Source: PaxForex Premium Analytics Portal, Fundamental Insight
Should you want to frustrate Disney theme park fans, ask them if they believe what Disneyland Paris has just begun doing will be extended to parks across the US. Disney's French resort is introducing Disney Premier Access, a value-added offer in which guests can use their smartphones to pay $9 to $18 per person to enter a fast track to a particular attraction or entertainment. Time is money when you're on vacation, but this little trick can make a big difference during your day at the park.
The FastPass platform at Disneyland in California and Disneyland Florida was available to all guests at no additional charge until the parks closed last March. Neither resort has reopened FastPass, making some question if changes are coming to the once-revolutionary system. After Disneyland Paris introduced a fee-based service for faster access, enthusiasts and investors are wondering if Disney World and inevitably Disneyland will be the next to start charging for FastPass.
It could happen, and there is no better time to introduce a new system than now when the original platform has been down for 16 months. Nevertheless, let's look at some ideas why DIS may not want to go that path.
Disneyland will be 50 years old in three months
Disney World's 50th anniversary is less than three months away, and it is preparing an 18-month celebration. In some ways, it makes sense in this environment to launch a premium upgrade. The four Disney theme parks in Central Florida will draw huge crowds, which means there will be no shortage of people paying to cut the long organic lines.
In addition, many new rides and attractions are opening in October. A possibly questionable decision like this could get lost or derailed in the flurry of positive coverage of this milestone.
But does Disney want to celebrate this achievement with a move that could be profitable in the short term but devastating for the brand in the long term?
No one would flinch if Disney raised ticket prices and hotel rates in anticipation of the celebration. Introducing a new level of classiness when every popular attraction becomes a paid attraction may happen, but the timing would be far from ideal at a time when you need to focus on celebrating the past rather than cashing in on the future.
Disney World is not Disneyland Paris
Nowhere in the world is a theme park resort as massive as Disney World. Magic Kingdom's flagship park has become the only theme park on the planet to bring more than 20 million guests through its turnstiles in 2019, more than the two parks of Disneyland Paris combined. As the smallest of Disney's wholly-owned resorts, Disneyland Paris has a bit more leeway in terms of monetizing the guest experience.
Disney World also has more than two dozen on-site resort options, and that brings us to the leverage that is likely to be involved here, rather than a direct grab for fare money. Disney has already taken the first step by announcing that guests staying in the most expensive luxury hotels will have access to exclusive evening park hours in December. Disney can sweeten the pill by not only raising fees at high-end resorts but also by including additional FastPass benefits.
Disney fans may call this a classic, and already some Disney fans are complaining that only the luxury resorts will get the new hours. However, this is one way for Disney to raise the cost of FastPass without sticking individual price tags on each expedited line.
Premium FastPass won't make sense until annual passes recover
Disney World canceled its annual pass program in January. Disney World is still supporting existing season ticket holders but is in no hurry to sell new season tickets. In other words, instead of annual pass holders paying a couple of bucks a day for access to Disney parks, a growing number of day visitors are paying full retail prices in the triple digits.
If we went back to the old days, when a bunch of seasoned regulars would gather in line and master the FastPass system, a premium add-on would be a great way to level the playing field. Premium FastPasses would have given the more profitable, once-in-a-lifetime visitors an advantage over the less financially advantaged pass holders. Everyone would get what they wanted - including equity investors in the travel companies, as paying attendees would subsidize premium pass holders. It won't happen now, but at this point, it may only be a matter of time.
While the price is above 170.50, follow the recommendations below:
- Time frame: D1
- Recommendation: long position
- Entry point: 177.04
- Take Profit 1: 182.80
- Take Profit 2: 185.50
Alternative scenario:
If the level 170.50 is broken-down, follow the recommendations below:
- Time frame: D1
- Recommendation: short position
- Entry point: 170.50
- Take Profit 1: 166.10
- Take Profit 2: 163.30
