DCL/Disney Business model change setup for long term failure?

[Dug720]

Do you have a point though where you would say no? We valued them for years until it no longer was a good value for us. Still a good product though.

To be honest I would drop to cruising every other year before I would give it up. I am pretty sure I like it better than the parks TBH right now. August is going to be my "park test".

And while I don't mind Radiance Class on RCCL, I don't see myself being happy with RCCL every year because I DO get bored at night on them because I don't like the quality of the performers (talking ship cast) or entertainment in general. I have pondered Celebrity, but that is as much if not more than Disney.

NCL and Carnival - which are generally purported to be cheaper - do not appeal to me as I do not cruise for bells and whistles.

 

[Dug720]

That is why I pointed to a specific crowd. Not you.

Who on this thread has said they do it JUST because they can?

 

[KalamityJane]

We are a "large" family. 2A, 3K, we generally will get 2 inside rooms. If we continue cruising, we will likely spread out to NCL and Carnival's new ships, but stay with DCL for their value cruises (like the TAs and to a lesser extent, the PC).

That being said, I can do the parks for much cheaper. We do stay deluxe but go in low periods and don't do many ADRs. I have family in Orlando so I can kill 2 birds with one stone by visiting Disney/family.

We also do a lot of other types of vacations (camping, snowshoeing/yurts, etc) that are on the cheaper side, so I feel it is a good balance.

 

[Lisa F]

I think some would and some may find other options they like better for different reasons and wouldn't come back. I had a discussion a year or two ago on these boards with a successful resteraunt owner on what would happen if they would raise there prices above the competition. The end point was that if the prices were lowered back down, some would come back but not all, how many is a great question.

For us and DCL, after one cruise on RCCL we would probably come back, but say six years down the road we may decide that

I think a restaurant is a totally different model than a cruise line because it is something that people consume on a regular basis and it is something that has pricing tiers where if to costs a certain amount, it is a completely different market, and it is something where there is a TON more competition. If a restaurant owner raised their prices above the competition without having something to offer for it, just for the sake of raising prices, then of course people would stop going if they decide that they are no longer paying $50 for a burger that was $15 last week. But if that restaurant raised their prices to $50 and it was a genuine kobe burger, you have just completely changed your target market entirely. There are a pair of local restaurants where I live ... one is casual style with a kid menu and they are still on the pricey side but I tend to go in the off season when they do 30% off entrees and even with generous tip on pre-discounted price, I get out of there for $34 for for two of us... something I'm willing to do for a delicious meal. Their other restaurant is one that the Obamas go to every year on their vacation. I have never been there... it is out of my price range/league and I am not the target audience.

But outside of going to super high end ingredients, the calculus that people make is totally different. I mean, a burger is a burger. There is one local place that makes amazing burgers I think are $11 or $12 and has them for $4 on sundays in the off season. So if I'm gonna eat a burger, I'm going to choose that. Or the bowling alley that has them for $6 on fridays. There is not enough difference between burgers for me to pay twice as much elsewhere. And there is SO much competition, I can get burgers at 90% of the restaurants in my price range on the island.

A cruise line is different. People have a very very emotional attachment to disney, through their films, through the parks, through their legacy (how many people have memories of going on RCCL 30 years ago when they were kids? not many I'd guess. Cruising was not really a "family" thing when I was a kid... I mean, I watched the love boat and I know people did go on cruises but it always seemed to be couples and older people and something completely exotic. It was not something that felt accessible to me or anyone I knew.) But Disney has something no other line can have... Disney. The characters, the shows, the theming (which they do better than anyone else). If someone came out with a well done floating hogwarts I'm sure people would be flocking to that, and paying a premium to do it. I think Harry Potter World or whatever it is called gave USO a HUGE shot in the arm for a park that was kind of flagging.

As with the parks, cruise lines are not a dime a dozen like a restaurant is. There are only a few really and they all are pretty different from one another. They are huge luxury expenditures for many people. Most people will take the time to save for what they want if it won't take forever rather than still pay a lot and save for something that they don't want. That said, there are only a few lines that can compete and with a few of their newer ships if you want a cruise like a disney cruise. If you want an adult cruise, there are many more options... but that is not Disney's direct competition. People spend a lot more time thinking about their next vacation than they do about their next burger. You can get if disney released a special and you could cruise for $2k in an inside cabin people would not be on autopilot with RCCL... they'd be looking hard at disney again even if they weren't willing to pay $5k for the same thing a couple of years before.

 

[Flossbolna]

It could if you lose your brand loyalty. Disney has been the best example of how to hook a family and keep them for generations. My thought is this new pricing structure could break that cycle. The rest of the original post talked about that. Not sure what will happen though.

I firmly believe that Disney no longer is in the business of trying to get repeat guests. Instead they believe that there are always new families coming around who will want to do a WDW or DCL vacation as a one time vacation where they go all out because it is kind of that thing every family has to do once.

 

[mevelandry]

Who on this thread has said they do it JUST because they can?

I'm not talking about people on this thread/DISboards. I'm saying that there are people in this world seeking expensive places because they prefer to be with people of "their kind" (rich people).

 

[cmph]

I recall when I was a kid WDW was a 'once in a lifetime' trip if you were very lucky. Now folks go every year. A cruise the same thing. People saved for years to go on a cruise. I was just wondering if our expectations changed somehwhere and now we are adjusting to we might have to cruise every 3-5 years not every year. We are cruising less now because we still want DCL. But that's ok. I did suddenly thought to myself when was it I got use to doing it most years! That is just my personal view.

Paula - this really is such a spot-on observation that absolutely applies to my family! Over the course of my childhood (which I'll define as birth through senior year of high school), we took 3 trips to WDW, 2 (not DCL) cruises, and 2 out-of-state (but driving distance and not Disney-priced) week-long summer vacations. Every other summer vacation we took would have been to an in-state destination. We certainly didn't do a "big" trip annually! I don't know anyone who went to WDW every year, or even every other year, although maybe if I had grown up in FL or the deep south, that would have been different. And Disney did just fine throughout those years. So it is really Disney's business model that is the issue, or our own expectations of what we should be able to do? We LOVE to travel, period, but this is an excellent reminder that I need to dial it back. Take some long weekend road trips, focus on local options, remember that the big stuff doesn't have to happen annually, Disney or otherwise.

 

[Paula Sedley-Burke]

Paula - this really is such a spot-on observation that absolutely applies to my family! Over the course of my childhood (which I'll define as birth through senior year of high school), we took 3 trips to WDW, 2 (not DCL) cruises, and 2 out-of-state (but driving distance and not Disney-priced) week-long summer vacations. Every other summer vacation we took would have been to an in-state destination. We certainly didn't do a "big" trip annually! I don't know anyone who went to WDW every year, or even every other year, although maybe if I had grown up in FL or the deep south, that would have been different. And Disney did just fine throughout those years. So it is really Disney's business model that is the issue, or our own expectations of what we should be able to do? We LOVE to travel, period, but this is an excellent reminder that I need to dial it back. Take some long weekend road trips, focus on local options, remember that the big stuff doesn't have to happen annually, Disney or otherwise.

Thank you for your reply. we come from the UK so imagine adding 2k flights to it! Car rental. Exchange rate. We bought DVC 8 years ago to come every other year. We had to pinch ourselves. Disney world every other year staying on resort at Villa Deluxe level ? What! I couldn't believe my luck. On our first 'once in a lifetime' visit we stayed offworld, ate in burger king and Denny's. Eating in a table service Disney restaurant a pipe dream. But We had the time of our lives!

Now I find myself tutting if I don't get BOG dinner on the night I want...

Weekend trips are nice. We forget what is around us sometimes! We went to London for the weekend it's only 30 mins but we never visit. It was great!

 

[bbel]

I firmly believe that Disney no longer is in the business of trying to get repeat guests. Instead they believe that there are always new families coming around who will want to do a WDW or DCL vacation as a one time vacation where they go all out because it is kind of that thing every family has to do once.

This is so true. From working for DCL for 3 years, it was becoming more obvious to us, especially in the last year. But at the same time, they're a business so its what they're going to do.
My first couple of years there were many repeat cruisers, the majority from North America. Near my end, there were a lot more first timers, from countries and cultures where things like (DCL) cruises were pretty in-accessible until recently. Especially in Europe we came across more and more families where money is nothing: They don't just book a suit for them, each nanny has a room too, their kids go to BBB every morning and have the most expensive package, they buy everything in the stores, they pay for private parities with the characters that cost more than the average persons cruise itself.
Me and a fellow ex-cm were talking about this just the other day, they pointed out that while the rewards for repeat cruisers aren't great, they haven't stopped so many people reaching those levels, and those perks 'cost' the company money. You hike up the prices, and yes you price out whole chunks of previous guests, but you're potentially going to be left with first timers (who are going to spend money on Palo, Remy, Cove, BBB, the stores....because they haven't done it before), the people who are just going to spend the money anyway, and those that have saved up that they're going to try and do it all because they don't know if/when it will happen again.
While the ships are still sailing full, unfortunately its going to happen because they're there to make as much money as possible. At the end of the day, I think Disney know what they're doing, even DLP is celebrating 25 years this year, and thats been 'struggling' forever...

 

[PAGA2003]

Paula - this really is such a spot-on observation that absolutely applies to my family! Over the course of my childhood (which I'll define as birth through senior year of high school), we took 3 trips to WDW, 2 (not DCL) cruises, and 2 out-of-state (but driving distance and not Disney-priced) week-long summer vacations. Every other summer vacation we took would have been to an in-state destination. We certainly didn't do a "big" trip annually! I don't know anyone who went to WDW every year, or even every other year, although maybe if I had grown up in FL or the deep south, that would have been different. And Disney did just fine throughout those years. So it is really Disney's business model that is the issue, or our own expectations of what we should be able to do? We LOVE to travel, period, but this is an excellent reminder that I need to dial it back. Take some long weekend road trips, focus on local options, remember that the big stuff doesn't have to happen annually, Disney or otherwise.

I understand where y'all are coming from to an extent. There are definitely people that feel entitled to luxuries such as vacations but I think the problem does lie with Disney in that it can be argued they are purposely excluding 90% of American households from their target demographic though of course it is their prerogative to do so. I found the article I read a while ago from the Washington Post (link) that discusses this topic and it really is an interesting read.

 

[cgolf]

I think a restaurant is a totally different model than a cruise line because it is something that people consume on a regular basis and it is something that has pricing tiers where if to costs a certain amount, it is a completely different market, and it is something where there is a TON more competition. If a restaurant owner raised their prices above the competition without having something to offer for it, just for the sake of raising prices, then of course people would stop going if they decide that they are no longer paying $50 for a burger that was $15 last week. But if that restaurant raised their prices to $50 and it was a genuine kobe burger, you have just completely changed your target market entirely. There are a pair of local restaurants where I live ... one is casual style with a kid menu and they are still on the pricey side but I tend to go in the off season when they do 30% off entrees and even with generous tip on pre-discounted price, I get out of there for $34 for for two of us... something I'm willing to do for a delicious meal. Their other restaurant is one that the Obamas go to every year on their vacation. I have never been there... it is out of my price range/league and I am not the target audience.

But outside of going to super high end ingredients, the calculus that people make is totally different. I mean, a burger is a burger. There is one local place that makes amazing burgers I think are $11 or $12 and has them for $4 on sundays in the off season. So if I'm gonna eat a burger, I'm going to choose that. Or the bowling alley that has them for $6 on fridays. There is not enough difference between burgers for me to pay twice as much elsewhere. And there is SO much competition, I can get burgers at 90% of the restaurants in my price range on the island.

A cruise line is different. People have a very very emotional attachment to disney, through their films, through the parks, through their legacy (how many people have memories of going on RCCL 30 years ago when they were kids? not many I'd guess. Cruising was not really a "family" thing when I was a kid... I mean, I watched the love boat and I know people did go on cruises but it always seemed to be couples and older people and something completely exotic. It was not something that felt accessible to me or anyone I knew.) But Disney has something no other line can have... Disney. The characters, the shows, the theming (which they do better than anyone else). If someone came out with a well done floating hogwarts I'm sure people would be flocking to that, and paying a premium to do it. I think Harry Potter World or whatever it is called gave USO a HUGE shot in the arm for a park that was kind of flagging.

As with the parks, cruise lines are not a dime a dozen like a restaurant is. There are only a few really and they all are pretty different from one another. They are huge luxury expenditures for many people. Most people will take the time to save for what they want if it won't take forever rather than still pay a lot and save for something that they don't want. That said, there are only a few lines that can compete and with a few of their newer ships if you want a cruise like a disney cruise. If you want an adult cruise, there are many more options... but that is not Disney's direct competition. People spend a lot more time thinking about their next vacation than they do about their next burger. You can get if disney released a special and you could cruise for $2k in an inside cabin people would not be on autopilot with RCCL... they'd be looking hard at disney again even if they weren't willing to pay $5k for the same thing a couple of years before.

There definately are people that have that emotional attachment to Disney and there are a lot of people like us that don't. We will never forget our DCL Hawaii cruise, but that was because of Hawaii not DCL, just as I won't forget my first RCCL cruise because we finally went by the airport on St Martin.

When my wife and I were discussing this over lunch, her take was that some/many would find new traditions to replace Disney with. I don't have a crystal ball, so I will watch and see what happens.

Mc Donald's was used as an example, because it like Disney was a company that know one would have thought would make choices that wouldn't see them anything less than highly successful.

 

[sixbitslocum]

To paraphrase Yogi Berra... nobody goes to Disney anymore, it's too crowded.

Actually, I don't think Disney is worried about losing future generations as the OP hypothesized. I think they have the opposite problem. They continue to add more ships and expand the parks and resorts yet still even after raising prices, there is no real "off season" anymore. To ensure a pleasant experience in the parks, they need to expand capacity and reduce demand (through higher prices). I think they are doing both.

 

[ScottFamily2005]

We just returned from Disneyland (grew up in California, now live in Texas). We go every year for Soring break. It now costs $100 per day to enter the park.

The park was packed. Locals, out of towners, jam crammed full of people. Didn't strike me as first time visitors. And there were large families, and people from all socioeconomic backgrounds.

I think Disney offers a quality experience you don't get anywhere else - both in the parks and on their ships.

We are taking our third Disney cruise in five years this June.

While each of us has to make our own decision if it's "worth it" for our families, Disney's business is booming. Whatever the strategy behind their business model, it's working.

 

[cgolf]

I understand where y'all are coming from to an extent. There are definitely people that feel entitled to luxuries such as vacations but I think the problem does lie with Disney in that it can be argued they are purposely excluding 90% of American households from their target demographic though of course it is their prerogative to do so. I found the article I read a while ago from the Washington Post (link) that discusses this topic and it really is an interesting read.

I think that had DCL in particular raised their prices above other lines at a slower pace, many of us wouldn't have any issue with it. Our 2016 cruises on DCL were competitively priced with other lines. When we priced out 2017 options DCL had jumped so far above the other lines that as I said before all of our costs for our 8 night RCCL trip were less than just getting on the 7 night Fantasy.

While yes people will pay it, going from competitive one year to well above the next causes some sticker shock, and like they are just trying to see how much people will really pay. Had they spread the increases out over five years, I bet we wouldn't have seen as many pricing threads on the boards here.

 

[LAX]

I know I am at risk for major flaming for writing this, but I really don't understand why some people feel Disney needs to price its offerings (ie: WDW/DL vacations, cruises, etc.) so that 90% of US population can afford it? Back when I was a kid, I didn't go on any Disney vacation because my parents couldn't afford one. Should my parents have complained that it wasn't affordable? While I am not in Disney's target demographics (supposedly top 10% of US incomes or something like that), I can now comfortably afford at least an annual WDW/DL vacation or DCL cruise for my family if I want to (but, I don't). My point is a Disney vacation/cruise should not be perceived as something that needs to be accessible to everyone. There are definitely other "luxuries" that price out 90% (or perhaps even 99%) of the US population (ie: private jets), and should those that can't afford them be complaining to those businesses as well?

LAX

 

[Dug720]

I know I am at risk for major flaming for writing this, but I really don't understand why some people feel Disney needs to price its offerings (ie: WDW/DL vacations, cruises, etc.) so that 90% of US population can afford it? Back when I was a kid, I didn't go on any Disney vacation because my parents couldn't afford one. Should my parents have complained that it wasn't affordable? While I am not in Disney's target demographics (supposedly top 10% of US incomes or something like that), I can now comfortably afford at least an annual WDW/DL vacation or DCL cruise for my family if I want to (but, I don't). My point is a Disney vacation/cruise should not be perceived as something that needs to be accessible to everyone. There are definitely other "luxuries" that price out 90% (or perhaps even 99%) of the US population (ie: private jets), and should those that can't afford them be complaining to those businesses as well?

LAX

WELL SAID!!!!

A couple of years ago when talking with my para about Disney (during Open School day when I had no more parents scheduled until the evening - the others had all already come), she started complaining about the cost. I finally said "Well, you know the Declaration of Independence does NOT say we are entitled to "Life, Liberty, the Pursuit of Happiness, and a trip to Disney World".

Like all vacations, it is a privilege, not a right. And if it is important enough for a person or family, they WILL find a way to make it happen.

 

[Club Disney Chandler]

I believe Disney will remain strong as long as the majority of Americans continue to "Keep up with the Joneses." Many continue to spiral into debt, (I'm not saying anyone here), on stuff their neighbors have, but don't have the means to truly afford it. Many of our friends drive Tahoes, Escalades, Lexus etc and are leasing them. My wife and I drive Hondas that we paid cash for so we are burdened with debt. But debt is the way of the world now. Just my $.02

 

[kiford]

I think that most new cruisers on average will outspend gold and up cruisers.

We spend very little onboard. Now that we are seasoned travelers and have traveled all over the world I don't need Disney's help exploring ports. We don't buy pictures, I don't shop. We drink, but were not huge drinkers so I agree with this.

I actually disagree. We spend more every time we go because once we've done the usual things, we start to look for new ways to enjoy. In the beginning as a new cruiser we were more conservative with our spending as we didn't know quite what to expect. As we've become more seasoned on DCL and at WDW and know what we like, we now look to expand the repertoire of what we do/eat/see so are willing to shell out for those as we trust Disney to do it well. At the parks we now look to do new experiences such as Wild Africa Trek and Jiko wine and cheese tasting. Every time we go to Victoria & Albert's or Remy's the bill gets larger as we add to what we've already done. Same for many of the excursions and spa treatments we do.

I don't know which is the norm - people spending less on each trip or those like us spending more by looking for new additions to what they've already done. I have to think that some of the reasoning behind offering new upcharge experiences, food, and other items that Disney is offering is due to attracting people who are willing to spend more for new experiences - people who've already "done it" but still want to go to WDW/DCL and are willing to pay more for new adventures to enhance the trip.

Given that revenues have been up over the last few years and capacity isn't, obviously people are spending more. Some of it is due to higher prices, but the rest has to be due to increased spending per person. I can't believe that this is entirely due to new customers all of the time. They still put a fair bit of marketing effort into retaining existing customers - it's always less expensive to retain a customer than to attract new ones. We get PIN codes several times per year for WDW. I don't know whether this is coincidental or targeted to us, but they certainly know what we spend and what we spend it on. They'd be stupid if they didn't target those people who spend more than the usual.

 

[PAGA2003]

WELL SAID!!!!

A couple of years ago when talking with my para about Disney (during Open School day when I had no more parents scheduled until the evening - the others had all already come), she started complaining about the cost. I finally said "Well, you know the Declaration of Independence does NOT say we are entitled to "Life, Liberty, the Pursuit of Happiness, and a trip to Disney World".

Like all vacations, it is a privilege, not a right. And if it is important enough for a person or family, they WILL find a way to make it happen.

I certainly don't think that vacations are a right and I don't think 100% of the population should be the target market but I do think that it should be reasonably accessible to more than 10%. From my understanding the entire intent of Disney was to make a family friendly destination an average middle class family could afford and it has gotten away from that. Obviously everyone is responsible for their own financial decisions but I hate it when I see people talking about scrimping and saving to afford a trip to Disney when I think in many situations they are doing that at the expense of their retirement savings and children's college funds.

 

[PAGA2003]

I believe Disney will remain strong as long as the majority of Americans continue to "Keep up with the Joneses." Many continue to spiral into debt, (I'm not saying anyone here), on stuff their neighbors have, but don't have the means to truly afford it. Many of our friends drive Tahoes, Escalades, Lexus etc and are leasing them. My wife and I drive Hondas that we paid cash for so we are burdened with debt. But debt is the way of the world now. Just my $.02

I agree. Unfortunately, that is so true with our society