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The fury of Walt disney (NYSE: DIS) theme park fans aren’t going away anytime soon. It’s been less than a week since the House of the Mouse dropped a bombshell: Disney World’s free-for-all FastPass platform for access to fast-track queues is being upgraded to a premium experience called Disney Genie +.
Visitors to Disney World in Florida will have to pay $ 15 per day – or $ 20 at Disneyland in California – to access the renowned Lightning Lane queues, and not all rides will be included. Top attractions will incur an additional charge for the express line for each trip. No one likes to pay for something that was free, but there is a mouse method. Fan venom is misplaced. It’s just not clear to all parties that Disney Genie + is a win-win situation that Disney theme park operators, visitors, and shareholders can all pull out of.
Image source: Walt Disney.
It’s a small world with a big price
Drivers don’t rejoice when new toll booths go up, so it’s only natural for Disney World’s biggest fans – its pass holders – to burn plush CEO dolls in the image. The problem here is that they don’t fully understand the reasons for the move, or how it will affect them if they decide to stay as Disney Genie + customers, refuse to pay and are content with waiting lines, or cut the lines. links with Mickey Mouse completely.
Disney’s reasons for taking this route are pretty clear. Its theme park segment has just become profitable after a year of red ink, and why crawl when it can fly? With guest numbers likely to remain historically low until the pandemic passes, restrictions on international travel ease and the global economy rebounds, Disney is going to have to increase its per capita income.
Disney is the only major theme park operator that does not currently have a low-cost offer that allows customers to access lines shorter than regular lines. Disney’s FastPass was available to all visitors, but it was defective. It was a system that favored pass holders over less frequent visitors who historically paid more and spent more per day at the park. Regulars played with the system, grabbing the best FastPass travel reservations 60 days in advance. Anyone starting to plan a Disney getaway a few weeks before arrival would end up with a slim selection on FastPass availability.
Unlike most parks where only a small number of visitors access the pay lines, Disney’s FastPass queues were loaded with priority guests over those in the queue. Things will be drastically different now. Visitors will not need to plan their trips two months in advance. Relief lines will move faster. In a world where “time is money” some customers, but not all, will be able to afford their trip to do more shopping in one day at Disney World. Disney Genie + will be a popular high-margin offering. Those who abstain – on principle or on financial grounds – can at least take comfort in knowing that their tours will be partially subsidized by Disney Genie + customers, which will help control regular ticket prices.
It is not obvious to the masses at the moment. Regulars hate learning a new system, and what they hate even more is that it comes with a cover charge. Non-regulars have no idea how much easier it will be to have a carefree day at Disney World, even if they don’t pay for Disney Genie +. Shareholders are poised to see a game-changing product offering that will have a significant impact on the bottom line of the Travel and Tourism Equities indicator. Everybody wins. They just don’t know it yet.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.
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