Price increase to come??

[SeaDis]

I'm in the no increase camp for park tickets this Jan/Feb, unless/until ROTR gets some serious tourist traction. Mmmmaaybe we get some tweaks to the peak pricing, etc, but I just can't see the kind of 20% hikes we've seen in the last couple years... at least right now.

Hotel rack rates, especially at DLR hotels, came down big this Fall, retracing to even 3-4 years ago. They are still lower for Spring, then elevated/unchanged for Summer 2020. If you start seeing Summer rates come down like last year, and/or deep specials, that would be the first "blink". No doubt DLR has near real-time data on airline/hotel & package bookings. They will know if people are coming, from where, and at what prices.

ROTR looks amazing and no doubt it will be crowded. But how many tourists paying top dollar remains to be seen for a while. Raising prices before it takes hold seems really risky in my opinion, and I think they would have done it already. They need serious buzz/social media to reboot the hype from last Summer.

I agree APS are a different animal and may see some tweaks/increase there. And, yes on Flex expansion! Give me a 3 day option, I buy.

 

[AndrewC]

Probably wishful thinking, but I keep thinking that with last year's drop in attendance, SWGE's lackluster opening, and admitting to share holders that ticket prices might have been part of the driving force behind the drop in attendance... maybe, just maybe they'll hold off on an increase. But, I'm probably wrong.

I think they were actually very happy with the attendance result. One of the largest issues they had was capacity and wait times. They "improved customer experience" by making it less busy in part because of ticket price increases. (Also pass black outs) Even with the lower attendance, operating income and revenues were up year over year. As long as they're making more money than they did last year, AND potentially increasing guest satisfaction from lower wait times and less general crowding, it's a win win for the Mouse.

Growth at Disneyland Resort was primarily due to higher guest spending, partially offset by expenses associated with Star Wars: Galaxy’s Edge, which opened on May 31, and, to a lesser extent, lower attendance. Guest spending growth was primarily due to increases in average ticket prices and higher food, beverage and merchandise spending.

Obviously higher ticket prices was a direct change by Disney, but higher food/bev and merchandise could be a mix of things. It could be that just in general the economy was doing better, but it could also be that people had more time for those things. If they've saved an hour total in wait times across a couple different attractions and finished their "must do" list they might linger longer in gift shops or opt for a table service meal rather then getting something they can eat while in line somewhere. There also may have been more impulse buying opportunities. If you see a line of 20 people at the milk stand in GE you might walk right past it, especially if you've tried it before. However, if there's only a couple people in line and you know it'll be just three or four minutes you might be more open to swinging in real fast to grab one... and hand over another what, $8 to Disney?

I wouldn't be surprised if they felt they could increase ticket prices a bit more without starting to eat too much into attendance numbers. I also think they actually have a little more room to improve capacity issues in general (not around holidays, that's pretty much a free for all) and see customer satisfaction increase. I know I personally was surprised and pleased that Smuggler's Run was never more than 70 minutes when I went during Halloween time in October, and was as low as 40 minutes during peak mid morning/early afternoon times. I was fully expecting it being a ~120 minute wait which would be killer without FastPass. I've never done RSR without fast pass because of the constant 90+ minute wait time (at least during October when I've been there).

Trust me, I hate paying ~$700 for attendance for a week long Disney trip, but I think I would trade a day's cost for more relaxed crowds...

 

[AndrewC]

ROTR looks amazing and no doubt it will be crowded. But how many tourists paying top dollar remains to be seen for a while. Raising prices before it takes hold seems really risky in my opinion, and I think they would have done it already. They need serious buzz/social media to reboot the hype from last Summer.

I think the buzz will happen anyway. Operating income increased 11% in 2019 compared to 2018 and revenue was up 6% during that same time. (The difference between those two numbers was mainly from higher cost in labor and investment in the parks). Increasing prices increased customer satisfaction (from less crowding) AND helped drive higher revenue...

ROTR is set to be the most advanced and largest attraction to open in a long time. I fully expected excitement for the land to be soft last year once it came out that the largest attraction was delayed and wouldn't open on time. Maybe some amount of families (out of state) had locked in vacation plans before the ROTR announcement hit, but I would think a decent amount probably were aiming for late summer to visit and may have been able to postpone their trip, or decide against it by the time the announcement was released. I think demand will be just as strong this year, even with a 10 to 15% price hike, especially if initial reports of wait times are low or super manageable.

 

[Cal-Pie]

I think they were actually very happy with the attendance result. One of the largest issues they had was capacity and wait times. They "improved customer experience" by making it less busy in part because of ticket price increases. (Also pass black outs) Even with the lower attendance, operating income and revenues were up year over year. As long as they're making more money than they did last year, AND potentially increasing guest satisfaction from lower wait times and less general crowding, it's a win win for the Mouse.



Obviously higher ticket prices was a direct change by Disney, but higher food/bev and merchandise could be a mix of things. It could be that just in general the economy was doing better, but it could also be that people had more time for those things. If they've saved an hour total in wait times across a couple different attractions and finished their "must do" list they might linger longer in gift shops or opt for a table service meal rather then getting something they can eat while in line somewhere. There also may have been more impulse buying opportunities. If you see a line of 20 people at the milk stand in GE you might walk right past it, especially if you've tried it before. However, if there's only a couple people in line and you know it'll be just three or four minutes you might be more open to swinging in real fast to grab one... and hand over another what, $8 to Disney?

I wouldn't be surprised if they felt they could increase ticket prices a bit more without starting to eat too much into attendance numbers. I also think they actually have a little more room to improve capacity issues in general (not around holidays, that's pretty much a free for all) and see customer satisfaction increase. I know I personally was surprised and pleased that Smuggler's Run was never more than 70 minutes when I went during Halloween time in October, and was as low as 40 minutes during peak mid morning/early afternoon times. I was fully expecting it being a ~120 minute wait which would be killer without FastPass. I've never done RSR without fast pass because of the constant 90+ minute wait time (at least during October when I've been there).

Trust me, I hate paying ~$700 for attendance for a week long Disney trip, but I think I would trade a day's cost for more relaxed crowds...

You make good points, I guess only time will tell

 

[DLgal]

Bob Iger himself said there wouldn't be any major price increases anytime soon.

What happened last year at DLR spooked the executives. Big time.

 

[AndrewC]

Bob Iger himself said there wouldn't be any major price increases anytime soon.

What happened last year at DLR spooked the executives. Big time.

I don't know if they break that out into a separate area in their earnings... but if operating income is up high enough to cover increased labor costs AND still have a higher revenue than last year... I wouldn't be really all that "spooked". Maybe they could have made even more money, but increasing year over year is still good! (Also, I though they said something on the earning call about occupancy levels being healthy, like 80%+ or something, but I don't have time right now to dig through it again)

 

[SeaDis]

Great points @AndrewC, but there is a lot of nuance. Operating income at DLR was down in Q3, not up. It was saved by Parks overall and merchandise, and spun on the earnings call as "higher guest spending"; which I take to mean higher spending per guest, but maybe not overall.

Yes fair to say it was up YOY, but that includes the previous holiday season (before price increases), the Spring ticket special, unblocking of APs, and hotel specials (i.e. higher occupancy) and part of the recovery in September with Halloween, room rates, and specials.

I still kind of lean toward the spooked idea. The executive shakeup/shuffle probably says it better than anything. I just smirk with any executive who spins a marginal earnings release with "we are raising prices and lowering crowds to improve the guest experience" as Chapek alluded too. They worked like crazy on Project Stardust to accommodate more crowds, at higher prices.

Anyways, all good! I totally agree the buzz will return as the new ride performs and we also have Marvel on the horizon. I just think the "annual" increase of Jan/Feb in recent years is a little soon given this SWGE staggered-open situation. But, Disney knows the numbers and will act accordingly. Again, APs are another story! Watching with interest!

 

[Aurora0427]

and then hotels went nuts and we did a spur of the moment trip in July because we got 6 nights for $500 because they were freaking out..

We were able to stay at the Park Vue Inn all summer for less than $200 a night, even on the weekends. We just moved to Southern California and thought that was the norm! Ha! We’ve now seen what the prices really are this fall and Christmas.

 

[DLgal]

I don't know if they break that out into a separate area in their earnings... but if operating income is up high enough to cover increased labor costs AND still have a higher revenue than last year... I wouldn't be really all that "spooked". Maybe they could have made even more money, but increasing year over year is still good! (Also, I though they said something on the earning call about occupancy levels being healthy, like 80%+ or something, but I don't have time right now to dig through it again)

Earnings calls are ALWAYS loaded with "spin" to make the company look good. You have to take them with a large grain of salt.

 

[DLgal]

That seems really stupid. Can't you just buy tickets via the app? Anyway, these people are wasting their time.

 

[Tylerrog94]

That seems really stupid. Can't you just buy tickets via the app? Anyway, these people are wasting their time.

That was my thought... Interesting nonetheless!

 

[SOCALMouseMommy]

I was in the parks today and it was extremely crowded. There were lines at the ticket booths all day. It seemed like a lot of guests today were first timers or hadn’t been in a long time. A lot of people from other countries, a lot of people saying “where is Star Wars land?” My guess is just a lot of people who needed tickets and didn’t know you can do this online.

 

[midnight star]

Yes. I’ve only heard it in various groups. Since prices increased this same weekend last year. I think people are trying to play it safe.
I also heard there are conventions happening so it could be people buying tickets for that.

 

[midnight star]

That seems really stupid. Can't you just buy tickets via the app? Anyway, these people are wasting their time.

You can use the app. But sometimes if you're buying a pass on payments with a bigger down payment, price bridging, etc it’s sometimes better to go to the booth.

 

[theluckyrabbit]

You can use the app. But sometimes if your buying a pass on payments with a bigger down payment, price bridging, etc it’s sometimes better to go to the booth.

And not everyone has a smartphone. (I know... hard to believe, right?) But we know people who refuse to get them or just don't trust them. So for them, standing in line at the booths it is!

 

[MikeRx]

You can use the app. But sometimes if your buying a pass on payments with a bigger down payment, price bridging, etc it’s sometimes better to go to the booth.

Unfortunately we need to use the booth this trip to receive our meager DVC tuppance of a discount. $20 off a $1300 pass is sad, but at least $60 is a nice breakfast for the three of us at SH55 in 2 weeks.

 

[theluckyrabbit]

Unfortunately we need to use the booth this trip to receive our meager DVC tuppance of a discount. $20 off a $1300 pass is sad, but at least $60 is a nice breakfast for the three of us at SH55 in 2 weeks.

At this point, any discount is better than nothing!

 

[LilyJC]

We saw that line when we arrived at the parks around 7 last night, and it was no better close to 9:30 when we headed out to try the line again. We needed to upgrade my oldest’s park hopper ticket and are DVC, so we want to get our measly discount as well. Thankfully I purchased a 2 day which means I’ll just pop over to the parks when the crowds clear out and hope for no price increase. Some regrets as the lines on Thursday, the 2nd, were non-existent.

 

[deejdigsdis]

That seems really stupid. Can't you just buy tickets via the app? Anyway, these people are wasting their time.

Is this comment in reference to something specific? Seems like something is missing.

 

[deejdigsdis]

Is this comment in reference to something specific? Seems like something is missing.

Never mind. I saw that it was edited by a mod. Now I'm curious! Been following this since I have a quick trip coming up.