Disney CEO Iger admits the company was 'too aggressive in its zeal to grow profits' after theme park price hikes left fans furious
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- Disney CEO Bob Iger admitted Thursday the company was "too aggressive" in its theme park price hikes.
- Price hikes at Disney World and Disneyland even outpaced inflation over the last decade, per WSJ.
- The price hikes angered fans. Even Iger complained to friends they were getting too expensive.
Walt Disney CEO Bob Iger has admitted that the entertainment giant may have pushed too hard in hiking theme park prices for profits.
"In our zeal to grow profits, we may have been a little bit too aggressive about some of our pricing," Iger said, according to a recording of a Morgan Stanley conference in San Francisco on Thursday. "I think there's a way to continue to grow that business, but be smarter about how we price so that we maintain that brand value of accessibility."
In January, Iger rolled back some policies which went into effect under his predecessor, Bob Chapek. Iger returned as Disney CEO in November 2022 — less than three years after stepping down from the post in February 2020.
While Disney theme park prices have been rising over the years, some fans say it's becoming increasingly unaffordable. Prices of hotels, tickets, and food outpaced inflation at three popular Walt Disney World hotels over the last decade, the Wall Street Journal reported in July 2022, citing an analysis run for the outlet by travel firm Touring Plans.
The Journal cites the example of Pop Century — a hotel at the Orlando resort — where the price of the cheapest room rose to $168 in 2022, from $95 in 2013. Disney World also hiked the price for its annual pass to $1,399 from $1,299 in November 2022, when the last round of price hikes took place.
Even Iger complained to friends that theme park prices were too high, the Wall Street Journal reported in November 2022, citing people close to him.
The price hikes were on top of tighter policies for ticket holders, which angered fans. For example, in 2021, Disney started requiring annual pass holders to reserve a spot at the parks in advance before they visit, instead of allowing them to enter whenever they wanted.
Upon his return, Iger also eased the reservation policy, allowing annual pass holders in Florida to visit some parks after 2 p.m. on any weekday without reservations. He also restored free parking for overnight self-parking and free photo downloads at its resort in Anaheim, California.
But Disney did not reverse the ticket price increases outright. Instead, it made them more accessible and flexible — for example, by increasing the number of days that Disneyland could sell lower-priced tickets at $104.
"None of these changes are about demand," Josh D'Amaro, the chairman of Disney's parks, experiences, and products division told the New York Times in January when the revisions were announced. Demand at Disney theme parks stayed resilient even amid the price hikes and recession fears, with revenues up 21% in the first quarter of fiscal 2023 which ends on September 30, the company reported on February 8.
Iger said Thursday the steps Disney took after he took over from Chapek "resonated extremely well with consumers."
"We're not only going to continue to listen to consumers, but we're going to continue to adjust," Chapek added.
Walt Disney shares closed 3.2% lower at $96.14 a piece on Thursday. They are up over 10% so far this year.