Solving Disneylands Annual Passholder, Attendance and Food Problems
Disney recently released 4th quarter results and theme park revenues and profits were down significantly as compared to last year. Disney does not break down how much the Disneyland Resort
contributes to the revenues and profits as compared to Walt Disney World Resorts contributions. If one were to estimate, Walt Disney World probably contributes at least 60-70% of the revenue and profit total since Walt Disney World has 4 theme parks and more resort hotels than the Disneyland Resort has.
Although attendance at Disneyland was up 15% in the period from July 1 through August 30, revenues and profits were down compared to last year.
How should Disneyland solve these problems?
The 2009 promotions of having free Disneyland admission and a gift card of $72 on your birthday was hugely successful and Disney has no one to blame but Disney. Disney heavily marketed this promotion and by allowing the gift card value to be applied to the purchase of an Annual Pass Disney has increased the Annual Passholder numbers to almost 1 million. The majority of the Annual Passes are the Southern California and Southern California Select Annual Passes. In retrospect, the gift card should not have been allowed to be used as a payment for an Annual Pass. The gift card should have been restricted to food and merchandise but Disney created this problem.
Disneyland will solve this Annual Passholder problem soon. The profits and revenue from the Disney theme park division are heavily scrutinized by Wall Street and Disney is a member of the Dow Jones Average. The stock price and Disneys profits are used as an indicator for consumer and travel spending.
One way to solve the Annual Passholder problem is to only have a Premium Annual Pass and a Deluxe Pass or just a Premium Annual Pass. This will reduce the AP number drastically. Back in the 1990s, only 2 passes were offered Premium and Deluxe. Disney should offer Southern California and Southern California Select passholders a discount to upgrade to a Premium or Deluxe pass.
Disney also needs to reduce the Southern California Marketing. The 2 for 1 ticket deals and other promotions need to be cut back. Disney could solve this by having promotions from January through March and then from September (after Labor Day) through November. Promotions during June through August need to be eliminated and/or reduced.
Disneyland has to balance its marketing to Southern California residents and out of town tourists.
The Disneyland Resort was to be a destination resort like Walt Disney World but that plan has not been successful. Perhaps when California Adventures improvements are finished, Disney can reassess its marketing for a destination resort. Obviously, the addition to the Grand Californian Hotel, the new Vacation Club units and the complete refurbishment of the Disneyland Hotel which is underway will add to the destination resort thinking.
Disney has successfully created the Halloween and Christmas markets at Disneyland and the results have been good. Attendance at Disneyland has been steady in October and November so far this year.
In the 1990s, Magic Mornings/Early Entry was only available to people who purchased a travel package from the Walt Disney Travel Company. Disney expanded this by allowing anyone who purchased a 3-Day Park Hopper Pass to have access to a Magic Morning/Early Entry on one morning. Disney needs to go back to the 1990s model and only have Walt Disney Travel Company packages and Disneyland Resort Hotel guests access to Magic Mornings/Early Entry. This will cut down on the attendance as well. Perhaps when the California Adventure improvements are finished, Disney can offer Magic Mornings/Early Entry to California Adventure on the remaining days when Magic Morning/Early Entry is not offered for Disneyland. Disney makes more profit on packages from the Walt Disney Travel Company and by only allowing Walt Disney Travel Company package guests and Disneyland Resort Hotel guests access to Magic Morning/Early Entry, Disney can steer more guests and money that way.
Food is another issue. Disneyland has a fairly liberal policy of allowing guests to bring in food and snacks. This policy does not need to be changed. The menu offerings and prices need to be changed.
Disneyland food offerings cannot compete with the Value meals that are marketed by almost every fast food chain in America. Unfortunately, Disneyland has not changed to conform to American consumers demands and expectations. Disneyland needs to offer value meals that include say a cheeseburger, fries AND a drink for one price. This price should be lower than the current price of a cheeseburger and fries and the additional charge for a drink. Also the drink size should be a 32 ounce drink and not a 20 ounce drink. Disneyland has the buying power to get quality beef, chicken and fish in the marketplace and should stop buying cheaper cuts. I realize that Disneyland and the Walt Disney Company are FOR PROFIT enterprises, but consumers should get more value for their dollar. If Disney is going to market its parks, it should also market first rate food as well. Also Disneyland should add more sandwiches and salad selections to its fast food offerings. Not everyone wants a cheeseburger and fries.
The pizza prices at Disneyland are outrageous. Over $30 for a whole pie that is just awful. Cheese and flour and tomato sauce are relatively cheap.
Just because someone lives in Southern California does not give that person a right to go to Disneyland and alternatively, a New York City Resident does not have a right to go to a Broadway show. Disneyland needs to balance its marketing for Southern California residents and out-of town tourists. I have no bias against Southern California residents. When I was living in LA, I had a Premium Pass and now that I live on the East Coast, I still have my Premium Pass but I get to Disneyland three times a year and always stay at the Disneyland Hotel and use the Walt Disney Travel Company for tickets for family members and travel packages.
Disney needs to solve these problems now because Disney shareholders (me being one of them) want a higher stock price, higher dividend payments and higher corporate profits and Disneyland tourists (me being one and a Premium Annual Passholder) want value for their dollar. Disneyland profits cannot solely be based on Southern California residents or out-of-town visitors. Disneyland needs both markets to survive. Disneyland needs to realize that and change its marketing, Annual Pass programs and food choices NOW and not later.