Disney's $1 billion dollar bet on magical wristband - Wired

DDLand · Mar 25, 2015

Had this add pop up while viewing this thread. I found it amusing...

carmelhp · Mar 26, 2015

DDLand said:
Let's just assume that the inflation numbers are correct because the consensus among economists, analysts, government, companies, think tanks, public organizations etc. is that it is. Now you can say all those people are evil or stupid. I just won't buy it.

I won't get into your understanding of monetary policy.

I think that it goes back to what Americans really want. Their priorities. Whereas Disney used to think that they were the equivalent of a 68$ priority they've found that they're really a 105$ priority. More American's also are willing to spend the money on WDW vacations. It's hard to categorically deny that a large segment of the population is better then ever before. Also Orlando has become a considerbly stronger destination in recent years. DVC lockin could also have an effect.

Tourism from Europe and Latin America has grown. I just don't think they're the only segment that has.

Tying increased vacation spending with people taking their money out banks because they're afraid of inflation is a stretch. Why wouldn't they just put their money into stocks, bonds, or funds? I feel like that is not the primary driver...

The inflation numbers may or may not be bogus, but the reason Disney's prices are rising so fast is because the market will bear it. They have record crowds at record prices so the price will rise to curtail demand until they hit the saddle point, which apparently hasn't happened yet. Higher ticket prices are still providing higher marginal revenue so it will continue.

Cormoran · Mar 26, 2015

carmelhp said:
The inflation numbers may or may not be bogus, but the reason Disney's prices are rising so fast is because the market will bear it. They have record crowds at record prices so the price will rise to curtail demand until they hit the saddle point, which apparently hasn't happened yet. Higher ticket prices are still providing higher marginal revenue so it will continue.

Yes, but I don't think MDE can be credited for the profits.

jade1 · Mar 26, 2015

Planogirl said:
There was pretty much nothing of any note still available in Epcot early in the afternoon.

I can attest the same thing with FP- XMAS week, actually late AM.

DDLand · Mar 26, 2015

carmelhp said:
The inflation numbers may or may not be bogus, but the reason Disney's prices are rising so fast is because the market will bear it. They have record crowds at record prices so the price will rise to curtail demand until they hit the saddle point, which apparently hasn't happened yet. Higher ticket prices are still providing higher marginal revenue so it will continue.

Yeah, like I said it comes down to America's priorites. Their priority is a Disney vacation even at 105$. They're willing to bear the cost because it's a priority.

jade1 · Mar 26, 2015

Planogirl said:
I can attest that your examples weren't possible during our visit last week. Maybe most of it would be available at rope drop

Actually that's all I was pointing out on those examples-what was available "IN THE PARK AT THE KIOSKS" in the AM, some not even at RD.

But thanks for confirming that.

carmelhp · Mar 26, 2015

Cormoran said:
Yes, but I don't think MDE can be credited for the profits.

No, but when you've spent +$1B you've got to justify it somehow.

Yellowstonetim · Mar 26, 2015

MDE and MBs are certainly responsible for some of the profits. When it is easier to purchase something without having to do anything but tap your bracelet, people tend to relax and spend a little more. Enough more to make a difference. And more people are using FP+ then used FP so more people are shopping just a little bit more while waiting to ride. Just a little in each of these areas is millions of dollars over a year. This has been explained. I believe it. I still think it is not the real reason, it is just a publically stated explanation and a bit of gravy. The real reason is the powerful raw data that will be worth more than 1, 2, or 5 billion!

mom2rtk · Mar 26, 2015

Tap your band..... swipe your room key.

I just don't get it. Just doesn't seem that different to me.

lockedoutlogic · Mar 26, 2015

It is almost no difference at all...but I honestly think they somehow calculated a financial advantage to not reaching for your pocket/purse.

It may actually be common sense...but will never be quantifiable

lockedoutlogic · Mar 26, 2015

Yellowstonetim said:
MDE and MBs are certainly responsible for some of the profits. When it is easier to purchase something without having to do anything but tap your bracelet, people tend to relax and spend a little more. Enough more to make a difference. And more people are using FP+ then used FP so more people are shopping just a little bit more while waiting to ride. Just a little in each of these areas is millions of dollars over a year. This has been explained. I believe it. I still think it is not the real reason, it is just a publically stated explanation and a bit of gravy. The real reason is the powerful raw data that will be worth more than 1, 2, or 5 billion!

There is currently no way to tie profits to the bands...

I'm not sure there ever will be. It's simply here say at this point.

Yellowstonetim · Mar 26, 2015

If the same set of circumstances by the same demographic generate more spending with the bands then without - that being the only appreciable difference, then it can reasonably be attributed to the bands/MDE. I also know this from personal experience and the testimony of other visitors. It is quite obvious that making spending easier increases spending.

mom2rtk · Mar 26, 2015

Yellowstonetim said:
If the same set of circumstances by the same demographic generate more spending with the bands then without - that being the only appreciable difference, then it can reasonably be attributed to the bands/MDE. I also know this from personal experience and the testimony of other visitors. It is quite obvious that making spending easier increases spending.

That depends. Spending per guest apparently went up by a similar amount at DLR last year. But they don't have bands yet. If they also had bands everyone would be attributing it to the bands. You can't just assume correlation means causation.

lockedoutlogic · Mar 26, 2015

Yellowstonetim said:
If the same set of circumstances by the same demographic generate more spending with the bands then without - that being the only appreciable difference, then it can reasonably be attributed to the bands/MDE. I also know this from personal experience and the testimony of other visitors. It is quite obvious that making spending easier increases spending.

Two things:

If they had rolled out the bands in a recession...and the trend reversed - then that argument holds. However they are in a boom and vacation spending is more heavily influenced by consumer confidence than almost anything. So spending would be up anyway. That is the historical FACT of the Walt Disney world resort.

Second,

They don't convey there "increased" guest spending broken down by where the increases come from...
What am I saying? Price increases are included and skew the numbers.

You buy the same ticket, tshirt, and ridiculous meal at Le Cellier... And your "spending" will be more than it was a year, two years, five years ago.

lockedoutlogic · Mar 26, 2015

mom2rtk said:
That depends. Spending per guest apparently went up by a similar amount at DLR last year. But they don't have bands yet. If they also had bands everyone would be attributing it to the bands. You can't just assume correlation means causation.

"Good economy" = more travel = higher spending on and during travel

But I don't have a scientific study and a Supreme Court decision to back it up...so please disregard

DDLand · Mar 26, 2015

mom2rtk said:
That depends. Spending per guest apparently went up by a similar amount at DLR last year. But they don't have bands yet. If they also had bands everyone would be attributing it to the bands. You can't just assume correlation means causation.

Where'd you see that information? I'm curious.

Yellowstonetim · Mar 26, 2015

You are looking at general numbers that have no bearing on what I am talking about. I was describing a much narrower specific examination: An examination of a specific demographic set within the reasonably exact same set of circumstances both with and without bands. It is a valid correlation within a specific error rate. And Disney knows how to gather this information comparing credit card spending before and after bands. They can do it to my account and then crunch the differences between my trips. There are variables, but with enough cases the variable accounted for and the numbers can be validated.

Also it is OBVIOUS that they increase spending. Ask people who use them. Many will tell you. Its just so easy!

wallrock · Mar 26, 2015

Yellowstonetim said:
You are looking at general numbers that have no bearing on what I am talking about. I was describing a much narrower specific examination: An examination of a specific demographic set within the reasonably exact same set of circumstances both with and without bands. It is a valid correlation within a specific error rate. And Disney knows how to gather this information comparing credit card spending before and after bands. They can do it to my account and then crunch the differences between my trips. There are variables, but with enough cases the variable accounted for and the numbers can be validated.

Also it is OBVIOUS that they increase spending. Ask people who use them. Many will tell you. Its just so easy!

One element that you're missing is how much spending took place with other venues such as cash or gift cards, so you can't make a legit comparison by comparing credit card spending between yesterday and today and say that spending is up. Little Sally Guest 'spent' money with a gift card last year but this year mom and dad decide instead to transfer that dollar amount over to the magic band. By that scenario I can declare that magic bands have attributed to more spending when in reality you're just moving the peas around on the plate.

Ease of use doesn't always translate to an increase. Sometimes it means taking the same as last year and consolidating to take advantage of that ease.

Yellowstonetim · Mar 26, 2015

wallrock said:
One element that you're missing is how much spending took place with other venues such as cash or gift cards, so you can't make a legit comparison by comparing credit card spending between yesterday and today and say that spending is up. Little Sally Guest 'spent' money with a gift card last year but this year mom and dad decide instead to transfer that dollar amount over to the magic band. By that scenario I can declare that magic bands have attributed to more spending when in reality you're just moving the peas around on the plate.

Ease of use doesn't always translate to an increase. Sometimes it means taking the same as last year and consolidating to take advantage of that ease.

Are you kidding!? You really honestly think ease of use doesn't get people to spend more!? You couldn't be more wrong. People don't spend totally logically and according to plan at theme parks. Make it easy when they are having fun and distracted and the will spend more. I do it. Many I've talked to and many on here talk about how easy it is to spend more than intended when you are having fun and it is so easy.

I give up. It simply cannot be true because Disney said it. No matter how obvious, logical, and statistically supportable. Colored glasses all around.

DDLand · Mar 26, 2015

wallrock said:
One element that you're missing is how much spending took place with other venues such as cash or gift cards, so you can't make a legit comparison by comparing credit card spending between yesterday and today and say that spending is up. Little Sally Guest 'spent' money with a gift card last year but this year mom and dad decide instead to transfer that dollar amount over to the magic band. By that scenario I can declare that magic bands have attributed to more spending when in reality you're just moving the peas around on the plate.

Ease of use doesn't always translate to an increase. Sometimes it means taking the same as last year and consolidating to take advantage of that ease.

Come now Wallrock, it's easy to crunch those numbers by looking at frequency of gift card spending. If Gift Cards plummeted then you can assume that it was canablized. The best comparison would be looking at Key To the World Usage and Magic Band usage year over year to determine the trend.

Ease of use doesn't immediately translate to increased usage. Just the majority of the time.

Disney's $1 billion dollar bet on magical wristband - Wired

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