So just why is Disney raising ticket prices so early

[mom2rtk]

9/11 was ten years ago. WDW has not added any Value rooms in that time span. And doesn't intend to. But it allowed a Waldorf, a Hilton and a Four Seasons to come on board. Disney will get rent from these tenants and will play host to higher end guests. That tells me something.

And they are now finishing the project in the form of the Animation Resort.

 

[book_junkie]

9/11 was ten years ago. WDW has not added any Value rooms in that time span. And doesn't intend to. But it allowed a Waldorf, a Hilton and a Four Seasons to come on board. Disney will get rent from these tenants and will play host to higher end guests. That tells me something.

Not trying to fan the fire, but Disney is currently adding to the value properties by taking the unfinished side of Pop and turning it into value suites- the Art of Animation Buildings which will hold families of 5 or more, which before had to juggle for the very few suites in the values or go up to the higher rooms. From what I've read, the suites will be priced the same as the suites in the value room ranges, so they are adding into the values, even in the down-turn economy.

 

[hookedonears]

So glad they are raising prices. Keep the riff raff out.

I thought this was pretty good. Some people just need to get a grip.

 

[JimmyV]

Only time will tell if it is a successful strategy for them. But they will not put up with low occupancy for long. So if people stay away, they will change their stragegy. If people ante up and go anyway, they won't. Simple as that.

I agree with 99% of what you say. But don't get too caught up in occupancy levels. Yes, a shift from 100% to 70% might be drastic. But a shift from 100% to 85% can easily be weathered if the 85% outspend the 100% in other areas. 100% occupancy of long-time visitors who do not buy souveniers and who bring in peanut butter and jelly sandwiches (or who are eating "free" food) is not as good as 85% who pay OOP for gifts and food. It is very complicated and I am sure that Disney has the computer models to figure all this stuff out.

 

[JimmyV]

Not trying to fan the fire, ... From what I've read, the suites will be priced the same as the suites in the value room ranges, so they are adding into the values, even in the down-turn economy.

You're not fanning the fire. It's a fair point. But some of what Disney is doing is semantics. Call it "Value", but charge $189 for the room. $189 isn't $79. Disney isn't going to add any more sub-$100 rooms and hasn't for quite a while. That's all I'm saying.

 

[MikeandReneePlus5]

I think you are way off base JimmyV.

WDW raises ticket prices to keep up with inflation and to make money.

Same reason movies went from $4.50 to $13 and pizza from $.75 to $2.50 and, and, and etc ad infinitum.

WDW has always been about families (ever since old Walt took his daughters to amusement parks of his day and as not, um amused). Not affluence or lack thereof. And call me a "rose-colored glass looker" but I do believe that is still the overriding goal of the parks: to provide good family entertainment....whatever tax bracket they are in.

IMO, ticket pricing at WDW has zero to do with an effort to cater to a specific clientele.

Now WITHIN WDW I agree with you OF COURSE. i.e. GF vs. POP.

 

[mom2rtk]

I agree with 99% of what you say. But don't get too caught up in occupancy levels. Yes, a shift from 100% to 70% might be drastic. But a shift from 100% to 85% can easily be weathered if the 85% outspend the 100% in other areas. 100% occupancy of long-time visitors who do not buy souveniers and who bring in peanut butter and jelly sandwiches (or who are eating "free" food) is not as good as 85% who pay OOP for gifts and food. It is very complicated and I am sure that Disney has the computer models to figure all this stuff out.

But I think Disney is absolutely addicted to packing the parks, and wringing every last dime out of the place possible. And they don't do a survey before taking your reservation to find out if you intend to spend money in the parks or eat crackers all day. Who's to say that the shift down to 85% might not still be a bunch of the cheapskates you describe? Their only way to maximize profit is to maximize occupancy.

 

[mom2rtk]

You're not fanning the fire. It's a fair point. But some of what Disney is doing is semantics. Call it "Value", but charge $189 for the room. $189 isn't $79. Disney isn't going to add any more sub-$100 rooms and hasn't for quite a while. That's all I'm saying.

But isn't the suite the size of 2 standard rooms?

And while they won't be available right away, aren't they going to add some standard value rooms to that resort?

 

[JimmyV]

I think you are way off base JimmyV.

WDW raises ticket prices to keep up with inflation and to make money.

I don't see how that is at all inconsistent with what I said. I agree with the above statement. But the way to keep up with inflation and make money is to draw people who have more coin in their pocket. If I open a restaurant and can choose between a clientele that has $50 of disposable cash in their pockets or $250, I am going to try to attract the people with $250. That is how you keep up with inflation and make money.

WDW has always been about families (ever since old Walt took his daughters to amusement parks of his day and as not, um amused). Not affluence or lack thereof. And call me a "rose-colored glass looker" but I do believe that is still the overriding goal of the parks: to provide good family entertainment....whatever tax bracket they are in..

Again, nothing at all inconsistent with what I said. Yes, WDW has always been about families. But was it always about the same 10,000 families over and over again, or was it once about each family going once in a while? My point has more to do with bringing in more people who come less frequently as opposed to bringing back the same people twice a year and less to do with the relative wealth of those people. It just so happens that there seem to be a lot of people here who go every year, or twice a year, and for whom a $500 per trip uptic is a huge dent in the budget. I think Disney is saying, maybe you ought to give it a rest and come every two years and let someone else have a chance.

None of this is all that difficult. We have to assume that Disney did the requisite market research before raising prices. And that research would have showed that many, many people would be upset, and that many, many people would have reached their breaking point and will not return, or will only return less often. Yet it raised prices anyway. That has to tell you something. Disney is comfortable with your unease, and comfortable with you not coming back or coming back less often. But it figures to make back that revenue and then some. The only logical reason is that they expect other people to fill the void, and they expect those other people to dip into their pockets. No other explanation even begins to make sense.

 

[mom2rtk]

I think Disney is saying, maybe you ought to give it a rest and come every two years and let someone else have a chance.

LOL! You sure lost me there. I don't see Disney telling ANYONE to stay home every other year!

 

[JimmyV]

LOL! You sure lost me there. I don't see Disney telling ANYONE to stay home every other year!

Go back and read the entire thread and count the number of people who have said that they will now come less frequently, or not at all. I am not suggesting that Disney is actually "saying" please don't come. Disney is acting in a way that suggests that it is cognizant of the fact that certain people will come less often, and it is comfortable with that result. By realizing that some people will come less often and doing nothing to change that result, Disney is figuratively "saying" the way only a corporation can, that they can live with that, and will find a way to make up the lost revenue from other guests.

Do you honestly think that the powers that be are going to wake up one morning startled to find out that their price increases have altered the visiting habits of long-time guests? You think that people skipping a year or two is going to come as a surprise to them? This has all been modeled out to the nth degree.

 

[mom2rtk]

Go back and read the entire thread and count the number of people who have said that they will now come less frequently, or not at all. I am not suggesting that Disney is actually "saying" please don't come. Disney is acting in a way that suggests that it is cognizant of the fact that certain people will come less often, and it is comfortable with that result. By realizing that some people will come less often and doing nothing to change that result, Disney is figuratively "saying" the way only a corporation can, that they can live with that, and will find a way to make up the lost revenue from other guests.

Do you honestly think that the powers that be are going to wake up one morning startled to find out that their price increases have altered the visiting habits of long-time guests? You think that people skipping a year or two is going to come as a surprise to them? This has all been modeled out to the nth degree.

Sorry, but I don't agree. I don't believe for a moment that they think people will stay away. I think they will continue to offer "free dining" hoping people won't look at the higher rack rate they had to pay to get it. Or the one less snack credit they will get for the counter service plan. Or the higher cost to upgrade to the regular dining plan. Or the higher ticket price.

Everything about these changes tells me they are going to continue to offer what appear to be great deals, and they will think they are putting something over on everyone. And maybe they WILL put it over on people.

Only time will tell. I do think their business will suffer some. But I don't think THEY think the business is going to suffer. They wouldn't be the first business to push their luck too far with dollar signs in their eyes.

I've worked in sales and marketing for years. And not a single one of those companies has EVER knowingly devised a plan for fewer sales. A few of them got greedy and took some customers for granted though!

 

[rt2dz]

My father's old company used to do a lot of consulting work for Disney. He would always complain that he couldn't get the different divisions on the same page, even if they working towards the same goal. It was a case of the left hand not knowing what the right hand was doing. Pretty typical among mega corporations. He'd also complain that he couldn't get them to see the big picture--they are very short sighted. And we're not talking mid-level management, but the big wigs. Now, this was awhile ago, but I have a hard time believing much has changed.

I basically believe they haven't thought about long term results. I don't think they care. I've said it a million times since the first time it came out, free dining is a rip off. Most people, perhaps not DIS Board members, but MOST people don't use the dining plans well and waste the majority of the money. It is extremely popular though. Disney is cashing in. They know people *think* they are getting a deal and are all over it.

Anyone who says "it's too much food," or didn't use all their credits, or ended up going on a snack credit shopping spree, or went to a signature dining meal that cost two credits, or didn't use the mug it came with didn't use the dining plan to its best benefit and probably actually lost money. There are other ways to come up with discounts, but Disney has slowly been fixing most of that.

I think those that go annually or more, see it a bit more because those are the people that are constantly planning a trip with changes mid-plan. It's more noticeable. The cut backs in entertainment shows up more to us. The sameness in the menus because more apparent to us. The lack of choices in the kids meal is more obvious when you have longer trips, or more frequent trips. The fact that we can't find "new" or "different" souvenirs, or just ones that tell us where we bought it.

 

[Cheshire Figment]

9/11 was ten years ago. WDW has not added any Value rooms in that time span. And doesn't intend to. But it allowed a Waldorf, a Hilton and a Four Seasons to come on board. Disney will get rent from these tenants and will play host to higher end guests. That tells me something.

The Waldorf and the new Hilton are not on Disney Property. They are in the Bonnet Creek Resort, which happens to be some property that is sandwiched between Caribbean Beach and I-4. The land was never owned by Disney. The only tie-in that Disney has is they had to allow Bonnet Creek to have access to their property. I don't know who actually built and maintains Chelonia Parkway, but I am sure that Disney did not build it for them for free.

 

[Brian Noble]

Go back and read the entire thread and count the number of people who have said that they will now come less frequently, or not at all.

Much of that is heat-of-the-moment bluster. When everyone has a little more time to think it over, nearly all of those folks will be right back to planning trips. This is not the first price increase, and attendance has generally only gone up. This could be different from all prior increases, but I don't think it will be.

 

[juliebug1997]

*


Hi! I also agree with your other post about Disney being approximately the same cost as a European vacation! We're both on the same page!

Disney will soon outprice themselves, I'm sure. With the economy the way it is and people are out of jobs the average person really can not afford a 10 day trip staying at Disney. It's really a sad time. Fortunately, we have a second home in Orlando and have annual passes.

brunette

DH and I priced going to Europe (mainly Italy) for the week that we're spending at WDW. It was going to be about $1600 a piece for a moderate price hotel. That didn't include transportation around town (Rome more than likely), transportation to and from the airport, food or entrance fees into the places we would want to visit. That would have been due at the time of booking. WDW cost us just a little more for that week and we got annual passes, DxDP, transportation included everywhere we need to go, and a decent room. And, I got to pay it off over four/five months.

I understand that DH and I might be in a different position financially than many who post here but I think that Disney does a lot to make themselves open to a lot of visitors. When I would like to see a new moderate resort (because that's where we typically stay), they are opening up a new value instead. They are adding to Fantasyland something that people have complained about for years.

I think they are in a darned if you do and darned if you don't situation. Just my two cents though.

 

[jayandstacey]

This is pretty simple economics. Disney knows that at SOME point they will reach a ticket price that is too high and the attendance (and income) will fall. But they haven't yet. So they keep raising until they do.

It really is that simple. Yes, they model how much they think they can raise, and they keep an eye on attendance and income levels. They're careful not to get too greedy. And raising the price has nothing to do with paying for renovations or anything like that - but that does help. Rather, it is a matter of correctly pricing to balance supply with demand.

 

[GadgetRick]

These threads are always funny. So many people just can't say something negative about Disney. If they increase the prices, there must be a good reason for it...

Bottom line is Disney is a public company. Their job is to make as much profit as they can...PERIOD. Now, there are MANY parts to Disney, however, they've mentioned their profits have gone up due--in large part--to an increase in attendance at their parks (although that was for the 1st quarter for the 2nd quarter they're a little lower because of the earthquake and Easter vacation not being included in the 2nd Quarter this year but the US park operations were UP). You can look all of this up. I'm sort of summarizing but you get the idea.

Do the price increases have to do with inflation and increased costs to operate the parks? Certainly, at least, in part. However, part of it is also seeing how much more they can get without alienating too many people. Not saying it's a bad (or good) thing, it just is.

Now, my problem isn't so much that they're raising prices, rather, that they've risen so quickly over the last few years. If you're doubling the price to get in (essentially) in about 10 years--like Disney has--then the product should either be getting better or be in such high demand they can command such increases. Well, I can tell you they haven't (overall) gotten better in the last 10ish years, however, the demand has been increasing (it seems) so they can continue to get away with these price increases.

A big reason demand has been increasing is because they've been running so many specials to get people in. The problem with that is, the millions of people (like myself now) who no longer stay on property see nothing but the price increase. We get no other benefits and, in fact, other things have significantly increased in price as well (like food). So people who are not staying on-property are really paying more.

This, to those of us who don't stay on property sucks. However, from Disney's standpoint, they'd much rather have us stating on property, which is why they still build more resorts (even if value resorts). People who stay on property spend more money as they don't leave to go off-property as much so everything they spend is spent at Disney.

So, I totally understand why they increase the prices. Whether I agree with it (or not) is irrelevant. I wish they'd stop with the price increases but I doubt that'll happen.

I guess my point of this rambling post is, I think it's funny reading the posts from the, "Disney can do no wrong," people and their convoluted justifications to the price increases. It's really just a simple capitalism situation. Nothing more. Nothing less. Disney doesn't care about you or I like we'd like to believe they do. They only care about how much money we spend with them and how much profit they can make off that money. Anything they can to to increase these numbers is fair game to them. Until people start telling them to stop by not going, they will continue the increases.

 

[TLSnell1981]

Much of that is heat-of-the-moment bluster. When everyone has a little more time to think it over, nearly all of those folks will be right back to planning trips. This is not the first price increase, and attendance has generally only gone up. This could be different from all prior increases, but I don't think it will be.

But, I thought attendance was down? My problem..quality has decreased, while prices have increased.

 

[LilyWDW]

But, I thought attendance was down? My problem..quality has decreased, while prices have increased.

Actually, attendance has been up recently (at least ticket sales have been). However, it is not back to pre-recession levels from what I can find. So they are recovering, but they have yet to do so fully.

And I am one of those that doesn't think it is "wrong" of Disney to increase their prices, but I am also explaining it from a business standpoint. To me, I don't have an emotionally vested interest in it. I'll save up for my trips like I always do. I can't go every year due to the cost, but I also don't think Disney owes me being able to.

What is funny GadgetRick is that we are saying the same thing, but seem to be on opposite sides of the discussion. Though I do think Disney could do things wrong, I simply do not see this as an example of it. I see it as a business decision that I can understand and agree with from that standpoint. I think it is an interesting discussion and situation and I am looking at it and analyzing it from that economic, financial, business point of view.