Niles: Don’t expect higher prices to mean lower attendance at Disneyland

So, Disneyland raised its ticket prices again. This year’s increase saw most multiday passes and single-day tiers go up about 6.5%.

That increase last week triggered the expected flood of new media and online complaints that Disneyland has become too expensive — just like every past increase for the past decade or so has done. I asked readers on ThemeParkInsider.com over the weekend if they thought that Disney was too expensive, and 90% of respondents answered “yes.”

Yet every time I visit Disneyland and Disney California Adventure, the parks are packed. Attendance last year was up 2.2% at Disneyland and 10% at Disney California Adventure, according to the industry’s TEA/AECOM Theme Index report. If Disneyland is “too expensive,” those high prices do not seem to be deterring Disney fans from visiting the theme parks.

Yes, those same fans are tired and frustrated by getting squeezed everywhere they go to spend money. Top concert and sports tickets routinely cost as much as — if not more than — a day at Disneyland, despite not providing as many hours of entertainment. Restaurants have raised their prices to the point where eating out at Disneyland is beginning to feel like a deal sometimes. Yet just because other stuff also is too expensive does not excuse Disneyland for charging an eye-watering amount for its tickets.

How are Disneyland fans making it work? From what I have seen in the parks, many of them are not paying Disney’s regular ticket rates. Casual fans are taking advantage of the many discounts that Disneyland offers during the year, such as the upcoming $50 kids’ ticket. Disney’s most loyal fans are paying far less than $100 a visit by using the resort’s Magic Key annual passes.

Let’s look at what Disneyland just did with the prices of those and how that might actually help increase the number of people in the parks on any given date. At the top of the chart, the price of the Inspire pass — the least restricted and most expensive — also went up about 6%. But at the other end, the price of the Imagine pass for Southern California residents — that is blocked out weekends and many popular vacation periods — went up 20%, to $599. Prices for the other two levels went up 10% and 14.7%.

Disneyland is not selling Magic Key passes to new customers right now. Those passes are available only for renewal. However, Magic Key holders can switch to other levels when they renew, and the regressive nature of Disney’s recent price increases seems designed to discourage people from downgrading.

There are two ways to get value from something: pay less or get more. If Disneyland fans choose not to pay less by downgrading their Magic Key passes, I suspect the higher prices may encourage many of them to chase value by visiting the park more often and spending less on entertainment elsewhere. The higher list prices also serve to make seasonal discounts look more attractive for casual fans, as well.

That’s how a Disneyland price hike actually can increase park attendance. We will see what happens, but I suspect that this year’s price increase will not thin crowds at the park any more than the previous ones did.