Disneyland announced that it has “sold out” of all annual passes in its Magic Key program. This post shares details and commentary about why this is happening. Plus, thoughts on the timing of the news right before the start of summer blockouts and while a lawsuit is pending about AP reservations.
As a quick recap, Disneyland’s overhauled Annual Pass program debuted last August with a new name, higher prices, and required reservations for all tiers. Demand was high from the outset, with a virtual queue and all-day waits to purchase Magic Keys on release day.
Late last October, Disneyland paused sales on the top level Dream Key. This came as park reservations were almost entirely gone for weekends over three months into the future. Then in November, the Believe Key also sold out amidst a similar shortage of reservation availability.
That left only the $649 Enchant Key and $399 Imagine Key available for purchase over the course of the last several months. Now, both of these are no longer available for purchase and have had their statuses change to “Currently Unavailable” on Disneyland.com.
It’s also worth noting that both of these lower-tiered Magic Keys are blocked out for pretty much the duration of the summer season. The Enchant Key is blocked out from June 3 until August 14, 2022 and the Imagine Key is blocked out June 3 until August 21, 2022.
That’s a pretty significant detail, and could explain why sales of these two lower tier Magic Keys are being paused. If the passes cannot be used for the better portion of the next 3 months, why bother selling them?
That’s a simple and straightforward explanation, and one that passes the smell test. However, it’s also not in line with historical precedent. Disneyland has long had Annual Passes with lengthy summer blockouts, and I don’t recall those sales ever being officially paused.
Of course, a lot has changed in the last couple of years with this entirely overhauled AP program, so that could’ve, too. In this case, Disneyland would have good reason for purposefully changing this policy.
In the past, a relatively popular loophole for circumventing the summer blockouts was buying multi-day tickets, using them, and then upgrading to lower-tier Annual Passes that otherwise would’ve been blocked out. The explanation for this move could be as simple as closing that.
Another theory is that the company is embracing the “Disney Vault” strategy of creating demand through scarcity, or rather, perceived scarcity. It’s possible that Disneyland has survey data showing a high dissatisfaction rating among Magic Key purchasers and low intent to renew.
That wouldn’t be the least bit surprising, especially with the difficulty so many have reported in securing reservations. However, if these same fans believe they might not be able to simply purchase passes at their leisure down the road, they might err on the side of caution and renew when their time comes.
Speaking of renewals, there has been some confusion about whether this will even be possible given that Magic Keys are sold out. Existing Magic Key passholders will be able to renew.
Whether that means renew their existing Magic Keys or renew to a new Annual Pass product remains to be seen. While it seems unlikely that Disneyland would relaunch the Annual Pass program again only a year after launching the Magic Key program, nothing would surprise us at this point.
Another wrinkle is the Magic Key Passholder lawsuit in the Central District of California. The complaint in this suit alleges that Disney misled and deceived pass purchasers by artificially limiting capacity and restricting reservations. The lawsuit argues that Disney has effectively created a second tier of blockout dates by virtue of allocating reservations differently for passholders and regular ticket holders, in order to maximize the number of tickets that Disney can sell.
The federal judge ruling on Disney’s motion to dismiss found that the “plaintiff has adequately pled facts supporting how a reasonable consumer may be deceived by the advertisement, which states ‘no blockout dates.’”
In the past, we were unconvinced that this lawsuit had any role in the ‘sold out’ Magic Keys. That’s still my belief, although my confidence in that wasn’t as high as it was even a month ago.
This was primarily predicated on the fact that Disneyland had not totally paused Magic Key sales–the lowest tiers of passes were still being sold both. If the company truly feared a massive class action lawsuit, no passes would be sold at all. Beyond that, Disney could easily avoid future litigation by clearly defining blockout dates and how those function in relation to reservations. Since the passes originally went on sale last fall, additional verbiage has been added to its marketing doing exactly that.
As such, it seems unlikely that the lawsuit has caused Magic Keys to stop being sold. However, I’ll concede that it’s “more likely” than it was previously.
The bigger factor is that Disneyland theme park reservations have been hard to book for months, with many dates–even in what should be the off-season filling up weeks in advance. Availability is definitely getting better, but part of that is probably due to the fact that the most popular Magic Keys haven’t been sold for the last ~6 months.
It’s also not as if Disneyland is setting aside availability for buyers of regular tickets and the parks are going mostly empty despite the lack of AP reservations. To the contrary, our consistent experience at Disneyland since around last October has been higher than normal ‘feels like’ crowds and congestion.
Diminished reservation availability has been exacerbated by the fact that Disneyland still is operating well below 100% capacity. As you’re also undoubtedly aware, some stage shows are still dark, not all atmospheric entertainment is back, and not every venue in the park (dining, in particular) is fully efficient due to staffing shortages.
This is mostly “invisible” to guests and may seem insignificant in the grand scheme of things–but it’s actually reducing attendance limits by a meaningful amount. During recent earnings calls, the company acknowledged that both Disneyland and Walt Disney World are still operating with undisclosed capacity caps in place, not for the sake of safety but due to a lack of staffing and other resources. Suffice to say, the self-imposed limitations on attendance impact Magic Key sales, as Disneyland would (understandably) rather prioritize regular ticket buyers who spend more per visit.
While there are likely many motivations for selling discount tickets during the summer tourist season (an unprecedented move until last year), the lack of Magic Keys is likely one explanation. It’s likely that this will bridge the gap until the parks are back at full capacity, as Disneyland has already discovered it cannot open the floodgate on Magic Key sales without causing other issues.
Ultimately, it’s not really surprising that Disneyland is suspending sales of the last two Magic Keys. There are several reasons for this to be happening, and the timing also makes sense.
Personally, I’m still unconvinced that any larger overhaul of the Magic Key program is on the horizon or that the lawsuit is influencing the sold out status. From my perspective, the simple and straightforward explanation is the correct one: there’s a supply-demand imbalance right now. Once the summer travel season comes to an end, I’d fully expect Magic Key sales to resume in August (so long as park capacity can increase by then). Probably at higher prices, though!
What do you think about all Magic Key Annual Passes selling out? Have you had difficulty making Disneyland park reservations? Hoping the passes will return this fall? Do you agree or disagree with our assessment? Any questions? Hearing your feedback–even when you disagree with us–is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!