Disney's Magic Kingdom got a bit more expensive this year. Source: Disney.

The news wasn't announced with a Disney press release. But it did turn a few heads when the company boosted theme park ticket prices back in February. The fee for admission into the Magic Kingdom crept up to $99 from $96, and other parks saw a similar bump.


That move was odd for at least two reasons. First, the House of Mouse often raises prices closer to the summer months, right before the crush of tourists hits. Second, the talk at the time was all about just how weak the outlook was for consumer spending in the year ahead. It seemed like a tricky time to be asking for more cash from your customers.

Now we know why Disney decided to increase those theme park prices anyway: Because it could. 

Magical earnings
The company announced blockbuster quarterly earnings results this week, with most of the press attention going to the Frozen-fueled spike in studio profits. That's understandable. The theater business unit leapt up three spots to become Disney's second most profitable division behind only its media business, which is the home of ESPN. 

Profit in millions. Source: Disney financial filings.

But the parks and resorts arm is still worth almost a third of Disney's total revenue, and its numbers were just as impressive. Profit leapt higher by 19% on an 8% boost in sales, the company said. However, those figures actually understate the division's earning power, courtesy of a calendar shift that cut out one week of the Easter holiday from this year's results. Account for that shift, and parks and resorts income would have been up a massive 31% last quarter.

Here's how Disney explained the improvement in its earnings announcement:

Higher operating income was due to growth at our domestic parks and resorts driven by increased guest spending at Walt Disney World Resort, higher attendance at Disneyland Resort and increased occupied room nights at both resorts. Higher guest spending was due to higher average ticket prices and food, beverage and merchandise spending. 

In other words, Disney exercised its pricing power modestly in the quarter and customers responded -- by purchasing more of what the House of Mouse was selling.

What it all means
Investors have to be happy about that result, as it means Disney's prices are nowhere near the level where they'd start to hurt customer demand at the parks. And that business is much more reliable than movies, anyway, where one flop can offset a whole year's profits.

The bottom line for shareholders is that while Disney's movie business can sometimes book great quarters like the one that just ended, theme parks are a much more consistent contributor, with a lot of growth left to kick in over the years ahead.

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Even while prices keep going up, the way we pay for things is about to change. The plastic in your wallet is set to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

The article This Is Why Disney Raised Ticket Prices originally appeared on Fool.com.

Demitrios Kalogeropoulos owns shares of Walt Disney. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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queencatfish2

Sign of the times-because the minimum wage in California is being raised from $8 to $9 an hour, effective 7/1/2014. Everything is going up. Our mimi-golf place, on a much smaller scale, went from $7.75 to $9.00 a ticket because of that. Disneyland should just make it a cool c-note , instead of $99.00!

June 23 2014 at 1:38 AM Report abuse rate up rate down Reply
Carolyn

As a 'tour packager' for groups (individuals), with 'almost' 35+ years of experience, we get, at least, 9 requests for Universal Studios over 1 for Disneyland. I suspect that's because Disneyland is promoted / marketed as 'family' oriented rather than for the individual tourist.

May 24 2014 at 2:59 PM Report abuse rate up rate down Reply
bcarstew

True, most people cannot afford Disney once a month (unless they buy an annual pass), but you save to go to Disney World like you save for any vacation. Again, I don't get the complaining.

May 24 2014 at 1:35 PM Report abuse rate up rate down Reply
bcarstew

Considering that $100 gives you unlimited access to a $ 3 billion dollar park for a day is still pretty cheap. A ticket to a play on Broadway runs about the same- or more-for an hour and a half. Sane for a show in Vegas. Go an a nice Zip line and it's $65 for three minutes. Plus you get free shows at Disney. If you don't want to eat at Disney, you can brown bag it and eat in the picnic area. I don't get all of the griping about Disney considering the high cost of everything else. Disney is STILL a bargain as far as I am concerned. At $200 per ticket, maybe that would be pushing it- but $100 is a steal.

May 24 2014 at 1:27 PM Report abuse rate up rate down Reply
bocavert

Why is the middle class disappearing? Of course Disney is a bargain for those who can afford it. The problem is in basics the same as it was when the United States rebelled against unfair taxation. Now it is the middle class supporting the wealthiest, we the the laborers are contributing a unfair amount to the poorer or less advantaged while the self proclaimed smarter wealthier classes either pass taxation, or pay a lesser percentage. Do we really need a decreasing value system to our money supply?

May 22 2014 at 8:33 AM Report abuse rate up rate down Reply
1 reply to bocavert's comment
bcarstew

bocavert,

The middle class is disappearing because we are shipping our jobs to China and allowing in millions of cheap labor immigrants- both legal and illegal- every year... to take American jobs and lower American wages. The Republicans call it "free trade" and the Democrats sell it as "compassion". It is designed for one purpose and one purpose ONLY- to make the rich richer. And it's WORKING! You might think about that the next time you vote.

May 24 2014 at 1:41 PM Report abuse rate up rate down Reply
cypspider

I can't believe people are spending that kind of money at a stupid amusement park. I would take that money and spend time in London, Paris or in beautiful Italy. Nothing against amusement parks that provide a day's worth of cheap fun but when people are spending their vacation time and thousands of dollars then there something is disturbingly wrong with a country's populace.

May 21 2014 at 9:17 AM Report abuse +1 rate up rate down Reply
1 reply to cypspider's comment
bcarstew

If you think Disney is expensive, go to Paris and find out what expensive REALLY is! Disney is very, very cheap in comparison. I was in Paris last year and paid $14 for a diet coke at one restaurant. That was an anomaly because usually cokes only cost about $5. At Disney you will pay- what $2.50 or so? And the food costs 50% more in Paris than in the USA- if you are lucky.

May 24 2014 at 1:46 PM Report abuse rate up rate down Reply
huey116

If you're looking for a very mediocre experience, Disneyland is for you ! No longer can you park and take the tram to the entrance. You have to park off-sight and take a bus. Between parking fees, high cost of food (which leaves a lot to be desired) and the price of admission, you are looking at a minimum of $200 per person..... it's a ripoff !!!!

May 19 2014 at 11:56 PM Report abuse +1 rate up rate down Reply
1 reply to huey116's comment
AL

Off-site parking IS an option, but it's not the only choice. They have a huge parking structure that leads down to the trams which take you to the park entrance. That is the main parking location and you either went on a day where it was incredibly busy and therefore full, so you were made to park in the off-site area and take the nice, comfortable, a/c bus to the main gate. Also, I don't know where you ate at Disneyland, but they have some excellent food in the park. And nothing is stopping you from bringing in your own outside food and eating that instead.

May 29 2014 at 5:09 AM Report abuse rate up rate down Reply
bassmnsc

They should change the name to bend over parks and put vaseline at the entry gate

May 19 2014 at 12:45 PM Report abuse +1 rate up rate down Reply
Rachel

Disney World is an amazing value. For everything that you are able to do while you are there, not much can beat it. I have a family of 4, and our children are not little either. For a 7 day stay, at one of the value resorts, a dining plan included, along with water park tickets will only run us about $3,100. That is not bad at all. Of course Disney can be much more expensive, but you have to be diligent about choosing when you will go, where you will stay, and what options you add to your tickets. And, any money savvy tourist would know that in order to get a better value, you do not purchase a 1 day ticket to Disney World. The more days you go, the cheaper the ticket per day. ALSO, there is so much to do and see at Disney there is no possible way you will be able to do everything in one day, purchasing a 1 day ticket would be throwing money away.

May 19 2014 at 12:01 PM Report abuse -1 rate up rate down Reply
2 replies to Rachel's comment
allini

Nice advertising. $3,100 a bargain. Must be nice to be amongst the haves.
,

May 19 2014 at 12:10 PM Report abuse rate up rate down Reply
2 replies to allini's comment
Rachel

Ha, 'among the halves', wouldn't that be nice. My husband doesn't have a job. He has been on unemployment for about 2 years. I work a full time job, but am in student loan debt up to my eyeballs. We are just like everybody else.

May 19 2014 at 12:14 PM Report abuse -1 rate up rate down
taostop

If I were on unemployment for 2 years I certainly won't be spending $3,100 for a Disney vacation. I guess it's all about priorities!!!!!!

May 19 2014 at 12:38 PM Report abuse +2 rate up rate down
Rachel

A 1 day ticket to Cedar Point will run you $50, and it is no where near the size of Disney World. And you want to talk about lines? The last time we were at Cedar Point there was a 3 hr wait for Top Thrill Dragster (and similar for other rides) and before we were even through the line the ride broke down, not once but TWICE. If your lucky in a day you could ride maybe 5-7 roller coasters, but I guarantee you will be able to do much more at Disney.

This is JMO, it is fine to disagree. It's not going to change my mind.

May 19 2014 at 12:22 PM Report abuse -2 rate up rate down Reply
Buckingham's

M-I-C-K-E-Y....oh you S.O.B.!

May 19 2014 at 11:47 AM Report abuse rate up rate down Reply