Disneyland shocked theme park lovers in January by discontinuing its annual pass program at its California resort, but it’s returning with a few changes later this month. Walt Disney’s (NYSE:DIS) first theme park resort introduced Magic Key, a new pass platform that will go on sale on August 25.
The names and pricing points vary, but it’s essentially a tiered approach, with cheaper alternatives for those willing to accept more blockout dates and smaller in-park discounts, as well as pay for parking. The new Magic Key passes range in price from $399 for a special pass exclusive to Southern California residents to $1,399 for the plan available to all Disneyland visitors without any blockout dates.
Reservations are necessary.
The main difference between the old passes that Disneyland reimbursed in January and the new program is that Magic Key purchasers must make park reservations for the park they wish to visit on any given date. Depending on the pass purchased, Magic Key holders can have between two and six park reservations open at any given moment.
When Disney’s theme parks first opened last year, it implemented a system for advance park reservations. It was a logical strategy to keep population numbers in check during the pandemic’s darkest stretches, with theme parks allowing in as little as 25% of a gated attraction’s former capacity, but Disney has persisted to the program even as it has relaxed the constraints on tight guest counts.
Securing park reservations for all members of a traveling party has been a source of frustration for Disney World passholders since the park reopened 13 months ago with the platform in place. There has been typically better availability for people purchasing one-day tickets or staying at a Disney resort to gain entrance on any given operational day.
The new Magic Key program in California, as well as the resumption of new Disney World yearly passes in the coming weeks, are all aimed at increasing the monetization of the company’s theme parks. Passholders do not spend as much as out-of-towners who come infrequently. By restricting regulars via a park registration system, the world’s largest theme park operator is able to control crowds during peak travel hours. It goes beyond blockout dates to increase per-capita spending on admissions and inside the park.
Since Disneyland refunded all pass holders (unlike Disney World, which stopped selling new passes but continued to renew current ones), this is a new start. It will learn a lot about consumer demand and whether the mandatory reservations would be a deal breaker for potential buyers. Magic Key isn’t for everyone, but if you’re going to overhaul an annual pass scheme, you might as well do it after a gap in which the California parks were closed for more than a year due to the pandemic.
There will be growing difficulties, but Disney has the advantage of being a well-diversified media stock, unlike other theme park and regional amusement park operators. It can make money even when its theme parks aren’t performing well. The new Magic Key passes aren’t perfect, but they’re preferable than no yearly pass at all. All eyes are now on Florida, where Disney has promised to provide details on the reinstatement of passes later this month, with sales set to resume in September. After all, the world isn’t so small.