Disney Charging For Fast Passes At Theme Parks, Could This Help The Theme Park Segment Recover Faster?

The Walt Disney Company DIS was one of many that saw a huge decline in attendance during the COVID-19 pandemic. The company’s theme park segment is showing signs of a recovery due to soaring demand as the parks reopen. The segment could be in for record revenue when at 100% capacity thanks to higher fees for guests and higher ticket prices coming in 2022.

What Happened: Disney is rolling out Disney Genie, a free app that will help with planning a theme park experience. The app will launch this fall and allow guests to order food, book reservations and pay for merchandise.

A paid version called Disney Genie+ replaces the company’s current FastPass and FastPass+ options. Park visitors will have to pay $15 per ticket per day at Walt Disney World and $20 per ticket per day at Disneyland.

“This service will soon be your new personal assistant to help you create your best Disney Day,” Walt Disney Parks and Resorts Vice President Gary Daniels said.

Disney hinted at adding a paid version of line skipping back at the 2019 D20 Expo.

Previously, guests could add a limited amount of fast pass line reservations for free with their ticket. Visitors will now have to pay for this service and only selected rides will be included for the new paid service. Additional fees will be charged for reserving faster line access to the more popular rides.

Related Link: Disney Q3 Takeaways: Big Earnings Beat, Hulu And Disney+ Subscriber Numbers Rise, ARPU Falls

Why It’s Important: Disney’s wording of Genie is all about the guest experience, discussing wait times and better service but it doesn’t take long to realize that they will see incremental revenue for something that was previously offered for free.

Disney averaged 57,000 guests per day at its parks prior to the pandemic, according to reports. If even 25% of people pay the $15 a day for the right to book access to a faster line, it would translate to over $78 million in annual revenue.

Disney will also raise its ticket prices in 2022, according to Blog Mickey.

All of these factors could add up to a huge one to two year period for Disney’s theme park division with pent-up demand from the pandemic and increased fees for park visitors.

Disney’s Parks, Experiences and Products segment saw revenue up 100% to $4.34 billion in the third quarter. Several analysts called out the strength of this segment as being ahead of recovery schedule.

Price Action: DIS shares closed Friday at $175.12. Shares are down 3% year-to-date and traded as high as $203.02 over the last 52 weeks.