Original Article By Daniel Kline At TheStreet.com
Disney World and Universal Studios compete for the same customers, at least once those customers are old enough to ride thrill rides. Until then, Disney has a pretty big edge with its kid-friendly characters and mild rides at Magic Kingdom.
Both theme park giants want to bring in families and keep them ensconced in their parks for an extended period of time. That means enticing them to stay in an on-site resort and giving them a lot of things to do beyond just the core theme parks.
That’s why Walt Disney (DIS) – Get Walt Disney Company Report added the Disney Springs shopping and dining area, two water parks, and a huge variety of resorts to Disney World.
Comcast’s (CMCSA) – Get Comcast Corporation Class A Report Universal Studios has followed a similar model, putting the Citywalk shopping and dining area between Universal Studios and Islands of Adventure, adding the Volcano Bay waterpark, and adding a number of new resorts.
Disney and Universal also want to attract repeat business. That can come from three places: Florida residents who can visit often, regional guests who can drive in or take a short flight a few times a year, and diehard fans who visit more than once a year even though they live a fair distance away.
Repeat visitors, however, want something that Universal offers, and Disney, at least at the moment, mostly does not: That is annual passes.
What Do Disney and Universal Annual Passes Look Like?
Before the pandemic, both Disney and Universal Studios offered two types of passes, Florida-resident passes and ones for people who live out of state. In those pre-covid days, Disney offered multiple tiers that had varying blackout dates.
The highest-end passes basically let you go to any park on any day, while the cheaper ones excluded various holidays, school vacations, and high-volume days.
In the case of both Disney and Universal, the companies charged less for Florida residents trying to lure locals in to fill the parks up on slower days. It was a good system that rewarded people who live near the theme parks while also offering a price break for frequent visitors from out of town.
Disney suspended annual pass sales during its pandemic closure and brought them back for a short time last year (with new tier names, higher prices, and more restrictions) but it paused those sales on all except its lowest-tier Florida resident only pass the only one available since roughly last Thanksgiving.
That gives a pretty big edge to Universal Studios, which has all tiers of its passes on sale both for residents and non-residents.
Why Are Disney World Annual Passes Not Being Sold?
Disney has been operating under a reservation system and limited capacity since it reopened after its pandemic closure. It has paused annual passes because it only has so many reservations per day which must be spread between passholders, single-day ticket buyers, and families visiting on vacation.
The theme park company does not want to sell annual passes and then not have park reservations available for those passholders. It also does not want to tell a family that flew in from out of town that it can’t visit the parks it planned to see over the course of a multi-day visit.
So, when will Disney go back to selling its more expensive annual passes? Likely when it can return to normal capacities and CEO Bob Chapek commented on that during the company’s most recent earnings call.
“In terms of sort of the self-management capacity, one of the last things to come back for us in a post-Covid world, what we hope is a post-Covid world, is actually live entertainment because much of the live entertainment is close proximity. And we are self-regulating that’ he said.
Live shows take hundreds, if not thousands of people out of the ride queues. That allows the parks to accommodate more people without feeling more crowded.
“We are self-managing that because we don’t want our guests to feel an excessive level of density. And the place that you get it is parades and fireworks shows and things like that,” Chapek said. “So I suspect that over time we’ll start to regain some of the capacity drop-off that we’re kind of self-imposing on ourselves.”
When that happens, it seems likely that annual passes will return, but until then, Universal Studios has an edge over Disney.
