The fury of Walt Disney (NYSE:DIS) theme park fans isn’t going away any time soon. It’s been less than a week since the House of Mouse dropped a bombshell: Disney World’s free-for-all FastPass platform for access to expedited queues is transitioning into a premium experience called Disney Genie+.
Disney World visitors in Florida will have to pay $15 a day — or $20 at Disneyland in California — for access to the rebranded Lightning Lane queues, and not every ride will be included. The best attractions will carry additional charges for each ride’s express line. No one likes to pay for something that used to be free, but there’s a method to the mouse-ness. The venom by fans is misplaced. It’s just not obvious to all parties that Disney Genie+ is a win-win-win situation in which the theme park operators, visitors, and Disney shareholders can all come out ahead.
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Image source: Walt Disney.
It’s a small world with a big price tag
Drivers don’t cheer when new tollbooths go up, so it’s natural for Disney World’s biggest fans — its pass holders — to burn CEO plush dolls in effigy. The problem here is that they don’t fully grasp the reasons for the move, or how it will impact them whether they decide to stick around as Disney Genie+ customers, refuse to pay up and settle for for standby lines, or cut ties with Mickey Mouse completely.
Disney’s reasons for going this route are fairly clear. Its theme parks segment just turned profitable after a year of red ink, and why crawl when it can fly? With guest counts likely to stay historically low until the pandemic passes, international travel restrictions ease, and the global economy bounces back Disney is going to have to increase per-capita revenue.
Disney is the only major theme park operator that doesn’t currently have a premium-priced offering for guests to access lines that are shorter than the regular lines. Disney’s FastPass was available to all visitors, but it was flawed. It was a system that favored pass holders over less frequent visitors that have historically paid more and spent more per a day at the park. The regulars knew how to game the system, snapping up the best FastPass ride reservations 60 days in advance. Anyone starting to plan a Disney getaway just weeks before arrival would be left with slim pickings on FastPass availability.
Unlike most parks where only a small number of visitors access the premium-priced lines, Disney’s FastPass queues were loaded with guests prioritized over those in the standby line. Things will be radically different now. Visitors won’t need to plan their trips two months in advance. The standby lines will move faster. In a world where “time is money” some but not all guests will be able to pay their way to pack more rides into a day at Disney World. Disney Genie+ will be a popular high-margin offering. Those who abstain — on principle or finances — can at least take comfort in knowing that their visits will be partly subsidized by Disney Genie+ customers, helping keep regular ticket prices in check.
It’s not obvious to the masses right now. Regulars hate a new system to learn, and what they hate even more is that it comes with a cover charge. The non-regulars have no idea how much easier it’s going to be to have a carefree day at Disney World, even if they don’t pay up for Disney Genie+. Shareholders are about to see a game-changing product offering that will pack a big bottom-line punch to the bellwether oftravel and tourism stocks. Everybody wins. They just don’t know it yet.
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