new annual passes - short term thinking from Disney?

[John and Theresa]

Fascinating disucssion on The DIS Unplugged last night which got me thinking. Pete talked about Disney seeing this an opportunity to price some out of the market by charging more, and resulting in lower attendance rates and wait times.
We live in the UK, both had annual passes pre-Covid. And planned two visits a year. We can afford to still visit (when travel is allowed) but my thought took me back 23 years to our first visit in May 1998. We had far less money back then and a 'once in lifetime' trip resulted in a love of Disney, and as our financial position improved, more and more visits.
But, if Disney are pricing some out of being able to visit (and at these costs I am not sure we would have been able to afford our first visit), are Disney now going to stop growing the future Disney fanatics on which the current costing model is being based?
Short term thinking from Disney?

 

[BadPinkTink]

I just watched the the new episode and I have to agree with Pete. Yes this is Disney's way of pricing out a section of the market, in order to give a better experience to those who can afford it. And yes it is harsh and yes people will scream and stamp their feet and say why don't Disney like me, I want to have my parks experiences like I used to have.

The harsh truth is Disney is a business and all they care about is the bottom line. Its just marketing and business 101, the life cycle of a customer.

Disney don't care about the people who are stomping their feet and screaming that they are done with the parks, as Disney know that for every person or family who does this, they are replaced with new first time people. Thats what the customer lifecycle means. People are first time customers >>>> people are returning customers>>>>> people stop being customers>>> new people are first time customers etc etc.

People scream and shout and say I spend x amount at Disney , why don't Disney care about me as a customers.

Well the harsh truth is , that even though you may SPEND x amount, where you spend that money and how you spend that money matters.

Each part of the Disney parks experience from the onsite hotels, to the individual shops and restaurants in the onsite hotels, to the park tickets, to the individual shops, carts and every other place on Disney property that you have to pay for something, will all have an individual budget and the manger will have targets they have to hit. You may be spending $1000 during a day in the park, but if where you are spending that money is not making a profit, then it will get removed or changed.

Disney will also be monitoring the amount of people who walk into shops, there are some very sophisticated software to monitor footfall in retail. Disney will be watching the amount of people in the shop and comparing to how much money is going through the tills and what people are buying. Things get so detailed that Disney will have a preassigned amount of people per hour they want to enter a shop and a preassigned $ amount of how much they need each person to spend in order to get X amount of profit per hour, per half day, per day, per week, per month, per quarter etc.

So the reality is Disney will continue to change and alter their products and experiences, they will continue to raise prices, they will continue to take away things, they will continue to add new things. People will come, people will go, and the company will survive.

Its up to you, how adaptable or resistant you are to change.

If you are a person who is resistant to change you will stop going to Disney as it is not the experience you are used to.

If you are a person who is adaptable to change, you will continue going to Disney and will enjoy the new experience.

 

[dvc lover 1970]

I do not agree. If I am going to spend that much for a vacation I would rather go other places and start to travel the world. I see this as a money grab because disney figures most will pay it.

 

[BadPinkTink]

The whole problem is like Pete said, is that the customers have an emotional tie to the company, but Disney runs the business without emotion.

To understand the why of Disneys decisions you have to take the emotion out of it. Every Disney guest is basically a number on a spreadsheet. If that number makes the company money great, lets keep giving them the things they are buying. If that number is not making the company money, how can we change that. We can either give them something that they will buy OR get rid of them and replace them with someone who will make the company money.

Now once you understand that, once you take the emotion out of it, you can choose what to do. You can choose to say, well I accept that Disney only see me as a number, BUT I place a high value on the experience I get as a customer , so I will continue to be a customer.

OR

You can say, the value of the experience has diminished and is not as high as it once was, so I choose NOT to continue as a customer.

Each one is a personal decision, based on individual circumstances. And Disney is WELL aware of BOTH types of customers. Each decision is right for that individual.

Where people are wrong is to think that their individual decision to stop being a customer will make Disney care about them, and that their emotional ties to the company mean something to Disney. To be harsh, it does not.

And yes running a business is ruthless and harsh decisions have to be made. Successful businesses are not run by lovey dovy emotional people.

 

[John and Theresa]

my thought though was that the type of customers Disney are pricing out of the market would in the future be the type of customers Disney DO want to attract. In the short term it might financially pay off, but in the longer term? You need to keep growing your future customer base to keep growing.

 

[quandrea]

my thought though was that the type of customers Disney are pricing out of the market would in the future be the type of customers Disney DO want to attract. In the short term it might financially pay off, but in the longer term? You need to keep growing your future customer base to keep growing.

I agree with you, but I’m not sure people like us matter. Like you, I went to WDW many years ago. First trip was 1981 and I fell in love as a nine year old. Trips again at 16, 17, 19, 20, 21, 25. The trip I turned 25 was a turning point. I was an adult, in my first professional job, and could finally afford a whole week. Later, I brought my husband and daughter. A year after that we bought dvc. Annual passes and more dvc followed. All three of my kids have been dozens of times. I bring friends and family on those once in a lifetime trips where they spend thousands on food, souvenirs, experiences. As my station in life improved, Disney got more. My kids were primed to do the same. That’s all changed now, but I don’t think they care. They are seeking once in a lifetime guests, of whom I suppose there will be an always regenerating supply. My spend per day must be too low.

 

[rangerxenos]

I do not agree. If I am going to spend that much for a vacation I would rather go other places and start to travel the world. I see this as a money grab because disney figures most will pay it.

And they're right, most will pay it. Look at the Halloween parties this year, all sold out at a higher price and a lot less than you were getting in years past.

 

[BadPinkTink]

my thought though was that the type of customers Disney are pricing out of the market would in the future be the type of customers Disney DO want to attract. In the short term it might financially pay off, but in the longer term? You need to keep growing your future customer base to keep growing.

No, and it is something that Kevin mentioned, which I don't think the team really understood. - DINKS, Double Income No Kids.

This is the the changing demographic and Disney are adapting their business model to these people. It is the old family demographic that is being priced out, not the Double Income No Kids.

This is part of the K shaped recovery after Covid. There is a part of society who have benefited financially from Covid and who for the first time have the time and money and are in a position to have experiences they never had before.

Kids of today, whose family are being priced out could be the Double Income No Kids adults of the future or could be part of the upper K section recovery after Covid.

Disney, like every other business during Covid, has had to pivot their products and services and target a new and different type of people.

A business will not grow and survive if it only targets returning customers, they HAVE to target new customers. And often the new customer demographic will be higher priority that returning customers.

 

[WDWEPCOT]

I understand your business term
Disney advertises itself with the emotional ties - they pull at heartstrings - they want to make that connection
But it very well could be short term thinking - drop off a whole tier of customers because you have priced them out - say a family with 2 kids - you run the risk that those two kids will never be customers - and thus cycle can continue - and spread like wildfire
No one is too big to fail - show your customers you only care about money and soon enough you won’t have either - I remember way back when Disney stock was under $10 - make mass amounts of your client base mad - trust me there are nut bottomless clients - eventually the bottom falls - that is also business 101
Yes you need to show you care about your customers if you care to have some - not just the very well off customers - Disney is pricing themselves where so many can’t or won’t be able to go - is it a God given right to go ? Nope - but what kid (adult ) wouldn’t like to go ? Most kids would - most parents wouldn’t like saying no too expensive but now will have too
I’m a huge Disney fan - my friends often in past have come to me and they thought it was so expensive - now they won’t even consider it - way too expensive - I’m in the camp I’m in agreement - hence why I’ve sold some of my DVC and I’m considering selling the rest - very sad
Yes it’s a business I get that but just like any other if you don’t give me what I FEEL is good value and treatment for MY money I’ll take my money elsewhere - you can call that emotional - I call it the way I handle my money - plenty of places out there that will value me as a customer and appreciate me spending my money with them - isn’t that what you want ? To be valued ??? Disney has lost sight of this trying to make the stockholders rich
Just my thoughts

 

[Suzabella]

Disney will also be monitoring the amount of people who walk into shops, there are some very sophisticated software to monitor footfall in retail. Disney will be watching the amount of people in the shop and comparing to how much money is going through the tills and what people are buying. Things get so detailed that Disney will have a preassigned amount of people per hour they want to enter a shop and a preassigned $ amount of how much they need each person to spend in order to get X amount of profit per hour, per half day, per day, per week, per month, per quarter etc.

They've had this technology for years. I worked retail 20 years ago and the store I worked in had that technology. They knew how many people walked in the store and compared that to the til giving the manager the per customer sales number to beat. You can bet Disney has had it longer.

If you are a person who is resistant to change you will stop going to Disney as it is not the experience you are used to.

If you are a person who is adaptable to change, you will continue going to Disney and will enjoy the new experience.


It isn't a matter of being resistant to change. People are coming out of the pandemic with different points of view than 2019. Priorities have changed for many. They want to do the things that they've put off rather than repeat experiences. Resistance to change has nothing to do with it. The ability or willingness to pay for what Disney is charging is and there are many who just aren't seeing the value or can do many other things for less. We traveled to the UK and Europe for less than Disney is charging for a family of 4. Will we still go to WDW? Yes but there will be less park days and more resort only stays at DVC. We'll explore eating off property more and finding other things to do in Orlando. This opens the door to more opportunities to travel other places for us.

Disney is also out of touch with their customer base. Pete also said that they didn't understand why people were upset when they took away ME. They won't understand why people are upset about any of their cuts if they don't understand that one. And I agree with him; this feels different. Time will tell if this really is the straw that broke the camel's back.

 

[rangerxenos]

No, and it is something that Kevin mentioned, which I don't think the team really understood. - DINKS, Double Income No Kids.

This is the the changing demographic and Disney are adapting their business model to these people. It is the old family demographic that is being priced out, not the Double Income No Kids.

This is part of the K shaped recovery after Covid. There is a part of society who have benefited financially from Covid and who for the first time have the time and money and are in a position to have experiences they never had before.

Kids of today, whose family are being priced out could be the Double Income No Kids adults of the future or could be part of the upper K section recovery after Covid.

Disney, like every other business during Covid, has had to pivot their products and services and target a new and different type of people.

A business will not grow and survive if it only targets returning customers, they HAVE to target new customers. And often the new customer demographic will be higher priority that returning customers.

But what is happening among my circle, most of us are Double Income, No Kids, is that the return on the cost of my Disney vacation is not worth it to me anymore. I can well afford to pay these prices, but it's not worth it to me. I will continue to go to the parks because I love them, but I'll be staying off property next year for the first time in a decade. If Disney is going to start charging me for so many things that used to be free, I'll start giving them a lot less of my considerable disposable income when I visit their parks.

 

[John and Theresa]

My wife and I are also double income, no kids. My main point was that way back in 1998 when we had less money, if we could not afforded that once in a lifetime trip we would never have fell in love with the place and spent a small fortune visiting over the last 23 years. We visited Disneyland Paris several times too, but not in last 7 years as the cost went crazy and refuse to feel ripped off.

Having said all of this. The DIS Team do a superb job in giving us a daily Disney Fix. I love Tuesday at 6pm (here) and watching the Dis Unplugged. also all of the other videos. Keep up the amazing work team and know how much we appreciate your work.

 

[BadPinkTink]

My wife and I are also double income, no kids. My main point was that way back in 1998 when we had less money, if we could not afforded that once in a lifetime trip we would never have fell in love with the place and spent a small fortune visiting over the last 23 years. We visited Disneyland Paris several times too, but not in last 7 years as the cost went crazy and refuse to feel ripped off.

Having said all of this. The DIS Team do a superb job in giving us a daily Disney Fix. I love Tuesday at 6pm (here) and watching the Dis Unplugged. also all of the other videos. Keep up the amazing work team and know how much we appreciate your work.

all thats happening is that you and other people who feel like you are at the end of the customer lifecycle. If you feel priced out, if you feel done with Disney, then you are not the people Disney are targeting.

People are first time customers You in 1998>>>> people are returning customers You in the years 1999 to Covid>>>>> people stop being customers You Post Covid>>> new people are first time customers all the people who never went to Disney before Covid and who are at the top of the K recovery and now have the time and money to experience Disney

 

[jknc]

We’re of family of 5 who are fortunate to be able to afford $6500 for annual passes.

However, is that a smart use of $6500 for leisure?

Not at all, IMO.

The US is a big, beautiful country. We are excited to find new places to explore.

 

[BadPinkTink]

We’re of family of 5 who are fortunate to be able to afford $6500 for annual passes.

However, is that a smart use of $6500 for leisure?

Not at all, IMO.

The US is a big, beautiful country. We are excited to find new places to explore.

Again, its about the value you as an individual place on a Disney experience. While you feel that $6500 for leisure is not worth the value, there is another family who feel that $6500 for leisure IS worth the value. Disney don't really care that jknc's family wont be coming any more, because they are still getting the $6500 from another family.

 

[John and Theresa]

I didn't start this to argue with each other. None of us know how many new first timers will go and if the expense will reduce that number. And I had not said that we won't return. We wouldn't be hooked on The DIS if we had given up on Disney. My point was that making it affordable as a first time experience can get people hooked and spending more and more as their wealth increases. On a personal level, paying a bit more for lower wait time and queues sounds pretty good.
Disney for us has never been about rides, more about experience and happy atmosphere.

 

[BadPinkTink]

I didn't start this to argue with each other. None of us know how many new first timers will go and if the expense will reduce that number. And I had not said that we won't return. We wouldn't be hooked on The DIS if we had given up on Disney. My point was that making it affordable as a first time experience can get people hooked and spending more and more as their wealth increases. On a personal level, paying a bit more for lower wait time and queues sounds pretty good.
Disney for us has never been about rides, more about experience and happy atmosphere.

arguing??? didnt think we were arguing, I just thought it was a polite and interesting discussion based on the most recent Dis Unplugged

 

[jknc]

Again, its about the value you as an individual place on a Disney experience. While you feel that $6500 for leisure is not worth the value, there is another family who feel that $6500 for leisure IS worth the value. Disney don't really care that jknc's family wont be coming any more, because they are still getting the $6500 from another family.

Dont most business schools teach, your best customer is your current customer?

How much money does it cost to acquire new customers?

 

[HelsBels16]

No, and it is something that Kevin mentioned, which I don't think the team really understood. - DINKS, Double Income No Kids.

This is the the changing demographic and Disney are adapting their business model to these people. It is the old family demographic that is being priced out, not the Double Income No Kids.

Whilst I agree with a lot of what you have said, I don’t think the DINK-demographic very significantly represents what Disney is targeting either. From my perspective the lustre is being lost less because of the price increases, than because the adult experiences seem to be disappearing more and more.

I would be prepared to pay higher prices if I felt I was getting a high quality dining experience or fantastic music everywhere I went, but it seems more and more generic and IP-obsessed lately.

Additionally, the focus seems to be on creating immersive experiences rather than focusing on the iconic characters and locations (compare Galaxy’s Edge to Harry Potter at UO, where I feel UO have read the market much better).

 

[BadPinkTink]

Dont most business schools teach, your best customer is your current customer?

How much money does it cost to acquire new customers?

your best customer is the customer who is spending money and generating revenue. More and more this is the new customer, not the returning customer. A business can not survive with just returning customers who are not increasing revenue.