Disneyland redesigns tickets after 37 years - why should you care?

Disney has been part of the casualties of the crackdown on COVID-19, which has taken a toll on sales and profits. Damages soar into the billions of dollars as the situation in the US remains sub-optimal. The situation is not helped by the news of the delta variant of Coronavir, which is adding wrinkles to Disney investors. Despite all the negative news we are seeing, it is with this title in particular that we can take comfort in the positive outlook Disney is predicting. At the same time, Disney has seen their diversification of revenue pay off, particularly from their streaming service Disney+, which has tripled its subscriber base over the last year see chart:

*Graph shows the number of subscribers to Disney+'s streaming platform from January 1, 2020. 

From now on, reservations only to Disneyland 

Disneyland on Tuesday announced details of a new program dubbed the "Magic Key." The Disneyland Resort has revamped its 37-year-old annual pass program to help reduce crowding on high-demand days, replacing it with a program that will require visitors to make reservations before visiting the theme parks while still not blocking access on the busiest days. These measures, Disney executives say, are intended to prevent the lines that have formed outside attractions so far. 

"We are confident that this move will allow us to balance demand throughout the year," said Disney spokeswoman Liz Jaeger. 

Magic Key includes four options, with prices ranging from $399 to $1,399 per year. It's important to note that this system will also help reduce COVID-19 carryover. The new ticket program is only for Disneyland and California Adventure Park. Previous annual passes ranged from $419 to $2,199, the latter of which included unlimited visits to the parks in Anaheim and Orlando, Florida. Ticket sales begin August 25. 

But what if the lockdown is reinstated?

We expect a significant increase in revenue for the Walt Disney Company after the ticket launch, as many sources say they no longer anticipate the closure of the theme parks that make up the majority of Disney's profits. Given the new sophisticated reservation system, investors should expect an increase in revenue. The increase is expected even though the opening economy may cause a reduction in the number of customers for streaming services Disney+, ESPN and others that Disney also has in its portfolio. Disney has shown through COVID-19 that their business is on solid footing and has not lost value even during the theme park closures, as evidenced by the following chart:

 

*Source: Yahoo Finance, Statista.com