Disney Raises SoCal Annual Pass Prices 30% - to Keep Locals “Out”

Author: William Donckels
Published: June 04, 2012 at 2:36 pm
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The Los Angeles Times reports major price increases at a number of Southern California attractions. The most famous park listed (obviously) is Disneyland, followed by Disney’s other park, California Adventures. Other southland theme parks include Magic Mountain, Knotts Berry Farm, Universal Studios, and Sea World San Diego.

Anyone who lives in Southern California knows that Disneyland’s annual pass prices consistently go up; however, this year they increased 30% for the all access pass that includes parking. This was a huge increase, that (understandably so) irked many of the “Disneyland loyalists.”

Common wisdom would seem to dictate that Disney increases their prices “because they can.” Few brands command the kind of “disciple-like” loyalty that Disney does; so you would think the price increases are a way of squeezing a few more dollars out of the loyal Disney collective. Plus, Disneyland recently revamped “Star Tours,” and California Adventures is opening “Cars Land,” a 12-acre addition based on the Pixar movie “Cars;” so it would make sense to increase prices a bit more than usual.

Reading the article, however, you learn that this is not the case. What you learn is that Disney is consciously raising its prices not to squeeze more money out of its local fans – but rather, to keep them “out” of the parks.

Annual pass holders tend to be local residents of southern California who love the parks. But local residents don’t use the hotels, buy the merchandise, pay for expensive dinners, or fund any of the other merchandising or services that tourists do. Quite simply: Disney makes a lot more money on tourists than “locals,” so they’re pricing the park passes to keep locals away.

Not only do locals not buy nearly as much additional merchandise and services as tourists; but lots of locals in the parks make them more crowded, and actually discourage more tourists from visiting. So, Disney is using the classic laws of “supply and demand” to discourage people from buying the annual passes; thus making the parks better “tourist” destinations.

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Article Author: William Donckels

I'm a financial consultant who's spent his last 20-years working as an accountant closing corporate books of companies. I like to be aware of the important issues; and I like discussing the relevant business issues of the day. …

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