Great explanation for Price Hike

[Fitswimmer]

This from this AM's Orlando Sentinel

Disney passes putting squeeze on rival parks
Published August 10, 2006


I remember when Mickey Mouse took out Church Street Station with brutal efficiency by building Pleasure Island. In a few years, downtown's bustling tourist spot was deserted.

I hope Universal Orlando and SeaWorld paid attention. They're next.

The tourism industry is undergoing a tectonic shift, and the Mouse is positioning himself to deal with it.

Tourism has gone from an economic thrill ride to "mature industry."

There will be no new parks. There will be no huge annual increases in the number of visitors.

To keep those turnstiles turning faster, or even to keep pace with past attendance figures, the theme parks must capture a greater share of the market. That means they must cannibalize one another's crowds.

This is exactly what Disney had in mind when it came out with a new pricing structure in January 2005 called "Magic Your Way."

Naturally, it involved a price hike for daily admissions. But then came this carrot. Prices would plunge the longer you stayed at the parks.

For example, a basic three-day pass costs $192. For only $10 more, you get admission for a fourth day. For only $4 more, you get a fifth. From there, it is only $2 more for each additional day up to 10 days.

Disney has four parks. The average out-of-state visitor stays about six days. One might assume this average visitor would spend a day at each Disney park, then maybe head to Universal and/or SeaWorld.

Now plug in Magic Your Way.

Let's say your family of four is visiting Disney for six days. You've been to each park and now are considering options for days five and six. With Disney's pricing, you could get the whole family into the Disney parks -- there's still plenty left to see -- on both days for a total of only $24.

But if you took the family to Universal Orlando and/or SeaWorld for those two days, the tickets could cost you about $500.

Has this had an impact?

Last year, attendance at SeaWorld was stagnant, while attendance at Universal Orlando plunged 8.5 percent.

But attendance at Disney parks was up between 5 percent and 6.5 percent.

I think this success was behind Disney's recent price hike, the second this year. The Mouse smells blood.

Not only does this help make up for lost revenue from the discounted days, it also makes the longer stays an even better deal.

The major theme parks have a tradition of matching one another's price increases. Nobody wants to look like a discount attraction.

But Disney has put SeaWorld and Universal in a box. If they do raise prices, they simply make Magic Your Way a better alternative to their parks.

Universal and SeaWorld also have multiday-pass discounts, but they are not multiday destinations.

In the long run, the only way they may be able to compete is to hold down prices on their one-day admissions. The Disney squeeze is on, as both are offering various discounts. SeaWorld now is offering adult tickets at child prices on its Internet site.

When you cut a company's revenue growth, you cut its ability to invest in the product. This could give Disney what it has long wanted for its competitors, and what Universal and SeaWorld have long tried to avoid -- second-tier status.

Mike Thomas can be reached at 407-420-5525 or mthomas@orlandosentinel.com.


Now, I get it. Thank you Mike Thomas for clarifying what is really going on.

 

[Gary M]

You can throw DME in the mix also.

 

[AdventureGuru]

there is a book out on how the mouse capitalizes on commercialism...I plan on reading it AFTER we get back...but just from reading this it seems like their marketing dept has it together. It is interesting to see things from a different view or to step outside the box...

 

[shyjade]

It worked for me. We wanted to at least spend a day at Sea World on this upcoming trip (and had planned to stay offsite again). Between ME and the free dining, how could we NOT spend the entire trip at Disney?! They got us hook, line and sinker...which is a good thing for everyone!

 

[Jalva22]

It's never a good idea to go head to head against the Mouse. (Well, let's say it's USUALLY not a good idea. Pixar didn't do too badly!)

Last summer, our original plan was to spend 5 days at WDW with our arrival day, a short day, going to Sea World. Then MYW made it possible for me to add a 6th WDW day for a few bucks more v. Sea World for $150+. No brainer: we spent all 6 days at WDW and -0- at Sea World.

But, I'll also add that for my family WDW is THE draw to Orlando. The other parks have always been 2nd tier parks to us. But that's just because we LOVE all things Disney and it really has nothing to do with Sea World or Universal themselves.

 

[tripplanner2]

I have to agree too. Last year we were planning on purchasing the 7 day Magic Your Way ticket but stay 9 nights to allow for travel days. When I called to book, the reservationist suggested that we take the 10 day ticket instead for a small difference in money this way we could go to the park on our arrival day for a couple of hours. We did upgrade our tickets but still never made it to the parks. In the end we extended our vacation to 13 nights so that we were able to use all of our passes. All of our food money, souvenear money, etc went to Disney. I would have loved to try Seaworld but between the ticket prices and the cost of transportation it was not worth it.

I will agree that I did not look at it the way it was explained in the article either. I also did not check the longer ticket prices. I just assumed they all went up considerably.

 

[seashoreCM]

The 7 day ticket is no longer an ideal pirce point for non-expiration, the latter add on went up about $30. The 6 day ticket is very limited when it comes to stretching it out over two vacations. The only remaining real bargain for non-expiration is a 10 day used for two medium vacations or three short vacations. The longer expiring passes did not go up by much, only about five dollars or so per pass.

There are still "everything but Disney" passes you can buy, such as the Orlando Flex Ticket. Some of them include both Universal and Sea World.

One thing keeping me away from Universal is the extra charge for their equivalent of Fastpass.

Disney hints:
http://members.aol.com/ajaynejr/disney.htm

 

[Amity 3]

There are still "everything but Disney" passes you can buy, such as the Orlando Flex Ticket. Some of them include both Universal and Sea World.

One thing keeping me away from Universal is the extra charge for their equivalent of Fastpass.

I think the Flex Tickets are one of the best values going. it'll be even better if Sea World adds their new waterpark to the lineup.

WDW has been pretty successful lately keeping people on property and sucking their wallets dry. by taking the need and expense of a rental car or shuttle from the airport gives people extra money to add a couple of days and getting a perceived better value.

no visiting other parks or restaurants or shows. a captive audience and all of their money.

 

[ricktib]

WDW has been pretty successful lately keeping people on property and sucking their wallets dry. by taking the need and expense of a rental car or shuttle from the airport gives people extra money to add a couple of days and getting a perceived better value.

no visiting other parks or restaurants or shows. a captive audience and all of their money.

Yep - what other company makes you feel so good about giving up so much money (myself included)? That's why I'll always own some of their stock.

 

[Fitswimmer]

WDW has been pretty successful lately keeping people on property and sucking their wallets dry. by taking the need and expense of a rental car or shuttle from the airport gives people extra money to add a couple of days and getting a perceived better value.

Most of us would probably say that it IS a better value, not a perceived one.

When my niece was 16, we took a day and went to Universal because she wanted to ride the rides. We spent the whole day at Islands of Adventure. On the way back to the World, I asked her if she had a good time. She said "yes, but we don't have to do it again." However, she will go do WDW as often as possible. I think that's the big issue that Universal has to overcome, they just don't get the repeat business that the Mouse does.

 

[bazzanoid]

The flip side of the coin is the UK market, and the VERY different ticket structures. Based on these assumptions:

1. UK visitors will visit for 7, 10, 14 or 21 days
2. UK visitors will nearly always visit US / SW / BG parks during their stay
3. Competing parks also offer good packages for UK visitors

Disney have recognised UK visitors normally only come out once a year, maybe twice if they're able to, and price their tickets accordingly, knowing that if they over-charge, UK visitors will spend more time at other, cheaper parks - you can pick up a 14-day ticket for GBP £165 online from a ticket broker. Similarly, Universal offer a two week pass for £75 (currently £65 as part of a two-weeks-for-one promo), making it a very attractive option if they haven't already purchased a FlexTicket for £135

Here's my strategy for this year:

Disney's Ultimate 14-day Ticket £165
Discovery Cove Plus ticket (14 day's access to SW & BG) £166 swim / £112 non-swim
Universal Two Week Pass £65

Total of £396 for two weeks at any of the major parks in florida, to come and go as we please.

If Disney put their cost up to UK visitors, the time spent at the park would go down, reducing the additional income from ride photos, gifts, food, parking etc. And they know it - that's why their ticket strategy is different over here to the US.

Just my $0.02

 

[Amity 3]

Yep - what other company makes you feel so good about giving up so much money (myself included)? That's why I'll always own some of their stock.

I agree with that, Disney owns the market when it comes to emotions. it's the quintessential family destination.

 

[FayeW]

Ah, the view through the mouse-coloured glasses is a beautiful thing.

What the article fails to mention,(but previous posters have) is the banding together of the "other" parks via the Orlando Flex ticket! For $202., Orlando visitors will have access to 4 Theme parks (US/IOA/SW/BG) and one water park (Wet & Wild) for a full 14 days! That is 4 days more, AND $81 CHEAPER than the 10 day, expiring, water park & more MYW tickets. Because I am not sure if you can access more than one park each day with the Flex ticket, I did NOT compare the price of the "hopping" feature on the disney tickets, but if you can go to multiple parks each day with the flex ticket, then the difference is really $129!

I am buying 10 day, non expire, MYW with hoppers and plus features. I plan to use 3-4 park admissions per trip, and will stretch these over 3 trips. At the moment, we have some left over free tickets to use at US/IOA, but after they are finished (this trip) I expect that we will take advantage of the flex tickets (since the disney portion of our trip will already be taken care of), or we will continue to take advantage of the killer deals that US offers every year ($99. for 5 days is a no brainer!) Either way, US/IOA is the destination for us, WDW is an add on.

Mike has given incorrect information, so you do have to take this article with the proverbial grain of salt. (He says that 2 days at US/IOA will cost $500 for a family of 4, but if the children are U10, then they would be free with the offer available right now, and if they are older, the tickets for 5 days are $89 +tax; he also says that US/IOA are not "multiday destinations" which again, is completely false).

At the end of the day, people see what they want to see. By not accurately comparing the special offers available at the various parks the author has given the perception that MYW tickets are the better value, when in fact, they are not!

 

[Amity 3]

Most of us would probably say that it IS a better value, not a perceived one.

I think that's the big issue that Universal has to overcome, they just don't get the repeat business that the Mouse does.

it's a nice perk. but now you're budgeting for those extra resort rooms per night, more souvenirs, more food.

as for Universal's repeat business, I'm quite sure the percentage is higher than you think, the same with Sea World. I see a lot of AP's in both parks being used for their discounts.

 

[Robo]

it's a nice perk. but now you're budgeting for those extra resort rooms per night, more souvenirs, more food.

as for Universal's repeat business, I'm quite sure the percentage is higher than you think, the same with Sea World. I see a lot of AP's in both parks being used for their discounts.

Local residents would be a different situation.

I wonder how many folks from elsewhere across the country have AP's for Universal and Seaworld compared to folks, like me, who buy AP's for WDW every year or couple of years.

 

[C.Ann]

For us - a trip to WDW - is not complete without a trip to Sea World and Universal as well.. After several days of nothing but Disney, we like to take a little break and do something different..

 

[Shula8205]

I agree with Mike's article but he did neglect to consider families who value their budget over the Mouse. My husband and I are going to WDW in September and spending the whole time there, because it would just cost too much for us to go to US, IOA or SW. However, my sister-in-law has 6 kids and the WDW price tag for her family of 8 was just too much! US had 2 day park hoppers online that gave them 3 days free . . . This was a no brainer! For the price of 2 day admissions for everyone they spent 5 days at US & IOA. My other sister-in-law and her boyfriend just got back from Orlando and they chose the Orlando flex ticket and no visit to the world because it was more expensive. While Disney's marketing is brilliant, they're still missing out on a demographic that will keep the other parks alive!

 

[Amity 3]

Local residents would be a different situation.

I wonder how many folks from elsewhere across the country have AP's for Universal and Seaworld compared to folks, like me, who buy AP's for WDW every year or couple of years.

I'm sure the percentages are high with Universal . Universal has a $99.00 renewal rate for all, and discount resort rates for passholders.

SW and BG AP's are pretty much locals, I believe.

 

[Metro West]

I'm sure the percentages are high with Universal . Universal has a $99.00 renewal rate for all, and discount resort rates for passholders.

Yes and the fact that Universal, Sea World and Busch Gardens all offer a flexible payment option on the annual passes makes them much more attractive to people who don't have the money in one lump sum. That really makes a difference when you have a tight budget. Disney wants their money at one time. I never did understand why they don't offer the flex pay option. It would make it a lot more affordable to some people.

 

[carone0318]

Local residents would be a different situation.

I wonder how many folks from elsewhere across the country have AP's for Universal and Seaworld compared to folks, like me, who buy AP's for WDW every year or couple of years.

We're a family of 4 from NJ and we have APs for Sea World. In addition we also have APs for Disney. We are DVC members who obviously are repeat Disney customers, not the "trip of a lifetime" family. They're the ones that SW and Universal have to fight for the most. Not saying all, but people who go often are more likely to branch out when they visit the area, IMHO.