It is certainly no secret that prices have gone up, up, up at Disney Parks in the past few years.
Hello, Main Street, U.S.A.!
Now, a so-called “activist investor” who is campaigning for a seat on the board of directors at The Walt Disney Company, says you’re being overcharged!
Nelson Peltz and his Trian Partners are critical of some aspects of how Disney has been run for the past few years. A presentation posted to the website restorethemagic.com states Peltz’s position that Disney is “a company in crisis,” and that many of the company’s current problems are “self-inflicted” and “need to be addressed.”
Is Disney in Crisis?
While The Walt Disney Company is profitable, the company has been posting major losses — largely in its streaming businesses. The value of Disney stock has plummeted over the past few years. As the graph below shows, at midday on Thursday, Jan. 19th, Disney stock had lost more than 11% of its value over the past five years.
©Google Finance
Disney shareholders have seen a 50% decline in adjusted earnings per share since 2018. While not everyone agrees, at least for Peltz, this indicates that the Disney company is “in crisis.”
Click here for more information on Nelson Peltz
Disney Parks Changes Peltz is Asking For
As Disney stock has declined, and the company has racked up streaming losses, Disney Parks have been posting record earnings. Many of those earnings have been due to price increases. In fact, Disney said in October that spending per person at Disney World and Disneyland has gone up a whopping 40% since 2019.
Peltz said he advises two big changes to the parks.
Stop “Nickel and Diming” Park Guests
Price hikes — and the end of “perks” — at Disney World have been contributing to that per capita increase in guest spending mentioned above. For example, Disney replaced its free FastPass skip-the-line program with the paid Disney Genie+ program. Disney has said that more than 50 percent of parks guests buy the service each day. At the time they made that statement, Disney Genie+ cost $15 per day, per guest.
In December 2022, Disney started using surge pricing for Genie+, and we have seen prices as high as $29 per day in Disney World and $30 per day in Disneyland.
©Disney
Peltz’s presentation says that while these kinds of price increases are good for the bottom line, they “put the brand value” at risk.
Pay Disney Parks Cast Members More
Another area that Peltz addresses is that of Cast Member wages. Disney has been negotiating with the unions that represent its Cast Members, and have been at an impasse on wages. Unions are pushing for Disney to raise its minimum wage to $18 per hour, and raise the pay of those who already make close to that amount by $3 per hour to keep up with inflation and higher costs of living. According to a recent report from the Orlando Business Journal, the city of Orlando ranks among the worst in the nation for affordability.
©Orlando Sentinel
Disney has stated that it presented a “meaningful offer” that provided a path to $20 per hour wages for many full-time Cast Members, but the unions have said that their members need the pay increases to come more quickly than Disney is proposing.
Peltz states in his presentation that employees are “a crucial component” of positive guest experiences at Disney Parks.
Click here for the latest news on the Disney/Cast Member negotiations
The bottom line of Peltz’s claim is that the company is increasing prices and keeping Cast Member wages down to maximize profits at its parks for short-term gains. And that continuing to do these things will harm the company’s long-term health.
Earlier this month, Disney brought back some perks for Disney guests — including free parking for Disney World resort guests, and free ride photos as an additional value with the purchase of Disney Genie+.
Josh D’Amaro, chairman of Disney’s Parks, Experiences and Products division, said in introducing the changes that they were prompted by guest feedback — “specifically ones that our guests have asked for and you’ve shared with me.” So it does appear that Disney is aware that the guest experience is being affected by what Peltz describes as “nickel and diming.”
Disney’s current board of directors is defending its management and opposing Peltz’s candidacy for the board. We won’t know whether Peltz will be successful in his quest until the annual Walt Disney Company shareholders meeting, which is typically held in March. We’ll be watching this story as it unfolds, so keep following Disney Food Blog for more!
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Do you agree with the changes Nelson Peltz wants to make in Disney Parks? Tell us in the comments!
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I agree that if you are going to raise prices in the parks, you should at least leave the perks such as free over night parking, adding photo pass with a purchase of Genie+. I used to be a cast member and for all that cast members do, I think the company really needs to keep them happy and pay them enough for living. Cast members play a HUGE part is the parks magic!
The streaming service losses need to be addressed. Have advertisement levels, add something for older teens or adults besides Marvel. They’re adding Disney + exclusive shopping, maybe create interactive games with in app purchases. I feel like there is a lot they can do.
Absolutely agree with him. Make it more affordable and more peope will visit and more peope will return. Disney can most defitiely afford all the requested changes and still be very profitable.
As a nonmillionaire that is still in touch with reality. I should be made a board member. I would even be willing to become Disney’s CEO (with the pay and full benefits). In case anyone was worried I wasn’t fully committed .
I know a few cast members and it’s hurting them more and more. I agree that they are “a crucial component to guest experience”. The company isn’t doing right by them, considering they are the front line of the company half of the time.
Disney has taken so much away from the average family and made it hard to be an enjoyable experience. Let’s look at some of changes. No Magical Express to and from Disney when staying at Disney Resort which also took away the advantage of Airlines check in at resort when leaving. You gave them your luggage and you got your boarding passes to return home. No more Fast Pass once again for families staying at Disney Resort which you could book if I’m not mistaken 60 Days before check in for all the days you were there. No Park Reservations which allowed you to change your mind if you wanted to go to a different park for the day! Continuing to raise prices more than once a year. No Annual Passes for non Florida residents which was beneficial to my family since we are DVC members from NJ. These are just a few of changes. Disney continues to build more properties which it is obvious the Parks will not be able to accommodate. The Disney magic to gone!! The average American family is being priced out and it seems Disney doesn’t care.
I agree the magic is gone my family went to Disney ever 2 years when my children were small I enjoyed every minute now I have 4 grandchildren that I would love that same experience with them but the magic is no longer there and affordable for the working family I would like to see Disney to drop. Park reservations and be able to get the perks back Disney was always meant to be
Disney never was an affordable vacation for the average family in America. I was not able to afford to go until I was married and 25. it isn’t attainable that it ever will be affordable magic because magic costs money. Decisions need to be made here.