I just don't understand how they are making money with this...

[Sonno]

Just for S&Gs I decided to figure out the price per day per person of our upcoming vaction.

There are 3 adults and 1 chlid in our party.
We'll be staying at ASMo for 7 nights.
We'll have park access for 6 days (no extra options).
And we be able to eat two meals a day and a snack for 7 days.

That comes out to $57.14 a day per person. That's less than a one day ticket to one of the parks.

Really, I just don't get it. But we're going!

 

[bsmcneil]

we thought the same thing...

 

[Glendamax]

Shhhhhh!!!!

 

[Mariposa]

Yeah, I was thinking about this, too..

We're paying $79/night plus tax for our room, plus 1 day MYW base tickets for two adults and one child. This came to $892.87. We're getting 1 TS meal, 1 CS meal, and 1 snack per day for roughly $112/night or $37/night per person. If we had to pay for the dining plan it would have run us $38/night per adult and $11/night for our DD (does this include tax?), bringing the total to $87/night (if the aforementioned includes tax) or $696 for the whole trip.

So, for $196.87 more than what JUST DINING would have cost us, we get a room to sleep in, 1 day MYW tickets with a value of $189.58, AND dining.

Wow, they must be really slow during Aug- Sept.. and can you even imagine what their profit margin must be on dining and hotel rooms for this not to be a loss? I know they're counting on people spending a portion of what they're saving on souvenirs, but still.

 

[bicker]

I suspect that the difference is made up by souvenir sales; perhaps a great number of folks visiting that time of year, when working off of such a generous discount, are more inclined to spend more money on gifts and such.

 

[wilma-bride]

Presumably, on top of that you've bought additional tickets to the parks

They will also, as Bicker says, make extra money out of souvenir sales (and possibly more than you may have spent originally because you got such a great deal on your trip )

 

[Mariposa]

Presumably, on top of that you've bought additional tickets to the parks

They will also, as Bicker says, make extra money out of souvenir sales (and possibly more than you may have spent originally because you got such a great deal on your trip )

Nope, we have APs covering this trip, but by making us buy the 1 day MYW tickets they are at insuring we'll be back in the future to buy more souvenirs.

Yeah, I assumed the souvenir increase was part of the logic, as well as the fact that empty hotel rooms cost more than deeply discounted hotel rooms, but the profit margin on the dining and rooms still has to be phenomenal.

 

[eeyoreiscool]

Not everyone will eat all their dining credits so they can make a little there. Then others will not quite understand the whole dining thing and not make ADR's and get stuck at the less popular restaurants which probably don't cost as much. I also agree with the souvenirs and how many more people will buy since everything else is "paid"for.

 

[lexmelinda]

I've been wondering the same thing as our family of 5. We have 2 teens and DS6 and I feel a little guilty because we will really be stickin' it to them for the free dining. Our hotel room is costing $139 per night and the dining plan would have cost around $167 per day for our family. Hard to believe the free dining plan is available for larger families. I figure since we are paying for MYW tickets for 7 days and it doesn't really cost them anything extra to let 5 more people into the park...they are making money that way plus what would they be profiting if our hotel room was empty for the week? Disney gets our $2300 and all they have to do is feed us and make our bed. Sounds like a great deal to me! We would not be making this trip were it not for free dining. Teenagers eat like adults and we could not have afforded it otherwise. I'm so grateful we found out about this offer. Thanks, Disney!

 

[bicker]

it doesn't really cost them anything extra to let 5 more people into the park

This is actually not true -- figure your 5 aren't the only ones taking advantage of this program, and so if you add up all the 2s, 3s, 4s, 5s, etc. that they're "letting into the park" it does end up costing them more.

The promotion is very generous. I'm sure they're making money, but still, it's an incredible deal for the folks taking advantage of it.

 

[Mariposa]

Not everyone will eat all their dining credits so they can make a little there. Then others will not quite understand the whole dining thing and not make ADR's and get stuck at the less popular restaurants which probably don't cost as much.

DFiance and I were just discussing this earlier. We figure there are a lot of people that go home without using their TS credits simply because they didn't bother to make any ADRs or to ask if they can use them as CSs.

 

[Nancyg56]

Presumably, on top of that you've bought additional tickets to the parks

They will also, as Bicker says, make extra money out of souvenir sales (and possibly more than you may have spent originally because you got such a great deal on your trip )

That would be us. We did as Bicker suggested happens, bought the package with additional tickets JIC, and then booked 2 additional meals because we wanted 1 sig meal as well as the Mickeys Backyard BBQ, and a CM breakfast on out last day. Then because we were saving so much money we upgraded from ASMO to POFQ. Then we thought that a waterview would be nice as long as we were there.

This was a trip that I had not planned on taking because we are going in Jan, but the price was nice even with the additional spending. I think that the Disney corporation has found that once people are onsite the money will follow. They already got an extra trip out of us, and I bet there are a lot of folks who did the same.

 

[SlightlyGoofy]

My perspective, as a Midwesterner who thinks $10 a meal is an extravagance, - the food at DW is very overpriced (for us at least) so they can afford to offer the Dining Deal. If they could not they would not offer it. Disney is not dumb (often). I also imagine that there is a percentage of people who are on the Free Dining but many are not so they are just filling up the seats that might have otherwise gone empty. Since the cost of the actual food is a very samll part of the price I think that would not be onerous.

At that time of the year there might be few large families who would be going at that time and most kids do not eat all that much anyway.

Ummm, now that has me thinking. I wonder if people who are paying full price or on the NOT free dining plan might not be able to get into some places? I do not remember if I was asked if I was on Free Dining when I made my ADR"s.

(Sorry, I am a train of thought type person and often talk to myself)

Slightly Goofy

 

[daisax]

I think they count on a certain number of people who generally think it's out of their price range coming for the first time (and presume they'll get hooked and come back again in the future), and people who already come regularly fitting in "one more trip this year."

Put that together with people trying sit down restaurants they wouldn't have
made the effort to before, and upgrading to the moderates or pricier locations (who will then be hooked and not want to go back next time they come) and the recent bad hurricane seasons, and I think it's win win for everybody.

 

[lorrainesy]

I suspect that the difference is made up by souvenir sales; perhaps a great number of folks visiting that time of year, when working off of such a generous discount, are more inclined to spend more money on gifts and such.

I agree.....I have already accepted the fact that any money I saved will be spent in the parks

 

[BethC1952]

They are making some money from us! Instead of the three nights we planned, with the free dining we decided to do five nights. Because we're going just before the Columbus Day weekend, we now had an extra day off, so...of course we had to add a few more nights. Because I'm a government employee, the price was right at the Dolphin, so we added three more nights (with no free dining, of course.) We already added park-hopping to our tickets (wouldn't go without that!), and, since we like to relax, we added non-expiration, too. And, of course, we now have to eat for those extra nights...and we're still paying less than last year's vacation!

 

[smep013]

People are going who had no plans to go before this deal - so they are making money there.

Also, the souveniers!

 

[bigbabyblues]

They offered the free dining during hurricane season, and right after school starts. Maybe they make more money with free dining from people that otherwise wouldn't come at that time of the year, thus filling hotel rooms that would have been empty?

I don't know. We stayed at CBR last fall during free dining and were in Martinique building 24 (right next to preferred). I know there were people in the room right beside us for a couple days, and a couple other rooms, but most of our building and the one across from it seemed empty. Didn't see or hear more than a couple families a day.

 

[sameyeyam]

I work for a hotel company and you have to look at your hotel rooms this way. Your inventory must be sold each day or you throw it away. Unlike a regular company where your inventory, if not sold each day, can hopefully be sold the next day. If you lose your chance to rent a room to a guest 1 day, then it's a total loss and you can never make that money up again.

It is better to offer a reduced rate and fill the room. As long as you are making enough money to cover the utilities, cleaning and wear & tear and a small profit then you will come out ahead.

Disney food is expensive. I mean really how many of us would pay that much money for a hamburger basket at home? So they have a huge margin on the food. Trust me they are making money even if you are on the dining plan. If I asked a normal person to eat on $39 per day, outside of Disney, you would have absolutely no problem eating like a king!

Plus you will probably spend money on souvenirs at the park. I don't know about you, but I wouldn't pay $1.00 for an antenna ball at home, yet I have no problem paying $5 for one at Disney. Once again huge markup! How about those $25 t-shirts, that realistically you can buy a Mickey t-shirt at Target for $7.

It costs them $0, nothing for you to walk around the park. Only costs them money when you are on the rides, for the energy/utility cost of that ride. There will be a base number of employees even on non-busy days, so if you can fill up the park with guests, it might take more employees, but not substantially more.

Trust me Disney is making money, they are not selling anything at a loss. Go to their website, they are a publicly traded company and look at their theme park profits!

It just so happens that we live in a Democratic society where supply & demand mean everything. When the demand for Disney is low, they will lower their prices! When demand is high, they will raise prices! But either way they will not give their product away at a loss.

 

[btuftee]

It's simple, it brings in people who wouldn't otherwise show up at WDW. As a businessman, if you give me the choice of selling a widget for $5, or not selling it at all, I'll sell it of course!

Disney's biggest day-to-day expense in running WDW is, without a doubt, payroll. For the parks, the length of the operating day is directly tied to the payroll expenses - keep MK open for 14 hours a day instead of 7 hours, and you're roughly doubling your payroll. So when the lean months of Aug-Sept-Oct hit, what does Disney do? It can truncate the park hours, but it can't simply close the parks. And it can cut park hours, but it really can't close attractions inside the parks, or else people get royally peeved (remember when they were opening Adventureland later than the rest of MK?). Plus, I'm willing to bet Disney's labor contracts with its various unions place limits on how much Disney can cut hours and lay people off.

So if Disney has to keep the MK open for 8-9 hours a day even during the slow seasons, and it has to pay for all of those employees, then it makes sense to do what it takes to get people in the parks. Also, keep in mind that these packages are tied to staying on-site in Disney hotels. Day-trippers who stay in the Motel 6 on International Drive aren't getting these deals. You have to look at the Hotels, Theme Parks, and Restaurants as a package deal. Once you've built the hotel and staffed it, the incremental expense of adding one more guest to the hotel is miniscule - just the gas, electricity, cleaning supplies, etc, necessary to restore the room for tomorrow night's guest.

By tying the promotion to hotel stays, Disney also gets a better grasp of its numbers. They can better calculate expected food requirements, making for less wasted food and more efficient operation of restaurants. If you're staying off-property and buy your tickets at the gate, Disney has no advanced warning whatsoever of your arrival, so they have to keep a little reserve capacity everywhere to accomodate that.

This all just makes your realize how much money Disney is making in the summer months, where they have jam-packed parks and hotels, and very limited perks!