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Disney Has a Plan to Solve Huge Disney World, Disneyland Problem

TheStreet logo TheStreet 3/12/2023 Daniel Kline

The Mouse House seems committed to addressing a major pain point at its theme parks.

Since taking back the CEO chair, Disney boss Bog Iger has not been subtle. He undid a bunch of changes his predecessor Bob Chapek had made, oversaw a huge layoff, and made it clear that billions of dollars in spending cuts were coming.

Some Iger-led changes mean bad news for consumers. The Walt Disney (DIS) - Get Free Report CEO canceled a number of streaming shows, pushed back others, and made it clear that the volume of shows produced for the Disney+ streaming service would go down.

DON'T MISS: Disney CEO Iger Shares Big News On Theme Park, Streaming Prices

"So, I think we have a lot of rationalization to do from a pricing perspective. But that's one path to profitability; another is we do have to grow subs," Iger said during his remarks at the Morgan Stanley Technology, Media, and Telecom Conference."A third is basically coming to grips with rising costs of production, and also figuring out just how much volume we need for that platform."

Iger's changes, however, are not all bad for consumers. The CEO also wants to address one of the biggest problems facing Disney World and Disneyland visitors.

Image source: Walt Disney © Provided by TheStreet Image source: Walt Disney

Disney World, Disneyland Have a Crowd Problem 

The challenge in running wildly popular theme parks is that it's tempting to push capacity and sell every ticket possible. Disney hasn't done that. It has actually kept max attendance at its parks below pre-pandemic levels.

Iger, however, understands that his theme parks face two major issues -- crowding and rising prices making the parks something most people can't afford.

"One of the things that we had to do is we had to improve the guest experience by reducing crowding. And it's tempting to let more and more people in. But if the guest satisfaction levels are going down because of crowding, that doesn't work," he shared.

The problem is that allowing fewer people in more or less means charging more to maintain revenue levels. 

"We had to figure out how we reduce crowding but maintain, obviously, our profitability. And we did that well, but we have to be careful about that as well because, in doing that, you're actually -- you actually end up increasing the price or putting features into your pricing that are viewed by some consumers as perhaps being a little too aggressive, and that's where we're being careful about," the CEO added.

Iger Hints at New Rides, Maybe Even a New Park

One of the ways to minimize crowding is to add new rides, shows, and attractions that create more capacity.

"Certainly, in Florida, we have a lot of property, and we have a lot of opportunity outside the United States. We actually have more opportunity in California than people are aware. As we continue to invest in those businesses, which is essentially building out new capacity or new attractions, it gives us the ability to, one, service more people," the CEO shared. "The more attractions you have, obviously, the more people have to do."

Iger does expect to build new rides and lands based on the company's familiar intellectual property (IP).

"We can also mine our IP more effectively. So, we announced in the earnings call that we're going to build an Avatar experience at Disneyland. It has done extremely well in Florida. Those are really important because those franchises that we do well with in film and in television are truly leverageable at the parks level as we learned with the Star Wars investments that we've made, the Avatar investment we made in Florida, the Toy Story investments that we've made," he added.


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