Did Disneyland Go Too Far This Time?

Walt Disney 's (NYSE: DIS) domestic theme parks are dealing with windstorms on both coasts this week. The situation in Florida is making national headlines. Disney World -- as well as the area's other popular gated attractions -- closed on Thursday in the aftermath of Hurricane Milton slicing through the state overnight. Disney's iconic Florida parks closed early on Wednesday afternoon ahead of the catastrophic storm.

Disneyland is going through a different kind of tempest. The original Disney resort raised ticket prices on Wednesday. The timing and the actual increases aren't a surprise. Disneyland and Disney World also raised admission prices in the second week of October last year. It doesn't mean that Disneyland enthusiasts are happy with having to pay more.

One can only imagine that Disney World held off on announcing hikes on Wednesday along with its sister resort in California as a result of the incoming hurricane. It would've been a bad look to introduce higher admissions while its year-round parks are experiencing a rare closure. Don't be surprised if Disney World announces its increases next week if not over the weekend. For now, let's turn our attention to Disneyland and what it means for investors.

Money makes the "World" go round

It will now cost more to get through a Disneyland turnstile in most cases. The cheapest of the resort's seven pricing tiers -- typically available on select weekdays during the slowest travel seasons -- will stay at $104 for a single day at either park. The rest of the one-day tickets are going up to between $126 and $206, a roughly 6% jump across the board. A similar uptick is also kicking in for multiday tickets.

The hikes get more ambitious for annual passes. The four different Magic Key passes for seasonal or year-round access will now set enthusiasts back $599 to $1,749 a year. It's a 6% to 20% increase. This time it's the cheapest of the passes getting the largest percentage increase.

Disneyland's new pricing is in line with the increase it pushed out last October. It held the cheapest one-day ticket firm, bumping the rest 4% to 9% higher. The Magic Key annual passes rose 3% to 22%.

No one likes to pay more for something, but it's fair in this case. Labor and operating costs keep rising for theme park operators. Disneyland also has some compelling reasons for regulars to keep coming back. Tiana's Bayou Adventure -- a flume ride themed to 2009's The Princess and the Frog -- opens next month. Disneyland also turns 70 next year, giving it the opportunity to offer new merchandise and experiences for the year-long celebration.

Image source: Disney.

Sticking the "Land"-ing

A fair and expected pricing increase doesn't mean that fans will accept the steeper cover charges. Disney already warned investors of recent softness at its stateside theme parks earlier this year. Raising prices at this point can sting demand.

It could be a similar scenario playing out for its streaming business. Disney is raising prices across its premium direct-to-consumer platforms next week, despite cutting costs that have finally turned that business profitable.

The media stock bellwether knows what it's doing. Disney announced major theme park additions at its D23 fan fest over the summer, and it's a lot easier to increase prices after announcing that it's making an 11-figure investment in the coming decade to beef up its gated attractions. Most of the expansion will take place in Florida, but Disneyland is also getting a couple of major additions. The Disney+ hike may take some more convincing in the competitive market for streaming services, but it just scored the two biggest theatrical releases of the year that you can or will catch on Disney's digital platform.

The price hike may generate some unflattering buzz on social media in the meantime, but Disney knows that it won't lose too many turnstile clicks following a reasonable hike. It's a storm that Disney is financially willing to ride out.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $20,855 !*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,423 !*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $392,297 !*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of October 7, 2024

Rick Munarriz has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool has a disclosure policy .