Dear Mr. Iger...

[Jon84]

Surge pricing is a business decision, and one that the rest of the travel, leisure and entertainment industries took a long time ago.

It's a business, and it will be run as one over and above customer experience. My company has had to let people go due to the oil price slipping so much.

Disney has overspent building Shanghai, and they've taken on the Paris debts, and HK is under performing. As such, they need to balance their books, and keep the share price up as best they can.

It sounds like it's robbing Peter to pay Paul, but that is how sometimes you need to run a company. Once the other parks make a return on the investment, the situation may well stabilize.

TWDC turns over so much money, they are now a very large and very clunky company across multiple business streams. They've made acquisitions, which while will make more money only slows their reaction to business problems down. Price hikes a quick wins, in a long term strategy.

 

[capegirl]

If I were a one day guest, I would work around the price increase by spending less in the parks on food and souvenirs. Packing a picnic lunch/dinner would be a good cost cutting compromise. Although the ticket increase will not stop people from coming, it may affect their in park spending.

 

[tlmadden73]

I think most people would gladly pay even more than the price increase for reduced crowds.

 

[DisneyWishes14]

Did you write this same letter to every airline and hotel? WDW parks just put themselves up to speed with the rest of the travel and tourism industry. Bigger demand = higher prices. I'm all for them disincentivising 1 day visitors from visiting the parks during peak times. If it means my holiday season, onsite, multi-day park stay will have less crowds, yippee!

 

[homie wanna liv]

Once again, if capacity were TRULY the issue (as in it's too crowded) then tbe answer is to increase capacity. More attractions, more meets, and yes another gate.

Nobody believes these price hikes or cuts are Disney's magnanimous way of tryibg to improve guest experience by reducing crowds.

If you listen to the quarterly calls, no executive has ever said that capacity is an issue. They are doing what any good business would do, its basic supply and demand. Increasing capacity takes time and a fair amount of capital risk (original DCA, was considered a billion dollar flop when it first opened).

I can get on board with raising ticket prices since the parks are full, but what I can't get on board with is the continued erosion of in-park entertainment, CM cutbacks, and an over-all reduction in facility maintenance.

Everyone is entitled to their opinion so this is fair. Disney has always had cutbacks in CM hours during off-season periods (DF used to work there full time) plus due to the latest reorg there will be restructuring of how business is done in regards to who thinks who is important. Entertainment is always changing and there will be lulls in what is offered while the parks (DAK and DHS) undergo their own transformations that people beg for then complain about half of DHS being closed (DHS has limited expansion space due to the creek to the south). Facility maintenance? Can you elaborate? I constantly see them refreshing spaces and keeping them clean, not sure if you are local or not. Just curious as I know a lot of this has been expressed but there needs to be change to get to the other side.

 

[Spork24]

IMO the theme parks (especially MK) are frequently above the optimum capacity. Now granted they only hit maximum capacity a few days a year and usually not at all parks. But i think Disney probably has metrics that show customer satisfaction as it relates to attendance. I would guess that the optimum number when you look at revenue earned balanced with customer satisfaction is probabably 15k-20k under max attendance.

Now obviously Disney doesn't want to drive down yearly attendance numbers. I do think that until they can finish the major expansion projects that they would be ok with less growth than they have been seeing in recent years. Also they are using the one day ticket changes to try to push more people to days when they don't reach their "Optimum" capacity from days when they do.

Just IMO, but I think this was a very wise business decision even if it is unfortunate for some travelers on a budget.

 

[Dug720]

Maybe I am in the minority here but I think a lot of people either don't care or forget that Disney is a business and they are there to make money. Vacation is a privilege and not a right; if someone cannot afford it anymore due to costs then you can still make memories with your family outside of Disney. It is just good business with record attendance to increase the prices until the trend slows down; which would be a happy medium for operations and the bottom line.

Exactly. I remember having a discussion with my classroom para last year when the rates went up and she said something like "How are some families supposed to afford to take their kids?" and I said something like "Trust me, I get it. I love Disney, but if the time comes I can't afford to go, I'll find other things to do and/or save up and go less often. The Declaration of Independence does not say our rights are 'Life, Liberty, The Pursuit of Happiness, and A Trip To Disney World.'" which made her laugh. There are plenty of other ways to have a family vacation.

 

[strat68]

Dumb question, but would you pay $500 per day per person for reduced crowds? (I'm just curious)

Of course not. But my 8 day PH averaged out to (I think) about $55 a day. I'd pay some premium above that to avoid any 30+ minute wait. Maybe an Express Pass? Limit per day? Definitely less than $100. BUT, if I could should which days to avoid lines I might pay that for a day or 2.

Luckily I understand how to tour and have been often enough where I can avoid most lines or just skip something I've done before. In 2012 we skipped Peter Pan. FPs were gone and waits were 50 minutes. Got it on the next visit.

 

[DebbieB]

and any and all executives within the Walt Disney company responsible for this decision, I would like to respectfully request that you reconsider your new tiered pricing structure that you announced for your theme parks . Despite record breaking attendance (up 17% over the past two years) leading to profits that have doubled over the past five years, you have decided to institute this new pricing policy . One has to wonder why at this time , when there are considerably less attractions to experience over that same five year time span in almost all your parks . Recently we have also seen cutbacks in guest services along with reductions in character meet and greet experiences , shows, and staffing . I fear this new pricing policy will make an already difficult decision for many families as to whether or not to visit Disneyland or Walt Disney World now something they won't even consider . As I'm sure you know many families for obvious reasons can not visit the parks except during the holidays or over summer vacation . These are the exact times you have instituted your premium pricing . If it ain't broke don't fix it ! As Walt Disney said during his speech at the dedication of Disneyland "Disneyland is dedicated to the ideals the dreams and the hard facts that have created America with the hope that it will be a source of joy and inspiration to all the world ." Please , keep park tickets at one price for the entire year . It isn't fair to punish families who cannot visit the parks except during these periods of the year . From a business standpoint I feel that you are shooting yourselves in the foot with this unnecessary price structuring . A severe backlash regarding this new policy I fear is imminent . A quick reversal of this decision would help you escape the wrath of many and also help your continued success and attendance growth similar to what you have seen over the previous five years .

Do you have a link for the 17% increase in attendance?

This article says MK increased 4% from 2013 to 2014. I don't think 2015 figures are out yet, typically not until summer.

http://www.orlandosentinel.com/trav...ey-parks-worldwide-attendance-2015-story.html

According to this, Epcot was up about 2%, DHS 3.5%, AK 2%:

https://en.wikipedia.org/wiki/List_of_amusement_park_rankings

Over 2 years (2012-2014):

MK 6%
Epcot 3.5%
DHS 4%
AK 4%

 

[lugnut33]

Everyone is entitled to their opinion so this is fair. Disney has always had cutbacks in CM hours during off-season periods (DF used to work there full time) plus due to the latest reorg there will be restructuring of how business is done in regards to who thinks who is important. Entertainment is always changing and there will be lulls in what is offered while the parks (DAK and DHS) undergo their own transformations that people beg for then complain about half of DHS being closed (DHS has limited expansion space due to the creek to the south). Facility maintenance? Can you elaborate? I constantly see them refreshing spaces and keeping them clean, not sure if you are local or not. Just curious as I know a lot of this has been expressed but there needs to be change to get to the other side.

I don't consider the cuts happening now to be occurring "during off season periods" as we are weeks away from some of the largest crowds of the year descending upon WDW. As for the changes happening to DHS, I would contend they are coming at minimum 5 years too late. They let that park languish and become stale for years being content with just raking in the revenue. Look at Epcot as a prime example of this management attitude. Yes, Disney is a business, but they have continually treated WDW as the red headed step child to Disneyland. If you don't see that, then it'll be hard to have a serious discussion.

As for facility maintenance, take a look at the monorail as a good example. The cuts in monorail operating hours are more for budget issues than they are maintenance issues. Look at Pirates that just underwent a long refurbishment and see that it is now down more than before the refurb. Disney just laid off 100 painters. Fact is the parks are not as clean as they once were, take a look at the area where you get on the doombuggy at Haunted Mansion as an example. It took Disney over two years to finish paint the South Seas room in IASW. Do I need to go on?

I don't know what you mean by getting to the other side? I'm always happy when they are doing new things in the parks. Last year I stopped at guest services to express my pleasure over the Frozen fireworks because HS needs a great fireworks show like that. I'm really excited about the new Avatarland coming to AK (I am questioning the timing of this and what its relevance in the parks will be).

Look, I was just there this past week and had a wonderful time, but that doesn't mean I do not notices the changes happening around me. I have my opinions on the parks and what I feel would be best for us guests. I don't care if Iger gets a huge bonus.

 

[lugnut33]

Of course not. But my 8 day PH averaged out to (I think) about $55 a day. I'd pay some premium above that to avoid any 30+ minute wait. Maybe an Express Pass? Limit per day? Definitely less than $100. BUT, if I could should which days to avoid lines I might pay that for a day or 2.

Luckily I understand how to tour and have been often enough where I can avoid most lines or just skip something I've done before. In 2012 we skipped Peter Pan. FPs were gone and waits were 50 minutes. Got it on the next visit.

Here's the problem, there are plenty of people that would pay $500 per day to have a non-busy park and you would have to pony up or be locked out.

 

[nilla]

People complaining seem to be forgetting that not only is Disney a business, but it's a publicly-traded business.

If shareholders got wind that Mr. Iger was intentionally passing on a chance to increase revenue, the board would remove him ASAP. Remember, most people don't invest in Disney thinking that they want to balance the return on their investment with the satisfaction of people on the DISboards.

Disney is doing nothing more than pricing based on supply vs. demand. There's a HUGE demand for access to Disney Parks. If Disney can increase their prices and maintain this demand, they will, and should, do it. That's how businesses work.

 

[lugnut33]

People complaining seem to be forgetting that not only is Disney a business, but it's a publicly-traded business.

If shareholders got wind that Mr. Iger was intentionally passing on a chance to increase revenue, the board would remove him ASAP. Remember, most people don't invest in Disney thinking that they want to balance the return on their investment with the satisfaction of people on the DISboards.

Disney is doing nothing more than pricing based on supply vs. demand. There's a HUGE demand for access to Disney Parks. If Disney can increase their prices and maintain this demand, they will, and should, do it. That's how businesses work.

Are you advocating that we as a consumer should not demand the best from Disney for the prices they are charging?

Like I said earlier, I'm OK with them raising prices considering how busy the place is. Not OK with the cuts that are occurring. Yeah, it'll be great for their bottom line, but not great for me as a consumer.

 

[homie wanna liv]

I don't consider the cuts happening now to be occurring "during off season periods" as we are weeks away from some of the largest crowds of the year descending upon WDW. As for the changes happening to DHS, I would contend they are coming at minimum 5 years too late. They let that park languish and become stale for years being content with just raking in the revenue. Look at Epcot as a prime example of this management attitude. Yes, Disney is a business, but they have continually treated WDW as the red headed step child to Disneyland. If you don't see that, then it'll be hard to have a serious discussion.

As for facility maintenance, take a look at the monorail as a good example. The cuts in monorail operating hours are more for budget issues than they are maintenance issues. Look at Pirates that just underwent a long refurbishment and see that it is now down more than before the refurb. Disney just laid off 100 painters. Fact is the parks are not as clean as they once were, take a look at the area where you get on the doombuggy at Haunted Mansion as an example. It took Disney over two years to finish paint the South Seas room in IASW. Do I need to go on?

I don't know what you mean by getting to the other side? I'm always happy when they are doing new things in the parks. Last year I stopped at guest services to express my pleasure over the Frozen fireworks because HS needs a great fireworks show like that. I'm really excited about the new Avatarland coming to AK (I am questioning the timing of this and what its relevance in the parks will be).

Look, I was just there this past week and had a wonderful time, but that doesn't mean I do not notices the changes happening around me. I have my opinions on the parks and what I feel would be best for us guests. I don't care if Iger gets a huge bonus.

Good response, just wanted to see the view from the other side. I know everyone has a difference of opinion. I think for the stagnation of changes to EPCOT and DHS could maybe be related to what happened with DCA; it made them fearful of big changes without knowing what the outcome will be. That was a billion dollar gamble that took years to pay off in guest reception, I know it went through on re-imagination and it could be argued it went through another with cars land.

I agree the monorail needs something, i.e. new trains, the cut hours is probably more maintenance then anything else in my opinion. Its an aging fleet (DLR got new ones in 2008) and upkeep is probably costing more and more as constant break downs are seen more often.

By other side, I mean people complaining that DLR/DCA is getting more attention than WDW. Now that WDW is getting more attention then DLR people complain that too much is closed, once we get passed the closure and have these three fairly large new areas that would be the other side. With all the construction going on that is a ton of cash flow that makes stake holders nervous and its Disney as a business's job to mitigate that by cutting cost during that time.

By the way as someone who lived 5 minutes from WDW, busy times are night and day at WDW. The next peek period around Easter is happening the week before and after; there is not a gradual increase in attendance. Ask anyone who has gone after Thanksgiving but before the week or two before Christmas is pretty much dead there except for families with young kids or no kids.

 

[homie wanna liv]

Are you advocating that we as a consumer should not demand the best from Disney for the prices they are charging?

Like I said earlier, I'm OK with them raising prices considering how busy the place is. Not OK with the cuts that are occurring. Yeah, it'll be great for their bottom line, but not great for me as a consumer.

Then for them as a business they are not targeting you as a consumer. You can demand all you want; Disney as a business is not going to listen. Nilla hit it directly on the head if Iger misses an opportunity to maximize the bottom line they will can him and sell off shares. If you invested in a business then the next day they announced we are doubling everyone's pay and decreasing ticket prices 50% would you be happy? Probably not because that share you just bought it worth nothing.

 

[Slapshot1188]

I appreciate the spirit of this letter, but instead of "despite record breaking attendance" it should read "due to record breaking attendance."

Disney keeps increasing prices and demand only keeps going up. They don't need attendance growth. They need to regroup and figure out how to improve revenue without jamming the parks even fuller and fuller until it becomes an even worse operational nightmare... which just breeds dissatisfaction.

The parks are so crowded during peak periods that it's a miserable experience for many families who come unprepared -- including emotionally -- to deal with it. Park are so crowded that cast members are yelled at in higher numbers by tired guests, decreasing labor satisfaction. And it takes years to build more capacity (and ironically, doing so requires closing down certain things for construction).

So what this letter suggests is really nice, but it just doesn't work. I've heard several people say they won't go back to Disney World for a long time, because they hated the crowds.

As for whether it's fair to punish people who must travel during peak periods, consider that peak season travel is already more expensive no matter where you go -- not just Disney. Airfare, hotel prices, rental cars, and more skyrocket in Europe, Hawaii, etc. during peak tourist seasons. If anything, Disney has been resisting this step on ticket prices.

Trust me, I'm frustrated by the skyrocketing cost of tickets that put Disney World further out of reach for the middle class. But you're talking to Bob Iger here, and he needs to look at this business very practically.

When crowds are high (constantly) there are two paths:

A) Try to control crowds by making attendance more cumbersome (ie. higher costs)
B) Increase capacity to accommodate more guests

The Star Wars expansion is a good start but it's a few years late. Same with Avatarland. They do not need to add a ride or two, they need to significantly increase attractions to meet demand. The impact of their decisions may not be felt for years or maybe even decades but it will be felt...

 

[kamik86]

They really need to find a way to lessen the crowds. Over the past 10 years WDW has gotten so crowded nobody wants to go there anymore.

Really there are only two ways to do that.

1) is raise prices until enough people stop going that you get to the crowd level considered ideal. Of course then only the most well off get to go but they get less crowds. Which is great for those that can/want to pay those prices.

2) Artifically limit how many can go by closing the park sooner. Of course that makes it much more likely that you can't go back to the room to take a break without risking not being able to get back in and may even be charged as a no show to an ADR when you were stuck at the gate. Again great for those that can plan to get in early and stay until they are done, but many others may be upset.

3) Don't do this and stay as it is. Where people complain about crowds.

So no matter what someone is going to complain about experience. So Disney should probably just pick which is best based on other factors, like profit. So it seems slowly doing number 1 and seeing how things go is where they are going with that.

 

[larryz]

Well, OP, there's no business like show business; there's no business I know. Everything about it is appealing. Everything that traffic will let go. No where you could get that happy feeling, when you are stealing, that extra dough...

 

[Slapshot1188]

I can get on board with raising ticket prices since the parks are full, but what I can't get on board with is the continued erosion of in-park entertainment, CM cutbacks, and an over-all reduction in facility maintenance.

I agree. It's not just the cost going up, it's the VALUE going down. Everyone will have a different perception of value, but for me it's dropped significantly over the years. After August my family will be on a 2 year Disney Hiatus. Hopefully by 2018 they will have Star Wars and Avatar lands fully open... (though I think it might realistically be beyond 2018).

 

[bwang123]

People complaining seem to be forgetting that not only is Disney a business, bu.

of course they forget, this is a disney fan board. most people here have probably visited multiple times and have a personal connection. so when disney makes a business decision they dont like, they feel like family let them down. its also almost like a drug for some. many people on here say they will never go again, will sell dvc, etc everytime they raise prices but they keep going no matter how much the dealer charges. in the end its a vacation spot and there are many many places in the world to make memories. Spend your dollars at the business thats worth it to you.