Disney pricing the middle class out

[oddman]

I guess you could say that. But we did Disney two years ago, and stayed off site and it was very affordable. The tickets to the parks cost more than the house for a week did.

In about a week we are going back and staying on site, and it is costing a LOT more, but not that bad as long as we budget where we are eating, and save up for the trip.

I guess my wife and I make decent money, but not what I would call 'rich' and actually, my wife doesn't even start her new job until August, so we only have the one income. <shrug>

The article makes good points, but I think you can do Disney on a budget is all I am saying.

of course you can do Disney on a budget, but now it costs more and average income families find it much harder to pay. It really is that simple.

middle class America is finding the costs less affordable than any point over the last 30 years I am aware of.

 

[oddman]

I guess I don't consider 7 years "a long time" when it comes to a theme park. Besides, the post I quoted had to do with cost and rides staying the same, and said nothing about driving attendance.

And don't forget DCA is 2 parks, not 4 plus water parks and a shopping district. And mini golf and a boardwalk area. I don't think you are comparing apples to apples.

I bet you would find those 7 year old ticket prices more attractive than todays rates.

 

[Josh Hendy]

The real estate bubble was a cataclysmic mistake in our economic history that hopefully will never be repeated...

A quibble ... it wasn't a mistake from the point of view of the people who perpetrated it. More like, the greatest profits and bonuses in history. The cataclysmic mistake was the public's. Even now I think there isn't anywhere near a sufficient number of the public who are aware of what really happened, in order to prevent the next, even more cataclysmic bubble from being blown.

What makes Disney's pricing relatively easy to understand I think is that when this bubble money was hosed all over the world, it was done so unevenly and for the most part unfairly. The minority of people whose jobs are positioned close to the monetary spigot do extremely well (group A). This is who the timeshare bungalows and dessert parties are aimed at. But working stiffs of all kinds (group B ... even professionals formerly thought of as middle class like teachers and doctors) who don't work in banking, real estate, government contracting ... plus poor old pensioners and anyone who like a fool actually saved money ... they're screwed. Group (B) are the people whose vacation dreams are being affected. They can however have a WDW vacation if they make a once-in-a-lifetime splurge ... a one-and-done spree where they buy the whole salami, 10 days in a Disney resort, park hoppers, water parks, meal plan, and FP+ selected for them by Disney dot com.

Working-class and middle-class people who do have multiple, satisfying WDW vacations are the strategic, guerrilla types (group C). They have DVC from back when it was a bargain, or they stay offsite and eat offsite, eat CS in WDW and often kids meals at that. Or they sit back and wait until a significant discount is offered. They use touring plans to avoid wasting time and money. They exploit loopholes like throwaway rooms and extra wristbands. Or they're locals.

Disney's strategy is obviously to give group (A) as many luxury products and upgrades as possible. For group (B) they will market the once-in-a-lifetime experience to the hilt, and use IT technology and tour packaging to get the largest possible revenue and profit from them. They will continue to allow group (C) into their parks fairly grudgingly, but will make the terms, conditions and prices as favorable for groups (A) and (B) as possible. With things like FP+ favoritism, parking lot prices, price and blackout dates of APs, and so on.

So the middle class isn't being priced out of the parks ... they're just being nudged into higher-profit spending patterns by Disney. Give us all the money you can scrape together right now for a big blowout vacation ... or if you insist on trying to out-think us, we're going to treat you like the hostile people that you are (hostile to our profit margins).

 

[lockedoutlogic]

A quibble ... it wasn't a mistake from the point of view of the people who perpetrated it. More like, the greatest profits and bonuses in history. The cataclysmic mistake was the public's. Even now I think there isn't anywhere near a sufficient number of the public who are aware of what really happened, in order to prevent the next, even more cataclysmic bubble from being blown.

What makes Disney's pricing relatively easy to understand I think is that when this bubble money was hosed all over the world, it was done so unevenly and for the most part unfairly. The minority of people whose jobs are positioned close to the monetary spigot do extremely well (group A). This is who the timeshare bungalows and dessert parties are aimed at. But working stiffs of all kinds (group B ... even professionals formerly thought of as middle class like teachers and doctors) who don't work in banking, real estate, government contracting ... plus poor old pensioners and anyone who like a fool actually saved money ... they're screwed. Group (B) are the people whose vacation dreams are being affected. They can however have a WDW vacation if they make a once-in-a-lifetime splurge ... a one-and-done spree where they buy the whole salami, 10 days in a Disney resort, park hoppers, water parks, meal plan, and FP+ selected for them by Disney dot com.

Working-class and middle-class people who do have multiple, satisfying WDW vacations are the strategic, guerrilla types (group C). They have DVC from back when it was a bargain, or they stay offsite and eat offsite, eat CS in WDW and often kids meals at that. Or they sit back and wait until a significant discount is offered. They use touring plans to avoid wasting time and money. They exploit loopholes like throwaway rooms and extra wristbands. Or they're locals.

Disney's strategy is obviously to give group (A) as many luxury products and upgrades as possible. For group (B) they will market the once-in-a-lifetime experience to the hilt, and use IT technology and tour packaging to get the largest possible revenue and profit from them. They will continue to allow group (C) into their parks fairly grudgingly, but will make the terms, conditions and prices as favorable for groups (A) and (B) as possible. With things like FP+ favoritism, parking lot prices, price and blackout dates of APs, and so on.

So the middle class isn't being priced out of the parks ... they're just being nudged into higher-profit spending patterns by Disney. Give us all the money you can scrape together right now for a big blowout vacation ... or if you insist on trying to out-think us, we're going to treat you like the hostile people that you are (hostile to our profit margins).

Don't disagree with any of this

 

[Teamubr]

A quibble ... it wasn't a mistake from the point of view of the people who perpetrated it. More like, the greatest profits and bonuses in history. The cataclysmic mistake was the public's. Even now I think there isn't anywhere near a sufficient number of the public who are aware of what really happened, in order to prevent the next, even more cataclysmic bubble from being blown.

What makes Disney's pricing relatively easy to understand I think is that when this bubble money was hosed all over the world, it was done so unevenly and for the most part unfairly. The minority of people whose jobs are positioned close to the monetary spigot do extremely well (group A). This is who the timeshare bungalows and dessert parties are aimed at. But working stiffs of all kinds (group B ... even professionals formerly thought of as middle class like teachers and doctors) who don't work in banking, real estate, government contracting ... plus poor old pensioners and anyone who like a fool actually saved money ... they're screwed. Group (B) are the people whose vacation dreams are being affected. They can however have a WDW vacation if they make a once-in-a-lifetime splurge ... a one-and-done spree where they buy the whole salami, 10 days in a Disney resort, park hoppers, water parks, meal plan, and FP+ selected for them by Disney dot com.

Working-class and middle-class people who do have multiple, satisfying WDW vacations are the strategic, guerrilla types (group C). They have DVC from back when it was a bargain, or they stay offsite and eat offsite, eat CS in WDW and often kids meals at that. Or they sit back and wait until a significant discount is offered. They use touring plans to avoid wasting time and money. They exploit loopholes like throwaway rooms and extra wristbands. Or they're locals.

Disney's strategy is obviously to give group (A) as many luxury products and upgrades as possible. For group (B) they will market the once-in-a-lifetime experience to the hilt, and use IT technology and tour packaging to get the largest possible revenue and profit from them. They will continue to allow group (C) into their parks fairly grudgingly, but will make the terms, conditions and prices as favorable for groups (A) and (B) as possible. With things like FP+ favoritism, parking lot prices, price and blackout dates of APs, and so on.

So the middle class isn't being priced out of the parks ... they're just being nudged into higher-profit spending patterns by Disney. Give us all the money you can scrape together right now for a big blowout vacation ... or if you insist on trying to out-think us, we're going to treat you like the hostile people that you are (hostile to our profit margins).

Completely agree with this summary. I know people in each category and this sums their behavior and attitudes quite well.

So where is the annual attendance increase coming from? Category As have many options for leisure, Disney being one of them. My racing team mate falls into this group. He is head of IT at a very large international company and makes 7 figures. He owns DVC, but has not been to Disney in 4 years choosing to go other places and do other things. His peer group is similar. The conversations aren't "When can we go to WDW again?" It's "Where should we vacation? An Alaskan cruise, the islands, maybe Europe this year or Disney."

That means the main group contributing to the census numbers are Group B. Are there really that many working/middle class families saving up for their "once in a lifetime" trip?

Or is it really the undesirable Group Cs that keep coming, no matter what?

At some point you think this would finally implode because it doesn't seem sustainable.

j

 

[DINKsAtDisney]

Beyond inflation and cost of wages/benefits for employees, one of the other factors I haven't seen mentioned is insurance. I'm 100% certain it gets a lot more expensive year over year to insure those parks/hotels/transportation systems with liability coverage. You also have to think the incidence of injury claims increased as well, which would require a lot of legal services and those are also expensive.

Also, Poly when it opened years ago is not the Poly of today (using the example from earlier). It's bigger, required major renovations, technology updates to bring it into this century, etc etc. So, you can account for inflation in your cost of the room, but that's not going to cover the value of a dollar plus everything I've mentioned above.

Is a WDW vacation expensive? Undoubtedly. But, we still find it worth it - it's clean, safe, exciting, and a nice retreat away from the real world.

 

[oddman]

Beyond inflation and cost of wages/benefits for employees, one of the other factors I haven't seen mentioned is insurance. I'm 100% certain it gets a lot more expensive year over year to insure those parks/hotels/transportation systems with liability coverage. You also have to think the incidence of injury claims increased as well, which would require a lot of legal services and those are also expensive.

Also, Poly when it opened years ago is not the Poly of today (using the example from earlier). It's bigger, required major renovations, technology updates to bring it into this century, etc etc. So, you can account for inflation in your cost of the room, but that's not going to cover the value of a dollar plus everything I've mentioned above.

Is a WDW vacation expensive? Undoubtedly. But, we still find it worth it - it's clean, safe, exciting, and a nice retreat away from the real world.

The Poly stuff is interesting but it does not impact the majority of middle class vacation goers. They don't stay there, at least not very many of them.

as to insurance, wages , cost to build rides.... That is not how Disney is priced, it in priced on the willingness and ability of the general public to purchase, or 'what the market will bear".

so unless Disney has seen a huge spike in costs these tings don't really enter the picture. Dis is not looking to recoup monies they are looking to improve margins.

 

[DINKsAtDisney]

The Poly stuff is interesting but it does not impact the majority of middle class vacation goers. They don't stay there, at least not very many of them.

as to insurance, wages , cost to build rides.... That is not how Disney is priced, it in priced on the willingness and ability of the general public to purchase, or 'what the market will bear".

so unless Disney has seen a huge spike in costs these tings don't really enter the picture. Dis is not looking to recoup monies they are looking to improve margins.

Agree but I just used Poly bc that was the example given earlier with a direct cost of inflation applied - it's accurate to say that most people can't afford to stay there (or it's not appealing to those who might be able to), which is why Disney has a variety of ranges.

Good point about the margins - that makes sense. I'd still submit that Operating Expenses would be a factor in what price point would keep things profitable overall.

 

[Dean Marino]

Welllll - I guess I would have to add one other fact - Disney has never invited me to join their Board of Directors.... .

That would be the group that actually DECIDES what a public Company chooses to do. Not complaining - just pointing out US Business 101.

Generally - no one running a public company cares one whit about anything posted here.... their REAL customers are the company stockholders. Oh, they care about us in the sense that the income stream remains constant, or increases.... but that's about it. The sum total of our opinions essentially becomes "customer noise".

So here is an off the wall suggestion . I'm even willing to participate . How about we all buy some Disney Stock - THEN start making noise as REAL customers?
It's been done before, with other corporations .

 

[Planogirl]

I'm not sure I'm saying anything that hasn't been said by other folks already, but my initial reaction to the article was that it buried what could have potentially been some good points in hyperbole, half truths and speculation. In particular:

• As others have said, I don't believe that a Disney World vacation was ever affordable for "everyone." I grew up in a family that was at the lower end of the middle class and going to Disney was a big stretch for my family only made possible because my mom was amazing at budgeting and saving money in other ways. (Our usual family vacation was a 1 week camping trip, so I remember how luxurious it seemed to stay at a hotel for vacation when we went to Disney). I had many friends who never got to go to Disney at all.
  
• It's pretty rare that I get offended on behalf of the wealthy, but the entire "Wall Street Dad" paragraph was ridiculous. While I'm sure there is some portion of the population that treats family vacations like a chore and is willing to pay any amount to get through the ordeal of spending time with their kids, I don't believe that this portion of the population is significant enough to justify the operation of an entire theme park. I also don't think that Disney's goal is to cater to people like this at the expense of others. I have seen zero Disney commercials featuring little girls getting expensive makeovers in the company of their nannies while their Dads sit across the room looking irritated and checking stock quotes on their cell phones.
• I'm pretty sure that Disney doesn't consider crowds and increased attendance a "problem" as the article calls it.
• According to the income charts that have been posted here, my family is smack in the middle of middle class for our state and Disney is affordable for us. As others have said, we prioritize vacations above other things like fancy cars, a big house, etc. We are also fortunate to be able to travel during off-peak times, which does make the trip more affordable. I certainly have co-workers making more than me who can't afford Disney because they have chosen to spend their money other ways.

Overall, I think that the real issue is the way the middle class is being squeezed in recent years, which has very little to do with Disney. (I also enjoyed reading the range of opinions here in this thread -- as as I always do on these boards).

I agree with most of your points. I do believe that WDW is getting too expensive but it's just one of many items that are putting pressure on us. Most of those others things have to come first unfortunately. And believe me, we don't have a fancy house or car or high eating out expenses and so on. However we do have steadily increasing taxes, food costs, insurance and on and on not to mention a kid in college and we're trying to make sure he gets done with as little owed as possible. A choice of course but one I'm glad to make.

One more point - I do think that Disney might consider the large crowds problematic due to capacity issues and that might be why they are working on new ways to spread people around. However that's a whole other topic.

 

[Planogirl]

Welllll - I guess I would have to add one other fact - Disney has never invited me to join their Board of Directors.... .

That would be the group that actually DECIDES what a public Company chooses to do. Not complaining - just pointing out US Business 101.

Generally - no one running a public company cares one whit about anything posted here.... their REAL customers are the company stockholders. Oh, they care about us in the sense that the income stream remains constant, or increases.... but that's about it. The sum total of our opinions essentially becomes "customer noise".

So here is an off the wall suggestion . I'm even willing to participate . How about we all buy some Disney Stock - THEN start making noise as REAL customers?
It's been done before, with other corporations .

Sears and JC Penney and some others might disagree. Sure a few customers such as us complaining doesn't matter but if it ever gets to be a barrage of complaints then they might be a little concerned. Cause and effect after all.

 

[Dean Marino]

Sears and JC Penney and some others might disagree. Sure a few customers such as us complaining doesn't matter but if it ever gets to be a barrage of complaints then they might be a little concerned. Cause and effect after all.

Gotta comment.... notice that both companies are still on the "Bankruptcy Watch List?" . And I hate that... LOVE Sears - but these guys are in serious trouble .

I don't think it's because they listened to customers.... in particular, Penny's got into the hole by NOT listening to customers. Saddly, I think it boils down to effective leadership. Effective leaders have a knack of reading markets, balancing markets with self interest, and finding that happy medium between continued income from the market, and all out financial rape for (very) short term financial gain....

It sounds harsh... but that's what corporate board members with stockholders DO. The real masters are the stockholders - the public is an income stream. This is how the United States chose to be what it is.... (yes- I also don't remember voting for this ).

 

[minnie-apple-mouse]

The theme parks left the middle class behind-because of the middle class demands IMO.

Even right now on this thread folks are almost demanding more more more expansion and rides.

Yes prices have increased with limited (lately anyway) expansion-but does anybody think prices would have stayed the same (or gone down) with massive continued constant expansion?

What did/does everyone think that would/will lead to?

I can clear this up...

The people complaining about crowd levels are wrong...

The people complaining about lack of new rides are
Right.

It's a mixture of things...notably the concept of park stagnation, the rising prices for less things, and Disney's own operational history of reinvestment...which they continually pump to sell rooms and tickets but don't follow...making liars out of themselves.

They have sat on their hands largely in Florida except for vacation club...

That's not what put them on top and could definitely lead to them sliding backwards to a category closer to universal or the AB parks...

You can't expect an 85 year old mouse to carry you on his back forever...

Why the crowd complaints? The FP+ system has highlighted the problem...

You're paying 100 for EPCOT and can only reserve your spot on 1 of about 3 things worth it each day...

The whole day

The system...which is a success...has a Mr Hyde side to it that has exposed the underbelly...
And that wasnt so much the case in 1999...at a lower price.

You can't add 10,000,000 new visitors to a finite space with less for them to do... And that is what CEO bob has done in 11+ years...

He'll retire a very rich man though.

How did that clear up that the middle class would not have been priced out, if they had invested billions more on expansion?

Unless you seriously believe all of that investment would have lowered prices.






As for the crowds:

The people complaining about crowd levels are wrong...

You can't add 10,000,000 new visitors to a finite space with less for them to do... And that is what CEO bob has done in 11+ years...

 

[lockedoutlogic]

Still waiting for the counter argument

 

[seascapemvy]

The cost of staying at WDW is not just the room but the county and state tax. There are so many issues which go into determining the affordability of vacations. For example as someone had previously posted the type of cars people have but there is also the fact that cars now last 200,000 miles while in the 70's they lasted 100,000. Having less children saves tens of thousands over 20 years. Then there is also two incomes versus one income families.

 

[cjparker0110]

While skipping over most of this thread I'm going to chime in on something. We are not a middle class family. Based on family size, we probably are considered below the poverty line. We qualify for food stamps (but do not get them). We are going to WDW in two years. It will be tight. However, we are getting there because we don't waste our money. We don't have cable/satellite TV. We buy used cars and pay in full so we have no payment. We just paid off our mortgage (after 5 years) so we don't have that payment. Our only debt is student loans (wish I didn't have those...).

We don't use credit cards to buy things. We buy our kids clothes from thrift stores and garage sales when we can. (Why pay $20/outfit for something they can ONLY wear for 3-6 months?) Sometimes we get luck and get hand me downs from their cousins that are still in good shape. We don't eat out a lot. Usually we try to pack a lunch when we think we may need to eat while out and about.

Yes...I am fortunate to live in a small town that isn't super expensive and live close enough to work that I can walk in 6 minutes (no fuel cost). My wife stays at home so we have no day care costs. That said, we are "poor" by standards set up by society, but we are making it. Could we buy stuff new? Sure. But why bother if we can find quality items for less? Could we buy a new car and pay $200-300/month? Sure...but why do that? Then we don't have money leftover to save up for things or to take care of emergencies. We budget ourselves so we have money leftover.

Because of this, we can and are saving up for a WDW vacation. We will not stay at the $2000/night bungalows, but really...how many people would do that even if they could? That's a LOT of money. We will stay in AoA or ASMu suites. I think we figured our trip will cost us around $4800 (including flight, hotel, food, tickets, and souvenirs) based on 2015 costs. I'm expecting over $5000, maybe $5200 by time we go. Who knows? But to give some perspective, we just made a trip to visit my parents. With driving, hotels, food, souvenirs, and an unexpected $200 repair bill on the van, we spent nearly $1200 to go back to my house I grew up in. WDW doesn't sound so expensive once I put it in that perspective.

 

[cjparker0110]

I would also say that while I have not read the whole article, I read enough to know that this guy is trying to make things worse than they appear. Let's look at the statement that the prices "rocketed" past $100 this year. That statement sounds like tickets were $70 and just soared. If I remember correctly, they were $96 or so last year. So they went up a few dollars. That's not rocketing past 100...that's more like taking a scooter/moped.

Another thing I saw was in the comparison of prices where they listed Six Flags charging only $62 at it's Maryland park. I believe that is one of their cheapest parks (along with the NY park which used to be Dorian Lake until about the same time). It also was not Six Flags until just a few years ago. In other words, it is an acquired park that Six Flags is SLOWLY transforming into one of their normal parks...not worth the cost of the other parks they operate which seem to vary from $50-75 for gate prices...and remember they are not the resort that WDW is. Busch Gardens in VA I think costs about $80 at the gate these days. And that is also not a resort.

Honestly, reading this article...it looks like the writer took the worst case scenario...the highest prices he found for everything. Even someone staying in a 2000/night bungalow would probably stay for a few days and have tickets FAR BELOW the $100/day cost. The expensive meals, the expensive experiences...they all exist. And that is the case anywhere you go. I can book a hotel for $40 when I travel to see my family. I choose to stay in $100 ones for the comfort. I could stay in $200 ones in the same places.

There are expensive restaurants that I can't eat at if I wanted to. But I can also go somewhere and eat for $6 if I want.

WDW is the same. I can stay in a budget hotel, go to the parks, pack my own food and have a blast for a few days for less than one night in a bungalow. Or I can go all out and spend a fortune. The middle class can still go...they just need to budget. Stop paying for cable, stop buying new cars every 3-4 years when they will last 10+ and stop buying stuff on credit. Pay cash only. If you can't buy it...don't. Then you can afford a WDW trip.

 

[minnie-apple-mouse]

Still waiting for the counter argument

Actually I'm the one waiting for the counter argument, or at least details of accomplishing what you say.

The counter argument was you said you could clear up why the pricing would not have gone up (pricing out the middle class) if they had increased expansion more than they have...how would that not also price out the middle class?

The other counter argument was in the same response-you said there were not more guests ("crowd complainers are wrong-it's just FP+ highlighting the problem")-followed by there are "10,000 more".

So which is it? No crowd level increase or 10,000?

 

[Planogirl]

I would also say that while I have not read the whole article, I read enough to know that this guy is trying to make things worse than they appear. Let's look at the statement that the prices "rocketed" past $100 this year. That statement sounds like tickets were $70 and just soared. If I remember correctly, they were $96 or so last year. So they went up a few dollars. That's not rocketing past 100...that's more like taking a scooter/moped.

Another thing I saw was in the comparison of prices where they listed Six Flags charging only $62 at it's Maryland park. I believe that is one of their cheapest parks (along with the NY park which used to be Dorian Lake until about the same time). It also was not Six Flags until just a few years ago. In other words, it is an acquired park that Six Flags is SLOWLY transforming into one of their normal parks...not worth the cost of the other parks they operate which seem to vary from $50-75 for gate prices...and remember they are not the resort that WDW is. Busch Gardens in VA I think costs about $80 at the gate these days. And that is also not a resort.

Honestly, reading this article...it looks like the writer took the worst case scenario...the highest prices he found for everything. Even someone staying in a 2000/night bungalow would probably stay for a few days and have tickets FAR BELOW the $100/day cost. The expensive meals, the expensive experiences...they all exist. And that is the case anywhere you go. I can book a hotel for $40 when I travel to see my family. I choose to stay in $100 ones for the comfort. I could stay in $200 ones in the same places.

There are expensive restaurants that I can't eat at if I wanted to. But I can also go somewhere and eat for $6 if I want.

WDW is the same. I can stay in a budget hotel, go to the parks, pack my own food and have a blast for a few days for less than one night in a bungalow. Or I can go all out and spend a fortune. The middle class can still go...they just need to budget. Stop paying for cable, stop buying new cars every 3-4 years when they will last 10+ and stop buying stuff on credit. Pay cash only. If you can't buy it...don't. Then you can afford a WDW trip.

Up to a point, I agree. However things happen. People get sick or hurt, cars fly to pieces or break down, houses are complete money pits. I do agree however that some priorities can be shifted. We choose to keep satellite because it helps keep us out of the stores and restaurants by keeping us entertained. I can see where such an expense done away with can help with a vacation budget though.

 

[minnie-apple-mouse]

The middle class can still go...they just need to budget. Stop paying for cable, stop buying new cars every 3-4 years when they will last 10+ and stop buying stuff on credit. Pay cash only. If you can't buy it...don't. Then you can afford a WDW trip.

Heck I know one Dad that works OT "just" for the WDW vacation fund, a friend who works a 2nd job just for WDW vacations. Both have vacationed elsewhere as well, but just doesn't compare to what they get at WDW. Some of it is indeed getting out of winter, but so much more to do than just a beach vacation, or other warm weather vacations.