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Patpat15
07-04-2003, 01:45 PM
Wouldn't Disney make more money if they gave DVCers the Florida resident discount on Annual Passes?

What do you think?

CaptainMidnight
07-04-2003, 02:08 PM
We're a captive audience that they know will be returning. As much as I'd like better discounts, they might not see an advantage. They've already convinced us to return to thier facilities for the next 39 years.

InstImpres
07-04-2003, 02:09 PM
I would settle for just being able to join the Florida Dinners club at Dis for the discounts on food. The cost of our character meals really adds up!

Sandy

Terry S
07-04-2003, 02:13 PM
I don't know if they would make more money, but they would sure make a lot of people happy!

I guess if they did offer a discounted AP more people would be inclinded to buy one and they they would think to themselves, well we got the AP's, we might as well use them..... then they would use up all their points and have to buy more points. Okay, giving a discount on passes might make them more money!

CarolMN
07-04-2003, 02:15 PM
IMHO, Disney has some of the best "data gatherers" and data analysts in corporate America. If they thought they would make more $$ by offering DVC members admission discounts, it would already be done. All we have to counter their data / market strategy is anecdotal evidence and/or statements made by members.

Although I'd love a discount on annual passes, I simply do not believe Disney would see an increase in revenue as a result of the discount.

Scott H
07-04-2003, 02:46 PM
I agree with the aforementioned. This does not stop me from telling them I would love the FL res rate on my PAP purchase at every opportunity I get. Be that either letter or email or verbal fedback during the annual meetings.

I say we let them know we would like it every chance we get.

The again in three years 10 months and 24 days I will be a FL res.

The other thought is we pay property Tax in FL. I pay there and in Charlotte County every year. Kind of a Patrick Henery thing.

dvc_john
07-04-2003, 04:35 PM
Well, they WOULD make more money from me if they gave us the Florida resident discount.
I buy an AP one year, and then don't go to the parks the next year. I was there in May without an AP, and didn't go to any Disney parks. Went to Seaworld and a water park. If we got the Florida discount, I'd keep my AP active all the time, and go to the parks every trip. And I'd spend money in the parks every trip.
And, they'd about break-even or make money on the tickets:
1 year regular AP = $393.
1 year Fl resident seasonal pass and 1 year renewal = $375.
1 year Florida resident unrestricted pass and 1 year renewal = $599.

CaptainMidnight
07-04-2003, 04:37 PM
Originally posted by dvc_john
Well, they WOULD make more money from me if they gave us the Florida resident discount.
I buy an AP one year, and then don't go to the parks the next year. I was there in May without an AP, and didn't go to any Disney parks. Went to Seaworld and a water park. If we got the Florida discount, I'd keep my AP active all the time, and go to the parks every trip. And I'd spend money in the parks every trip.
Good point. I think we'd eat at EPCOT more in the evenings on those days when we don't do the parks all day.

DebbieB
07-04-2003, 05:50 PM
This comes up in every annual meeting and every once in awhile someone will start an e-mail campaign. So they are well aware that the members want it and if it would make them more money they would be doing it instead of shooting down the idea at every opportunity. I don't buy the definition of "florida resident" as an argument, all they have to do is call it a "dvc member pass" instead.

Blake
07-06-2003, 01:20 AM
IMHO, Disney has some of the best "data gatherers" and data analysts in corporate America.
This was true at one time, but not anymore. Disney is a big company and the divisions that are having problems cannot figure out what the customers want. Look at the ABC TV. They can't place a primetime show in the top 10 (unless it's football season). They killed Who Wants To Be A Millionaire through overexposure.

I think the same is true for the parks. These analysts may have a lot or raw data, but they seem more interested in validating their pre-conceived notions than find out what would be mutually beneficial to the company and the public. Read the threads on the focus groups. They seem to be making decisions as if it was still 1980 when Disney had a monopoly on Orlando area entertainment.

A lot of folks like to point out that when we bought DVC we only bought vacation accomadations, not special perks or privileges. Now Disney has to realize that they only sold us vacation accomadations, not an agreement to spend additional money only at Disney. The company should be actively competing for our vacation dollars. If they did, I would think most of us would be more than willing to spend "at home".

Caskbill
07-06-2003, 02:48 AM
I too agree completely with DVC_John. We too are firmly developing a pattern (since free passes expired 1/1/00) of purchasing annual passes every other year. We still use our DVC accommodations during the off year, except go to SW, IoA and other non-Disney activities.

If I could get an annual pass for two years for the same price I pay now to get only one year, I would do it, and subsequently spend a lot more time in the parks, buying souvenirs, and eating in the restaurants.

anniet
07-06-2003, 07:01 AM
Not sure- What is the price of the UPH pass vs. the Annual pass and how many people purchase the UPH? (do I see a poll coming? :eek: ) If they are making money now, why change it?

Muushka
07-06-2003, 09:07 AM
Originally posted by Blake

A lot of folks like to point out that when we bought DVC we only bought vacation accomadations, not special perks or privileges. Now Disney has to realize that they only sold us vacation accomadations, not an agreement to spend additional money only at Disney. The company should be actively competing for our vacation dollars. If they did, I would think most of us would be more than willing to spend "at home".

AAAAhhhhh, a voice of reason. Thanks, I needed that.

Wouldn't Disney make more money if they gave DVCers the Florida resident discount on Annual Passes?

They sure would from us.

CarolMN
07-06-2003, 09:30 AM
Originally posted by Blake
This was true at one time, but not anymore. Disney is a big company and the divisions that are having problems cannot figure out what the customers want. Look at the ABC TV. They can't place a primetime show in the top 10 (unless it's football season). They killed Who Wants To Be A Millionaire through overexposure.

I think the same is true for the parks. These analysts may have a lot or raw data, but they seem more interested in validating their pre-conceived notions than find out what would be mutually beneficial to the company and the public. Read the threads on the focus groups. They seem to be making decisions as if it was still 1980 when Disney had a monopoly on Orlando area entertainment.

A lot of folks like to point out that when we bought DVC we only bought vacation accomadations, not special perks or privileges. Now Disney has to realize that they only sold us vacation accomadations, not an agreement to spend additional money only at Disney. The company should be actively competing for our vacation dollars. If they did, I would think most of us would be more than willing to spend "at home".

We'll just have to disagree on this one. FWIW, I think the ABC-TV example is not relevant - IMHO, a TV network is a significantly different animal from a theme park.

I have no doubt that many DVC members who post here have reduced their park visits and believe they would spend more at WDW if they received a bigger/different discount on park admission. I just don't think that they are representative of the typical DVC member.

If you charge back to your room, Disney knows where you spend your WDW $$. If you buy an annual pass or an UPH, Disney knows how often you visit and which park. They have the ability to cross reference DVC members who have annual pass admission media. I'm convinced that they keep close track of these (and other things) - perhaps not by individual, but certainly at the macro level. Doesn't it make sense that if they saw significant changes in those numbers, that they would be developing startegies to "stop the decline?" To me, the best way to get Disney to offer better park discounts is for significant numbers of DVC members to quit charging back to their room.

When this topic came up at the annual meeting last year, the GM as much as said that they did not believe that increasing discounts for park admission represented a good opportunity for Disney to increase revenue from DVC members. Instead, they intended to concentrate on enticing DVC members to enjoy the other recreational and minor park attractions. Don't hold me to the exact words, but that is the gist of what I understood of the answer the GM gave to the question of annual pass discounts for DVC members.

In summary, while it is certainly possible that Disney business managers have missed a trend, I just don't believe that they aren't looking at the data. It's much more likely that they don't see as much of a money-making opportunity as some DVC members do.

P.S. If a discount on PHP or AP/PAP is ever offered, I will be among the first in line to take advantage of it. At this point, I can't honestly say that I would spend more at WDW because of it. Perhaps as we venture more off site, that will change in the future.

PKS44
07-06-2003, 09:34 AM
Blake captured my sentiments exactly--this mantra that Disney automatically does the best thing for themselves is blind faith-not supported by the latest evidence including their horrible failures at ABC and Go.com---...the failure of Animal Kingdom to catch on, the failure of DCA, the success of Tokyo DisneySea (when Disney's "numbers crunchers" laughed at Tokyo for investing so much and predicted failure) the failure of Character Caravan to replace Early Entry---how anyone can look at Disney's latest track record and conclude that they have the best "numbers crunchers" is either wrong or a terrible statement on the quality of available "number crunchers."

I don't know if offering DVC members discounts would or would not help Disney in the short or long term...but I am betting Disney does not really know either.

CarolMN
07-06-2003, 10:04 AM
Again, I am referring to only the liklihood of increasing revenue by offering DVC members discounts on PHP and/or AP/PAPs. As far as I'm concerned, ABC-TV, Go.com and etc. are not relevant to that decision.

FWIW, I don't see how AK and DCA can be called a failure. They may not have generated the total amount of revenue the initial forecasts predicted, but they certainly did better than many other theme parks. (When these parks were proposed, no one was predicting the decline in our the economy and the effects of 9/11/2001 on air travel).

According to a CNN article, these are the top 10 parks in terms of 2002 attendance - note AK is #5 (behind 4 other Disney parks) and that all 6 of Disney's parks are in the top 10:

1. The Magic Kingdom (Lake Buena Vista, Florida)
2. Disneyland (Anaheim, California)
3. Epcot (Lake Buena Vista, Florida)
4. Disney MGM Studios (Lake Buena Vista, Florida)
5. Disney's Animal Kingdom (Lake Buena Vista, Florida)
6. Universal Studios (Orlando, Florida)
7. Islands of Adventures (Orlando, Florida)
8. Universal Studios Hollywood (Hollywood, California)
9. Seaworld Florida (Orlando, Florida)
10. Disney's California Adventure (Anaheim, California)

Here's a link to the original CNN article:

http://www.cnn.com/SPECIALS/2003/summer.trips/top30.html

FWIW, I don't expect to change anyone's mind. I don't doubt that Disney managers make mistakes like everyone else, but I do not believe that they are either stupid or irresponsible. They have the data and the rest of us have only our opinions. My boss always said "In God we trust, all others must bring valid data!"

CaptainMidnight
07-06-2003, 01:59 PM
Great list of parks, thanks for sharing.

Sometimes, I think it is a matter of attention. What has the attention of those determining discounts that they give priority to and make the effort to make happen. While lots of changes might help make more money, they are not acted upon due to attention and priority. Someone somewhere says no, and that sticks and it isn't reconsidered.

We don't always buy APs. If we did through a financial incentive, we would be more likely to eat at Epcot in the evenings when we didn't spend the day in the parks.

CarolA
07-06-2003, 02:19 PM
I doubt Disney would make more money since they would switch a lot of people like me from AP to Florida Resident Passes. That would actually be a decrease.

crisi
07-06-2003, 02:22 PM
CaptianMidnight,

Since few Epcot restaurants sit empty at dinner time, in my experience - even during slow periods, Disney wouldn't make a significant amount of money from you eating in Epcot. Either you make your PS, or Bob and Sue from Iowa do a walk in at 5:30.

DVC members are more Disney aware - which probably means that we are more likely to book hotel or DTD restaurants anyway - and those are the restaurants less likely to be operating at capacity. Those restaurants are the ones that we are likely to get DVC discounts on - because Disney is trying to drive traffic to them.

We don't actually spend that much money in the parks. We don't snack our way through, we don't buy any more souvieniers if we spend an extra day there. In some ways, we are MORE likely to spend money on the "non-park" days - playing golf, renting watermice, going horseback riding, putting the kids in kids clubs and going out to a nice dinner.

vernon
07-06-2003, 06:28 PM
Carol said IMHO, Disney has some of the best "data gatherers" and data analysts in corporate America. If they thought they would make more $$ by offering DVC members admission discounts, it would already be done.
I agree very much with what most of Blake said to this. The most valid part is to point out that Disney is an entity now that is split up into many different divisions. The division that deals with park tickets, it's arguable as to whether they would actually make more money. Personally I think they would, but until someone has the testicular fortitude to try it we'll never know. Where I'm certain Disney as a whole would increase revenue is that many people, like me, would visit a themepark for 3 or 4 hours eat a meal, shop a little and buy a few drinks. Maybe spend in the region of $80-100 a day X 15to 20 days a year that's in the region of $1,500-2,000 that I don't spend at Disney. From the evidence on this board I would suggest there are many DVC members like me that would visit the parks more if they had a better break. My most recent visit I went to one Disney park in 8 days on site, I spent most of what I saved by treating myself to 2 days at the Portifino Bay Hotel at Universal ( $400 ) park tix ( $150) , meals ( $450) and drinks $100. The point is that the divisions in Disney that would certainly make more money, are not the divisions that issue the tickets. IMHO that is the #1 reason why you don't see a decent deal. It has nothing to do with what I see as a "win win situation" and everything to do with the internal squabbles that go on within Disney. All the divisions are scared to make a move that they know would be successful over all for the company, but worry they are giving a rival division a "free leg up" while they incur a cost themselves.

In my situation Disney would make on park tickets, because I currently get a 5 day hopper plus and make it last for 2 x 14 day visits , but they would make massively on my vacation $$$ staying on site, at the moment it will go to Discovery Cove one year, Universal the next and Busch Garden/SW after that.

Crisi Said We don't actually spend that much money in the parks. We don't snack our way through, we don't buy any more souvieniers if we spend an extra day there. In some ways, we are MORE likely to spend money on the "non-park" days - playing golf, renting watermice, going horseback riding, putting the kids in kids clubs and going out to a nice dinner. To a degree you're making my point, just I would venture that it's very possible that playing golf $$$ could go "off site" , as could horse riding and a nice diner. Maybe 30% or more of that spending you mention could go off site as people have the time to travel for better/different deals. Whereas with a better deal on park tickets it is more likely that the convenience of on site golf,riding,dining would mean people spending a couple of hours in the parks ( before or after those activities) wouldn't want to waste the time it takes to drive to off site facilities.

JimC
07-06-2003, 06:35 PM
I believe they would make more money with a better pass discount program, particularly on the APs. This is not based on any research, just my own reaction and observations of random comments here.

We probably go more often and longer with DVC and APs because the expensive part of a WDW holiday is covered. We even have extended and added trips on cash, using AP discounts, because of the passes. For others it might encourage more time on property rather than exploring non-Disney attractions. Where they make out is increased spending on shopping, dining and recreation. I believe that would more than offset the decrease in ticket sales.

crisi
07-06-2003, 08:47 PM
But vernon, the point is that we don't. We do these things on Disney property. I despise Central Florida off Disney property -- though eventually the kids will be of the age to really enjoy IOA, and we will do that (I'll just have my husband drive and close my eyes so I don't need to look at Central Florida). So Disney giving us additional discounts is a money losing proposition. For everyone who would spend more time/money at Disney there is someone who would spend the same amount of time/money at Disney and make the additional discounts a losing proposition.

People say "we just buy a seven day hopper and maybe spend four days in the parks, then we spend time by the pool or going to other Orlando attractions, so Disney would make money on us by giving better/bigger discounts." But there are a ton of us who buy UPHs with our 10% discount, play a round of golf, never cook in our room and never leave Disney property. Any additional discount (and the 10% discount on UPHs) is money out of Disney's pockets with my family. And a ton of DVCers already buy an annual pass every year. Give those people a discount and its lost cash to Disney. (The Florida residents would be a wash, its unlikely that we'd get discounts better than theirs are, and I'd guess that Florida DVCers are already using their Florida discounts. Same with military discounts or any other special discounts).

The question then becomes, do the statistics support additional discounts? - i.e. will the net gain of DVCers spending more time in the parks compensate for the discounts taken by people whose spending patterns would remain stable? My guess is that the answer is no. But, given the data warehousing I KNOW Disney does, its a pretty easy question to answer - and despite the fragmentation of the business, I can't believe they haven't run the numbers. (BTW, I do this sort of statistical analysis for a living nowadays - Six Sigma Black Belt with an IT background).

Don't get me wrong, I'd LOVE additional discounts (yum, Florida resident discounts, Disney Dining Experience). I just remain unconvinced its a clear cut good business decision.

CaptainMidnight
07-06-2003, 09:28 PM
Originally posted by JimC
I believe they would make more money with a better pass discount program, particularly on the APs. This is not based on any research, just my own reaction and observations of random comments here.

I agree, despite Crisi's assertions. We often get park hopper passes and then avoid the parks for full days at a time. If we had APs due to a reduced price or Florida resident discount and the breakeven point were different, we'd be spending more time and money in the parks and at park restaraunts, lounges, even for deserts and after dinner drinks and a couple of attractions. We would spend more than we would save with the discount. It appears from other posts, we're not alone.

childsplay
07-06-2003, 10:50 PM
It has been my experience that in situations like these (should Disney offer larger discounts) people's myopic perspective tends to become their reality......in other words... "Disney would/wouldn't make more money from me therefore it is a good/bad idea."

To that end I can only share our experiences, when OKW had free passes for the length of stay I can unequivocally state that we spend more money on our vacations at Disney (as a whole) as compared to our trips since the expiration of that promotion.

Patpat15
07-06-2003, 11:31 PM
We spend half of our time "off site" spending alot of money. If Disney gave us the discount I really truly believe they would make much more money than the amount lost on the discounted annual pass. That is why I started this thread.

The following is just my opinion, and I do think the company sometimes just does not use common sense. Inter department squabbles, whatever.

And it just takes a little bit of common sense to realize that the communication between Disney departments is lame. From the miscommunication between the valet and the front desk, to the (yes, I will say it) the demise of the go network, and other "great ideas" which have affected this Disney stock (prior to 9/11 it was tumbling). I really believe that, although we love disney, you just never saw things like the bottlenecks at Animal Kingdom, in the old Disney, the Disney who built the underground city under the Magic Kingdom. And although we still love, Disney, go two to three times a year, If you look at Main Street USA you can nowdays find lightbulbs out, and not just one or two, the surest sign that they have, corporately, spread themselves too thin, from the cruise lines, to the team ownership, etc. You have to spend money to make money, and spending the money on giving your base- the DVC members, the best salespeople they could ever find, by giving us all discounts on spending more time in their parks, seems very prosperous to me.

Just my opinion.

vernon
07-07-2003, 05:22 AM
Crisi said and despite the fragmentation of the business, I can't believe they haven't run the numbers They run the numbers, but only on a departmental level, i.e. what's in it for me. It's arguable as to whether park ticketting would increase revenue, therefore it hasn't been done. I think you underestimate the rivalry that exists between departments. If you, as head of ticketting, take on a program that has a negligable impact on your profitability, but it increases profit of the dining or sales departments and their is a promotion up for grabs the way the company works it will be them getting the promotion, not you. IMHO that's one of the big problems in much of American business. People are judged on their P+L not on their contribution to the company.

But vernon, the point is that we don't You personally may not, but do you not concede that the evidence, even here on this topic, shows that many people do. As Childsplay says people tend to become myopic and view it only as what they personally do. From talking to and reading people's posts it is pretty obvious to me that many people do indeed spend a fair amount of time off site, this is particularly the case in many of those longer standing members that have been visiting over many years. With another 40 odd years to go until the end of the program I believe that trend is more likely to increse than to decrease. Much has been made of Disney's ability to track my "spending", but considering I rarely charge to my room they would find that difficult and even then, how do they know what I spend at Universal, SW or any of the off site restaurants I use. Crisi, you really are missing out on some wonderful opportunities by refusing to sample other things in central Florida, it's your vacation so I won't try to corrupt you, but there are things to cater to every taste.

crisi
07-07-2003, 10:00 AM
I conceded the evidence that many people POSTING HERE do. But that is a self selected sample. Quite a different thing than a random sample. Ancedote is not the singular of data. None of us have anything but our own experiences and the ancedotes of others.

And I think you overestimate the fragmentation of business. Doing this sort of data analysis and having consulted prior to my current gig for years, if Disney is as fragmented as you think, they are far behind the Fortune 500 I've worked with.

spiceycat
07-07-2003, 10:41 AM
I don't even know if WDW offered me a discount (even to make it a florida resident pass) that I would buy it.

I had an annual pass last year - we went 7 times - too many really....

I have an annual pass for both SW and US/IOA - that I intend to kept - they are reasonable and if you go more than twice - a very good buy. I also looked at that 5 days pass that US/IOA has for my guests.

Johnnie Fedora
07-07-2003, 11:22 AM
The main problem here is that WDW doesn't offer any ticket media that fit the DVCers vacation style. We currently do the three trip on an AP then skip a year or more of parks, then do an AP again. We almost never/want to spend an entire day at the parks. I cant stand the idea of wasting a hopper for three to four hours of park time.

Personally, I'd like to see a pay by the hour park admission for DVCers. You clock in and clock out. If you forget to clock out you pay for the rest of the day. With the ever increasing numbers of DVCers, this wouldn't be a difficult concept for Disney to develop. Dvcers would have their own checkout turnstyle for leaving the park. Disney could just direct bill your credit card or room account the going rate for your hourly use of the parks. This would give DVCers a special perk, without calling it a discount. It would also allow DVCers to jump in and out of a park for dinner or shopping etc.

Johnnie

Jimbo
07-07-2003, 11:29 AM
The main problem here is that WDW doesn't offer any ticket media that fit the DVCers vacation style. We currently do the three trip on an AP then skip a year or more of parks, then do an AP again. That's exactly what we do. So isn't it fair to say that Disney <u><i>does</i></u> offer a pass that fits our vacation style? It would be even better if they gave us a discount on it, but it certainly fits as is.

vernon
07-07-2003, 11:44 AM
Crisi I think this forum is probably the biggest single meeting place of DVC members, by the fact we tend to be people who have a regular (daily) interest in Disney, not just our vacations I would suggest the if anything the members that frequent these boards are more likely to be the type that would buy AP's not less.

As far as the fragmentation of business, Disney is by it's nature a much more diverse and fragmented business than many of the others in the Dow Jones Industrial average. Most of the other companies in the indexes tend to have a much more limited product/client base. IMHO it has been a corporate choice to make Disney divisions "fight" against each other. I don't think they would consider their business "model" as being "far behind" more that their business culture is one of competition and survival of the fittest. The company reflect Mike Eisner's ideas of what makes a good business, while it may be true that his ideas have been successful in some areas, I would contest the notion that they have been successful in all areas.

sgtdisney
07-07-2003, 11:49 AM
I can't speak for anyone except me, but I can assure you if we had some incentive to be in the parks more, we would be there. As it is now, we tend to visit one park per year for only one day. Then we take our vacation dollar off property and come back to our 'home' to rest and relax.

When we had the free passes we were in a Disney park every single day of our vacation. Even if it was just to go into Epcot Center (as it was called then) for dinner everynight. We stayed on property and in the parks spending money along the way. Now, since the passes are gone, that has all stopped for us. We go off property more. Universal (and SeaWorld) as of late are offering great pass discounts to everyone, not just the elusive Fla resident, but for everyone. Apparently Disney does not have to do this. If they don't have to, fine. I am a stockholder as well and if they are able to maximize profits by charging everyone full price so be it. However on the flipside, I am perfectly content to take my vacation dollar and spend it somewhere else for now. Would I rather be in the parks, probably. But, not at the prices Disney wants for the privledge..

As the average 'age' of the DVC member (in terms of how long a person has been a member) increases, I think Disney will see a drop off of DVC member attendance at the parks. There aren't nearly as many 10 year+ members are there are 4 years or less. When these people tire of spending the money on admission, maybe, then we will see a discount. Until then, I am happy to give my money to other places and restaurants in and around Orlando and enjoy my 'home.' If Disney isn't missing my money, no loss to either of us...

crisi
07-07-2003, 12:07 PM
I've consulted at 3M - you don't find many more companies more fragemented. And this was prior to the Imation spin off. Sandpaper, cleaning chemicals, scotch tape, medical supplies, computer hardware, etc. All in seperate divisions. A corporate structure developed to make the divisions compete against each other. And Grand Met PLC, who owned Pillsbury, Burger King, Alpo Petfoods, liquor companies and brands, Liggett, Intercontinental Hotels, Horse Tracks, Pearle Vision Centers, Restuarants, and a retirement home (all while I worked for them, although not all at the same time). That was a nightmare! I'm intimately familar with the fragmentation of large diverse companies. Moreover, I was at a conference with Disney employees who were doing such data mining to make decisions two years ago - so I'm pretty sure Disney does do similar work.

And us owning more APs is exactly the point. We ALREADY own APs, giving us a discount on APs is taking money off the top from the people already holding APs in exchange for the assumption we those who don't own them spend more money in the parks if they did own them. We need to spend enough in Mickey Bars and meals to make up for the discount (don't forget, you only get to count the margin on the Mickey Bar, not the complete cost). Its possible the math works out on this. Its possible it doesn't. We don't have the data to support either conclusion.

DebbieB
07-07-2003, 12:51 PM
Originally posted by Jimbo
That's exactly what we do. So isn't it fair to say that Disney <u><i>does</i></u> offer a pass that fits our vacation style? It would be even better if they gave us a discount on it, but it certainly fits as is.

I attended the DVC annual meeting in December 2000 and this came up. So they took the opportunity to announce a DVC only pass called "Magical Years" I believe. Only problem was that it was a total joke! Pay $700+ upfront and get a 5 day park hopper plus for 4 of the next 5 years. All 5 days must be used within the year, no carryovers. I wonder how many members bought it? :rolleyes:

sgtdisney
07-07-2003, 01:16 PM
Originally posted by DebbieB
I wonder how many members bought it? :rolleyes:

So MANY people bought it that it was cancelled very quietly, fairly soon after it was introduced. :confused:

Duckielucky
07-07-2003, 01:36 PM
Last year we went to Disney World three times so we bought year passes for the whole family. It was great. We stayed at the Boardwalk and could run over to the World Showcase to eat whenever we felt like it. We were there a total of 22 days. I believe that 10 days is the break even point. Anything over 10 days and it is cheaper to get a year pass.

I would love to be able to get a 5 or 10 year pass. A lifetime pass would be even better.

Jimbo
07-07-2003, 02:04 PM
DebbieB - My point was that the annual pass fits our vacationing style. We go a couple times in a year. By timing the trips we can use our APs many times. We're probably pretty typical, I think. So it's not a situarion where the right kind of pass doesn't exist, they're just expensive.

I agree that the "Magical Years" pass didn't make a lot of sense for anyone.

vernon
07-09-2003, 05:01 AM
I did receive a request to complete a survey that was being done by Disney last weekend. There really wasn't anything interesting in it ( certainly nothing to do with DVC) , the main interest seemed to be how much time one spent off site and how much money was spent on the most recent trip. Looking through my CC receipts I came up with my spending coming in at about $5,000 of which less than $1,000 had been spent at WDW ( the majority of that was $400 at Hoi Palloi in DTD and $300 on restaurants at the non Disney hotels at DTD). I'm certain that if Disney compare my spending for the trip to the spending on my room charge ( which we are all sure they can track easily) it would make for quite disturbing data for them.

It did make me wonder if Disney is becoming concerned about how much money is leaking away from WDW as guests try out other attractions in the area. I'd be interested to know if many other recent guests received the request to fill out the on-line survey.

crisi
07-09-2003, 07:30 AM
vernon,

If I were doing the analysis for Disney, I'd pull the data every year or eighteen months and re-run it. Things change - people's spending patterns, the availablity of decent Orlando area attractions, the economy, the margins Disney works with. Its possible that what makes sense this year won't make sense next year.

But I'd also keep in mind how unhappy DVC members get when Disney takes away perks. If they give us a discount on annual passes because it makes sense, and five years from now the statistics show the discounts being a money losing proposition, they are in a bad spot. They either keep losing money or create bad will amoung DVC members by pulling the discount.

So it isn't a decision I'd make lightly - even if it made financial sense. I suspect that I would be more likely to give DVC members some sort of one time coupon as a "thank you" (and maybe give out the coupon every year or every couple of years or whenever it made sense) good for an additional 10% off the admission media of their choice.

(Now as a DVC member, I'd like the discounts. But I trying to think from the other side).

vernon
07-09-2003, 09:34 AM
IMHO the demographics for this would be the same as for Florida residents, you'd simply move it in line with whatever Disney thinks viable for the Florida residents. IMHO the same arguments/rationale can be made for both groups. If it's worth giving Florida residents a break on park passes because Disney feels they spend more time and money that way, the same argument can be made for DVC members, JMHO.

P.S. Disney could quite easily put out a notice with the offer along the lines of " In an attempt to give our members perks that they have indicated a desire for we are running the following promotion to gauge the viability of making it more permanant, obviously if the take up of the perk is at a low level we would be forced to reconsider it's value to the members and it's economic viability to the company" "

crisi
07-09-2003, 02:38 PM
My concern, vernon, (playing Disney exec here) would actually be that the perk was used at a high level (discounting something that is not used much is cheap - that may be why we get our UPH discount) on something already bought by a significant percentage of the population (say the aforementioned APs), but doesn't change the behavior (i.e. spending on Disney property on things for which there is margin) to "pay for" the discount.

I suspect Disney's FL resident discount has as much to do with Disney lobbying and politicking in Florida as it does with wanting to drive the behavior of Floridians. We DVCers don't vote in Florida (at least not the ones not getting the Florida resident discount).

vernon
07-09-2003, 05:58 PM
So what you're saying ( with your exec head on) is that a perk that no one uses is cheap to offer. Granted that's true but I would ask you " what's the point of the "offfer" if it's of no use to anyone. Other than window dressing it's a waste of time. Looking at the poll ( granted a small section) but less than 10% of people go for it as their ticket option. It's pretty obvious what the members think of it.

I would tend to agree with what seems to be your view that the execs who make the choice are too scared to take a potentially radical view aimed at increasing turnover. I would disagree with your view that it would have no effect on spending and the areas that IMHO it would increase spending are mostly high margin areas, food and drinks.

By the looks of it Disney would drop $100 a ticket on a PAP and $80 a ticket on a regular annual pass on those that already take those options ( not forgetting that many of those buying AP or PAP could well be Fl residents anyway). I would guess Disney would lose on average $90 on maybe 35-40% of it's ticket sales. UMPs would be regligable as the costs are the same or slightly less than the AP. If half the 34% of members upgraded from the park hoppers to AP or PAP that's an average of $150 per person ( assuming the hoppers are used fully each trip and many people seem to use them for two trips). Nett it looks like a $90 loss on 37.5 % to a $150 profit on 17.5% ( I think I'm being fairly generous on the # of Florida residents). Spead over the DVC membership I'd guess that the "cost" in terms of ticket entries would be less than $25 per member, the net result would be getting an extra 35-40 % of the membership into the parks probably another 10-12 days for at least some of the day. I'd estimate break even to be the guests that you have coerced into the parks would need to spend on average an extra $10 a day in the parks. DAMN !! two sodas and an icecream bar would cover that.

With the greatest respect to Florida voters, I don't think the discount makes a blind bit of difference to how people vote or feel about Disney. If you're going to shell out $400 a year to visit Disney, you do it because you like going there, not to see if they are doing anything that adversely effects your environment. The people that voice concern or dislike of Disney are unlikely to buy a ticket to the parks if it was half what they are currently charged. IMHO Disney knows if it can get the people in the parks, they will spend money while they are there.

KNWVIKING
07-09-2003, 06:32 PM
We purchase AP's and this year got 4 weeks out of them,that comes to $93.75 for passes per week. My discount is my DVC ownership because of the way I chose to vacation.My DVC ownership allows me to spend a much greater amount of time in WDW then I could without it,so this allows my park pass average daily price to be minimal. I don't know if i'm explaining this very well but that's the best I can.

As for additional discounts: They will come when Disney see's us stop going to the parks- plain and simple. Unless we use cash for everything "Disney" that we purchase, then they will know exactly what,where,when,how much,etc that we spend. If you pay anything with plastic-CC or room key- that gotcha. Now, this is a case of "do as I say,not as I do" because don't intend on ever paying with cash.

anniet
07-09-2003, 06:44 PM
Originally posted by KNWVIKING
My DVC ownership allows me to spend a much greater amount of time in WDW then I could without it,so this allows my park pass average daily price to be minimal. I don't know if i'm explaining this very well but that's the best I can.

Either I don't understand what you are trying to say, or I do and would have to respectfully disagree. We used to stay on 192 right by Old Town and I think we were in the parks a LOT more then than we are now that we are DVC owners. :confused:

Because our room is so convenient and MUCH nicer than where we stayed before...we are more likely to spend a full day there and skip the parks. Pre DVC we would pretty much OPEN AND CLOSE the parks. (okay maybe it's because we were a little bit younger then too!:eek: :) )

KNWVIKING
07-09-2003, 06:54 PM
***Either I don't understand what you are trying to say, or I do and would have to respectfully disagree. We used to stay on 192 right by Old Town and I think we were in the parks a LOT more then than we are now that we are DVC owners. ***

I'll try again:-)

If I didn't own DVC, I would probably only make one trip a year to WDW for 9 days,8 nights. My park media would cost over $300.00 per person. Now I own DVC. I will make three, 8 day,7 night trips per year. That brings my average price down. I also like staying at other resorts so if the right price for room and flight come along, I'll make additional trips - made two such trips like that this year- bringing my average down even lower. Without the DVC ownership, I never would have bought AP's. Without AP's, maybe I don't take those extra trips. Sooooo.... for me, DVC ownership is my best discount.

anniet
07-09-2003, 07:11 PM
Got it!:)

CaptainMidnight
07-09-2003, 07:21 PM
Perhaps we should mail them a polite note, or visit thier offices and tape a note to thier doors regarding our interest in florida resident discounts for DVC members?

Hope we get the notes on the right doors....

WebmasterDoc
07-09-2003, 07:28 PM
Originally posted by vernon
IMHO the demographics for this would be the same as for Florida residents, you'd simply move it in line with whatever Disney thinks viable for the Florida residents. IMHO the same arguments/rationale can be made for both groups. If it's worth giving Florida residents a break on park passes because Disney feels they spend more time and money that way, the same argument can be made for DVC members, JMHO.


I look at the FL Resident's Pass in a different light and don't see the same demographics at all.

The FL Resident's Pass is aimed at bringing in guests who otherwise might not visit WDW on a regular basis. It provides an incentive to get those who live within a couple of hours drive to "drop in" for a spur-of-the-moment trip when the opportunity arises. Clearly there are those who would come regardless, but the real intent of the pass is to attract the other FL residents who are not frequent visitors. Many will not take advantage of the heavily discounted room rates and will make it a day trip, but are still likely to eat a meal and purchase some momentos of the trip. Some will decide to make a weekend out of the trip and grab a discounted room onsite.

DVC members are already coming to WDW to use their points. Disney does have extensive data showing just how many days the "average" guest spends in the parks based on how many days they stay onsite. Even in the poll currently on this board, 67% either have an AP or use the UPH- which suggests that these members plan to spend a significant amount of time in a WDW Theme Park during their stay. My assumption is that the 67% is far greater than the time spent by the "average" guest. (I'd estimate that average as 3 days in the parks for a 7 day stay- but that is speculation on my part.)

Disney already knows the number of FL Residents who venture into the parks (did you ever have a CM ask you for your zip code as you enter a park?) and also knows how many DVC members are staying onsite on a given day. By applying the "average" number of days those onsite guests will go to a park, they know how much time we (DVC members) will spend in the parks. From a poll like this one and the data they have available at WDW they may even assign a higher-than-"average " amount of time for DVC members.The result is that they can extrapolate that DVC members already spend 2/3 of their stays in the parks and that 90% of DVC members come to WDW for at least 7 days per year. They can also extrapolate that only 1% of FL residents within 3 hours come for a week each year. (I'm making up numbers here, but you get the idea.) Which group would you try to attract with discounted rates- those who are not already planning to visit or those who are already coming (and already have AP's and discounted UPH's)? I know the group I'd target.

CaptainMidnight
07-09-2003, 08:37 PM
Yep, makes sense. It doesn't support our personal desire for a discount on APs, but it makes sense.

crisi
07-09-2003, 09:36 PM
This is really simplified, because there are far more variables here than the ones I'm considering and the numbers are guesses. But here is what I am talking about. Once again, I don't have REAL data to work with, so this is more an example of how you'd do the analsysis than anything real.

Lets say 60,000 DVC members purchase 180,000 tickets a year (3 tickets per member - its probably higher, but that lets singles be singles and families of four be families of four - also, not all of us buy tickets every year - some of us do the "two trips on an annual pass 11 1/2 months apart yearly trip" Some of us bank and borrow to go less often, or use our points to cruise or trade out). 50% of those tickets are APs. Disney offers a 10% discount to DVC members on the $400 AP. This means that Disney loses $3.6 million dollars in discounts that people take that are already buying Annual Passes. (And that's a 10% discount - personally if they were going to bother giving me an AP discount, crisi the DVC member would hope for more than 10%. The Florida resident rates are more than 10% - using the FL resident discount, discounts would cost Disney on the order of $6.7 million.) This $3.6 million is the program "cost."

Variable not considered: Some percentage of DVC members are FL residents and already get the FL discounts. These members would not "cost" anything under the program.

We will assume that a discount on APs will not drive those currently holding APs to spend any more time and money in the parks. AP holders have already made the maximum per year committment - they aren't avoiding the parks due to the cost of tickets. So 30,000 DVC members (their guests, families, renters) have to spend enough to make up that $3.6 million. Its about $120 per member.

Now that $120 isn't additional spending, its profit Disney needs to clear in order to make the discount pay for itself. Say they have 100% margin (for every dollar spent, they make 50 cents). Its low on lots of stuff, but high on some things. So the 30,000 members who don't already commit to APs need to spend an average of $240 more to make up for the discount.

Now we figure capacity. Last I checked, most in park restuarants were not sitting empty at meal times. Not only do you need to spend $240 to me it worth my (the Disney Exec) effort to give you the discount, you need to spend that $240 where I need you to. I don't care if you spend it at CRT for breakfast or Chef Mickeys - those seats are already full, there isn't any lost opportunity there. You need to spend it at Marrakesh, or Akershus. And even there I don't care if you spend it at Christmastime or over Easter. I need your body in that seat when a guest paying full price isn't using it - otherwise, your spending doesn't count towards paying for the discount I'm giving you. Granted if you are taking that seat in Alfredo's you are probably driving someone to a burger over at the American Adventure - so it isn't a total loss - it just isn't a total net gain either.

Some people won't change their spending habits at all - with or without the AP discount. That's where my own personal myopia comes in - our family would not travel any more, spend any more, or spend any more time in the parks if discounts were available to us. We aren't money driven. We will take advantage of easy to use discounts, but won't use that to justify more spending. Other people are money driven - but in the opposite way, they will take any discount you give them, and eat in their unit and not spend a dime more than they would have without the discount. Because of this - as well as the capacity issue covered above, you need an even more significant behavior change from the people you are looking for the behavior change in - maybe they'd need to spend an extra $500 per trip on Disney property.

Now comes the 3.6 million dollar question - will they?

As I said above, this is extraordinarily similified, and little changes in the numbers (what is Disney's expected actual margin, how many APs do DVC members buy per year currently, what is the actual impact of capacity) have a huge impact on the numbers. As well as additional variables I'm not even thinking about. I don't have real data and I have little knowledge about theme parks management, I'm just showing you how you'd start analyzing it.

vernon
07-10-2003, 04:53 PM
Crisi unless I missed it, you don't seem to have allowed for any of the members that currently get hopper tickets getting AP or PAP. Using your figures ( 60,000 members buying a total of 180,000 tickets) Our rough poll has 35% of members buying the cheaper passes. If half those were to buy the more expensive passes it would yield ( 180,000 x 35%= 63,000/2 = 31,500 x $150= $4,725,000. If you work on an even more conservative figure that just one third of those currently using hopper passes upgraded it would nett $3,240,000.

Although you agree they exist, you also don't seem to take into account in your "loss"figures the percentage of DVC members that are Florida residents and are already AP or PAP pass holders I think they would be a considerable figure. I've forgotton the % of memebrs that come from Florida, but I believe they make up the largest number of any State am I correct? I think it was somewhere in the region of 10% of the membership in the early years, but that may have changed as membership has grown. I would place the "cost" being in the region of $2.8-3 mill if you allow for Florida residents.

Now I understand that with your Disney exec head on ( one that obviously doesn't want to consider the idea of a discount working in Disney's favour) it's perfectly understandable that you try to skew the figures and ignore possible benefits, but as we're doing this as a intelectual exercise I think at the least you need to make some concessions to the potential upsides.

This is a risk and reward business, the risk ( using your figures) is $3.6 mill ( this is assuming NO increase in people attending the parks more by buying more expensive tickets) , the reward is an increase in ticket sales from other sources that could be somewhere in the region of $2.5-4.5 mill plus the extra sales generated from putting an extra 21,000 people in the parks x the extra number of days. I'd guess that # of days would be somewhere between 5 and 10. It's the equivelent of putting an extra 100,000-200,000 people in the park for one day. I don't know the average spent per person per day on food,drink and souverirs but I don't think $20-30 would be too far out ( if anything a little low) so the potential reward would be somewhere in the region of $2-6 million. That isn't allowing for the likelyhood, IMHO, that the people making a saving of $100 or so on their PAPs would plough a lot of that original cost you're fretting about ( $3.6mill) back into Disney.

Put basically the risk is $3.6 mill, the reward is somewhere between $4.5- 10.5 mill (and a lot of satisfied regular customers). I'm not inherently a gambler, but I don't think it's that big a gamble. Personally I would take the chance to see if it worked. Obviously the execs that make the choices either haven't looked at it in this manner, don't want to put their necks on the line or simply don't want to put the majority of the extra $$ into someone elses department's profitability (my favourite as the reason).

Doc, I would agree with you that DVC members are already coming to stay at WDW but the question is are they spending their time exclusively in the Disney parks spending their money at Disney outlets. I would suggest the answer is no, and as more members become long standing members I would suggest they will spend less and less time( and money) at Disney outlets unless they feel they are getting good value for money. The excellent point you make ( and I agree with it ) that the FL resident pass encourages people who wouldn't go into the parks regularly to (and I quote you)
" Many will not take advantage of the heavily discounted room rates and will make it a day trip, but are still likely to eat a meal and purchase some momentos of the trip"
is exactly the same argument I'm making for DVC members.

Your final comment
"Which group would you try to attract with discounted rates- those who are not already planning to visit or those who are already coming (and already have AP's and discounted UPH's)? I know the group I'd target"

I don't understand why you ( and others) feel that there is a choice of one group or the other.In many ways Fl residents and DVC members have similar profiles (and this similarity grows the longer the membership of the individual). The same solution for both areas may well work. Many DVC members already feel they don't need to visit the parks "ALL DAY", yet there is no concession made for that lack of desire and it seems no attempt to address it. Many people baulk at paying top $$ for just a few hours in the park, their choice is pay up or not visit. It's my contention that this phenomon will increase unless this issue is addressed. If not the answer could well be, not visit the parks. If it's a solid argument for Fl residents, why is it not for DVC members? Finally ( for now :D ) Why just "target" one group, when you can hit both targets with one weapon ?

MickeyMcMouse
07-10-2003, 05:48 PM
Originally posted by vernon
Doc, I would agree with you that DVC members are already coming to stay at WDW but the question is are they spending their time exclusively in the Disney parks spending their money at Disney outlets. I would suggest the answer is no, and as more members become long standing members I would suggest they will spend less and less time( and money) at Disney outlets unless they feel they are getting good value for money. The excellent point you make ( and I agree with it ) that the FL resident pass encourages people who wouldn't go into the parks regularly to (and I quote you)
" Many will not take advantage of the heavily discounted room rates and will make it a day trip, but are still likely to eat a meal and purchase some momentos of the trip"

Forgive me for joining in a discussion half way through but I have to agree with Vernon. :-

Here's our story .

We've been around 13 or 14 times in the last 10 years and bought into dvc 2001.

We bought ap's in jan 2002, used them well on our 10 day stays in jan 02 and aug 02. Used them that well that I don't think, out of the 20 days we were there in total, we were not in the parks for maybe 2 days.

Much of that time was enjoying the parks, but probably the large majority of that time was shopping (that big shop in epcot is a killer ) or more specifically going into the parks for meals, expensive meals may I add, but very good meals. And of course after the meals, there probably was a bit of shopping.

Its kinda funny when you realise with ap's you can nip into a park for only lunch or dinner and your not losing any days.

Looking at cc bills, many, many $100's of dollars where given to Mr Disney.

Now .... our ap's expired in jan 03, and as we "thought" we would not be back until nov/dec this year we did not renew them - NO INCENTIVE.

As it happened, we had a last minute trip during july, which was a long weekend at VWL. ( The great benefits of DVC ). The 4 full days, we were in wdw, we did NOT visit any parks, didn't eat in any disney restuarants, bar once at Artist Point(ap cobbler :)) ,and once at Rain Forest at DD. We only went to dd once (no dc disc available) and so did the vast majority of out shopping, spending, outside of the Disney Empire at the outlets.

There where no incentives to buy ap's and Disney lost many many $100's to other vendors. We will probably purchase ap's in dec which will cover another trip next year, but, and here is the killer blow, both of us did NOT miss the parks. We still very much enjoyed our visit, but our funds were spend elsewhere.

To cut a long story short (too late), on the trips when our aps were valid, we would have probably wondered into a park for a meal or some shopping ( don't know if anyone has seen us before, but we are the ones with the hand fulls of bags struggling thro the lobby of Wilderness Lodge ) and spent a great deal of money bolstering the share price of the Disney Co.

On our last visit with no annual passes, we were the ones sitting at the quiet pool, reading a few books and shuttling between Roaring Forks and our seats with those fantastic refillable mugs ;) and not really wondering about the contents of the Disney shops.


If I where a Disney Exec, this is surely got to be a very worrying trend.


David

KNWVIKING
07-10-2003, 06:34 PM
***" . We will probably purchase ap's in dec which will cover another trip next year, " ***

See, I think that is what Disney knows. For four days, they got very little of your money, but what's going to happen with your next two 10 day trips ?

Also, look at how you vacation. You buy an AP for first trip,then it's good till next trip,then it expires. You buy AP for Dec '03 trip & plan on using it for your Oct '04 F&W trip- just as an example,but you got 20 days use.Suddenly your July '03 trip pops up. Say the AP had a 20% discount and instead of waiting till Dec, you buy in July, use it in Dec, but it's expired before Oct '04 trip. You only got 14 days out of your AP. Sometimes the best choice may be to just stay out of the parks.

WebmasterDoc
07-10-2003, 07:58 PM
Originally posted by vernon

Doc, I would agree with you that DVC members are already coming to stay at WDW but the question is are they spending their time exclusively in the Disney parks spending their money at Disney outlets. I would suggest the answer is no, and as more members become long standing members I would suggest they will spend less and less time( and money) at Disney outlets unless they feel they are getting good value for money.

....

I don't understand why you ( and others) feel that there is a choice of one group or the other.In many ways Fl residents and DVC members have similar profiles (and this similarity grows the longer the membership of the individual). The same solution for both areas may well work. Finally ( for now :D ) Why just "target" one group, when you can hit both targets with one weapon ?

Good points, Vernon. I'm basing my comments on the poll on this board about admission media- where over 60% have indicated that they use either AP's or UPH- thus already having access to the parks every day of their trips. I'll assume that Disney has similar imformation and has decided that there is no direct benefit to courting a group that already goes to the parks at least as much as their "average" guest. They will aggressively try to attract the FL residents who can get there easily and may NOT be already planning to come.

DVC members are already coming and are already planning to enter Disney Theme Parks at a rate at or above the "average" Disney guest (based on their polling data). They have chosen to try to attract some small percentage of the millions of FL residents who otherwise may not take a trip (or two or three) to WDW.

While I'd be delighted to accept a discounted rate for something I'm already going to purchase, I can certainly see where the decision to try to attract possibly hundreds of thousands of "new" guests (FL Residents) would be a wise business plan with much to gain. I don't disagree that they could "hit both targets with one weapon". I just don't see why Disney (from a business position) should consider DVC members a target.

Shamus
07-11-2003, 01:01 AM
Originally posted by Doc
I just don't see why Disney (from a business position) should consider DVC members a target.

But Disney DOES consider DVC members a target, one which I believe they have hit dead on. Disney targets DVC Members for the UPH. There is currently no value for them to target with the AP or other media types. (Is that what you meant Doc??)

Ask yourself this question "Why would Disney Target DVC Members with the UPH and not the PH, PHP, AP, or PAP?"

Because the other types of admission do not guarantee that a guest will "Pay Admission" each day of their stay( first and/or last day dropoffs excluded). "USE it or Lose it" "Captive Audience"

The Park Hoppers and Annual Passes don't do that. "Let’s go to USF or SW or stay by the pool or ..................."

You may say "I paid for my admission for 365 days with an AP, is that not the same as UPH?" Most APs and PAPs are purchased because the consumer has calculated that APs are cheaper for them then the UPH and PH based on the number of days they plan on attending the Parks not their length of stay. Lets call this the AP TEST LINE -- "the old 7 Park Days Breakeven". Once the AP holder crosses the line they’ve broken even. It may or may not then change their visiting habits but they first need to cross the line.

AP discounts would only provide a change to the visiting habits of those who just fall short of the "AP TEST LINE" maybe those planning 6 days of park visits. Thus, only those who are affected by the "NEW AP TEST LINE" will likely purchase an AP solely because of the discount.

I'm sure Disney's numbers tell them that the number of NEW DVC AP holders would be so small that the Projected Revenue Increase would not make up for Overall Cost of the Discount to all DVC AP holders.



Shamus

JimC
07-11-2003, 08:12 AM
Let me rejoin this very interesting discussion. Twenty years ago I participated in a project regarding a new major multipurpose sports/entertainment venue. The same issues arose.

What are the profiles of the attendees (families, couples, singles, income strata, etc)? How often will they visit? How far will they travel to get here and by what means? How much will each spend (there are some interesting norms regarding spending habits)? Will discounts change the mix of attendees, or the distance they will travel or the frequency of the visits or the length of the visit or some combination? Will separate pricing or bundled pricing improve revenues and profits?

Some of the conclusions the experts came up with: There is a fairly tight range of dollars that each attendee will spend per visit or per day by category and income strata for a particular venue. Spending included travel (hotel, gas, tolls, etc), meals, drinks, programs, souveniers. Disney must factor in long multi-day length of stay and broader geographic reach issues than we did. We only needed to deal with the length of stay for mostly one, but some two or three day setups (much like WDW in its early days of operations, I suspect) and a geographic reach of generally less than one day's drive.

Discounts can change the mix of attendees or increase the frequency of visits or increase the distance attendees are willing to travel to visit or a combination. But discounts will have little impact on those initial spending ranges or the length of time for each visit. Travel costs factor in to this, but it is not a dollar for dollar offset either direction. So it is a complex analysis.

On pricing (separate or bundled) the conclusions were that you need to do both. Bundled pricing simplified transactions for both attendee and operator, but had a negative impact on revenue (ie the venues with one price, one payment for everything consistently resided in the lower half of the spending ranges -- that may have changed over the years as I have seen some more recent evidence that single pricing (like an all inclusive resort) can actually charge a premium for convenience.

Cost management is important and managing variable costs must not be ignored; but once the level of service is set, the costs are relatively fixed and revenue becomes the primary variable to improve profits.

Totally separate pricing (a la carte) increased frustration for the attendee (constantly reaching for the wallet and back then having the cash - few ATMs and less use of charging) and cost for the operator (additional cashiering operations) and oddly (at least to my thinking) also did not result in being in the upper end of the spending range. The venues that were in the upper range were those who combined bundled pricing and separate pricing.

I don't know how these patterns have fluctuated, except for the one item I mention above. There are also behavior studies that enter into this becuase some discounts and pricing programs are designed to alter long-term behaviors and have little to do with short-term economics.

But I think it does suggest that senior management must be involved. Multi-divisional organizations are going to struggle with turf battles over recognition, budget, and other resources. Having your own revenue stream and control over pricing is generally considered part of the arsenal one needs to do well in that arena. But for the organization, the data indicates that individual divisions may not naturally act so that the organization is as well off as it could be.

Having said all of this, I still believe that Disney would benefit from a discount program on APs. I believe it would increase the number of visits to WDW parks, capturing the spending per day that was going elsewhere. It would also open up the opportunity for lengthening the number of days on property and adding the per day spending (I believe the FTP pay for 4 and stay for 7 package was designed for just that result).

Alas, I must confess that I lack the hard evidence to support my conclusions.

CarolMN
07-12-2003, 10:04 AM
Originally posted by JimC
...(snip)....Alas, I must confess that I lack the hard evidence to support my conclusions.

No one except select Disney employees has any data to support their conclusion. As far as I know, none of them ever post here. Even if they did, I doubt they'd be sharing proprietary info on a public bulletin board. All any of us have is our own opinions based on our own experiences. Yours is certainly as welcome as everyone else's.

We won't ever come to agreement on this subject - FWIW, count me in crisi's camp, but IMHO, this thread/topic makes for very interesting reading! And that's one of the main reasons I love spending time here!