A trip to the magical world of Disney theme parks could soon become a more expensive affair for families, particularly if they’re looking to maximize their ride time. The House of Mouse is introducing a new premium pass, dubbed the Lightning Lane Premiere Pass, that promises to bypass queues and grant guests access to the most in-demand rides, but at a hefty price.
This move, however, could be a significant revenue boost for Disney, according to Goldman Sachs analyst Michael Ng, who reiterated a Buy rating on Disney and raised the price target from $120 to $125.
Ng estimates that Disney could rake in an additional $220 million to $230 million in revenue from selling one million Premiere Passes in 2025 alone. The passes will be rolled out as a pilot program starting in late October 2024 at both Walt Disney World and Disneyland Resort.
The Premiere Pass offers a one-time entry to each Lightning Lane experience within a theme park per day, eliminating the need to choose specific arrival times. “Premiere Passes largely remove these restrictions allowing guests more flexibility in accessing the most in-demand attractions,” Ng explained in an investor note.
The new Premiere Passes come with a price tag ranging from $129 to $449 per pass per park for Walt Disney World, based on the data. Disneyland’s Premiere Passes currently cost $400 per pass for visits until December 31, 2024, and will range from $300 to $400 per pass starting January 1, 2025.
Adding to the potential financial windfall for Disney, the Premiere Passes are only available to guests staying at Disney hotels or select partner hotels for Walt Disney World visits. Ng estimates that 700,000 Premiere Passes could be sold at Walt Disney World in 2025, with an additional 300,000 sold at Disneyland.
However, there’s a potential downside to this rosy financial picture. Ng cautions that the delayed launch of the Disney Adventure cruise ship could negatively impact Disney’s fiscal 2025 earnings by roughly $300 million. The ship’s maiden voyage, originally scheduled for fiscal 2025, has been pushed to fiscal 2026.
Despite this setback, the new Premiere Pass strategy could be a game-changer for Disney’s Parks and Experiences segment, potentially attracting a new segment of guests willing to pay a premium for an expedited theme park experience.
Disney stock closed up 0.52% at $95.90 on Friday, marking a 7% year-to-date gain in 2024. The stock has traded between $79.23 and $123.74 over the past year.
It remains to be seen whether families will embrace the new Premiere Pass or opt for more budget-friendly alternatives, but one thing is clear: Disney is betting big on its new premium offering.
