Are Disney prices too high?

[flicx]

MyMagic+ is like an iceberg.

If it is an iceberg then all the new rides that could have been built are the titanic!

 

[GreatLakes]

Regardless in the realm of guest experience it was still a useless program. Even if you want to go to the extreme of 300 million for an E ticket attraction that's still nearly 7 new major attractions that could have been built. You could manage crowds a lot better by distributing those among the parks than implementing a ride rationing system and a way to sell ride photos. Their ability to track my spending (whether I link a credit card or not) and ride preferences means even less than whether or not Scuttle talks or they can magically find me at BOG.

There is nothing in that project that from a guest/consumer perspective that is even worth 10% of the cost.

I don't look at the project as a guest or from the guests side, I look at it as a project manager and business analyst and from the project and data side. It is a really exciting project that is gathering a lot of data to improve customer monetization and the kind of project I would love to work on.

E-ticket rides aren't going to build the data warehouse or decision engine that MyMagic+ was built to provide. It is a project built for internal clients, not for guests. Guest facing facets of it like MDs, FP+, and MDE are just there to provide the data for the core of the system.

Anyway, I made that post to point out two misconceptions that seems very common here and elsewhere:

One, that MYMagic+ and MDE/MBs/FP+ are the same thing when they aren't. The later is a small subset of the former.

Two, that the main goal of MyMagic+ is to implement FP+ when it wasn't. I would place a wager on the fact that FP+ wasn't even a part of the first round of project meetings or in the original BRDs but that is really only a speculation I have. I think it was added to the project after the initial round of requirements gathering.

 

[3DisneyFanz]

I don't look at the project as a guest or from the guests side, I look at it as a project manager and business analyst and from the project and data side. It is a really exciting project that is gathering a lot of data to improve customer monetization and the kind of project I would love to work on.

E-ticket rides aren't going to build the data warehouse or decision engine that MyMagic+ was built to provide. It is a project built for internal clients, not for guests. Guest facing facets of it like MDs, FP+, and MDE are just there to provide the data for the core of the system.

Anyway, I made that post to point out two misconceptions that seems very common here and elsewhere:

One, that MYMagic+ and MDE/MBs/FP+ are the same thing when they aren't. The later is a small subset of the former.

Two, that the main goal of MyMagic+ is to implement FP+ when it wasn't. I would place a wager on the fact that FP+ wasn't even a part of the first round of project meetings or in the original BRDs but that is really only a speculation I have. I think it was added to the project after the initial round of requirements gathering.

If you remove FP+ from the equation you have 3 data points they can collect now that they couldn't before and that's how long I'm in the parks, where I go when I'm in the parks and how much I spend in there since I don't link a credit card. Even the last two items can already be extracted but not on an individual basis. So essentially they put in a system to say Mr Smith spends $100 rather than an average guest spends $100. I get that there are ways to monetize that but the initial investment and ongoing maintenance makes it cost prohibitive.

 

[JimmyV]

Disney has always been high,

Prices in 1972.

$5 for admission and 8 attractions, and $0.50 to park. And back then...

Average Cost of new house $27,550.00. That current cost is now 10x that amount.
Average Income per year $11,800.00. That number has grown 5x.
Cost of a gallon of Gas 55 cents. This number has also grown around 5x.

 

[GreatLakes]

If you remove FP+ from the equation you have 3 data points they can collect now that they couldn't before and that's how long I'm in the parks, where I go when I'm in the parks and how much I spend in there since I don't link a credit card. Even the last two items can already be extracted but not on an individual basis. So essentially they put in a system to say Mr Smith spends $100 rather than an average guest spends $100. I get that there are ways to monetize that but the initial investment and ongoing maintenance makes it cost prohibitive.

There is a lot more you can do with the data collected by this system both individually and, more important, in aggregate. Knowing that Mr. Smith spends $100 is nice and all but using Mr. Smith's behavior to forecast how you can better monetize him is what the this system's goal should be.

Once you have collected enough data you can use that data to forecast both how an individual will act in the parks and how groups on aggregate will act in the parks. As an example, you can predict under what circumstances a particular set of customers will enter a standby line or skip it and use that information to better forecast staffing or, better yet, dynamically staff based on need so you don't pay 15 people when the forecast shows 13 are enough for the next hour and those other two people could be better used in a different capacity.

I believe you will eventually see promotions tailored for individuals such as seeing that guest x attempted to secure a FP for Anna and Elsa along with an ADR at BOG for their Nov 5th through 8th trip without any success but you could offer a guaranteed FP and ADR to those places on Nov 9th if they want to extend their trip.

They could use the data to better route buses which has the potential of reducing that operating cost. You have a bus on the way to stop x that is scheduled to then go to Epcot and 5 minutes behind it there is a bus for AK. You ping the MBs in the stop and based on the reservations they have you determine that of the 15 people there 10 are going to MK and 3 are going to DHS so you change the bus destinations in real time.

The things a company can do with a large data warehouse when it comes to forecasting and monetization can generate a very large amount of revenue if it is used correctly. I think we have yet to see the potential of MyMagic+ because they are still building the data warehouse and figuring out how to best use it.

Big data is very exciting if used correctly.

 

[DLgal]

Prices in 1972.

$5 for admission and 8 attractions, and $0.50 to park. And back then...

Average Cost of new house $27,550.00. That current cost is now 10x that amount.
Average Income per year $11,800.00. That number has grown 5x.
Cost of a gallon of Gas 55 cents. This number has also grown around 5x.

My rebuttal to that would be in 1972, the cost of one ticket and parking was approximately 0.0005% of the average annual income. In today's numbers, one day at the Magic Kingdom and parking as a percentage of the average income (using your example of a 5x increase) is 0.0020%. So, a 4x increase. That is less of an increase than all your other examples.

 

[flicx]

Prices in 1972.

$5 for admission and 8 attractions, and $0.50 to park. And back then...

Average Cost of new house $27,550.00. That current cost is now 10x that amount.
Average Income per year $11,800.00. That number has grown 5x.
Cost of a gallon of Gas 55 cents. This number has also grown around 5x.

I think a decade by decade comparison may show even a greater inequity!

 

[GreatLakes]

Prices in 1972.

$5 for admission and 8 attractions, and $0.50 to park. And back then...

Average Cost of new house $27,550.00. That current cost is now 10x that amount.
Average Income per year $11,800.00. That number has grown 5x.
Cost of a gallon of Gas 55 cents. This number has also grown around 5x.

I don't think anyone can say with a straight face that Disney isn't more expensive compared to income now then 1972. I think Disney is just a much different company with different goals then they were at the time.

I think a lot of people forget how bad the financial situation of the company was in the late 1970's and early 1980's before Eisner took over. Disney was so fixated on keeping prices low that they almost got the company taken over and split up. It was not very well run and almost ceased to exist because of it. Love or hate Eisner he saved the company from being taken over, stripped down, and sold for parts.

Disney is a luxury brand now when it comes to vacations, at least when talking about staying onsite at WDW. That wasn't always the case but it also wasn't always the case that Disney could splash out $10 billion dollars (even when adjusted to a 1970's era equivalent) on one project and two acquisitions either.

The Disney of Walt's era is gone and isn't coming back. I always see the "what would Walt think" meme on the Disboards and other places but, quite frankly, Walt would have been booted from his own company if he tried to run it the way he did while he was alive. The way founders ran companies and the way management runs them when they are a Fortune 100 company is very different. There were times when a single movie failure threatened the well being of the company, that is no longer the case.

 

[JimmyV]

My rebuttal to that would be in 1972, the cost of one ticket and parking was approximately 0.0005% of the average annual income. In today's numbers, one day at the Magic Kingdom and parking as a percentage of the average income (using your example of a 5x increase) is 0.0020%. So, a 4x increase. That is less of an increase than all your other examples.

My rebuttal to your rebuttal is that when you are talking about things that are such a small percentage of household income, how many zeros that appear to the right of the decimal point becomes largely irrelevant. The better way to look at it is, what was the cost of going to WDW as compared to similarly priced luxuries (or necessities). In 1972, a fill-up of gas cost about $12. (22 gallon tank in a gas guzzling Chrysler Imperial). And a family of 4 (two adults and two children) could park and go to WDW for ((2 x $5) + (2 x $3.75) + ($0.50)) = $18. The cost of these two is fairly close. Today, a tank of gas (16 gallons at $2.50 per gallon) costs $40. And a family of 4 going to WDW for a day, (using the pro-rated daily cost of 5 day park hoppers plus one day of parking) is $262.60. One can no longer say: "For the price of a tank of gas, we can go to WDW today." This is a much more relevant analysis than percentage of income. Of course, today, the guest gets much more than 8 attractions for the day. But still. Whereas the cost of a day at WDW used to compare to a tank of gas, now it compares to something in a whole other strata. Look what happens when we extrapolate and add in a hotel:

Then:
Two night stay at Contemporary = (2 x $48) = $96.
Two days at the MK (using figures above) = $35. (I deleted the parking because the example assumes an on-site guest).
Total without food is $131. Or around 10 tanks of gas.

Now:
Two night stay at Contemporary = (2 x $375 (being generous here. It could easily be $550+) = $750.
Two days at the MK (using figures above) = $490.40. (I deleted the parking because the example assumes an on-site guest).
Total without food is $1,240.40. Or around 31 tanks of gas.

That's a pretty big difference.

 

[JimmyV]

I don't think anyone can say with a straight face that Disney isn't more expensive compared to income now then 1972.

To be fair, the post I was responding to said that Disney has always been expensive. Truth is, in 1972, one could pop in for a visit without giving it a second thought.

 

[jodifla]

I grew up about 70 minutes from Disney, and we routinely went with Girl Scouts and school trips. I remember for about $20 I could get tickets and food and even souvenirs. I wonder if that is group trips are really doable today with the way the prices are.

 

[Happy_2_B]

en:
Two night stay at Contemporary = (2 x $48) = $96.
Two days at the MK (using figures above) = $35. (I deleted the parking because the example assumes an on-site guest).
Total without food is $131. Or around 10 tanks of gas.

Now:
Two night stay at Contemporary = (2 x $375 (being generous here. It could easily be $550+) = $750.
Two days at the MK (using figures above) = $490.40. (I deleted the parking because the example assumes an on-site guest).
Total without food is $1,240.40. Or around 31 tanks of gas.

That's a pretty big difference.

I agree that Disney is more expensive now than then- those first couple of early years it was downright cheap. What you are not factoring into these equations is that back then most of the super headliners didn't exist- and today you not only get a vacation at the MK- but also at EP, DHS, AK- plus DD, BW, ESPN, etc. You have golf courses, water parks, mini golf, lots more themed options for staying on site, a plethora of additional dining options- and the list goes on and on. In short, there is more value in a WDW vacation now than then. Yes, we actually drove from PA to FL in the early 70s just to see the MK- now the money you spend to get there delivers a lot more value. So there is a lot more to the equation than just MK then vs. MK now.

 

[JimmyV]

What you are not factoring into these equations is that back then most of the super headliners didn't exist- and today you not only get a vacation at the MK- but also at EP, DHS, AK- plus DD, BW, ESPN, etc. You have golf courses, water parks, mini golf, lots more themed options for staying on site, a plethora of additional dining options- and the list goes on and on.

That's only partially true. It is of course true when talking about the other parks. But when the ticket books were in use and admission was very cheap, you had Pirates, Haunted Mansion, Space Mountain, Jungle Cruise, and all the FL dark rides. Plus two (and later 3) golf courses. And River Country and boating. Truth be told, we did a lot more golfing and boating back in those days (because there was only one amusement park). There may be more golf courses now (just barely), but they get used a lot less. And I think, if I am not mistaken, that the tennis center (which was a big selling point in the 1970s) was leveled to make room for BLT. There are way more amusement parks and rides now. But in all honesty, WDW was much more of a diverse vacation destination back then. When was the last time you actually played tennis or golf or rented a boat or went horseback riding at WDW. (And by "you", I don't specifically mean "you", but the typical guest). We used to do all of those things back then because you didn't want or need to spend 16 hours a day at the MK. Golf, tennis, swimming and boating were absolute daily activities then. Now? Maybe people find one (or a half) non-park day out of a week to do that stuff. WDW has morphed from a "Vacation Destination" to a "Theme Park Destination". That can be viewed as either positive or not. But either way, it is very different.

 

[bryanb]

But that oversimplifies things because you have not defined what the market is. If Disney used to sell Turkey Legs to 5,000 people at $6 a pop, and now sells them to 3,158 people at $9.50 a pop, it receives the same revenue. But can it be said that this is "what the market will bear"? It priced 1,842 people out of the market. Looking at this in the extreme, suppose it decided to sell only one Turkey Leg per day, and this created a mad fervor to be the one person to buy that leg, and Disney raised the price to $30,000 for that one leg, and each day, it sold that one leg. It would be generating the same revenue as when it sold 5,000 at $6 each. But is this "what the market can bear" if virtually every prior customer stopped buying the product? Sometimes "what the market can bear" means generating a similar or greater revenue stream than before. But sometimes "what the market can bear" means the price at which all of the current customers remain current customers. Frankly, I don't think $9.50 is what the market can bear for Turkey Legs. I am sure that they are selling far fewer of them than ever before. I know that my family is off that bandwagon, or cart, as the case may be.

One of my jobs is consumer pricing analysis (not for Disney), but I feel confident that Disney hires smart people who spend their entire day with spreadsheets and historical info and meetings, passionately determining the most profitable pricing models.

I am sure that analysts are always looking at the optimum price points (vs. cost of goods and demand), testing new price points, and that ultimately their numbers are continuously challenged and adjusted by teams of smart people who think about this much more than we do.

Pricing doesn't happen by accident. Someone is preparing daily reports of what has sold and the cost of goods, including labor. If the price of turkey legs caused turkey leg profits to fall, someone is looking at that report at their desk and calling a meeting to discuss it.

 

[Happy_2_B]

But in all honesty, WDW was much more of a diverse vacation destination back then.

Was there in the summer of '72 and '73, then took some time away from the MK before I lived in Orlando in '78 and '79- which were all pre-EPCOT years. We will have to agree to disagree as to the diversity WDW offered back then. Sure, it was a fun place to visit back then, but it wasn't the destination it is now. Now in the post AK years- the equation is much, much different than comparing A,B,C,D and E tickets to the current MYW tickets. I have been there many times over the decades- and recent trips don't include full-day park touring anymore- three or four hours in a park is plenty. It's more about chillin' at club level, relaxing at the pools, eating TS meals at the wide variety of restaurants in the parks, resorts, at DD, the BW and occasionally offsite- and basically enjoying the diversity of everything else that the resort and Kissimmee as a whole has to offer. You really have to factor what Kissimmee offers into your equation as well, because back then it was all basically farmland. For some it may be a 'Theme Park Destination', but I think there are many long timers that view a trip to WDW very differently.

 

[minnie-apple-mouse]

Was there in the fall of '71, the summer of '72 and '73, then took some time away from the MK before I lived in Orlando in '78 and '79- which were all pre-EPCOT years. We will have to agree to disagree as to the diversity WDW offered back then. Sure, it was a fun place to visit back then, but it wasn't the destination it is now. Now in the post AK years, the equation is much, much different than comparing A,B,C,D and E tickets to the current MYW tickets. I have been there many times over the decades- and recent trips don't include full-day park touring anymore. It's more about chillin' at club level, relaxing at the pools, eating TS meals at the wide variety of restaurants both in the parks, at DD, the BW and occasionally offsite- and basically enjoying the diversity of everything else that the resort and Kissimmee as a whole has to offer. You really have to factor all that Kissimmee has to offer into your equation as well, because back then it was all basically farmland. For some it may be a 'Theme Park Destination', but I think there are many long timers that view a trip to WDW very differently.

Yea if they removed everything added/built since 1972-we wouldn't even go for $5.

 

[flicx]

Yea if they removed everything added/built since 1972-we wouldn't even go for $5.

Interesting? Seems these attractions were all completed in 1972. Carrousel of progress, country bears, diamond horseshoe revue, dumbo, shooting gallery, hall of presidents, haunted mansion, small world, jungle cruise, mad tea party, keel boats, Mr. Toads wild ride, skyway buckets, snow whites adventures, swiss family tree house, tropical serenade(tiki room?), raceway, peter pan, flight to the moon, America the beautiful, 20,000 leagues, if you had wings. In 73 pirates of the carribbean, tom sawyer island opened and in 75 space mountain. Seems like a very large portion of the park that is there today, with some attractions replaced that many wish still existed! Any way I'll give them 10 bucks!

 

[usd2bmd]

Examples:

Bottled water $3.26
Turkey leg $9.25
Dessert Party $50.00
Hotdogs $8.50
BOMA dinner $45.00 plus
1 day ticket $100 plus
Dining Plan $70.00 plus
Lunch and dinner menus the same price
Refillable mugs $18.00 only 4 refills in 90 minutes lol
Alcoholic beverages $10 $15 plus
Resort pricing exorbitant
souvenirs exorbitant

I think Disney needs to reevaluate their pricing strategy.

It also seems like the quality has gone down too. Anyway these are just a few things. What are your thoughts?

Brunette

Unfortunately for all of the people that can't or won't pay those prices, there are plenty of people who can and will. So until attendance plummets and the resorts sit empty, they aren't going to change anything about the prices except to maybe increase them again.

 

[DisneyPrince1982]

MyMagic+ is like an iceberg. The public will see a very small portion of it while the vast majority of it's capability will be seen by the people looking at the data behind the scenes.

I could care less what Disney is getting from their back end. It's meaningless to me. And the front end isn't much better. As far as I'm concerned, it was a waste of money and I'd rather have 5 to 6 more headline attractions in Disney World and legacy FP, than this junk that is called "MyMagic+."

 

[3DisneyFanz]

There is a lot more you can do with the data collected by this system both individually and, more important, in aggregate. Knowing that Mr. Smith spends $100 is nice and all but using Mr. Smith's behavior to forecast how you can better monetize him is what the this system's goal should be.

Once you have collected enough data you can use that data to forecast both how an individual will act in the parks and how groups on aggregate will act in the parks. As an example, you can predict under what circumstances a particular set of customers will enter a standby line or skip it and use that information to better forecast staffing or, better yet, dynamically staff based on need so you don't pay 15 people when the forecast shows 13 are enough for the next hour and those other two people could be better used in a different capacity.

I believe you will eventually see promotions tailored for individuals such as seeing that guest x attempted to secure a FP for Anna and Elsa along with an ADR at BOG for their Nov 5th through 8th trip without any success but you could offer a guaranteed FP and ADR to those places on Nov 9th if they want to extend their trip.

They could use the data to better route buses which has the potential of reducing that operating cost. You have a bus on the way to stop x that is scheduled to then go to Epcot and 5 minutes behind it there is a bus for AK. You ping the MBs in the stop and based on the reservations they have you determine that of the 15 people there 10 are going to MK and 3 are going to DHS so you change the bus destinations in real time.

The things a company can do with a large data warehouse when it comes to forecasting and monetization can generate a very large amount of revenue if it is used correctly. I think we have yet to see the potential of MyMagic+ because they are still building the data warehouse and figuring out how to best use it.

Big data is very exciting if used correctly.

With the exception of tying walking patterns and cash transactions to Mr Smith most of what you mentioned they could have done with existing systems.

As for the bus analogy I would love to here then explain to someone that they can't get to their ADR at AK because they are the only two waiting. They can barely keep them running on time just doing set routes. Since Disney can barely keep their web site functioning do you really want to depend on Disney's IT to get you a bus?