More Blatantly GREEDY Dining Surcharges on the way

[Tricia1972]

Actually, Disney's net income (total revenues minus total expenses) in the last fiscal year was $4.25 billion (this works out to $2.07/share). Still a lot of money, but not $10 billion.

Disney does pay a $0.35/share annual dividend, so that is some money back to the shareholders. That being said, the stock price has been pretty flat for the last year or so, notwithstanding some pretty good corporate performance.

Well that shows what happens when you go and believe what you read on the internet!

(Didn't the theme parks show close to $10 Billion and then maybe the company overall showed a profit of $4.25 Billion.

 

[labattblue]

This has probably been said already but...

1.You pay more to fly at busier times of the year.

2.You pay more to stay at WDW resorts during busier times of the year

...and now you have a CHOICE to pay more to eat at certain restaurants during busier times of the year.


Do I like it? Not really.
Do I have other dining options? Yes.
Is the parks division of Disney hurting so much that they need to do this? No.
Will the increased profit go right back into the parks budget? Only Disney knows.
Will this mean the quality of the food will be better? Nope.


That about sums it up.

 

[crisi]

A certain amount of Disney's profit goes to "Retained Earnings" This allows them to have money available for capital expansion - for instance, two new cruise ships - they finance much of that, but having retained earnings makes financing more affordable. They also use retained earnings for investing outside of Disney - corporations own stock in other corporations.

Most of Disneys revenue is plowed back into running the company. They only have an 11% profit margin (an 20% operating profit margin). That's profitable, but it isn't great shakes for a corporation. So almost 90% of the money they take in isn't profit - its the cost of doing business. If that was spread out evenly across everything you spend (and it isn't) - that $100 meal you have only makes Disney $10.00. Of that $1.60 gets passed to shareholders.

 

[RllngRckBrw]

It does seem like they are trying to sneak in extra charges especially with the people that are not as knowledgable about the parks. The parking increases, food increases, the downgrading of the DDp. I am still in love with DW but it may soon get to a point were your avg fam will be priced right out of going to DW.

 

[TisBit]

This has probably been said already but...

1.You pay more to fly at busier times of the year.

2.You pay more to stay at WDW resorts during busier times of the year

...and now you have a CHOICE to pay more to eat at certain restaurants during busier times of the year.


Do I like it? Not really.
Do I have other dining options? Yes.
Is the parks division of Disney hurting so much that they need to do this? No.
Will the increased profit go right back into the parks budget? Only Disney knows.
Will this mean the quality of the food will be better? Nope.


That about sums it up.

That is my point exactly. I don't see a point to outrage or disbelief. Restaurants in tourist towns often change their prices based on the season. High prices in tourist season and low prices off season to attract locals that wouldn't normally go. While its a little different, it is the same philosophy.

As you said, I am not happy about it, but I understand it. Some people will go elsewhere, but the fact is the restaurant will be packed either way.

As for being priced out of WDW, WDW always tweaks and adjust things for demands. People have talked about how WDW was getting so expensive since it began, but they still draw the crowds.

 

[crisi]

It does seem like they are trying to sneak in extra charges especially with the people that are not as knowledgable about the parks. The parking increases, food increases, the downgrading of the DDp. I am still in love with DW but it may soon get to a point were your avg fam will be priced right out of going to DW.

That's really not a Disney problem, thats an American economy problem. Real wages for the "average" American haven't been keeping pace - and with the increase in gas EVERYTHING is getting more expensive, not just Disney. That leaves less disposable income for everyone, which squeezes the middle class out of luxuries like vacations.

If you look at the big picture, Disney could cut its profit margins, but that functionally means a pay cut to their shareholders. Would you like it if your boss gave you a pay cut? And the vast majority of shareholders aren't the wealthy, they are investors who own a piece of Disney as part of a mutual fund portfolio maybe for retirement, maybe they are already retired - average, ordinary, middle class people. Cut prices (or maintain them) and you just take it out of your own 401k.

And that big picture has to do with the growth of the third world, with cheap imports, with limited oil production (and long term availability of fossil fuels), with the weak dollar for a number of reasons - not the least of which is our expensive war that is not being supported by the world.

I think the middle class being able to afford yearly travel type vacations was an abberation in the U.S. and we are in the process of doing a reset on this. Which will be tough for the travel industry in general. But who traveled to Disney every year as kids in the 1970s? Or even took big yearly stay in hotel kinds of vacations? I'm betting very few of us did. Our big yearly vacation was a two room, no airconditioning, cheap cabin up on a lake in Northern Minnesota. No restaurants - Mom cooked in the galley kitchen, the kids slept in the living room and Mom and Dad had the bedroom.

 

[fairestoneofall]

I will say that, because the holiday dining pricing will be in effect for most of our trip this year, we will be doing the DDP.

 

[ilovecountry]

I originally was going in June but I switched everything to July. I bought through travel sites, I can't get the DDP so I can't afford to pay "high season" food prices too.

 

[Airb330]

That's really not a Disney problem, thats an American economy problem. Real wages for the "average" American haven't been keeping pace - and with the increase in gas EVERYTHING is getting more expensive, not just Disney. That leaves less disposable income for everyone, which squeezes the middle class out of luxuries like vacations.

If you look at the big picture, Disney could cut its profit margins, but that functionally means a pay cut to their shareholders. Would you like it if your boss gave you a pay cut? And the vast majority of shareholders aren't the wealthy, they are investors who own a piece of Disney as part of a mutual fund portfolio maybe for retirement, maybe they are already retired - average, ordinary, middle class people. Cut prices (or maintain them) and you just take it out of your own 401k.

And that big picture has to do with the growth of the third world, with cheap imports, with limited oil production (and long term availability of fossil fuels), with the weak dollar for a number of reasons - not the least of which is our expensive war that is not being supported by the world.

I think the middle class being able to afford yearly travel type vacations was an abberation in the U.S. and we are in the process of doing a reset on this. Which will be tough for the travel industry in general. But who traveled to Disney every year as kids in the 1970s? Or even took big yearly stay in hotel kinds of vacations? I'm betting very few of us did. Our big yearly vacation was a two room, no airconditioning, cheap cabin up on a lake in Northern Minnesota. No restaurants - Mom cooked in the galley kitchen, the kids slept in the living room and Mom and Dad had the bedroom.

Great post, I agree 100%. These dining charges seem excessive, but if people will pay, that's the market then.

 

[lntsmom]

Do you know what the new price is? I guess tonight when I get home I'll call Disney. We are suppose to do Chef Mickey's, Crystal Palace, and Tusker House the last week of May.

If they've raised the prices we'll drop Chef Mickey's and Crystal Palace. I'll also tell the CM at Disney Dining why I'm cancelling. As it is my older son won't eat off the adult menu, so I lose huge amounts of money. I don't see why they can't let 10 - 13 year olds decide which menu to eat from anyway.

I just simply won't pay $30 for him to eat chicken nuggets!

 

[MsStinkerBelle]

I will say that, because the holiday dining pricing will be in effect for most of our trip this year, we will be doing the DDP.

That's what we're doing for our December trip.

 

[HunnyPots]

Do you know what the new price is? I guess tonight when I get home I'll call Disney. We are suppose to do Chef Mickey's, Crystal Palace, and Tusker House the last week of May.

If they've raised the prices we'll drop Chef Mickey's and Crystal Palace. I'll also tell the CM at Disney Dining why I'm cancelling. As it is my older son won't eat off the adult menu, so I lose huge amounts of money. I don't see why they can't let 10 - 13 year olds decide which menu to eat from anyway.

I just simply won't pay $30 for him to eat chicken nuggets!

The surcharge is $4 per person. I believe the new buffet price for chef mickey's dinner is $29.99 so for the "holiday" period it will be $33.99 plus tax and gratuity.
I cancelled both my chef mickey's and crystal palace reservations when I found out about this.

 

[Jimdvc]

Disney has stock holders. Stock holders demand for the company to generate as much profit as possible. Disney is only doing what any company does. Making as much money as they possibly can.

Price a convertable in Jan and then again in May, and tell me what you discover.

When the demand for an item (wdw food in this case) goes up, so does the price. Does it upset me when I pay, you betcha, But I do undertand why they are doing this.

 

[Tricia1972]

Disney has stock holders. Stock holders demand for the company to generate as much profit as possible. Disney is only doing what any company does. Making as much money as they possibly can.

Price a convertable in Jan and then again in May, and tell me what you discover.

When the demand for an item (wdw food in this case) goes up, so does the price. Does it upset me when I pay, you betcha, But I do undertand why they are doing this.

I agree with this completely. I understand the why, and it's up to each of us as individuals to decide if it's worth it to us or not to pay the premium price.

See though, I'm the kind of soul who WOULD buy that convertible in January and park it in my garage until the weather is nice enough to drive it. I don't consider myself cheap, but I would like to get the best possible price for the product/service that I receive.

We are choosing to not pay the premium price for the character breakfast or the buffet dinners. Others will take our place, and that's fine. Disney will continue to increase the prices as long as demand lets them and when demand wanes, then the price increases will stop. As a PP said, that's the market.

I figured out last night just what bugs me so much about paying the premium price for mediocre food. I spent too much time in Vegas prior to switching to Disney vacations. Gourmet food with gourmet desserts there, at a buffet, will cost approximately $25-$35 per person (during peak periods). I had Vegas buffet on the brain and was comparing to Disney. Disney has their captive audience and thus doesn't have to work too hard at food quality to retain their guests. Vegas is working hard to get your dollars to their casinos and the food shows it (or it did as late as 2005 when we last went).

The surcharges are what they are. Everyone has to make the choice, is it worth it to you to pay the premium price?

 

[Goofy4]

I hope this hasn't been said:

In my opinion it's mostly about the help; keeping the place running.

I'm sure the busy season puts a tremendous strain on resources all across Orlando. Disney can least avoid to make a 'sorry, don't have enough help tonight' excuse for poor service.

I think the poor person running the food division may have had to bite the bullet and implement the surcharge to help make sure we have a "magical day" by paying his folks a little more (for O.T., recruiting, whatever). <having said that, a CM will probably correct me in 4,3,2...>

 

[lntsmom]

I'd seen the announcements about increased prices for Spring Break. That I can understand, in that it is in response to demand. But, the entire month of June and part of May? That isn't increased demand.

I have to agree with those I've read elsewhere who say that Walt would be outraged by Disney's current plan to raise the prices as high as the market would bear. He didn't mean for Disney to be an experience only the wealthy can enjoy, but that is the way things are headed.

This will most likely be our last WDW trip. There may be one more Disneyland trip down the road 4 or 5 years from now. I'll be spending my money so my kids can visit places like Chicago and San Antonio and at "must see" parks such as the Grand Canyon and Mount Rushmore. They aren't Disney, but they also won't require years of savings.

Now I have to ask myself: is it really worth almost $90 for waffles with Mickey and friends or do I cancel all our buffets???

I'm sure what Disney is attempting to do is push more and more families into buying the dining plan. After all, if you're paying $34 for one meal, why not?

This all makes me a little sad. We don't really care about the characters, but a full week of nothing but fast food could get a little old. Now, where were those addresses for the grocery stores in Orlando that will deliver to WDW?????

 

[lmhall2000]

It really isn't making sense to me and is CRAPPY customer service...

Okay, they're facing more demand...that means they're already selling MORE food, right? So they ARE making more money....which will pay for the extra labor force needed....

If I have 5 horses and give lessons, then all of a sudden I have more lessons than horses, I add some horses and pay for it with the extra lesson fees I get from the MORE students, not the MORE fee....

OUTRAGEOUS!! I hope Disney is watching these threads. They should be THANKFUL that they have MORE business during certain periods and meet the demand just through the extra money being funneled their way....just nuts, that's why I'll NEVER go to Disney during high tide...we always go the slowest weeks of the year and I love the NO LINES and easy ADR's!

Tara

 

[angelmav]

First, dont ever trust the reported earnings of any publicly traded company. Second, dont trust the earnings report of any privately held company. Disney is working with profit margins a whole lot greater than many want to give them credit for.

 

[TLSnell1981]

First, dont ever trust the reported earnings of any publicly traded company. Second, dont trust the earnings report of any privately held company. Disney is working with profit margins a whole lot greater than many want to give them credit for.

Numbers don't lie....but people do. They can be manipulated to say what one wants...to a point.

 

[crisi]

Numbers don't lie....but people do. They can be manipulated to say what one wants...to a point.

Course, if you manipulate them in violation of GAAP now, you will go to jail. Are there ways to manipulate earnings?, sure. Why any publically traded company would make their margins LESS than they actually are over a long period of time is mystifying.