I'm not usually one to prognosticate (although my prediction of VGF2 as the next DVC was dead on), but let's look at the issues regarding APs:
1. AP's sold to Florida and California residents for use in FL and CA respectively yield lower revenue to Disney, both in terms of average admission price and average amount spent in the parks. Disney reports "gate figures" including these lower revenue residents. If Disney eliminates FL and CA passes, the gate figures will drop. No matter how much Chapek explains the "fundamental change" in eliminating these lower revenue guests, the stock price will take a hit. Investors will see the drop in gate figures as a sign that people are going elsewhere, and that Disney theme parks are in decline. If the stock drops in price, so does Chapek's income. If the stock drops too far, Chapek is replaced. This is further reinforced by the "return" of AP's for FL and CA following the pandemic closure, when Disney NEEDED those locals to come to the park to show that Disney parks were still a destination post-pandemic. So, FL and CA discounted passes aren't likely to disappear.
2. AP's sold to non-FL and CA residents are relatively small in number. They exist for the die hard Disney fans, which is a tiny number, and DVC members, which is a larger number.
The non-DVC die hard fans are coming and staying, likely on site, for multiple trips or for very long trips (as we've seen with non-US users of this board). I don't think we can even guess as to what the behavior of the die hard fans are regarding revenue in park, since one can make the argument that die hard fans already probably own every souvenir, but the counter argument that new souvenirs come out monthly can quash that. I think it's safe to say that the die hard fan probably isn't staying or dining off site. So, their incremental revenue is probably close to, if not greater than, the "average" person who comes for a week and buys individual passes. The difference is their theme park admission price. Realistically, the theme park admission price is a smallish fraction of the entire trip considering the price of Disney lodging, food, and souvenirs. The numbers of passes sold in this category, and the iffiness of the revenue model, probably mean this will remain available, but only as an Incredipass.
The DVC members get a discount. DVC leverages that discount to sell direct contracts. DVC members aren't paying for Disney lodging. DVC members may or may not be paying for Disney food and souvenirs. DVC members are the "lower revenue customers" that Chapek would like to curtail in the park. But, the trade-off between the cash coming in from DVD/DVC and the lower revenue in the park isn't clearly defined. If DVC eliminates AP discounts, would that push people toward resale? Would it de-value DVC's direct sale pricing? If DVC owners don't have AP's, would they buy a lower number of individual days in the Disney parks (I did on my recent trip) and *gasp* go to Universal or SeaWorld instead? If those people in the 1000+ DVC rooms at 95% utilization suddenly stopped going to Disney parks, "gate figures" would fall (see #1 above). In addition to the falling gate figures, Disney would also suffer from the loss of ancillary revenue (e.g., I ate lunch at Universal, instead of having lunch at Disney). I believe that DVC AP's will continue, if only because DVC, who has a seat at the table, will rightfully claim that eliminating one of the biggest direct sales incentives may cripple their future growth.
3. Theme parks in the northern part of the country aren't open all year. They sell annual passes before they open, typically for a period of a few months. I've had passes to three different parks near me. All were priced based upon a 3 day regular admission. I suspect this metric is based upon the average number of times a person actually uses their pass (using a multiplier, of course). If a typical pass is used 6 times, they're offering a 50% discount over regular admission pricing. Unless you are hyper-local, you're not likely attending a northern theme park more than 12 times a year.
Disney's AP is different. Disney is open all year around. They're pricing the Sorcerer pass based upon a 12 day average priced admission. By doing that, they're eliminating the AP from consideration for guests who are coming for a one time trip lasting a week. They're also eliminating the locals who won't use it for at least 12 days during the year. In effect, they're creating a perfect storm of locals who will use it like crazy, thereby increasing the gate figures, and people who plan on returning multiple times inside a one year period, or whose total stays are going to be longer than 12 days (which are your DVC members and non-US guests).
I think that AP's will return, if only to keep the gate figures up. Disney could have eliminated them during the pandemic, as it was the perfect time due to the park closure. "The parks are closed; gate figures are zero." But, when they re-opened, they needed to stop the stock price slide by showing that people still wanted to go to the parks. So, AP's were re-offered.
4. The lawsuit in California is a good reason to halt AP sales. While Disney has changed the buckets, the fundamental problem of "low revenue customers" using AP's still exist. They'd still like to claim that their average revenue per customer is increasing, while maintaining or increasing their gate figures. But, greater AP use lowers that average revenue per customer figure. Their only way to increase that is to figure out ways to charge users more.
Genie+ is a good example of getting more money out of a certain percentage of customers. If your daily admission is $100 and you get 33% of the people to buy Genie+, you're now averaging $105 per guest, a very respectable 5% revenue increase per customer.
individual lightning lanes are another way of getting more money out of park goers. I willingly forked over $25 per person to ride ROTR and Avatar this trip instead of waiting 2+ hours in line at each ride.
Implement price increases on food, right up to the point where Disney executives are saying that they're going to reduce portion sizes (meaning they've hit the top of what people are willing to spend).
$24.99 for a T shirt. Really? Even with the 20% DVC discount, it was hard to justify buying one.
In Chapek's quest to show increasing key performance indicators (gate figures, revenue per guest, bottom line) to investors, he's boxed himself in. If he eliminates AP's, he's likely out. If he increases AP's, his KPI's suffer, so he needs more revenue opportunities. If he continues the recent trends on pricing and "nickel and diming" his customers, gate figures for higher revenue customers may fall as frustration builds in those customers. In addition, his goal of making Disney a more premium experience (i.e., more costly) competes with other premium experiences that can be afforded by those higher revenue customers. Would you prefer to take you children to WDW for a third time, or would you like to take them to Europe, Asia, or the Caribbean for less money and brand new experiences?
. I don’t think that is coincidence.
