odds of Disney extending 45th anniversary AP discounts?

[Lalalyn]

The 45th Anniversary discounts are set to expire September 30 (I believe). Any chance Disney would extend them or make some of the restaurant discounts permanent?

I would think if they saw an uptick in annual pass purchases and corresponding visits that they would at least consider it.

 

[rteetz]

We really don't know what they will do yet.

 

[wilkeliza]

If you are talking the extra month free I thought that was already gone for new purchases and it was only extended to September to offer it to those renewing.

 

[tjkraz]

I would think if they saw an uptick in annual pass purchases and corresponding visits that they would at least consider it.

It's never as simple as that. Any discount cuts into the profitability of the product. Let's say a hamburger costs $10, of which $5 goes to cover Disney's costs (materials, labor, utilities, etc) and the other $5 is profit. With a 20% discount, it still costs Disney $5 to prepare the item but their profit falls to just $3.

At full price, sell 1000 hamburgers and you've made $5000 profit. With a discount, you now need to sell 1666 hamburgers just to net the same profits.

(All fictitious numbers, of course, but illustration is valid. Discounts do tend to increase sales, but question is whether that increase is sufficient to cover the reduction in profit.)

Disney is counting on Pandora to increase attendance. With Pandora opening at end of May, they've already committed to running the anniversary discounts thru first 4 months of that post-opening period. I think they'll be very cautious about going beyond that. Ideally (in their minds), Pandora alone will cause a traffic boost and they can start to ease back on discount programs. But we'll have to wait and see how it plays out.

 

[Madonna3]

It's never as simple as that. Any discount cuts into the profitability of the product. Let's say a hamburger costs $10, of which $5 goes to cover Disney's costs (materials, labor, utilities, etc) and the other $5 is profit. With a 20% discount, it still costs Disney $5 to prepare the item but their profit falls to just $3.

At full price, sell 1000 hamburgers and you've made $5000 profit. With a discount, you now need to sell 1666 hamburgers just to net the same profits.

(All fictitious numbers, of course, but illustration is valid. Discounts do tend to increase sales, but question is whether that increase is sufficient to cover the reduction in profit.)

Disney is counting on Pandora to increase attendance. With Pandora opening at end of May, they've already committed to running the anniversary discounts thru first 4 months of that post-opening period. I think they'll be very cautious about going beyond that. Ideally (in their minds), Pandora alone will cause a traffic boost and they can start to ease back on discount programs. But we'll have to wait and see how it plays out.

All valid points, but you're not taking into consideration that just because they came for AK means they're going to venture into MK, Epcot, or DHS. So they may do what was done before where they offer discounts at other parks to increase a. park hopping b. attendance at other parks and thusly, c. sales at other parks.

 

[tjkraz]

All valid points, but you're not taking into consideration...

There are many factors which will ultimately factor into Disney's decisions. My post was not intended to serve as a comprehensive essay on Disney's pricing methodology. I was simply illustrating how discounts + increased sales do not necessarily equal increased profit.