Disney Magic Key Lawsuit Settlement Puts Program Under Spotlight

Disney has reached a preliminary settlement in a lawsuit over alleged deceptive practices tied to its Magic Key program. 

Dream Key pass holder Jenale Nielsen filed the lawsuit in 2021, accusing Disney of misleading pass holders into thinking they had unlimited access to its parks by advertising “no block-out dates.” Nielsen claimed certain dates were effectively inaccessible due to the advanced reservation system introduced during the pandemic for all visitors and other Dream Key pass holders booking available slots.

The details of the preliminary settlement reached between Nielsen and Disney weren’t disclosed. Disney responded to Skift’s requests for further details to the settlement with a statement, “We are satisfied that this matter has been resolved.”

The Magic Key lawsuit puts Disney’s theme parks in the spotlight, just weeks after CEO Bob Iger pushed back on reports claiming attendance was down.

Disney’s Magic Key program replaced the company’s old Annual Passholder program in August 2021 during the pandemic. As a reservation-based ticket system, the Magic Key program offers four different levels of access to one or both Disneyland Park and Disney California Adventure Park, with block-out dates, parking, and discount privileges varying across the pass types:

• Inspire Key ($1,599) This tier replaced the Dream Key pass in August 2022. 
• Believe Key ($1,099) 
• Enchant Key ($699)
• Imagine Key ($449)

Assessing Disney’s Magic Key program on price makes it seem “fairly reasonable,” according to Jonathan de Araujo, owner of The Vacationeer travel agency. De Araujo outlined the current price as being cheaper than the old passport program in 2019, with its then top-tier Premiere Passport priced at $1,949.

De Araujo said that the most significant complaint from his clients regarding Disney passes had been the obligation to use Disney’s advanced reservation system. This system is, however, set to be phased out in 2024. 

De Araujo called Disney’s approach to controlling crowds and pricing “a tough balancing act.”

Disney Parks Chairman at Skift Global Forum

“Disney is always trying to balance profit with improving the guest experience,” said De Araujo, calling it a double-edged sword to raise prices to reduce crowds at the risk of decreased demand that could leave parks less full, with attendance already under scrutiny.

“The question in the suit was the promotion of the Dream Key as having no block-out dates, which was technically true,” said Robert Niles of Theme Park Insider.com. “However, certain dates became functionally inaccessible to some Magic Key holders after other Magic Key holders claimed all available reservations on those dates.”

Despite the controversy, Niles said Disney’s reservation system helped manage park capacity and prevent overcrowding, a common issue with the previous annual pass system.

Len Testa, the founder of Touring Plans agency, believed Disney’s reservation system, although set to be phased out and initially justified during the pandemic, now appears to serve little purpose beyond cost-saving for the company.

Testa said his clients frequently complain about what they perceive as “Disney’s nickel-and-diming approach” and the complex nature of needing to book and secure park access beforehand, whether you are a day visitor or a pass holder, and all dependent on availability.

Nielsen’s legal action was warranted, added Testa, who said, “It was bad faith on Disney’s part to sell a pass with ‘no blackout dates’ that also couldn’t be used if the park ran out of reservations.”

“The absurdly complicated nature of visiting the parks these days serves no purpose now other than Disney trying to save on park labor costs,” Testa said. He also noted that the simultaneous opening of different ticket queues often results in guests missing out on preferred time slots. 

“What this tells me is that not a single person in Disney management has ever had to use the tools and processes that they force on guests,” said Testa. 

UPDATE: This article has been updated to include Disney’s statement.