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Are Higher Ticket Prices a Good Sign for Disney?

7 August 2010 No Comment

Businessweek is speculating that the recently announced increase in park ticket prices is a good sign for the company itself.

According to the article, the fact that Disney feels it can raise prices is a sign that demand is staying strong, despite the economy. From the article:

That indicates that park revenues are holding up, despite building economic pressure and no discounting, Wible wrote in a morning report. Wible believes this suggests that Disney will report stronger-than-expected earnings for its fiscal third quarter next Tuesday.

The analysis that there is currently “no discounting” however, is questionable given promotions like free dining through December. Disney has an array of options to bring people into the parks and many ways to get them to part with their money while they’re there. While increased ticket revenue may bode well for the stock, the analysis may be too simplistic.

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