So just why is Disney raising ticket prices so early

[hookedonears]

Pete on the DisBoards Podcast said it best. As long as people continue buying tickets at the prices they're charging, Disney will continue raising prices each year. At some point, they may reach that point where people quit buying tickets at a level that's acceptable to the brass. You will then see a reduction in prices. My opinion is that they'll continue raising prices every year like they've always done, but depending on the economy and ticket sales, you may see more discounted packages offered here and there.

 

[jayandstacey]

*
Can you elaborate on that please? I'm not quite sure what you are referring to. thanks!

As an example of when it isn't worth the extra money to put that extra "wow" factor in:

WDW could be covered in a giant dome - no rain, always A/C'd. But not profitable.

Pirates could include Johnny Depp live, in person, in the final scene. But not profitable (and probably not an aspiration of Mr. Depp's).

They could put something in the closed Epcot pavillions - but it isn't profitable to do on Disney's dime.

Etc.

 

[mousefanMI]

I feel lucky I got an order in at a ticket broker and got the old prices... just in time, no doubt.

 

[TLSnell1981]

Pirates could include Johnny Depp live, in person, in the final scene. But not profitable (and probably not an aspiration of Mr. Depp's).



Etc.

Johnny Depp...Live at Disney...a girl can dream!

 

[GadgetRick]

Ah, but that is the heart of the question. What makes people spend money there? Why do people come? Why do people keep coming? Do they really think without repeat business they can survive long term?

Just questions...

Well, not really the question, the question is why Disney raised prices early this year and why they continue to raise them. The answer to that is very simple...profitability.

As far as what you're asking, that's a much deeper (and harder to answer) question.

 

[GadgetRick]

*
Hi! I agree with your post. But the bolded part, don't you think the more that they raise prices and suffice quality, I would suspect it would be a huge risk factor. This is in reference to the Dining, hotels heck even the Grand Floridian had some bad rooms, and so has the Polynesian. Granted the hotels are beautiful but they do charge a premium price for a non premium room. Also, the stroller rentals, parking, and tickets, I could go on and on. People are not going as much as they did a few years back, that's why they are offering the FREE dining 12 months out of the year.

Of course it's a risk. However, they aren't going to not raise prices because we are all insulted by the increases. However, if everyone stopped going, they'd have to look at the price increases and determine whether that's why everyone stopped going.

And, honestly, more people are going than a few years back (look at their public documents). IMO, that's a function of the stuff like free dining. That brings more customers. When they started it, park attendance was down but it's been up for a while now. I think they just really understand what free dining really does--and it's not just get people to go there. It gets more people to stay on property for more time meaning they spend more money and they make more profit.

Again, it's a very simple capitalism situation. Not a bad (or good) thing, it just is...

 

[disneyfav4ever]

I think they want to take advantage of getting more money out of summer visitors who have not bought tickets yet. Prices are really getting ridiculous.

That's what I think as well. Luckily I can usually longer trips, and the longer tickets are a little less worse, but it's still a lot of money. I probably won't do under a week anymore, unless I have an AP, but those are so expensive too.

 

[GadgetRick]

But if Disney has that factored in -- which I suspect they have, realizing the popularity of the Harry Potter franchise -- then they're likely not nearly as worried as you think. They're not stupid -- they knew WWoHP would be popular. And even if they didn't realize HOW popular, it's likely they adjusted those expectations after Universal hit it out of the park on opening weekend. Disney knew they'd take a hit. However .... WWoHP is probably bringing a bunch of people to Central Florida who would not have made the trip normally. They're coming to see Harry Potter, but since they're here, they may well choose to spend a day or two checking out Disney. Those are days that Disney may have never had without WWoHP -- so I'm thinking it evens out to a certain extent.

I'm guessing them buying the Marvel franchise had something to do with WWOHP coming (at the time). Once the contract Universal has with Disney runs out, I expect to see some major Marvel attractions coming to WDW. That is going to hurt Universal. WWOHP is great but it's not like everyone is into HP (I know myself and my wife aren't and I know of many others who are). However, everyone seems to dig the mouse. And with an extra incentive to bring people there (i.e. Marvel stuff), I see good things on the horizon. I just hope they don't make it so darn expensive many people can't (or won't) pay the prices...

 

[GadgetRick]

Oh come on. That's a bit simplistic, don't you think? Of course they're a "for profit" company, but they are also very aware of what their product is and why people purchase it. If they truly did not give a rat's butt about their customers, then they'd just toss up a new off-the-shelf looping roller coaster every year because that would bring people in. They'd shoot off generic fireworks over the castle -- why develop a story and music around it? People would be awed simply by a ton of fireworks over a castle. Why spend the extra time and money to do more?

If they didn't care about the people who come to the parks, why spend all that time training Character performers? Seriously ... just put some people in costumes and have them stand there. All people really want is a photo anyway. Who cares if Mickey and Pluto and Stitch and Donald have different personalities and behave differently? Who cares if Mickey's signature is the same no matter when or where you meet him? Why bother? Who cares if the characters interact with your kids?

If you don't give a rat's butt, why put all that thought into DAK? Everest, schmeverest. Drop in a steel coaster and rip out the queue. Drop in some food and merch locations and call it a day. Who cares if the guest has anything at all to look at or be entertained by while they're waiting. Just put in some rope lines and leave it at that. Why develop something like FoLK or Nemo? You could certainly put butts in seats in those venues with a lot less. Why theme all the resorts differently? Hire Hilton to build 23 hotels and pay you rent for the land. Tons easier and a lot cheaper too.

I love the romanticized views of Disney. Sorry but it is a simplistic view because it is a simplistic answer.

Why do they do all of this? Because it's the product they sell. And you're missing the fact that a lot of the little kinds of stuff you're mentioning has been lost over the years. They don't do as much of the little stuff as they used to.

As far as why make good attractions? Again, it's what they do. Of course they're going to go the extra mile in making attractions. If they didn't the value would be seriously diminished and the attendance would fall off drastically and they'd make much less profit.

I have never attended a Disney board meeting but I'm pretty sure they don't sit around and talk about how much they can do for the guests. I am sure, however, they talk about things which will bring in more profits.

Again, it's not a knock on Disney, they're a for-profit company. However, it doesn't mean I'm happy about the price increases. Heck, I'm not happy about the price of gas being so high or a gallon of milk being so high or anything else. However, I have to buy gas and milk, etc. And people complaining about that (obviously) has no affect on the price of these necessities. However, if enough people complain, and enough people stop going or spending as much, Disney will listen because profits will be down and the stockholders will ask why.

While you may not be upset with the price increases I doubt you're terribly happy about them either. Trying to justify them by saying (essentially), it's the price for the, "magic," doesn't help the experience at all.

 

[GadgetRick]

Seems to me attendance is down.That is as good a barometer as any.

Attendance is up, not down. Again, this is all in public documents.

 

[GadgetRick]

All these things are done to ensure that people keep coming back and the profits keep rolling in. Being a for-profit company doesn't mean it has to be cheap product - think Mercedes or other such premium brands. They can maintain higher-than-average margins as they offer higher-than-average quality. But make no mistake:

If the profits disappeared, so would the offering.

Throwing up steel coasters would be a disaster as then Disney becomes just like all the other amusement parks people fly over on their way to Disney - and such, Disney would experience a double whammy- less attendance (as there's no longer a need to fly to FLA) and less pricing power as those that still come would expect the prices to be inline with other such parks.

So Disney doesn't do that.

Saying that Disney exists for Profit doesn't mean that Disney doesn't try to make magic happen, doesn't care for guests and doesn't occasionally do something that seems non-profitable. But just like comps in a casino - they are ALL designed to draw you back, ensure you perceive value, and ensure you keep that profit ROLLING in.

Thank you. Very well-put.

 

[Cheshire Figment]

Attendance is up, not down. Again, this is all in public documents.

According to the Themed Entertainment Association's 2010 Report MK and EC were down 1.5%, DHS was down 1.0% and AK went up 1.0%. This is a very fascinating report and just came out this week.

 

[GadgetRick]

According to the Themed Entertainment Association's 2010 Report MK and EC were down 1.5%, DHS was down 1.0% and AK went up 1.0%. This is a very fascinating report and just came out this week.

According the Disney's FTC filing attendance is (overall) up. It was slightly down in the 2nd quarter due because the Easter holiday didn't fall during their 2nd quarter and the 2 weeks of Easter people they usually get weren't counted in those numbers. If those numbers were counted for the 2nd quarter their numbers were up.

First quarter were also up according to their FTC filings.

Don't know about the Themed Entertainment Association's Report but the FTC filing is a legal document Disney must file. Not numbers inferred from other sources. These numbers are the true numbers.

 

[phamton]

According the Disney's FTC filing attendance is (overall) up. It was slightly down in the 2nd quarter due because the Easter holiday didn't fall during their 2nd quarter and the 2 weeks of Easter people they usually get weren't counted in those numbers. If those numbers were counted for the 2nd quarter their numbers were up.

First quarter were also up according to their FTC filings.

Don't know about the Themed Entertainment Association's Report but the FTC filing is a legal document Disney must file. Not numbers inferred from other sources. These numbers are the true numbers.

Are you referring to 2011? The report sited is for all of 2010 not 2011 (which will come out in a year.) It is accurate. In 2010 only AK, Universal, and Islands of Adventure had an increase in attendance. Seaworld, Epcot, Magic Kingdom, and MGM were all down in attendance in 2010.

 

[jayandstacey]

According the Disney's FTC filing attendance is (overall) up. It was slightly down in the 2nd quarter due because the Easter holiday didn't fall during their 2nd quarter and the 2 weeks of Easter people they usually get weren't counted in those numbers. If those numbers were counted for the 2nd quarter their numbers were up.

First quarter were also up according to their FTC filings.

Don't know about the Themed Entertainment Association's Report but the FTC filing is a legal document Disney must file. Not numbers inferred from other sources. These numbers are the true numbers.

Its the internet, and the internet was made for nitpicking...but isn't it the SEC, not FTC? I presume you're talking about the 10Q filings and such. Maybe there's also an FTC filing?

Anyway - as I'm sure you'll agree, price increases don't exist in isolation, but profit does. SOOOO....Disney will tinker with increased ticket prices vs. dining giveaways vs. souvenier costs vs. operating costs vs. payroll etc etc. But it all rolls up into profit, and Disney will continue to wring the towel until every drip of profit is drained from it.

So the argument that some pose - that the dining plan is evidence that Disney loves us unconditionally - doesn't hold water. Disney does love us, but under the condition that we continue to support thier profitable motives.

To look at it another way: imagine how much MORE Disney would love us if we collectively turned our back on Disney? We'd see all kinds of overtures to come back - free hotels, free park days, free dining, etc. We're not doing that, rather we're eating from their hands. So yes, they continue to provide an excellent product.

Their goal is to find that precise point (of prices and offerings) where we WOULD turn away.

 

[Planogirl]

And run down? IMO, Yes. Spend a few hours at WWoHP and then walk into Seuss Landing. Everything looks old in comparison. Now ... I expect some of it to look older simply because it is. But compare how it looks now to any photo of how it looked when that area opened. The colors are faded, signs are washed out, it doesn't have that bright, neon, Seussian look it used to have. Superhero Island? Yikes. Again ... my opinion. Jurassic Park still looks great. Other areas are holding up well. But you can tell they haven't invested much at all in the other lands. All their eggs, right now, seem to be in Harry Potter's basket.

You've mentioned people seeing things from different perspectives and this is certainly one where I see something completely different. When I walk into Seuss Landing, I see complete magic and nothing fade or washed out. I respect that you do though.

I would agree that the vast majority of funds did go into Harry Potter recently though. From my understanding that area cost a fortune to build so other areas had to suffer. Personally I admire Universal for rolling the dice as they did and I hope that it works out because in the long run it'll be better for both Universal and Disney IMO.

But this isn't really about Universal no matter what side you're on. This is about Disney and it meeting its own standards and whether prices are getting out of hand based on what Disney is all about. As Brunette mentioned there is that theory that Disney is trying to make itself more exclusive which is interesting. Building an expensive neighborhood on property would just seem to add fuel to that fire.

 

[jayandstacey]

Are you referring to 2011? The report sited is for all of 2010 not 2011 (which will come out in a year.) It is accurate. In 2010 only AK, Universal, and Islands of Adventure had an increase in attendance. Seaworld, Epcot, Magic Kingdom, and MGM were all down in attendance in 2010.

Disney's 10Q filing covers the quarter ending April 2, 2011 and compares to the prior year, the 2010 quarter ending April 3, 2010. From that report (bolding is mine): note that what matters is how much money left your pocket over your whole trip - and is reflected in revenue and profit measures:

"Parks and Resorts revenues increased 7%, or $181 million, to $2.6 billion due to increases of $168 million at our domestic operations and $13 million at our international operations. Results at both our domestic and international parks and resorts reflected an unfavorable impact due to a shift in the timing of the Easter holiday relative to our fiscal periods. As a result, the current quarter did not include any of the two week Easter holiday, while the prior-year quarter included one week of the Easter holiday.

Revenues at our domestic operations reflected a 5% increase due to higher average guest spending and a 3% increase from higher passenger cruise days driven by the launch of our new cruise ship, the Disney Dream, in January 2011. Higher guest spending was primarily due to higher average ticket prices and daily hotel room rates."

http://yahoo.brand.edgar-online.com...903-241564&type=sect&dcn=0001193125-11-134405

 

[GadgetRick]

Its the internet, and the internet was made for nitpicking...but isn't it the SEC, not FTC? I presume you're talking about the 10Q filings and such. Maybe there's also an FTC filing?

Anyway - as I'm sure you'll agree, price increases don't exist in isolation, but profit does. SOOOO....Disney will tinker with increased ticket prices vs. dining giveaways vs. souvenier costs vs. operating costs vs. payroll etc etc. But it all rolls up into profit, and Disney will continue to wring the towel until every drip of profit is drained from it.

So the argument that some pose - that the dining plan is evidence that Disney loves us unconditionally - doesn't hold water. Disney does love us, but under the condition that we continue to support thier profitable motives.

To look at it another way: imagine how much MORE Disney would love us if we collectively turned our back on Disney? We'd see all kinds of overtures to come back - free hotels, free park days, free dining, etc. We're not doing that, rather we're eating from their hands. So yes, they continue to provide an excellent product.

Their goal is to find that precise point (of prices and offerings) where we WOULD turn away.

My bad, SEC, not FTC. Was in a hurry this morning.

I'm not arguing with you here. I'm saying (essentially) what you're saying here. They won't do anything different until they stop making profit (and more of it).

 

[GadgetRick]

Are you referring to 2011? The report sited is for all of 2010 not 2011 (which will come out in a year.) It is accurate. In 2010 only AK, Universal, and Islands of Adventure had an increase in attendance. Seaworld, Epcot, Magic Kingdom, and MGM were all down in attendance in 2010.

Yes, I'm referring to 2011. We're halfway through 2011 and attendance is up. 2010 doesn't mean anything at this point. The trend is more people are going...not less. (Regardless of price increases.)

 

[jayandstacey]

My bad, SEC, not FTC. Was in a hurry this morning.

I'm not arguing with you here. I'm saying (essentially) what you're saying here. They won't do anything different until they stop making profit (and more of it).

I agree with our agreement

Have a great day, I'm taking the kids crabbing. Crabs don't have filing requirements or shareholder pressures.