In true Disney fashion, Disney announced on January 14th, 2021 that they would be ending their 50+ year annual pass program to Disneyland. The news came as a shock to thousands and thousands of passholders as Disney gave no warning whatsoever. With the resort having been closed since March of 2020, not much has been shared on the status of the parks in Anaheim, particularly a reopening date.
So what does the ending of the passholder program mean and what does the future hold for those who frequent the parks? We have several ideas that we’re going to share on the topic as well as taking a deeper dive at what happened when the program came to an abrupt end.
First off, when Disney made the announcement, no passholder (including top-level Premier holders) were aware of what was happening beforehand. The discussion was internal only to Disney and, until they sent out the initial email, no one knew. The email that Disney sent out didn’t really offer a reason as to why they were ending the passholder program, only that it was happening and how they were going to “compensate” the passholders.
Second, Disney used the word “sunsetting” to explain the end of the program to guests. This is Disney’s nice way of saying see ya later. At the same time, it was also their way of saying, there’s something on the horizon so while we’re saying goodbye now, look forward to something new and fresh.
Third, the “compensation” part was really more of an explanation as to how they would be refunding the guest if they were due anything. Essentially Disney will be refunding anyone who paid in full but were unable to use their pass during the closure. They will be deducting any eligible dates out of the cost (pre-closure) and refunding the rest back to the guest. The timeline for this is several months.
BENEFITS AND EXTENSIONS
One of the biggest reasons guests loved the Disneyland passport program was the benefits that the passes offered. All offered merchandise discounts and food discounts (at various levels). Some included free parking at the resort and discounts on special event tickets like Mickey’s Not-So-Scary Halloween Parties. Guests could save up to 20% on merchandise and up to 15% on dining. For frequent visitors, the savings added up fast.
Now with passes gone, Disney is still allowing holders to save on merchandise and food until a new program is put into place. For now this only includes Downtown Disney and select shops and dining locations in California Adventure Park. You must have held an active pass from March 14th, 2020 forward to receive these benefits.
Disney top-tier passholders, the Premiers, will continue to receive access to the above mentioned benefits like everyone else, as well as access to the Walt Disney World Resort theme parks thru March 31st, 2021. After this time they can renew for Walt Disney World only thru April 20th, 2021.
The only group of passholders who received a “true” extension on their passes (both Disneyland and Walt Disney World) were Club 33 members. They received an email from the Club president who ensured that their passes would remain active at both resorts until the new passholder program was announced.
WHY THE CHANGE?
It’s easy to blame COVID-19 for all of our problems currently and this is no exception. COVID has had a significant impact on Disney’s overall revenue, particularly the Disneyland Resort, as the state of California refuses to let them reopen the parks. It’s been almost a year since the resort closed; thousands of jobs have been lost and millions in revenue. This is not something Disney can bounce back from quickly so they are coming up with as many ways as possible to reclaim lost money.
While they could just raise ticket prices (which you can count on them doing anyways), that’s not enough. They have a lot of lost dollars to recover and the AP program is one place they can do it. We’ll try to explain this in a way that makes sense. It’s actually a pretty simple and obvious answer for Disney.
If a regular guest pays $350 for a 5-Day ticket to Disneyland, Disney just made $70 per day on them. Now compare that to an annual passholder who paid $1,200 for 365 days of access. That’s a mere $3.28 per day. It gets even less when you pay $450 for, let’s say 215 days of park access. Now scratch the annual pass and lets say those guests purchase 2 5-day tickets for 2 visits during the year. Disney is still making $70 per day on the guest instead of $2-$3 per day. It’s a numbers game and Disney wants to come out on top.
Their biggest loss has been Southern California AP holders, who, for the last decade or more have made up the majority of passholders (estimated to be somewhere around 1 million). They have been able to purchase passes for less than $500 for years and use them frequently. It’s caused major crowd problems for the resort, particularly on the weekends. From Disney’s point of view, they want the crowds to be made up of $70 per day guests, not $3 per day guests. Thus ending the program will give them the opportunity to rethink how “low” they are willing to let guests enter the parks, mainly passholders.
WHAT’S ON THE HORIZON?
Nothing yet but you can bet Disney is working on something great for the future. And by great we mean something better for them and more expensive for us. Disney did say that their future program would offer more choice, flexibility and value to their consumers which can be translated into more money for us and more restrictions for you. We think they may not know the definition of flexibility but they sure are great at disguising it.
We think that the new passholder program will launch sometime in 2022. With capacity limitations guaranteed to be in place whenever they reopen, Disney is going to be wanting to fill the parks will full-price paying guests only until they can have capacities over 75%. At this point, we would guess they launch a pass that is a combination of open, reservation days and date-based. This means the guest would have to make a reservation (limited number) and the passes overall pricing may be based on the number of days available and the guest visiting on those days. If not, a slight variation of this.
This is all based on Disneyland following in it’s sister resorts footsteps which we believe they will. We also think that Disney will significantly limit the number of passes they sell in the new program to stay much less than they were before. This could make being a passholder much more “savvy” than ever.
So a few things to look forward to in 2021-2022. One thing we know for sure is that the parks aren’t going to be getting any cheaper. Passes could end up costing over $1,500 for all out access each year. This would definitely limit the number of people buying and using them.