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

[Maggie'sMom]

As long as they are filling the ships and parks to a certain % of capacity and making good profits, they will continue to raise their prices. If bookings begin to drop off due to the price increases, then Disney will slow the increases or drop them. But the ships continue to book up and the profit from the parks continues to roll in, Disney has no incentive to change.

 

[PAGA2003]

I have thought what Disney has done with pricing has been quite sad for a long time. I read a Washington Post article (last year I think) that said the way Disney has priced themselves basically targets the top 10% of households (that is somewhere around $160k I believe). So many households can not afford Disney anymore and either can't go or take trips they really shouldn't. I think it is a shame and while Disney is nice for children we've done so many other vacations that cost less including the Dalmatian Coast, Paris and even renting private villas in St. Barth. The fact I can travel to Europe or one of the most expensive islands in the Caribbean for less than a trip to theme park or cruise on DCL is just wrong! We do Disney as inexpensively as possible in the low season because we just can't fathom paying (what we consider to be)the obscene prices they charge in the high season.

 

[CamColt]

Interesting theory. Thanks for sharing!

I'm not a business person so I can't really form an educated opinion here, but from a regular person point of view, I have recently seen a few average/upper middle class families look into DCL and say they just cant pay that kind of money. 1 in particular was looking at 8K for a family of 4 this summer for the cruise alone (no other travel expenses included). They are now going to WDW instead so I guess Disney isn't missing out, but I am seeing how DCL is unattainable for some families.

 

[mevelandry]

The way I see it is that other cruise lines are stepping up their games with reasonable/more affordable pricing while Disney keep raising their price to the point that many families who used to be able to sail with them are getting outpriced.

Also, they only have four ships and Dream/Fantasy are pretty similar and Wonder/Magic are pretty similar. For us, the feeling of "repetition" is already being felt. The new ships are not going to be here for another five and seven years. And the prices for the same "old" ships keep going up.

There will always be a crowd who likes to pay expensive rates just because they can.

And there are people who are more frugal who like having more bang for their buck (value, like beauty, is in the eye of the beholder) that will simply find their happiness somewhere else. My husband is one of them. He's obsessed with Carnival since we sailed with them and doesn't want to sail with DCL after our upcoming DCL cruise. He found value in a more affordable cruise line and he's excited about RCCL and Norwegian and wants to try them.

 

[Dug720]

The way I see it is that other cruise lines are stepping up their games with reasonable/more affordable pricing while Disney keep raising their price to the point that many families who used to be able to sail with them are getting outpriced.

Also, they only have four ships and Dream/Fantasy are pretty similar and Wonder/Magic are pretty similar. For us, the feeling of "repetition" is already being felt. The new ships are not going to be here for another five and seven years. And the prices for the same "old" ships keep going up.

There will always be a crowd who likes to pay expensive rates just because they can.

And there are people who are more frugal who like having more bang for their buck (value, like beauty, is in the eye of the beholder) that will simply find their happiness somewhere else. My husband is one of them. He's obsessed with Carnival since we sailed with them and doesn't want to sail with DCL after our upcoming DCL cruise. He found value in a more affordable cruise line and he's excited about RCCL and Norwegian and wants to try them.

MANY of us who have said we prefer Disney have said we pay Disney rates because of the VALUE to us. I've not seen anyone saying "I pay for Disney just because I can." It's because we would rather spend one money on something we value - the overall Disney experience.

You are ok with "just" going on a cruise. That's cool. You do you.

 

[mevelandry]

Isn't it expensive to do anything with a "large middle class family"? I would imagine things get dicey once you choose to have more kids than you can reasonably fit in a single hotel room.

(Note: I'm not arguing that Disney isn't getting crazy expensive ... but it looks to me like it's supply and demand. The planet's population has also doubled in the time WDW has been open. They almost *have* to keep charging more just to keep the crowds under control.)

I doubt it. If you want to keep the crowds under control, you minimize the number of people per room. I really think they are just seeking more profits. (It's their right, but I'm not biting.)

 

[Dug720]

I doubt it. If you want to keep the crowds under control, you minimize the number of people per room. I really think they are just seeking more profits. (It's their right, but I'm not biting.)

The "people per room" thing is set on land by fire codes and on ship by lifeboat capacity.

 

[Paula Sedley-Burke]

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.

 

[we"reofftoneverland]

I almost think they are targeting people without kids. Look at all the people just in this thread who do not have kids. I have read many people's trip reports in this thread who do not have kids. If I did not read disboards every so often I would never suspect so many people do dcl without kids. I suspect it is people without kids who are more likely to spend more money on board. Tiffanys, concierge, star wars souvenirs, remi, alcohol, etc.

 

[cruiser21]

I almost think they are targeting people without kids. Look at all the people just in this thread who do not have kids. I have read many people's trip reports in this thread who do not have kids. If I did not read disboards every so often I would never suspect so many people do dcl without kids. I suspect it is people without kids who are more likely to spend more money on board. Tiffanys, concierge, star wars souvenirs, remi, alcohol, etc.

Psp
How many posters without kids.? I think the percentage with kids is probably 90% at least.

 

[codylamb18]

It all comes down to who is willing to pay for "Disney". Think about it when DCL announced 2018 itineraries some dates and levels were sold out the first week! People are buying so why discount when they can raise prices. Now this is a opinion from a couple that its hard to afford all-star for $110/night. Our first DCL will be this September because it is our honeymoon. I feel like we all want to cruise with Disney and that is why we pay the big bucks to go and why Disney is charging the big bucks. They are currently building two new ships so they have to pay for that somehow! Most cruise lines have 20+ ships! Hopefully once the new ships come out prices will start to go down. The demand is so high they half to raise prices I guess.

 

[mevelandry]

I have thought what Disney has done with pricing has been quite sad for a long time. I read a Washington Post article (last year I think) that said the way Disney has priced themselves basically targets the top 10% of households (that is somewhere around $160k I believe). So many households can not afford Disney anymore and either can't go or take trips they really shouldn't. I think it is a shame and while Disney is nice for children we've done so many other vacations that cost less including the Dalmatian Coast, Paris and even renting private villas in St. Barth. The fact I can travel to Europe or one of the most expensive islands in the Caribbean for less than a trip to theme park or cruise on DCL is just wrong! We do Disney as inexpensively as possible in the low season because we just can't fathom paying (what we consider to be)the obscene prices they charge in the high season.

THIS.

I argued a lot with my cousin who was telling me over and over that I was paying way too much for "something fake". Although I wouldn't phrase it that way I am starting to see it now. WDW has nice rides and all but it's man made. You can experiment the beauty of nature (like icebergs and whales in Alaska, the Grand Canyon and other wonderful "natural" places) for a fraction of the price of a WDW/DCL trip. I think I am starting to value nature over "man made" and comfort over luxury (luxury can be comfortable but comfort can also be affordable).

 

[mevelandry]

MANY of us who have said we prefer Disney have said we pay Disney rates because of the VALUE to us. I've not seen anyone saying "I pay for Disney just because I can." It's because we would rather spend one money on something we value - the overall Disney experience.

You are ok with "just" going on a cruise. That's cool. You do you.

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

 

[mevelandry]

The "people per room" thing is set on land by fire codes and on ship by lifeboat capacity.

I know. Just saying that they could always go for "less".

 

[Lisa F]

I get that Disney is trying to maximize profit, and as a company they can do whatever they want. Sometimes though maximizing short term profit sets you up for long term losses. Will be interesting to see which way Disney goes.

It's not that "as a company they can do whatever they want." They are beholden to their stockholders. As a company, they are going to do what they can to maximize profits, yes, but "raising prices" is not some kind of long term harmful strategy that will set them up for long term losses. If they were say... not maintaining ships or not updating them to provide better amenities in the name of short term profit for this quarter or whatever, THAT could come to bite them in the butt in the long term as they find themselves with an aging unmaintained fleet with a higher cost to get it up to snuff. Raising prices when demand is high is pretty much basic economics, and the nice thing about raising prices is you can lower them again when economic conditions dictate. It's not some kind of permanent shortsighted decision that will cost you more in the long run.

 

[PAGA2003]

THIS.

I argued a lot with my cousin who was telling me over and over that I was paying way too much for "something fake". Although I wouldn't phrase it that way I am starting to see it now. WDW has nice rides and all but it's man made. You can experiment the beauty of nature (like icebergs and whales in Alaska, the Grand Canyon and other wonderful "natural" places) for a fraction of the price of a WDW/DCL trip. I think I am starting to value nature over "man made" and comfort over luxury (luxury can be comfortable but comfort can also be affordable).

Your cousin sounds like my husband! If he had his way there would only be one more Disney trip in our future when our daughter is older, I'm the one that wants to try a squeeze in an 'affordable' trip every 2-3 years because of the magic for them. I'm totally on board with him though, and agree with what you said about all of the amazing experiences to be had that aren't 'Disneyfide'. My son still talks about our trip to Grand Teton and Yellowstone when he was 3! It is really stuck in his memory as it is for all of us. And we stayed at one of the top hotels in Jackson Hole that cost less than the Wilderness lodge

 

[cgolf]

It's not that "as a company they can do whatever they want." They are beholden to their stockholders. As a company, they are going to do what they can to maximize profits, yes, but "raising prices" is not some kind of long term harmful strategy that will set them up for long term losses. If they were say... not maintaining ships or not updating them to provide better amenities in the name of short term profit for this quarter or whatever, THAT could come to bite them in the butt in the long term as they find themselves with an aging unmaintained fleet with a higher cost to get it up to snuff. Raising prices when demand is high is pretty much basic economics, and the nice thing about raising prices is you can lower them again when economic conditions dictate. It's not some kind of permanent shortsighted decision that will cost you more in the long run.

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.

 

[Lisa F]

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 don't think they will lose brand loyalty. People who love disney would come flocking back if the prices were much lower.... right now people are doing the price vs. disney comparison but whenever that comes out on the side of disney, people will go with Disney.

 

[cgolf]

MANY of us who have said we prefer Disney have said we pay Disney rates because of the VALUE to us. I've not seen anyone saying "I pay for Disney just because I can." It's because we would rather spend one money on something we value - the overall Disney experience.

You are ok with "just" going on a cruise. That's cool. You do you.

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.

 

[cgolf]

I don't think they will lose brand loyalty. People who love disney would come flocking back if the prices were much lower.... right now people are doing the price vs. disney comparison but whenever that comes out on the side of disney, people will go with Disney.

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 come back, but say six years down the road we may decide that to stick with RCCL for various reasons. Look at Mc Donald's, twenty five years ago, if you would have told me they would go through struggles to stay relavent I would have laughed. But they have been struggling.