So just why is Disney raising ticket prices so early

[GadgetRick]

apologies if the tone was off I was typing quickly and didn't bother to read it for tone etc...my bad

But I do think that even shareholders know that the first - very first and most important thing - is the customer.

It is all about the customer...everything else follows. Yes, as you say, the s/h's want value....without customers (happy ones) there won't be any.

Here is Disney's statement off it's IR website, notice the order of the overall objective, and the following financial goal:

"The Walt Disney Company's objective is to be one of the world's leading producers and providers of entertainment and information, using its portfolio of brands to differentiate its content, services and consumer products. The company's primary financial goals are to maximize earnings and cash flow, and to allocate capital toward growth initiatives that will drive long-term shareholder value."

Here is the CEO in the shareholder letter from the 2010 annual report...3 priorities mentioned:

"In my five years as CEO of this great Company, we’ve sought to build on Disney’s legacy by focusing on three
core strategic priorities: creating great entertainment that people want to experience; using new technology to
maximize the quality and reach of that entertainment; and growing our businesses in promising international markets
to extend the impact of that entertainment.
These priorities again served us well in 2010."

He then goes on to discuss how those priorities led to profits etc.

Anyway - I am probably beating a dead horse...seems like lots of other interesting discussions are going on - I haven't had time to read it all.

I was responding to people who say they don't give a crap about customers happiness. I thought you were among them. It just isn't true.

And again...my bad on the tone of my earlier post...

No worries.

Keep in mind, what you're quoting here is typical business-speak. Of course they're going to say they're all about the customer. Do you think people would want to hear them tell the truth...We want profit! That's PR and marketing.

Obviously, without customers, they don't have profits. However, if there was a way to have profits without customers, they wouldn't complain as long as there were profits. More importantly, without profits, there is no company to cater to the customer. Once a company is established, the shift to gaining customers quickly shifts to, how do I make money at this? There is a fine line which must be walked at this point between customers and profits. At times, you must give up customers to gain profits because they're not doing this (Disney) for a hobby or for practice, they're doing it for MONEY.

Disney has done (maybe better than anyone) an incredible job creating this ideal that they care so much about the customer--more than anyone else. And they do a great job taking care of the customer or people wouldn't continue to go regardless of price. However, they--like any other for profit company--are always looking to exploit this ideal they have created in order to make more money. There's no getting away from that.

Again, not saying it's wrong (or right), it just is.

 

[GadgetRick]

I disagree that this was always disney's motive.They used to do it the old fashioned way.By being on the cutting edge,keeping things kept up,looked after the little things such as park cleanliness,and friendly cast members etc.They offered a exceptional expierience at a fair price.

And why do you think they did these things? They didn't do it because they were, "swell," people, they did it to bring more people in and keep existing customers to keep coming back so they could make more money. That's why a company does things like this.

Have they gone more the direction of profit over customers? I don't honestly know. But make no mistake, they're about profits and have always been...even back in the day (so to say).

 

[Metro West]

Does that include the characters that are only meet and greet characters such as Wolverine? I've never been clear on that.

There is something in the contract regarding walk around characters but I'm not sure to what extent. I imagine some are off limits but others could be used...that's a just a guess though.

 

[brunette8706]

So with the conversation about Disney cutbacks (attractions that need repair, paint peeling, less and less decorations, less and less candy and decorations at the Mickey Parties, decline in food quality, etc. etc, when and where does the eh hem....

"Disney Difference" come into play?

 

[MikeandReneePlus5]

However, they--like any other for profit company--are always looking to exploit this ideal they have created in order to make more money. There's no getting away from that.

Again, not saying it's wrong (or right), it just is.

of course they want to make money.

but it seems to me this "exploitation" is accomplished by providing an even better product, with even more of a wow factor in order to make customers even more satisfied and therefore willing to spend even more money on Disney goods and services. It isn't accomplished by saying "let's try squeeze the customers for a few more bucks", or by dropping entertainment options or reducing park hours or making crap movies just to cash in (notable exception was the cutback in F!, which they have now brought back) they do it by making constant improvements in their offerings of entertainment.

What is behind Tangled, Toy Story 3, TSMM, new Fantasyland, NextGen Queues, the Marvel acq., the Pixar acq. that big new dragon at the DL F!, etc etc etc - is an overriding goal of being the best. And it isn't an "ideal"...they are pulling it off....it's reality... there can be no question that Disney is the king of what they do in the entertainment business. And their shares are at an all time high.

And yes, if you are the best at what you do you can then command higher prices because customers will seek you out. Profits rise and the stock rises.

I think all we are doing is having a debate about looking at the company from the eyes of the Operations vs Finance departments (or even Walt vs. Roy...).. If you are the CFO, I want you thinking the way you do I suppose...COO...not so much....

and I have definitely said the same exact thing a few times in a row now...so clearly you must change your mind and agree with me: Disney loves you...they really do...I mean they are always wishing you a magical day aren't they ?...

 

[WDSearcher]

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.

I don't think my view is any more romanticized (or simplistic) than the people who can't believe that Disney is raising prices. People are looking at Disney as if it's in a vacuum. Look around you -- everyone is raising prices. Why should Disney be somehow immune? Airfare, gas, hotel, food, clothing, insurance, souvenirs, transportation, baggage fees ... everything has gone up. But yet Disney is supposed to keep its prices the same. It's not realistic. It's less about price and more about value, IMO. If it's still a value at the price you pay, great. If not, stop going and tell Disney why.

I totally agree with you that if enough people complain, Disney will change. Thing is ... my guess is that 90% of the people on this thread who are grousing about the high prices and greed and all the rest have never expressed that directly to Disney. (And I bet the majority of them are also planning their next trip.) They've complained and posted and vented here, and have never once put pen to paper or keys to e-mail and sent a well-thought-out note to WDW. They just expect that Disney will notice because they -- one of millions of families who visit each year -- have chosen to spend only seven days at Disney this year instead of ten.

 

[WDSearcher]

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.

I agree that it's about Disney, but everyone keeps using Universal and WWoHP as a comparison and a reason why Disney should be worried. So, it's hard not to bring it into the conversation.

As an FYI ... Disney is not "building an expensive neighborhood on property". They are leasing the land to other people who are building an expensive neighborhood on property. There's a difference.

As for Disney making itself more exclusive -- I would agree with that on a certain level. Any business anywhere goes for the affluent customer. Would you rather sell a million glasses of lemonade at a dollar a piece or one glass at a million dollars? Every theme park out there -- even Gatorland -- has options (tours, resorts, timeshares, special events, special add-on activities) that are designed to appeal to the folks with more travel dollars to spend. That's just normal good business. You offer value resorts for folks traveling on a budget and high-end options for those who don't have to watch the dollar quite as closely.

 

[MikeandReneePlus5]

I totally agree with you that if enough people complain, Disney will change. Thing is ... my guess is that 90% of the people on this thread who are grousing about the high prices and greed and all the rest have never expressed that directly to Disney. (And I bet the majority of them are also planning their next trip.) They've complained and posted and vented here, and have never once put pen to paper or keys to e-mail and sent a well-thought-out note to WDW. They just expect that Disney will notice because they -- one of millions of families who visit each year -- have chosen to spend only seven days at Disney this year instead of ten.

I complain about every price increase I can...LOL...

Just a couple months ago all the stuff in the vending machine went from $.85 to a $1 at work and I said "that's a 17% price hike!!!!!"

they thought I was nuts. But at least I made my point.

oh....and the landscaper..who I JUST hired this spring at an agreed upon price...sent me a letter saying a surcharge of $1 was being added to all clients for rising fuel costs. I said "I don't think so...we agreed the price a month ago and if anything gas has come down since then".

I could go on and on.....

But I won't complain to Disney because FOR ME, it is still a value. And I totally get that others feel differently.

 

[mom2rtk]

Any business anywhere goes for the affluent customer.

Not always. Wal-mart has done pretty well targeting bargain shoppers.

 

[Planogirl]

Not always. Wal-mart has done pretty well targeting bargain shoppers.

ITA. I also understand that discount stores such as Big Lots are making a killing nowadays.

 

[flicx]

As an FYI ... Disney is not "building an expensive neighborhood on property". They are leasing the land to other people who are building an expensive neighborhood on property. There's a difference.

As for Disney making itself more exclusive -- I would agree with that on a certain level. Any business anywhere goes for the affluent customer. Would you rather sell a million glasses of lemonade at a dollar a piece or one glass at a million dollars? Every theme park out there -- even Gatorland -- has options (tours, resorts, timeshares, special events, special add-on activities) that are designed to appeal to the folks with more travel dollars to spend. That's just normal good business. You offer value resorts for folks traveling on a budget and high-end options for those who don't have to watch the dollar quite as closely.

Theres no difference!Come on were really splitting hairs here now!Exclusive,expensive houses that affluent people can only afford is taking up space at the florida resort!Period it is just that simple.That is hardly a move to improve 99% of the guests expierience! I also get tired of hearing the worn out excuse that prices are increasing everywhere why shouldn't disney raise prices!I think disney is way way ahead of the curve in this department.The rest of the world only wishes the could jack there prices at a disney pace!

 

[WDSearcher]

Theres no difference!Come on were really splitting hairs here now!Exclusive,expensive houses that affluent people can only afford is taking up space at the florida resort!Period it is just that simple.That is hardly a move to improve 99% of the guests expierience! I also get tired of hearing the worn out excuse that prices are increasing everywhere why shouldn't disney raise prices!I think disney is way way ahead of the curve in this department.The rest of the world only wishes the could jack there prices at a disney pace!

There actually is a difference.

A company came to Disney and said, "We'd like to build some really expensive homes on your property because we think we can fill them with affluent people." Disney said "OK, here's how much we'll lease the land to you for." That's pretty different from Disney saying, "We're going to use our land and our resources to spend money and build a bunch of really expensive homes." Disney is getting income from the home builder without taking the risk if the homes don't sell. And who cares, really if "exclusive, expensive houses that affluent people only can afford" are taking up space. There are exclusive, expensive hotel rooms taking up space. I'm sure only affluent people can afford to stay in the high-end, upper level suites at the Grand Floridian or in the high-end rooms at Wilderness Lodge or DAK Lodge. Why SHOULDN'T there be accommodations for all income levels at WDW? What's wrong with Disney saying, "There are rich people out there, so let's help cater to them the same way we do to the folks looking for value accommodations"?

And I'm sorry, but building another value resort is ALSO not a move to improve 99% of the guests experience because more value resorts mean more events like Pop Warner and cheerleading competitions and big old tour groups from everywhere under the sun because it's cheap and they can stay there. How does THAT improve my guest experience?

What is Disney's pace? Your rant about how Disney is ahead of the curve in raising prices would mean a lot more if you backed it up with numbers. Compare it to something -- gas prices, say. Or milk. Compare the annual percentage of Disney's increase to the annual percentage of airline travel or college tuition increase. Heck ... compare it to the consumer price index or the rate of inflation. I'm not saying you're wrong, but at least look at Disney in the big picture. My guess is that Disney is right there somewhere in the middle and not nearly as big and evil and greedy as you think they are.

 

[GadgetRick]

and I have definitely said the same exact thing a few times in a row now...so clearly you must change your mind and agree with me: Disney loves you...they really do...I mean they are always wishing you a magical day aren't they ?...

:::sigh:::

If you insist...

 

[GadgetRick]

and I have definitely said the same exact thing a few times in a row now...so clearly you must change your mind and agree with me: Disney loves you...they really do...I mean they are always wishing you a magical day aren't they ?...

:::sigh:::

If you insist...

In reality, I don't think we're really debating the same thing here. People asked why ticket prices increased early (and regularly basically). I explained it's because they're looking for more profits.

Obviously, they try and add things to keep people coming back and feeling as if they're getting their money's worth. I've never said otherwise. However, they're getting people to come back, not just to talk about how great Disney is.

Keep in mind, I've also said I still go, I just don't go as often as I might nor do I spend the money I'd normally spend there. But I still go so I still feel as though I'm getting something worthwhile...

 

[GadgetRick]

I don't think my view is any more romanticized (or simplistic) than the people who can't believe that Disney is raising prices. People are looking at Disney as if it's in a vacuum. Look around you -- everyone is raising prices. Why should Disney be somehow immune? Airfare, gas, hotel, food, clothing, insurance, souvenirs, transportation, baggage fees ... everything has gone up. But yet Disney is supposed to keep its prices the same. It's not realistic. It's less about price and more about value, IMO. If it's still a value at the price you pay, great. If not, stop going and tell Disney why.

I totally agree with you that if enough people complain, Disney will change. Thing is ... my guess is that 90% of the people on this thread who are grousing about the high prices and greed and all the rest have never expressed that directly to Disney. (And I bet the majority of them are also planning their next trip.) They've complained and posted and vented here, and have never once put pen to paper or keys to e-mail and sent a well-thought-out note to WDW. They just expect that Disney will notice because they -- one of millions of families who visit each year -- have chosen to spend only seven days at Disney this year instead of ten.

Well, justifying the price increases by saying everything else is going up so why not Disney doesn't help either. I mean, if it were for some of the reasons someone like an airline has raised prices, profits (at Disney) wouldn't be going up, they'd be down or about the same. To me, that's even less of a good reason than they're doing it just because they can (which is what I believe the real reason is).

I think you'd be surprised at just how many people have (and do) complain to Disney. I have (and continue to) complained to Disney. I've spoken with people in the department which handles this kind of thing. They've mentioned they hear many of the same complaints I've voiced. Just not enough people complaining through not spending there to make them change anything. Which brings me back to the original reason they continue to raise prices...they do because they want to make more profit and (so far) have been able to get away with it.

And nobody is asking Disney to keep their prices the same. I think you're missing the point on this one. It's the amount prices have gone up EVERY year which seems to bother people the most. I can certainly understand that.

As I've said, I'm one of the people who aren't spending as much money there as I used to. Are there enough of us for Disney to feel it? I have no idea. However, I do have lots of conversations with people who have gone a lot in the past and spent a lot of money in the past there and a lot of them are similar to me in that they're not going as often or spending as much. So a lot more people are voting in the most powerful way possible than you may think.

 

[hookedonears]

I complain about every price increase I can...LOL...

Just a couple months ago all the stuff in the vending machine went from $.85 to a $1 at work and I said "that's a 17% price hike!!!!!"

they thought I was nuts. But at least I made my point.

oh....and the landscaper..who I JUST hired this spring at an agreed upon price...sent me a letter saying a surcharge of $1 was being added to all clients for rising fuel costs. I said "I don't think so...we agreed the price a month ago and if anything gas has come down since then".

I could go on and on.....

But I won't complain to Disney because FOR ME, it is still a value. And I totally get that others feel differently.

IMO, the quickest, best and maybe only way to complain to Disney about increases in prices is for enough people to quit buying tickets. That's probably the only way Disney will get the message. Until that happens, they're going to continue raising prices every year. Hypothetically speaking, if Disney said okay, we'll lower our prices, but y’all tell us, what services do you want us to cut to offset our cost increases each year? Do you want us to reduce park hours, (the quickest cost cutter)? Reduce our staff in the Resorts, Parks etc.? It's a difficult issue.

 

[jayandstacey]

As I've said, I'm one of the people who aren't spending as much money there as I used to. Are there enough of us for Disney to feel it? I have no idea. However, I do have lots of conversations with people who have gone a lot in the past and spent a lot of money in the past there and a lot of them are similar to me in that they're not going as often or spending as much. So a lot more people are voting in the most powerful way possible than you may think.

I sense that you (or I) might gravitate to such people, but for everyone of us, there's a family going for the first or second time, about to be sucked into once-a-year, 10 days each trip madness - at least for a while.

I also sense that most people have a kind of "bell curve" relationship with Disney - a trip or two over a decade, then a rocket to the pinnacle of frequency, then back down again. I also believe that the other side of the bell curve though is higher than the front side - ie, even once the magic has dulled, they'll still be back every 3 years instead of every 6. That's where Disney really shines.

I think people's signatures on this board follow that pattern - you generally see a trip or two as a kid, then a young adult trip, then an explosion of trips in the last 7 years or so as they are adults and may have kids of their own. (and if I had the time I'd prove it.) I also think the continued growth numbers supports the claim too, depsite many backing off and others complaining.

 

[jayandstacey]

IMO, the quickest, best and maybe only way to complain to Disney about increases in prices is for enough people to quit buying tickets. That's probably the only way Disney will get the message. Until that happens, they're going to continue raising prices every year. Hypothetically speaking, if Disney said okay, we'll lower our prices, but y’all tell us, what services do you want us to cut to offset our cost increases each year? Do you want us to reduce park hours, (the quickest cost cutter)? Reduce our staff in the Resorts, Parks etc.? It's a difficult issue.

The irony is that if less people came as the prices were too high - then suddenly the park is less crowded and becomes a better value for those who do pay and visit.

I'll dub this the Disney Ticket Paradox: that higher prices are good for me no matter what - either I decide NOT to go and save my $$$, or I decide TO go and have a better experience than if prices were lower.

 

[hookedonears]

I sense that you (or I) might gravitate to such people, but for everyone of us, there's a family going for the first or second time, about to be sucked into once-a-year, 10 days each trip madness - at least for a while.

I also sense that most people have a kind of "bell curve" relationship with Disney - a trip or two over a decade, then a rocket to the pinnacle of frequency, then back down again. I also believe that the other side of the bell curve though is higher than the front side - ie, even once the magic has dulled, they'll still be back every 3 years instead of every 6. That's where Disney really shines.

I think people's signatures on this board follow that pattern - you generally see a trip or two as a kid, then a young adult trip, then an explosion of trips in the last 7 years or so as they are adults and may have kids of their own. (and if I had the time I'd prove it.) I also think the continued growth numbers supports the claim too, depsite many backing off and others complaining.

Pretty perceptive.

 

[jayandstacey]

I also sense that most people have a kind of "bell curve" relationship with Disney - a trip or two over a decade, then a rocket to the pinnacle of frequency, then back down again. I also believe that the other side of the bell curve though is higher than the front side - ie, even once the magic has dulled, they'll still be back every 3 years instead of every 6. That's where Disney really shines.

Funny, Hookedonears posted pretty much as i was writing this and their signature shows what I'm talking about. Very few trips, then an explosion, then a slacking off...

(then, in this case, followed by another resurgence )