There have been several interesting recent developments, each of which is relatively insignificant in isolation. However, when you add all of these things together, they collectively make us begin to wonder whether Walt Disney World is finally starting to turn a corner, bringing “relief” to disillusioned fans and visitors who have been overwhelmed by crowds, prices, and…pretty much everything else!
Let’s start by sharing the recent ‘signs’ that Walt Disney World might be turning the corner. First, the Walt Disney World Annual Passholder merchandise discount will increase from 20% to 30% for a limited time this holiday season. The extra discount will be available from December 12 through December 23, 2022 at Disney-owned and operated locations throughout Walt Disney World.
Per Disney, this is your chance to finalize your holiday shopping or treat yourself with items from this year’s holiday collections. You can also find that special Walt Disney World 50th Anniversary celebration must-have…before they head to the Disney Character Warehouse Outlet and are sold for 70% off in April 2023! 😉
In isolation, this is evidence of absolutely nothing, except the bullwhip effect in action. We haven’t shut up about this when covering Black Friday and Cyber Monday discounts; in case you missed those, what’s happening is essentially the aftermath of supply chain disruptions and inventory shortages.
Due to delays the last two years, businesses rushed to place orders to avoid empty shelves, ordering extras with the expectation that there would be delays due to the aforementioned supply chain chaos. These excess orders continued to arrive as consumer spending has shifted from goods to services.
During their quarterly earnings calls, retailers including Walmart, Target, Best Buy, and many others all reported having a glut of inventory due to the bullwhip effect. Disney has not commented on this phenomenon during its quarterly earnings calls, but there’s every reason to believe gift shops at Walt Disney World and Disneyland are also impacted.
No offense to Disney, but I cannot fathom that their inventory management and ordering systems are more sophisticated than those utilized by titans like Target and Walmart. (When in doubt, just assume Disney uses Windows 95 and the most archaic methods for any and everything.)
Still, it’s heartening to see Walt Disney World discounting merchandise during what should be the heart of the holiday shopping season. It’s good news at best and ‘neutral’ news at worst. Either way, nice to see.
The reason we’re leaning towards this merchandise discount being good news is the fact that it’s not happening in isolation. In addition, Walt Disney World is also offering Annual Passholders 20% off food and non-alcoholic beverages at select EPCOT International Festival of the Holidays food booths from December 12 through December 23, 2022 when using cashless payment methods.
Participating dining locations at EPCOT include:
Mele Kalikimaka Holiday Kitchen
Holiday Sweets & Treats
Nochebuena Cocina Holiday Kitchen
Chestnuts & Good Cheer Holiday Kitchen
Bavaria Holiday Kitchen
American Table Holiday Kitchen
Tangierine Café: Flavors of the Medina
L’Chaim! Holiday Kitchen
Holiday Hearth Desserts
Yukon Holiday Kitchen
The Donut Box
This also is not totally unprecedented–we’ve seen Walt Disney World offer discounts for Annual Passholders at EPCOT festivals before during the slow season. However, I don’t ever recall it happening during Festival of the Holidays (period), or this close to Christmas.
But wait, there’s more! Walt Disney World has released an unprecedented number of bonus reservations for Annual Passholders in the lead-up to Christmas. Bonus reservations are not a new or uncommon thing, but they’re usually available at a specific park (e.g. EPCOT or Animal Kingdom) and only sporadically every couple of weeks.
Not so now. From December 12 through December 23, 2022 every single park has bonus reservations. This has never happened before since the Disney Park Pass system has been in use, let alone this close to what should be the peak season at Walt Disney World. With that said, normal blockout dates for each Annual Pass tier still apply.
As indicated above, this one is totally unprecedented. However, even it isn’t entirely without precedent or out of left field. The last two years, we’ve seen an increasing number of hotel discounts for this exact same window. Our assumption with the resort special offers has been that Walt Disney World overshot on pricing, and is thus discounting to incentivize more people to visit during what should be a busy time–but one that has lower occupancy despite that because the company got a little too aggressive with pricing.
This seems similar. Aside from the top-tier IncrediPass, every single Annual Pass is blocked out for at least a portion of (and thus ineligible for) these bonus reservation dates. Our guess is that Walt Disney World has gotten a little too aggressive with the AP blockouts. This is an attempt to course-correct, and fill underutilized capacity during a time that will still be moderately crowded. (In other words, this is not a sign that the parks will be dead those dates.)
There’s also the fact that Christmas is on a Sunday this year, so most tourists are probably going to visit the week between Christmas and New Year’s Eve, rather than spread out among both weeks prior to the two holidays. This means lower crowd levels than normal in the week leading up to Christmas (but still high as compared to an average week) and somehow worse crowds than normal between Christmas and NYE.
In other words, there’s a logical way to “explain away” each of these AP perks in isolation. In aggregate, though, they collectively provide evidence of a slowdown. Speaking of which, we have even more signs of that…
Thus far, December 2022 crowds have not been as bad as expected. While wait times have increased in the last week or so following the post-Thanksgiving lull we previously discussed in our last crowd report, they are still down year-over-year. There are a number of ways to also explain this away–from longer hours to Fantasmic and other returning entertainment helping redistribute crowds and reduce average wait times.
To be sure, if you told me that attendance has increased in December 2022 as compared to last year despite lower wait times, I would absolutely believe it. Paradoxically, I’d also believe that the number of occupied hotel rooms is up, while the occupancy rate is down. (Let’s see if you can crack that riddle.)
However, if we’re adding context to “explain things away,” I think it’s also important to look back on the circumstances at this time last year. Walt Disney World reinstated face mask rules a few months prior to the holiday season and the Delta variant (followed by Omicron) started causing large numbers of people to cancel vacation plans.
On top of that, there were fears that the first few months of the 50th would bring colossal crowds, causing others to hold off on plans. Finally, not all hotels had reopened, and those that had were operating with a lot of their rooms taken out of the bookable inventory, making it difficult to reserve rooms if you wanted to stay on-site. None of these are major considerations depressing attendance or crowds this year. Demand is more or less organic and not being artificially limited–and yet, crowd levels are still lower.
No matter how you slice it, current crowds are below expectations. (So long as your expectations are reasonable, and premised on 2019 and 2021, rather than 2017 or earlier when attendance was much lower.) Between the two of us, we’ve been in the parks for partial or full days almost every day in the last couple of weeks, and we’ve both been pleasantly surprised at actual crowds as compared to what we expected.
The last time this happened was mid-July, which is not so long ago. The big difference then was that it came after a couple months of surging gas prices and growing concerns about the economy. Right now, the reverse is occurring. The national average price of gasoline has fallen to $3.234 per gallon–the lowest level in 411 days. Meanwhile, the University of Michigan Consumer Sentiment Index rose more than expected in its most recent reading, amid declining inflation expectations. Both should provide economic tailwinds for Walt Disney World, improving forward-looking vacation bookings and near-term visits among Southerners and also those taking last-minute weekend getaways during the fan-favorite Christmas season.
For our part, we’ve already lowered predictions for early 2023 crowds at Walt Disney World. Specifically, our expectation is that January 9, 2023 through February 17, 2023 will be among the least busy dates of the year (minus the MLK holiday weekend). To be sure, it won’t be dead or off-season by historical standards, but it should be the best time to visit since mid-August through September of this year.
After Presidents’ Day and Mardi Gras (which will be bad–among the worst 5 weeks of the year), we’re expecting more of the same. Of course, we’ve been wrong before–but I’d be surprised if early 2023 is as busy as this year or the same stretch in 2020. (It was quickly forgotten, but before the parks closed, that year was shaping up to be the busiest ever at Walt Disney World.)
Another positive is that Walt Disney World has already released several discounts that run through March or April 2023, and they’ve done so far earlier than normal by historical standards. If past weak discounting and late releases are a sign that pent-up demand has still been running strong, this is a sign that the opposite may now be true.
When these all dropped in the span of a couple weeks, that alone gave me a newfound sense of optimism that maybe we have finally turned the corner on pent-up demand. While there have been a few “false starts” on that front, I can’t recall the last time there was a slate of deals on par with what we’re seeing for early 2023. You’d probably have to look back all the way to late 2020 or early 2021–and it was a totally different world then.
As we’ve written several times in the last few months, we’re optimistic that this holiday season will be the “last hurrah” for pent-up demand. Over the course of the last year, household savings have been decreasing, personal debt levels rising, and ongoing effects of inflation continue being felt. People book trips months in advance, and it seems increasingly likely that this is starting to impact Walt Disney World bookings, with the parks and resorts possibly starting experience their own slowdown reflective of the broader economy.
With that said, I also have to admit that “revenge travel” running this hot for this long is not something I expected. Conversely, there has been a lot of talk about a recession on the horizon, including on this blog (see What Does Walt Disney World Do During A Recession?). However, that is not yet borne out by consumer behavior. (As we’ve joked before, economists have predicted 9 of the past 5 recessions!) Even as consumer sentiment dropped earlier this year, spending remained strong–meaning that people were saying one thing but acting differently.
To that point, United Airlines CEO Scott Kirby said in a recent interview leisure travel demand continues to be strong, and that the company is not seeing a recession in based on its bookings. Kirby half-jokingly noted, “If I didn’t watch CNBC in the morning…the word recession wouldn’t be in my vocabulary, just looking at our data.”
Ultimately, there are a number of positive signs that demand is starting to fall back to normal levels, which is coinciding with capacity and other aspects of the regular, pre-closure experience at Walt Disney World being restored. It’s still premature to get overly excited about lower crowds or better discounts in 2023 based on what we’re seeing so far. However, all of this is good news–and better than signs pointing the opposite way, as has been the case for most of the last 18 months.
We remain optimistic about Walt Disney World in 2023. Even before the return of Bob Iger, there were strong signals that reservations would fade away for most guests (aside from Annual Passholders) in early 2023. Speaking of which, there’s also reason to believe APs will return in the first quarter of the calendar year. These are just two incremental steps in the right direction, but we expect many more to come. Beyond that, Cast Member morale is also improving, and guest satisfaction is likely to follow suit.
The pessimists could dismiss this, saying that it’d be difficult for things to get any worse. However, that’s the kind of attitude that has been met with many head-scratching ‘hold my beer’ decisions from Walt Disney World in the last couple of years. The lesson that should have been learned is that things can always get worse…so we’re really happy that it appears they’re finally getting better.
What do you think about these so-called signs that things might be starting to normalize at Walt Disney World? Do you think pent-up demand is actually exhausted, or is this another false start before more astronomical crowds in 2023? Any other explanations for the AP discounts, bonus reservations, increased resort deals for early 2023, or anything else discussed here? Do you agree or disagree with our assessments? Any questions we can help you answer? 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!