Chuck S said:
But the question you posed was would Disney raise prices to those that don't have the dining plan to make the plan look even more attractive. And no, I don't see that as being the reason for any price increases that may occur. Food cost are going up, energy costs are going up, insurance and other operating expenses are going up. That would be a reason to raise prices. Snubbing guests that stay off site and or your local customer base (who may not have the DDE) is not a smart business plan, is it?
The question I posed was raising prices for profitability sake, not for cost and inflation sakes. The establishment costs are not part of this scenario, as they will happen regardless, unless disney takes a profitability hit.
From my experiences with Disney, as a stockholder, consumer and working there, people from Orlando and the surrounding area are a small part of their business. Many of the people from the area who frequent the parks are employees or family of employees; those who aren't make up a small part of the overall business and aren't the most profitable customers. Those staying off site aren't being snubbed, they are being targeted. While Disney treats all guests equally, as in Animal Farm, some are more equal than others. The ones who stay onsite are the most important ones to please. Why? Because the goal is to get them to return and stay at Disney. By getting these guests onsite, Disney assures more money is being spent AT DISNEY... Internal Studies prove this statement, although logic should prove it as well. This is a big reason for the keys to the Kingdom card that lets you charge everything to your room. It is billed as convenience (and it is) but it also works liek a credit card, where many people spend without thinking, thus spending more money on average than those paying with cash.
Disney's most coveted Guests? Those staying on longer term vacations off property. Disney knows they will spend money, so how can disney get them onsite? Lower their profitability slightly and create the appearance of a huge value, thus attracting more customers, THUS increasing profitability. How do you think
Walmart made so much money. Deep discount items with lower markup. Bring in more customers who then buy things they weren't intending too. While the department store might have made a $15 profit off of a toaster, walmart makes $5, then makes and additional $25 off of the extra stuff at low prices people compulsively buy.
Look at it this way: Raising the prices of food, causes them to lose 10% of people who are staying off property from dining in their restaurants. Tragic, but most of these will still come to the parks and buy merchandise, so not a huge deal if you can make up for it in other areas. NOW, if they can convince 10% or even 5% of the off site people to stay on property with the Dining plan because it is a better value, they have just dramatically increased their profitability, because those numbers are spending more with Disney (food and Hotel where they were spending none before), making up not only the lost dining business from the 10% but the extra from the new peopel staying on property.
Business history will show you that raising prices does not tend to alienate your bases if done properly. Maybe you misunderstood what I was inferring... I am not talking about a drastic raise of $3-5 per entree all at one time. I am talking a gradualy increase over the course of the year. Unannounced, etc. People will pay raised prices if done ina graduated sense. There is way to many exampled in Food and Beverage, retail sales,e tc that bear this out. The trick is to not make it look like you are trying to be greedy. Disney isn't going to come out and say "We are raising prices to make the dining plan a better value." But if you compare prices from one date to a year or year and a half later, you may notice a significant increase.
Will this happen? I don't know, I can only speculate. But it wouldn't surprise me if it did. I don't even agree with them doing it... I just think it would be a brilliant ploy to try and knowing the way they have done business, it wouldn't surprise me to see them do this... I will bet money they have at least contemplated it. Is it right of them to do? Probably not... your reply above is very consumer advocate in statement and makes a lot of great points from that POV. Unfortunately though, most consumers are willing to take a lot without complaining. My guess is if they do raise, they lose a little dining business, but even if they do and don't increase on site DP business, the majority who stay and dine will make up a good percentage of the increase... if not all of it and more, and that some who don't dine TS because of that, will dine CS, still putting some money in the coffers.