Is the Disney customer experience in crisis?

Once upon a time, the Disney customer experience was the gold standard. In recent years, mainly as a result of dramatic price hikes that have had Disney fans griping on social media, many have questioned whether the reputation is still warranted.

The hefty cost is compounded by low employee morale, divisive politics, turmoil in the C-suite and an extreme wealth gap betwen workers and executives. Most recently, the Wall Street Journal ran an article, Even Disney Is Worried about the High Cost of a Disney Vacation, which has fans, the media and Disney bloggers buzzing. Some are wondering out loud if Disney has lost its magic. 

Pricing out families

At the center of the discussion is the fact that in 2024, a family of four, with two parents and two kids, would spend US$4,266 for the least expensive Disney resort package, up from US$3,230 five years earlier, according to Touring Plans, which shared its research with WSJ. Many say the executives at Disney are "addicted to price hikes."

In addition, nearly 75 percent of respondents to a Harris Poll via WSJ said Disney experiences are financially out of reach for their family. In 2024, CNBC had already reported that over the past 10 years, the average cost for a Disney World single park ticket had inflated more than 56 percent, well above the national rate of inflation. Disney uses dynamic pricing, and the most expensive days can run as much as more than $200 per person per day at the park. 

"The pricing schemes have really alienated the fan base," said Eric Morton, vice president of operations at WDW News Today, in a recent WDWNT podcast. In that same discussion, Morton referred to the pricing as a "fleecing." 

To break this down, the domestic parks attendance increased one percent in the fiscal year ending in September, which was down from the previous year's six percent growth. At the same time, according to WSJ, the per-person spending on tickets, food and merchandise at US parks increased three percent in each of the company's past two fiscal years and rose four percent in the quarter ending in December.

In the third quarter of 2024, the operating profit of Disney Experiences, the category that includes parks and resorts, dropped three percent from the previous year, according to CNBC. Parks and resorts accounts for 40 percent of total revenue and 65 percent of a total operating profit, so this is noteworthy, said Laura Martin, senior analyst at Needham & Co. to CNBC. 

Disney vacations were once seen as a rite of passage, but now many are priced out. The bigger story is that the company's customer base has shifted from middle class families to upper-class families. Often, they do not become repeat visitors and might spend their money on other luxury travel to foreign destinations or places like Vail, Colo. or Hawaii instead of Disney, according to CNBC. The value does not always compare. 

"It felt like a budget amusement park experience at a very high price," said Brian Brenberg, host of "The Big Money Show" on FOX Business. 

Making vacation planning complicated

Returning visitors are disappointed by what they see as money grabs. WSJ reported that nearly 80 percent of the price increase came from new costs for services and add-ons that were once free. Fast pass, which was free, was replaced by line-skipping tools that can add hundreds of dollars per day to the tab. Disney stopped offering the free Magical Express bus service to and from the airport and resorts. Now, there's a far less convenient, for-pay option. Previously, the company sent resort guests free magic bands to use as a ticket, hotel key and credit card throughout their stay. Now, they can move their tickets, room key and preferences to their smart phones. If they want the magic bands, however, they cost upward of $40. 

Resort guests no longer had the perks they had before the pandemic. The company canceled extra magic hours and free parking. Even after the pandemic, guests had to sign up for park days and could be blocked. It was even worse for annual passholders who had many blackout days on their calendars and could not even renew passes for a while. Parking really became a point of contention. One of the benefits of staying on Disney property was the free parking. When Michael Eisner, the former CEO of Disney, once suggested charging $1 per day for parking, people were in an uproar because it was not something Walt Disney would do. More recently, Disney was charging $30 a day for parking, even for resort guests. 

In addition, the technology required and pre-planning necessary to get even close to a positive return on investment (ROI) is too complicated for many. Guests are required to use complicated apps, get on boarding flights, and outsmart fellow guests with technology to avoid long lines, get reservations at restaurants and purchase food. Even those who are tech savvy feel like it drives anxiety during vacation. 

"I can go to the parks and meet a guest who has only been traveling to Disney World for the last five years. We will have very different opinions on rides...The thing we're not going to disagree on, the thing no one in that park is going to disagree on is that the whole system is too convoluted. The number of dates you have to remember to pre plan things, the number of different systems there are, the boarding group stuff [reference to having to wake up early and game a system to get in a boarding group for popular rides like Guardians of the Galaxy]," said Tom Corless, owner of WDWNT on the podcast with Morton. "No one in that park - whether it's me or Joe Idaho - is going to have a different opinion on the fact that it doesn't work, and it makes people stressed. It's just not enjoyable." 

Turmoil in leadership

Some of these initiatives happened when Bob Chapek was the CEO. He was ousted after what Wall Street investors called a "delusional" presentation of results and a lack of vision for the future. His two-year tenure was marked by fierce criticism and tension between Disney and its most ardent fans. He also became embroiled in a political fight with Florida Governor Ron DeSantis, a Republican. The battle raged on for some time. 

Part of the problem was this idea that Disney had become too "woke." Some customers who were not politically aligned with Disney felt as though storylines in movies and support of the LGBTQ+ community during a debate about DeSantis' Don't Say Gay Bill required protest. The bill prohibits discussion of sexual orientation and gender identity in grades kindergarten through three and provides further instruction for older children. 

Whether the perception some had of the company's political agenda was accurate did not matter. The storyline was out there. Jackie DeAngelis, host on FOX Business' The Big Money Show, said she longed for the days when her children could delight in the Disney princesses and no one worried about the gender of the characters on display or which bathroom to use. There is no proof that any of this is an issue at the parks. The princesses are available for meet and greets and character dining, and Mickey, Minnie, and the gang are using the same pronouns as always. However, some recent movies featured characters from underrepresented groups and the politicization of the business has come at a cost.

Employee experience impacts CX 

Bob Iger returned to be CEO for a second tenure when Chapek got fired. Some of the damage had already been done. The poor customer experience and what some saw as a lack of creativity in the Disney movie studios led to activist investor Nelson Peltz making multiple runs, including two in 2024, at the Disney board.

Peltz felt the company was underperforming and needed to cut costs for customers. Ike Perlmutter, who sold Marvel to Disney in 2009, was a major stockholder and backed Peltz, who also made no secret of his concerns about succession. While Peltz and Perlmutter failed to secure a board seat, the future of leadership remains a problem for the company. 

"When I think Disney, I think of a CEO who's about to retire, who they already brought out of retirement and a company without a succession plan," said Taylor Riggs, a host on FOX Business' The Big Money Show.

While this does not necessarily directly impact customers, the employee experience does. This uncertainty cannot be helpful, but neither can the enormous divide between the salaries of senior leadership, especially the CEO, and workers. In 2024, Iger had a base salary of $1 million but earned $41.1 million with bonuses, a 30 percent increase from the year before. Variety reported that the Disney CEO earned 595 times more than the average Disney theme park worker in 2023. 

Abigail Disney, who is a member of the Disney family and a documentary filmmaker, has been a critic of the pay structure at Disney and other big companies. Her 2022 documentary, The American Dream and Other Fairy Tales, about Disney cast members (as employees are called) revealed that some workers experience food insecurity or even homelessness. She has rallied to convince Disney to pay workers a living wage. 

"To brush aside criticism of the low wage you pay workers at the company by saying you pay more than the Federal Minimum Wage and that you provide opportunities for education is a dodge," she has said. 

If employees cannot afford basic necessities, they might not be as willing to produce that Disney magic at the "happiest place on Earth." In fact, some have noticed the changes in the cast members. 

"Many cast members have become condescending and outright rude," said Katy Dean, a mother of six and a contributor to the website New Orleans Mom, in a Bloomberg article. "During my last visit, cast members were also on their cellphones and disengaged from guests, and one was dripping with attitude when we had a misunderstanding."

There are still many cast members who do a great job, according to the podcasters at WDWNT. They often comment on the wages and treatment of employees. Disney recently paid $233 million in a  settlement of a wage theft lawsuit with Disneyland workers. They raised the minimum wage for employees to $24 per hour. 

Bring back that loving feeling? 

While this is happening in the background, the company came second to Dollywood for its customer service in the latest report by Newsweek. Disney continues to teach others about CX. On the website for the Disney Institute, the company sums up its supposed approach to customer experience: 

"When an organization puts the customer at its core - empowering its people and unifying its processes - outstanding customer service becomes possible on a consistent basis, from the first greeting to the final meeting. When provided with exemplary experiences, a customer has a much greater incentive to return as well as recommend us to others." 

The question remains, however, about whether this new business model that relies on upperclass families traveling to Disney resorts and a significant divide between executive and worker pay is sustainable. Will customers forgive Disney for the "money grabs" as they describe them online? No one knows for sure, but Disney bloggers implore the company to do better. 

"Give people the best product you can give them and the money will come," Corless has said. 

Since Iger's return, the company restored free parking for resort guests, offered some discounts, retooled the system for line-skipping passes (but it is still not free again), and made a $50 ticket for kids available. However, shareholder interests, executives who expect enormous bonuses, and a lack of succession plan remain issues. 

"It's a very simple choice," said KTLA 5's David Lazarus. "Do you look after the interests of your customers or do you prefer the profits of your shareholders? Which way is Team Mickey going to go on that one?"  

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