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Disney CEO says price hikes could hurt Disney World, Disneyland

Disney CEO Bob Chapek said Disney World and Disneyland customers could soon face another round of price hikes.

After raising prices across Disney’s streaming services, including Disney+, Hulu and ESPN+, Chapek told CNBC that price hikes could hit the Mouse House’s popular theme parks next.

“We read the demand. We don’t have any plans for what we’re going to do, but we’re going to operate here with a surgical knife,” Chapek said Thursday. “It’s up to the customer. If customer demand continues, we will act accordingly. If we see softening, which we don’t think we will, then we can act accordingly.

Price hikes are par for the course at Disney during times of strong demand.

The price of theme park tickets has jumped over the years, with data tracking firm SJ data visualization showing that the tab for admission tickets to Disney World and Disneyland theme parks has risen more than 3,871% over the past 50 years — dwarfing increases in visitor wages, as well as the cost of rent and gas.

Disney CEO Bob Chapek
Disney CEO Bob Chapek said that if demand continues to increase at theme parks, prices are likely to rise.
Bloomberg via Getty Images

Earlier in the year, Disney raised prices at Disneyland and Disney California Adventure in Anaheim, California. The popular single-day ticket price rose 6.5% to $164 for admission at one park, while the price of a two-day Park Hopper Pass was $319, up nearly 9%.

Tickets for Florida theme parks, which include Disney World and Epcot Center, remain unchanged at $109 for a single-day pass. For the Park Hopper option, which includes access to more than one park, the price increases to $169 for entry after 2 p.m.

Ticket prices at both Florida parks can go up even more if booked on a high-volume day – just like airline tickets.

Disney is slowly raising the prices of food and merchandise at its parks. For example, iconic Mickey ear headbands at Disney World increased in price by $10 to $39.99, while the popular Mickey’s Premium Ice Cream Sandwich and chocolate-coated Premium Bar went from $5.69 to $5.99, Disney fan blogs Inside the Magic and Walt Disney World News Today reported earlier this year.

Mouse House is taking advantage of the price hike. In its most recent quarter, the Burbank, Calif.-based firm reported a 72% increase in revenue in its Parks, Experiences and Products division, to $7.4 billion. Disney said spending per capita at Disney World and Disneyland rose 10% And more than 40% compared to FY 2019.

Guests wearing protective masks cross a bridge in front of Sleeping Beauty Castle during the reopening of the Disneyland theme park in Anaheim, California.
Disney customers have already noticed price increases at Disney World and Disneyland.
Bloomberg via Getty Images

During the earnings call, Chapek revealed price increases on the company’s streaming services Disney+, Hulu and ESPN+, which continue to lose money as the company spends aggressively on content to keep pace with rivals like Netflix, Amazon and HBO Max.

The streaming segment’s loss exceeded $1 billion, compared to a year-ago loss of $300 million. Streaming revenue rose 19% to $5.1 billion.

The new Disney+ with ads, now called Disney+ Basic, will launch Dec. 8 at a cost of $7.99 a month, Chapek said.

The price of Disney+’s ad-free service will increase from $3 to $10.99 per month, and will be called Disney+ Premium when the basic version launches.

This photo illustration shows a close-up of a hand holding a TV remote control displayed in front of the Disney+ logo.
Disney recently revealed that it will charge $10.99 a month, or $3 more, for Disney+ without ads.
Lightrocket via Getty Images

At the same time, the price of grass will also increase. Starting October 10, Hulu with ads will go up to $7.99 a month while the ad-free version will go from $12.99 to $14.99 a month.

The Disney bundle, which includes Hulu with ads, Disney+ with no ads, and ESPN+, costs $14.99 a month. The premium version of the bundle with no ads across any service is $19.99 per month.

As previously announced, the price of ESPN+ will increase by 43% to $9.99 per month on August 23rd.

Overall, the streaming unit banked 221 million subscribers overall, edging out Netflix, which reported 220.7 million subscribers last month. However, through the split, Disney is still chasing the steaming giant.

During the quarter, Hulu boasted 46.2 million subscribers, marking an 8% jump from a year earlier. Approximately 23 million people paid for ESPN+ access, a 53% increase, while Disney+ sign-ups totaled 152.1 million subscribers, a 31% increase.

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