e’re about to find out if folks are willing to pay nearly $50 an hour to enjoy Disney‘s (NYSE:DIS) most popular theme park. Disney After Hours launches tonight, offering a limited number of guests the ability to enjoy several Magic Kingdom attractions and character-greeting experiences for three hours after the park closes to day guests. It will be offered through the next six Thursdays. There’s also a Sunday offering — on Mother’s Day, May 8 — in the mix, giving Disney a way to gauge if timing is a differentiating factor.
Disney After Hours won’t come cheap. Tickets run $149 a night, and it remains to be seen if the high price alone will be enough to keep access as limited as the theme-park giant is promising. None of the seven nights had sold out as of yesterday afternoon, even though the tickets have been on sale since late last month. That’s probably a sign that Disney may have pushed its luck here, or needs to do a better job of communicating the value of the event.
Disney’s including ice cream novelty treats and bottled beverages at no additional cost to attendees, but $149 may be too dear a price for folks until we get first-hand experiences of all that guests were able to do in just three hours of access with limited crowds. With Disney obviously staffing the park during the event it’s clear that it needs a minimum level of guest buy-in to make it profitable. Disney has made seasonal hard-ticket events pay off nicely during Halloween and Christmas, but there’s a lot at stake if it can get tourists to shell out top dollar for enhanced experiences during the off-peak season.
This isn’t the only operating day-extending experiment being put to the test. The media mogul also began selling Disney Early Morning Magic earlier this month. The model here is to get guests to pay $69 each to enter the park a little more than an hour before it opens to the public with access to three Fantasyland attractions and a complimentary breakfast. It’s available most Tuesday and Saturday mornings through the end of June starting on April 26. Disney Early Morning Magic also didn’t have any mornings sold out as of yesterday afternoon, but that event’s been on sale for a shorter amount of time. It’s also not starting until later this month, and it’s available on 18 different mornings.
Educating potential customers will be the challenge. Guests staying at any of Disney’s on-site hotels have access to Extra Magic Hours that offer access to select parks before or after they close to the public. Disney After Hours and Disney Early Morning Magic should draw much lighter crowds and they include food, but it’s going to be a hard sell for guests already staying at a resort hotel. Many guests staying offsite may flinch at the asking price of these hard-ticket events, often what keeps folks from staying outside of Disney property in the first place.
There’s a lot at stake here, and purists may applaud if Disney After Hours fails to impress well-to-do Disney buffs. Disney has already been raising the bar on what a vacation to Disney World will cost this summer. It raised the price of single-day tickets in February, a move that will push one-day admissions as much as 18% higher this summer. It’s also been testing charging a 75% premium for premium parking lot spaces at Disney World’s two most visited parks.
The year is young but either Disney has gone too far in 2016 with “upcharge” products or it’s about to crack open the firehose that delivers a healthy flow of high-margin earnings to its theme parks division this summer. Fans and shareholders are standing at opposite ends of this debate, and the first fight in this battle begins late tonight at a Magic Kingdom near you.
Source: The Motley Fool