Need your thoughts, Heard Disney actually looses money entertaining some guests

[johnGorski]

A friend of ours who we meet in Disney who is a Local FL resident was telling me what it cost for Disney to entertain a guest daily.
A Local FL resident they actually loose money on because they do not spend much money in the park. If they go over 15 times a year where many of them do, they loose money on that guest.

another group is the ones that buy a 10 MYW ticket Non park hopper option. They only buy lets say a burger and fries for lunch and eat outside of the park for dinner. They also stay off site, buy min merch. Disney looses money on these guests too.

I asked about the parking fees they have to make a killing he said actually most of that money guest to tram opps and a big portion goes to infrastructure costs in southern Orlando. Reason why parking as gone sky high is the huge road projects right outside of Disney and by the Orlando convention center.


well I asked him what guest group to they make money on. Well corporate meeting held on property is the number one! Second is the resort guests/DVC members especially purchase Disney dinning plans ect. He also told me that they spend twice amount of money on merchandise.

This kind of concerns me with the group that they make money on. First with conventions look at las Vegas for an example with coperate America pulling out of conventions. Our company had a convention every year until last year, it is not going to happen this year as well. Free dinning programs here again this will cut into that group.... IMHO are we on our way to ticket price hikes? No new attractions to bring us back to the world?

 

[Robo]

A friend of ours who we meet in Disney who is a Local FL resident was telling me...

Famous last words.

IMHO are we on our way to ticket price hikes? No new attractions to bring us back to the world?

Within the laws of "supply and demand..."

All prices can inflate up to near the point that few will buy the item in question.
Or, the product (new attractions) will not remain in a state of desirability
to attract sufficient buyers (vacationers) to support the product (the parks.)
Then, either the price must be made more attractive (special "packages" come to mind,) or the company will simply not receive enough to continue to operate.

Look at the airline industry as a prime example of ticket pricing in tough times.

 

[Missytara]

This from a person who uses the word "loose", which is what pants are when you "lose" weight.

I would take it with a grain of salt.

 

[DisneyMomma81]

Consider DLR ~ lots more locals ~ cheap APs (1 type costs less than a 3 day Park Hopper!)

 

[CandleontheWater]

Is your friend affiliated with Disney in any way, or are those just his ideas about who brings the most money into the parks? I recently moved away from Florida, but my husband and I were locals and I know that the parks made a killing on us. Yes, we bought APs and maxed them out, but when we sat down to look at our Disney budget, we were spending approximately $10,000 a year at Disney between lodging, drinks, dining, more drinks... We would go down with other couple friends at least once a month and have a blast. We were dual income, no kids, and Disney what what we chose to spend our money on (as opposed to clothes, cars, etc), but I know plenty of other locals families who also would drop big bucks on multiple trips to the world. I supposed true Orlando locals might not make as much for Disney if they do not stay over, but even then, all that dining would tend to add up!

 

[Michael623]

I'm glad I'm not the only one bothered by the loose/lose typo. It is by far the most prevalent on this site.

 

[ransom]

Okay, I'll try to take this seriously.

Every theme park that offers season/annual passes knows that the locals who buy those are not going to be as profitable on a per-visit basis as the one-time visitors. Yet, all the parks offer those passes. Amazing, huh?

The reason is that the marginal cost of entertaining one more guest is extremely small, given decent attendance. Yet that one additional guest may spend a few dollars per trip (on a bottle of water, a soda pop, or whatever). That's money the company wouldn't make, otherwise.

 

[BarleyJack]

This from a person who uses the word "loose", which is what pants are when you "lose" weight.

I would take it with a grain of salt.

Having a bad day?
Was that really necessary?
Methinks not.
Check this post for grammar and spelling errors please......as I'm sure you will.

Let us review some of your prior threads/posts as you seem to be so caught up in proper spelling/grammar:

On another thread you said: Askerhaus in Norway is a character meal and is a 2TS credit on the DDP. Umm, it is Akershus, not askerhaus

Also said: If you are a table with 2 adults and 2 children,; well, if you are a table then they don't need to eat; the proper term should have been something like: If you are a party requiring a table for....

Also: I noticed a slight new york accent when they spoke. New York is a proper noun, really should be capitalized.

Just sayin'

 

[H.E. Pennypacker]

Okay, I'll try to take this seriously.

Every theme park that offers season/annual passes knows that the locals who buy those are not going to be as profitable on a per-visit basis as the one-time visitors. Yet, all the parks offer those passes. Amazing, huh?

The reason is that the marginal cost of entertaining one more guest is extremely small, given decent attendance. Yet that one additional guest may spend a few dollars per trip (on a bottle of water, a soda pop, or whatever). That's money the company wouldn't make, otherwise.

Right. Hence (I suspect) the reasoning behind giving FL residents 15 months on AP's. Disney makes the same on the AP whether the person visits one time or 450 times. But by giving them an extra 3 months to come to the parks and potentially spend money on food, merchandise, maybe even lodging, Disney increases their chances of making more profit on a demographic group that may or may not be as profitable as the "one-time out-of-stater" group.

 

[mountdew1]

The reason is that the marginal cost of entertaining one more guest is extremely small, given decent attendance. Yet that one additional guest may spend a few dollars per trip (on a bottle of water, a soda pop, or whatever). That's money the company wouldn't make, otherwise.

Exactly. No idea what their actual break even point is, but assume its something like 20k guests at MK, paying 40 a head. (Price assumption based on a rough estimate that many guests do 5/6 days per trip in park) Those 20k guests pay for staffing all rides, attractions, shops, etc from 8-7 (or whatever the hours are) Most rides, attractions, etc don't necessarily benefit from additional staffers, and when they do, the costs of adding another CM are marginal. Something like $10 an hour. So one additonal paying guest, covers another 3 or so hours or staffing. BUT, that one additional CM can service a few hundred guests. So as the PP said, any AP holder who visits after that point and buys just 1 item, that is additional money in their pocket. Not to mention, a standard AP would allow for 10 or so entrances at our fictional $40 per head break even point. So it's not until after that point that they even start to have lower returns.

And it is all in their accounting. Technically, MK COULD lose money on a slow day in January. But that would only be if they report the gate take separately from the food take separately from the merch take, etc. Which they may do. BUT, then on a busy day at XMas time, or over summer vacation, the MK gate take more than covers staffing, and the excess would in theory cover any short comings from the slow season. But on the whole, WDW still makes money every day you are there. Otherwise they wouldn't still be open now would they? ; )

As a PP said, it's a bigger issue in DL. The AP holders at DL, and even WDW to a point, seem to be very demanding, expecting better service, more freebies, simply because they are AP holders. But they forget that the AP holder may have a smaller per visit take for Disney, so Disney should be bowing down to the occasional guests in reality.

 

[Tomh]

It comes down to the quantity / quality balance. While it may well be true that Disney makes a lot more money per day on vacationers who are traveling from some distance away, and only spending ten days in Disney per year, the local who owns a season pass (and I'll venture that quite a few season pass holders are indeed local) may well visit 30 or more times a year. So if Disney makes $30 per day profit on the 10 day visitor, and only $10 per day on the 30 day seasonal pass holder, at the end of the year, they've made the same $300 on each.

 

[Lucky Bug]

We spend a lot of money on merch, like at least $200 a day on average, mostly due to pin addiction. Pins have a HUGE profit margin for Disney, so I don't think that we are the "typical" 10 day MYW non expiring ticket holders.

We usually do stay onsite, usually in a deluxe or better. We usually do eat all meals onsite, with an average of one TS a day. We try to go at least once a year. We both have gone solo inbetween our trips together. For a couple of DINK's, I think we put a pretty decent amount of cash into the Mouse's wallet. Oh, and we have a rule, once you arrive on property, you can not leave property until it's time to go home. If I can't make do with what the Mouse has to offer onsite, then I just don't need it.

I bought a 10 day MYW non-expiring pass in April to cover the last day of my solo trip. I finished off two other left over tickets during that trip before I bought this one. I have 9 days left. I will use 4 in December. I would love to say that the next 5 days will be used on a solo trip for me in the Spring, but I don't think our schedule is going to permit it. My wife travels a lot for business and her 2010 calendar is already looking kind of scary busy. At any rate, we will be using those 5 days in 2010, but it will most likely not be until the F&W Fest or until December. We love going at both of those times of year.

We also tend to buy access to either MNSSHP or MVMCP when we travel during those seasons. We also tend to go two parties on two nights instead of just one because it's nice to be able to take full advantage of the events without feeling rushed due to crowds.

Basically, I think we blow the norm as the OP stated the norm is for the 10 day MYW non-expiring ticket holders. We love our Disney stuff.

 

[MouseMomx2]

I'm glad I'm not the only one bothered by the loose/lose typo. It is by far the most prevalent on this site.

I agree that it is a popular one, but it doesn't hold a candle to the should "of", could "of", would "of" typo triad.

As for the OPs subject, I don't put a lot of faith in things I hear second or third hand. Even some of the CMs at WDW don't know what's going on. My guess is that WDW makes money off nearly every guest. If they didn't then APs and DVC memberships would be priced a whole lot higher since those two groups are the guests that acheive the lowest cost-per-day for park entry and resort accommodations.

 

[TitanBrett]

Okay, I'll try to take this seriously.

Every theme park that offers season/annual passes knows that the locals who buy those are not going to be as profitable on a per-visit basis as the one-time visitors. Yet, all the parks offer those passes. Amazing, huh?

The reason is that the marginal cost of entertaining one more guest is extremely small, given decent attendance. Yet that one additional guest may spend a few dollars per trip (on a bottle of water, a soda pop, or whatever). That's money the company wouldn't make, otherwise.

You can always spot someone with at least a basic understanding of Economics when they use the word "marginal". Ransoms post is absolutely correct, the cost of having 50k in the park vs 40k or 30k or whatever is negligible. There is also no way Disney is at a net loss for a local visitor, if that was the case they would not offer us discount tickets. If they lost say $10/day for every local visitor than you could expect them to raise our ticket prices more than $10/day to make up the shortfall.

 

[dtum]

FL residents aren't the only ones who buy AP. I know a lot of out-of-state people w/AP and they go twice during that time period. I also know of people who buy an AP and then only use it once for some reason (time just got away I guess) so not all APs are created equal. Living in OH, I'm considering an AP, but not sure whether we want two trips in one year (spring & fall). I'm pretty sure Disney is not losing $$ on AP or any other ticket. People out for the day are going to spend, spend, spend...JMO

 

[TLinden16]

Since this isn't really about trip planning, and the information isn't directly from Disney, I think this is a better fit on our rumors board, so I'm going to move it over there now.

 

[mariepapa]

My guess would be that Disney has the best accountants and marketing teams at their disposal. I seriously doubt they lose money on many people. If you are in the park you are likely spending money in some fashion, because frankly, they force it down your throat in their wonderful, magical way. Don't get me wrong, I love Disney and would rather spend my money there than anywhere, but they are almost evil in how smooth it is to be there and have the cash leave your wallet.

 

[7Le's]

Having a bad day?
Was that really necessary?
Methinks not.
Check this post for grammar and spelling errors please......as I'm sure you will.

Let us review some of your prior threads/posts as you seem to be so caught up in proper spelling/grammar:

On another thread you said: Askerhaus in Norway is a character meal and is a 2TS credit on the DDP. Umm, it is Akershus, not askerhaus

Also said: If you are a table with 2 adults and 2 children,; well, if you are a table then they don't need to eat; the proper term should have been something like: If you are a party requiring a table for....

Also: I noticed a slight new york accent when they spoke. New York is a proper noun, really should be capitalized.

Just sayin'

Hehehe-thank you for writing this, I was thinkin' the same thing, but didn't care enough to type it out!! Siince when is the Dis english class??? and why are we correcting others postings?? Come on!!









DH Me DD9 DS6 DD4 DS3DS2

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[dizfamily4]

BarleyJack..(did I spell that right?) thank you too for your response, that was just uncalled for!

 

[johnGorski]

I am sorry for the grammar issues and started this battle of the proper grammar, lets all try to stay on topic. I have been personally trying to work on this as I came to the US from France.
But back to this- I am just looking at how they can lose money. I am going to use Six Flags as an example and yes I had a very good friend that was a finance executive they wanted to get as many people in there parks so they offered season passes for about the amount of a 1 day ticket. They thought guests would spend more in the park guess and building mega coasters. Well they ended up bankrupt.
I know Disney will never go bankrupt they have too many other business units to fall back on. I am just trying to guess what % of these customers were they could make little profit off of or break even. With this ecomomy I could see this increase.