendance uncontrollable and it's not the customer's fault.

Prior to APs (´84) DL was averaging about 10 million visitors annually, in 2019 they had nearly 19 million visitors, I think Disney would like to scale back attendance a bit (maybe 16-17 million) but there’s no way Disney wants to completely eliminate a program that’s helped double attendance.

 

[chadwpalm]

Does it? How? My son has one.

Well, I've used the Youtube VR app free from the Steam store, but I think they discontinued it after not updating it for over a year, so if it's not already downloaded you're a bit out of luck on that. That would let you watch 360 videos people have made on youtube.

Another alternative is to get the free Google Earth VR app in the Oculus Store and you can "walk" around Disneyland using the street view. It won't be in 3D, but it's 360 and you kinda feel like you're there.

 

[DanielBB8]

LOL. So how did Disneyland exist for 30 years without passes. Why do people think annual passes are the only solution when you can have dynamic pricing.

APs aren't the lifeblood, they are the filler and arguably Disneyland was a better place before APs came into existence.

I don't blame people for taking Disney up on discounted admission passes, the company created a business model that made attendance uncontrollable and it's not the customer's fault.

Disney milked its success for a very long time until capacity was unbearable. I have to agree about that. How many times did people complain about no new E-Ticket attraction since Indiana Jones in 1995. 25 years later, Rise of Resistance plus Smuggler Run. In a few more years, Mickey Runaway Railway. All this new capacity and a new parking structure supports thousands of more people in the parks. They need the APs to fuel the growth.

DCA is also opening a new Superheroes land and Spiderman ride. This second park plus possible third park (Disneyland Forward) means people need to show up.

Or they can go back and retain their slow growth model and sell their theme parks to a corporate raider, which almost happened.

 

[George Lucas on a Bench]

Outside of some peak days during the holiday season, since the end of the Diamond Celebration, DCA just doesn't seem to draw crowds unless guests have affordable APs and the resort overall is packed like the last lifeboat on Titanic. You see it during peak season with AP blocks where it's fairly dead and you're seeing it now when people are having to make a choice between the two parks.

 

[flynnibus]

I just looked and park hopper tickets (and DCA only) are available every day except for a few Saturdays and 2 or 3 weekdays, if they can’t even sell out 25% occupancy, especially after being closed over a year, I think APs will be back sooner than most of us expected. It’ll help when non residents can go also but I think it shows that even the junkies in need of a fix won’t pay to go repeatedly, they’ll go once every few months but that’s not often enough to even fill 25% occupancy.

It's not really fair to think failing to sell out right now is a tell on tourists interest in Disneyland. The whole situation is still very anti-tourist for California. It's different for WDW which has been open for months, in a state that basically has opened up completely. California is just weeks since its announcement, still very restrictive, and DLR is just days into opening.

Tourism doesn't just start up overnight. Disneyland will have to wait it out until the lag clears up. They can easily run short-term ticket promotions to draw in the typical regional crowd until they are ready to roll out their new program.

The beauty of the promotions is no long term commitment and they can change them up or down on almost a whim.

I'm sure Disney is more worried about getting things back on track operationally before they worry too much about their client demographic.

 

[waltography]

I just looked and park hopper tickets (and DCA only) are available every day except for a few Saturdays and 2 or 3 weekdays, if they can’t even sell out 25% occupancy, especially after being closed over a year, I think APs will be back sooner than most of us expected. It’ll help when non residents can go also but I think it shows that even the junkies in need of a fix won’t pay to go repeatedly, they’ll go once every few months but that’s not often enough to even fill 25% occupancy.

Good time for an update!

For a start, it's not just a few Saturdays, it's all for 1 park per day and all but one for park hoppers. They've been gone for a while now, though some availability pops up now and then from people rescheduling. A handful of week days are gone too:

I think what we're seeing is the parks with APs and regular Californians without out of state visitors (of whom there are many itching to go back). I doubt we'll see the return of the APs before the end of summer unless attendance continues to lag once the June 15 guidelines are lifted.

 

[CaptinEO]

Disney milked its success for a very long time until capacity was unbearable. I have to agree about that. How many times did people complain about no new E-Ticket attraction since Indiana Jones in 1995. 25 years later, Rise of Resistance plus Smuggler Run. In a few more years, Mickey Runaway Railway. All this new capacity and a new parking structure supports thousands of more people in the parks. They need the APs to fuel the growth.

DCA is also opening a new Superheroes land and Spiderman ride. This second park plus possible third park (Disneyland Forward) means people need to show up.

Or they can go back and retain their slow growth model and sell their theme parks to a corporate raider, which almost happened.

So Disney builds new rides that attract MORE people, but have trouble getting more people? I don't get it...

 

[Disstevefan1]

I just looked and park hopper tickets (and DCA only) are available every day except for a few Saturdays and 2 or 3 weekdays, if they can’t even sell out 25% occupancy, especially after being closed over a year, I think APs will be back sooner than most of us expected. It’ll help when non residents can go also but I think it shows that even the junkies in need of a fix won’t pay to go repeatedly, they’ll go once every few months but that’s not often enough to even fill 25% occupancy.

This is a good sign for the (now former) DLR APers. The fact is DLR is a local park attended mostly locals. I heard on a vlog that Disney will be announcing the new DLR “membership program” by the end of this year.

Whatever this new membership program is, you know you will be getting less and paying more for it...

 

[el_super]

Prior to APs (´84) DL was averaging about 10 million visitors annually, in 2019 they had nearly 19 million visitors, I think Disney would like to scale back attendance a bit (maybe 16-17 million) but there’s no way Disney wants to completely eliminate a program that’s helped double attendance.

But attendance growth isn't the prime objective... profit is.

More AP holders spending less and less per entry means more operating costs to Disney. As you add attendance to the park, you have to pay for more security, more parking lot trams, more ticket takers, more custodial, more guest services. More of everything. You have some people paying $150 a day for entry, and you have some people paying around $60 per entry, so spending more and more money to get that $60 makes less and less sense.

And then the more crowded the park gets, the fewer people want to go. THAT is a big strike against the AP program. When Disney started messing with the AP program in 2019, by raising the prices and introducing the flex passport, they reported success in getting higher paying guests to return (and that's what drove the success of Star Wars Land):

Alexia, I just want to put a little more granularity on the Disneyland results for the quarter. As I said, the attendance was down 3%, but the paid attendance was up in the quarter, and that lower attendance was primarily driven by the annual passholder visitation. And when we look at the per cap spend across Disneyland, all categories, they were up significantly year-over-year.​

Which also leads to... the AP holders are notoriously hard to keep as customers. Appealing to a local audience means having to put resources into new offerings several times a year. For a big company like Disney, that's incredibly hard and expensive to do. You see them pour resources into special events, food and wine festivals, new character offerings, new entertainment and new specialty merchandise that is mostly meant to retain repeat visitors. That work represents hundreds (if not thousands) of people working on these projects all year long.

And then there is the big one that Wall Street worries about: growth potential. Eventually you're going to hit a ceiling where you can't get any more people through the gates of Disneyland and you won't be able to show year to year growth through attendance alone. Some could argue we already hit that point between 2018 and 2019 when attendance stayed the same. Disney can't keep spending millions of dollars, adjusting the park, and squeaking out more capacity here and there, just to get a single digit increase in attendance. It doesn't make financial sense.

There is a LOT working against having the AP program, and Disney's earlier efforts to control it, seemed to have been met with success. that's why it's been eliminated.

 

[el_super]

Also just so we're clear on what Disney's position on AP holders is:

All I'll follow up on the parks question is that, as you know, different guests, depending on where they're coming from, have different relative values in terms of their contribution as a guest to the park. And typically, someone who travels and stays for 5 to 7 days is marginally more valuable to the business than someone who comes in on an annual pass and stays a day or 2 and consumes less merchandise and food and beverage. So the way I would look at it is that it's just as that constituency changes a little bit, so do our overall margins change.​

​

-Bob Chapek - Q3 FY20 Earnings Conference Call August 4, 2020​

 

[Stevek]

The goal isn't selling out.

Exactly...Potrock made it very clear in the interview linked below that it's about improving the guest experience which also recognizes that the AP program had become too big.

Disneyland's President Previews Changes as Parks Return

www.themeparkinsider.com

"Potrock also promised improvements to the park ticketing and reservation systems and suggested that advance reservations may be here to stay at Disneyland.

"Having a reservation system more efficient than what you experienced, when you have to buy a ticket and then make a reservation and then link them... some number of weeks from now, you're not going to go through [those] three steps. That's going to get much more efficient for you, kind of one stop shopping.

"But having the ability to control capacity and maintain the optimal experience for our guests is actually really important. Now while it might be a little inconvenient [to make a reservation] - everybody wants to be spontaneous and all those kinds of things - it helps us operationally, to really understand how many rides we need to have operating, how many parades or shows do we need to have operating for how many people that we're going to bring into the park that day. And how do you think about what hours of operation [too], and so I think that's a vital tool."


"Potrock also addresses the decision to end Disneyland's annual pass program and talked about the replacement membership program that he expects the resort to launch before the end of the year.

"We were able to recognize that we had a dilemma, [and] the dilemma was limited capacity. We had too many passholders. How are you going to manage that? Even if you could, you're going to be overrun by passholders. That's not the business model - we need a balanced business model. So that's why we sunsetted the program."

 

[Disstevefan1]

RIP AP. Alas, We knew you well old friend, you served us well...

 

[Stevek]

RIP AP. Alas, We knew you well old friend, you served us well...

Which is fine. Hopefully the new system will make the parks more manageable from a guest experience perspective.

 

[DanielBB8]

Also just so we're clear on what Disney's position on AP holders is:

All I'll follow up on the parks question is that, as you know, different guests, depending on where they're coming from, have different relative values in terms of their contribution as a guest to the park. And typically, someone who travels and stays for 5 to 7 days is marginally more valuable to the business than someone who comes in on an annual pass and stays a day or 2 and consumes less merchandise and food and beverage. So the way I would look at it is that it's just as that constituency changes a little bit, so do our overall margins change.​

​

-Bob Chapek - Q3 FY20 Earnings Conference Call August 4, 2020​

Addressing Chapek, this is true in WDW where people can actually stay 5 to 7 days onsite. It's marginally more valuable. That's cream off the top. The APs who show up for 1 or 2 days will obviously come back so he doesn't say they do. That's a huge oversight. Disney already got their money so they can come back many more times. If they don't, Disney still got their $600 for the AP they haven't used. Isn't the frequent repeat visits the source of the complaints about overcrowding?

They not only clog up the park, they take the restaurant reservations and buy up many AP special park merchandise like popcorn containers. They buy up special limited edition drinks like the Beauty and the Beast Rose Cup. Will we now say Disney will lose these customers? Let hope so?

 

[DanielBB8]

So Disney builds new rides that attract MORE people, but have trouble getting more people? I don't get it...

The day pass is priced too high. This is by design. You would think Disney should know all about price elasticity.

I believe the sweet spot is $99 for a day pass and $599 for the Annual Pass, but Disney always aims 20% higher.

 

[Stevek]

LOL. So how did Disneyland exist for 30 years without passes. Why do people think annual passes are the only solution when you can have dynamic pricing.

APs aren't the lifeblood, they are the filler and arguably Disneyland was a better place before APs came into existence.

I don't blame people for taking Disney up on discounted admission passes, the company created a business model that made attendance uncontrollable and it's not the customer's fault.

I would love if people learned to appreciate Disneyland like many of us did growing up. We were lucky if we went 2 times a year when an aunt or grandma came to visit and then for a special private party that they used to do fairly regularly. I don't blame the APs as you say above, Disney created the monster but I do blame the APs that came multiple times a week just to hang out for causing overcrowding.

 

[Stevek]

The day pass is priced too high. This is by design. You would think Disney should know all about price elasticity.

I believe the sweet spot is $99 for a day pass and $599 for the Annual Pass, but Disney always aims 20% higher.

And Disney could very well adjust prices on day passes once they launch the AP replacement. Maybe wishful thinking?

 

[el_super]

The APs who show up for 1 or 2 days will obviously come back so he doesn't say they do. That's a huge oversight.

Not really, because they are looking at per-visit spending per guest as their metric. A person spending on a hotel stay, park hopper tickets, high end dining reservations and souvenirs will spend more money PER DAY than an AP. Typically. We all understand that some hotel guests have purchased APs, but when they do that, they are doing it to save money.

They buy up special limited edition drinks like the Beauty and the Beast Rose Cup. Will we now say Disney will lose these customers? Let hope so?

Forcing people to go less frequently would put less demand on the specialty merchandise, so maybe? Or maybe it causes ebay reselling to get worse.

 

[DanielBB8]

Not really, because they are looking at per-visit spending per guest as their metric. A person spending on a hotel stay, park hopper tickets, high end dining reservations and souvenirs will spend more money PER DAY than an AP. Typically. We all understand that some hotel guests have purchased APs, but when they do that, they are doing it to save money.

Forcing people to go less frequently would put less demand on the specialty merchandise, so maybe? Or maybe it causes scalping to get worse.

Just looking at PER DAY misses the big picture. Another poster mentioned the customer yearly spend. Their spending is spread out throughout the year and many buy tons of merchandise, food, and drinks. APs can also just go a few hours so the spend can be measured PER HOUR in the parks. They must pay for parking each time unless they got the most expensive APs.

Don't forget Disneyland isn't like WDW. High end dining is only a few restaurants in each park and the hotels.

It has been already shown that the parks aren't filling up. This is unpredictable income. You can expect cutbacks instead of more offerings. Less specialty merchandise or they start selling them in Downtown Disney. They'll adjust, maybe. Or they get back into selling APs again.

 

[CaptainAmerica]

@DanielBB8 you're going to have a hard time trying to claim that Disneyland is too crowded *and* too expensive. One of those things solves the other.