Fantasyland: Disney hikes some park prices by 15%

Although it defies reason and the principles of basic economics, Disney has hiked its prices again. It has increased the admission price of its water parks, Blizzard Beach and Typhoon Lagoon at Walt Disney World, by $5, to $45 per adult and $39 for kids. That's a nearly 15% increase for kids, and a 12.5% increase for adults.

Most economists would say that when times are bad, you lower your prices to build business back up. The rules don't apply to Disney. They don't have to. People may not be able to afford mortgage payments or diapers, but there are plenty of folks who simply can't hold on without taking a trip to Disney.

In fact, there are just as many people in the Disney parks as there were last year. It's just that after spending so much on admission, they're not spending as much once they get in. Last quarter, the parks had 50% lower profits, but attendance was even, so Disney Parks still made a profit anyway.

That's an admirable result in these times, you have to admit. Disney knows that a substantial set of its fans is rabid for the Mouse and will stop at nothing to come. But if people are going to cut back on food and souvenirs, Disney must know, it'll just have to make its wad on entry. Therefore, prices keep going up at the gate.
It also has figured out ways to keep expenses down. First, it trimmed attractions. Two months ago, it hacked some 2,000 jobs from the parks, but cleverly, it made most of the cuts behind the scenes in managerial positions. The people who deal with guests -- the public face of the company -- were mostly unaffected, so the bloodbath's ripples (and any bitterness) were barely felt by visitors. That way, Disney didn't scar its cheery public face.

Disney has also figured out to turn a perceived industry negative -- heavy discounting -- into a positive, by requiring guests to stay for a week to yield the full benefits. So don't expect a shorter line at Soarin'.
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Disney's continued dominance despite the recession is, however, causing substantial erosion down the road in Orlando. SeaWorld and Universal are both clawing to maintain their health (both have new mega-coasters opening for the summer, which should help provide a temporary attendance bump). Meanwhile, visitors who pay the same price ($45) at the Wet 'n Wild water park get the right to come back free for the rest of the year. Next year will be a make-or-break year for Universal Orlando. If its massive new Wizarding World of Harry Potter land fails to attract tourists, it may curse its two-park resort.

The leap in Disney water park prices means there will probably be no unexpected recession relief coming from the Magic Kingdom this year. Each August 1, Disney usually raises prices for its major theme parks, including Epcot and Disneyland. Expect the usual price hike this year, because people are obviously still willing to plunk down a small fortune to get in.

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