Disneyland ticket price hikes look frothy – Daily News



“Bubble Watch” digs into trends that may indicate economic and/or housing market troubles ahead.

Buzz: The seemingly annual hike in Disneyland admission costs pushed the benchmark ticket price up 3% to $154.

Source: Disneyland

The Trend

Disneyland watchers tend to eyeball long-term trends by watching the highest price charged for a one-day, one-park ticket. Using that metric, Disneyland has been able to raise prices from $43 in 2000 to $154 today — that’s an eye-catching, annual average gain of 6.5%.

To be fair, the Anaheim theme park’s pricing is fairly complex with variables like how many days one is purchasing (from a one-day ticket to an annual pass); for one park or both Disneyland and California Adventure; and do you wish to attend on any day, the busiest days, or the “value” days? So, bargains can be found.

The Dissection

It’s hard to find any noteworthy price that’s grown like a Disneyland admission over 20 years.

My trusty spreadsheet tells me the Consumer Price Index is only up at a 2.1%-a-year pace since 2000. Los Angeles gasoline? Increases run 5.1% a year this century. Meanwhile, the tab for a college education has averaged 4.6% yearly growth.

Or look at some usual suspects we watch to check if a bubble is forming — stocks and real estate. Disneyland’s ticket appreciation easily exceeds both.

Since 2000, the Standard & Poor’s 500-stock index has risen at a 4% annual pace. And real estate, as measured by a federal index of California home prices, is up 5.2% yearly in the same period.

Now, I did find two things that did grow faster than entrance to the happiest place on earth. The value of rare collectible art, according to one industry index, has been rising at a 9%-a-year pace this century.

And shares of Disneyland’s owners, Walt Disney Co., have appreciated at a 7.1% annual rate since 2000. That helps explain ticket prices.

It’s been two decades in which Disney managers deftly used the company’s creative wealth and financial might to forge an entertainment juggernaut. Disneyland is a perfect example.

Billions, yes, billions, were spent in Anaheim retooling the old theme park and creating California Adventure next door. When Disney realized the second theme park was poorly conceived, it essentially redid it all. Today, California Adventure can be just as mobbed as its legendary neighbor. So, outsized admission hikes can be viewed as the company’s yield from its Anaheim investments.

Disneyland also benefitted from broader changes in how folks use disposable income. “Experiences” like entertainment and tourism became trendy. Add to that a long-running upswing in foreign tourists visiting the U.S. The entire industry fell into a consumer-spending sweet spot.

And it’s no small boost. Recreational businesses including tourism and entertainment grew at a 3.7% annual pace over the 20 years ended in 2018, according to federal research looking at the economic impact of these industries.

Again, Disneyland ticket prices outpaced this economic boost.

Another view

Look how the cost of attending a professional sporting event for a family of four (tickets, parking, food, souvenirs, etc.) grew since 2000, according to Team Marketing Reports’ FanCostIndex: National Football League, up at a 3.8% average annual pace; Major League Baseball, up 3%; National Hockey League, 2.7%; and the National Basketball League, 2.5%.

How bubbly?

On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … FOUR BUBBLES!

It’s not the Disneyland ticket price that’s worrisome, though it’s decidedly frothy. Rather, it’s what the price surge symbolizes: a huge boom in these recreation/tourism/entertainment industries.

We’ve witnessed a head-scatching building boom encompassing new or revamped attractions, lodging, and related properties. Prices have ballooned for most things fun — events to experiences to dining to hotels — and in many cases up to record heights.

Hopefully, the business operators in this game are aware that far-above-average future growth is unlikely. At some point, a downturn will occur. And what about a risk like coronavirus to overall travel?

Just look at the aforementioned Disneyland admission price. This year, the benchmark ticket rose by just $5. Over the previous two years, it was increased a total of $25.

Now Disney can “afford” that shrinkage in pricing power. How about others?

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