Interesting slant on the new pricing plan from Motley Fool:
Motley Fool
Disney's Brilliant Hike
Monday December 6, 8:57 am ET
By Rick Aristotle Munarriz
Its annual dividend wasn't the only thing that Disney (NYSE: DIS - News) was raising last week. Come January, a one-day ticket to its Disney World theme parks in Florida will set you back a stunning $59.75.
That's a daring $5 hike, especially when you consider that some of its parks wouldn't exactly qualify as full-day experiences. Animal Kingdom has now had six years to establish itself as more than just a half-day park, yet it still closes at 5 p.m. every day. EPCOT is a more popular gated attraction, yet it still closes many of its rides shortly after dusk and won't open its country exhibits until just before lunchtime.
According to Amusement Business, just one of Disney's four Floridian parks grew its attendance last year and, with the peninsular state drawing a few tourist-chasing hurricanes in 2004, it's not as if the results are likely to have improved much this year.
Yet calling this a brilliant hike wasn't meant to be drippy with sarcasm. The move is a good one because at the same time Disney is rolling out customized ticket options that will make extended stays substantially cheaper.
That's what Disney has wanted all along. Sure, it wouldn't mind you as a day guest, but it would much rather have you as a captive customer for a week or so. Staying at one of its many onsite resorts, dining at its many restaurants, taking in the various water parks, shopping districts and golf courses -- that's where Disney would rather see you.
All around the country even the smaller regional chains are starting to flesh out their thrill havens as resorts to profit from extended stays. Last week, Cedar Fair (NYSE: FUN - News) announced that it was building overnight accommodations at its Worlds of Fun park in Kansas City, following in the footsteps of its more fleshed out destinations elsewhere.
While the industry has always been defined in terms of attendance and per capita spending, amusement parks are now starting to cash in on its patrons on the other side of the turnstile.
For Disney, longer stays also mean providing its guests the flexibility to explore its massive entertainment compound. So if your animal-averse teen isn't wowed by Animal Kingdom, perhaps the next generation DisneyQuest video arcade will do the trick. The childless couple who feel they've outgrown Magic Kingdom's Fantasyland may find a more nocturnally tantalizing experience at the company's Pleasure Island collection of nightclubs or the fine dining alternatives at the upscale resorts.
Living in Florida, it just doesn't feel right if I'm not heading out to Disney World every other month or so. Yet as many visits as I may have logged in my life I tend to discover something new every single time. That's why I always wonder if the tired family dragging itself to the parking lot at the end of the day knows that same Disney World that I do. The parks aren't cheap and favorable first impressions are difficult when everyone comes in with different expectations. That's why I'm pretty upbeat about Disney's new pricing strategy. The company has some promising new attractions in store for 2005, and marketing itself as a value for extended stays over a pricey one-day deal is the best way to make sure that most of its guests walk away with smiles on their faces -- and not cheated by kicking into Disney's coffers along the way.
While Disney's $59.75 may seem steep, its $199 option for a full week at the parks shaves the daily price by more than half. Is this the right move for Disney? Will you be heading out to Disney World in 2005? Which new ride are you looking forward to the most? All this and more -- in the Disney discussion board. Only on Fool.com.
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Longtime Fool contributor Rick Munarriz has been to all six of Disney's domestic theme parks this year, and even though he has owned shares of Disney since the 1980s, he has never counted on the dividend as a get-rich-quick scheme. He also owns units in Cedar Fair. He is a member of the Rule Breakers analytical team, seeking out tomorrow's great growth stocks a day early.
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