Back to top

Disney Extends Demand-Based Pricing to Multi-Day Tickets

Read MoreHide Full Article

Disney (DIS - Free Report) recently announced that it will extend its demand-based pricing strategy to multi-day tickets from Oct 16. The company had introduced this strategy in 2015 for single-day tickets to better manage customer traffic at resorts.

Customers can book tickets with the help of an interactive online calendar, which displays the lowest prices available for each month. Prices for the trip will vary depending on the start day of the trip along with demand for the dates i.e. prices will be higher during peak periods. Notably, customers can choose the Flexible Dates Option if they are unsure about the date.

Disney stated that the new pricing system will help customers better plan their vacations. Additionally, the company expects to provide better services by reducing wait time with this strategy.

Moreover, customer traffic can be better distributed throughout the year to avoid any fluctuations in revenues caused by low demand periods.

The company also noted that ticket prices for all its four theme parks will be on par. Magic Kingdom currently has higher ticket prices owing to its demand, per Forbes.

Notably, Disney’s customers can access the interactive calendar and choose to purchase tickets either through the website or the mobile app.

These changes are helping the company to enhance its product features, adding functionality to the application and enriching user experience. This will eventually boost its top-line growth. Disney aims to give its users a seamless experience on mobile and an opportunity to avoid long queues.

The Walt Disney Company Revenue (TTM)

The Walt Disney Company Revenue (TTM) | The Walt Disney Company Quote

Parks & Resorts Segment Drives Revenues

Disney’s continuing investment on Parks & Resorts is reaping benefits.

Parks & Resorts revenues (34.1% of total revenues) increased 6.1% year over year,in third-quarter 2018 to $5.19 billion. The segment continues its robust performances both domestically and internationally owing to rise in customer spending, higher ticket prices and attendance.

Disney’s strategy of better-load balancing of attendance throughout the year is driving visitor growth rate. Notably, Walt Disney World hosted more than 50 million visitors through its theme parks in 2017.

Additionally, Disney’s upcoming theme park Star Wars: Galaxy’s Edge along with the recently opened Toy Story Land in Orlando and Shanghai is expected to increase footfall, thereby driving top-line growth.

Moreover, the company enhanced customer experience with the introduction of MyMagicPlus program in 2013. Through the program, customers are provided with a wrist band that allows them to pre-book their rides and make reservations at the parks.

Strength from its Parks & Resorts segment may boost revenues from Disney’s streaming services, set for launch in late 2019.

Notably, Disney is working with its subsidiary, Marvel Studios to develop a short series based on popular characters from Marvel Cinematic Universe (MCU). With popular themes and movies already in place, the upcoming short series may attract additional audience to Disney’s streaming services.

Competition Rife

Disney is expected to face tough competition from Netflix (NFLX - Free Report) , which dominates the streaming video market and has made whopping investments in original content. The company expects to spend close to $8 billion on original content in 2018 alone to cater to its growing customer base.

Moreover, Netflix’s impressive performance at Emmy awards reflects its strength in original content.

Amazon (AMZN - Free Report) is expected to spend roughly $5 billion on original programming this year. Additionally, it plans to acquire Landmark Theatres, which is likely to showcase Amazon’s award-winning films.

Moreover, Apple (AAPL - Free Report) is expected to launch its own streaming service in early 2019. This will further intensify competition.

Despite having blockbuster content, Disney may not find it easy to grab a share of the pie in the streaming space.

The company currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>
 




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


The Walt Disney Company (DIS) - free report >>

Netflix, Inc. (NFLX) - free report >>

Amazon.com, Inc. (AMZN) - free report >>

Apple Inc. (AAPL) - free report >>

More from Zacks Analyst Blog

You May Like

Published in