Thoughts on the Annual Price of Admission Increase...

[darrengs]

If we're going to blame salary increases for the ticket price increases, let's not only look at the union. Let's look at ALL the salary increases and the impact. I know union bashing is what all the hip kids are doing these days, but there are a lot of people on Disney's payroll that are non-union employees and they all got larger raises than the union folks did.

I don't think anyone was "blaming" the unions

In fact the PP pointed out several things that would cause an increase in operating costs.

 

[GAN]

I am Non-Union, but I love it when people complain about Unions in general -it's funny that I never hear the same people complain about Executive increases like PP09 pointed out. Wake up Middle America.

 

[lugnut33]

I am Non-Union, but I love it when people complain about Unions in general -it's funny that I never hear the same people complain about Executive increases like PP09 pointed out. Wake up Middle America.

But, havn't you ever met those union thug teachers!! One of those thugs cried on the last day of school as he was saying goodbye to the kids for the year. Good thing we are cutting back his takehome pay and benefits!! <obvious sarcasm is obvious>

I'm on a school board here in WI and it was horrible having to negotiate the new contract knowing we were taking away about 10% of the take home pay of people making 35K-65K per year because of cuts in education. A lot of tears were shed the last few months.

 

[Allison]

I may be wrong but, the Disney theme parks have the following revenue centers.

1. Food and beverage
2. Merchandise
3. Park operations

F & B is responsible for their own expenses and profits, same with merchandise. So when you think of a ticket increase don't think about food or souvenirs. That's a separate world all together.

So what would justify a ticket increase yearly? Well, salaries of the staff. We all know about the union negotiations right. We have to pay for that, not Disney.

Next, custodial services (janitors). Just like we see in the grocery store, the price of cleaning chemicals and plastic especially (like trash can liners) has taken a big increase in the past 18 months. Is Disney going to absorb those increases...no, we are.

And how about the big one? Pharmaceutical companies call it Research & Development or R&D. Disney calls it Imagineering. These talented people's salary goes up every year. And they bill Disney for it. And Disney bill's us. Did you know Disney has a research lab at Carnegie Mellon University? The leading university in the US for robotics and computer science? http://www.cmu.edu/corporate/partnerships/disney_lab.shtml We go to Disney parks because they are the best in the industry (heck, they invented it!) I'm happy to pay for this. I don't want Disney talent to work somewhere else!

Well, I'm just scratching the surface. I'm sure there's more. Has anyone noticed how fast health care costs are rising? Over 10% yearly!

Oh, and those surveys that Disney takes everywhere, they are tracking the guest's sense of value. I attended a Disney Institute seminar and learned something very interesting. Disney sends surveys/questionnaires to guest's homes 5 weeks after their vacation to determine their perceived value of their vacation. Why? Well you've received your credit card statement by then! And it seems people still say it's a good value (I agree).

Just like your family's expenses increase yearly...so does the Disney theme parks. Shareholders expect to make more yearly. So additional operating expenses will be passed on to the guest.

I completely agree with your post.

 

[*NikkiBell*]

If we're going to blame salary increases for the ticket price increases, let's not only look at the union. Let's look at ALL the salary increases and the impact. I know union bashing is what all the hip kids are doing these days, but there are a lot of people on Disney's payroll that are non-union employees and they all got larger raises than the union folks did.

I agree 100%.

 

[Cheshire Figment]

If we're going to blame salary increases for the ticket price increases, let's not only look at the union. Let's look at ALL the salary increases and the impact. I know union bashing is what all the hip kids are doing these days, but there are a lot of people on Disney's payroll that are non-union employees and they all got larger raises than the union folks did.

This is not accurate.

At least for the hourly workers, which is definitely the largest portion, whether you are Union or not the pay raise is the same.

 

[Paul in CT]

I have to agree 100% with both lugnut33 and what Peter said on the Podcast. The current ticket prices just reflect the cost of services around the country. When people stop buying the tickets to WDW and Disneyland then Disney will cut back. In the meantime I would expect at minimum of 3-5% increase/year in ticket prices.

An additional example of the same ticket price increases where everyone complains year after year but keep buying is MLB baseball tickets. Teams like the Yankees, Phillies, and Red Sox have been increasing their yearly ticket prices by >5% each each of the last five years and all three teams keep filling their ballpark game after game. Additionally, teams like the Yankees have premium tickets that run $250-$3000/game and they still get people to buy them at that price. Until people stop purchasing the ticket then these businesses will keep increasing prices based on supply and demand.

I also have to mention that WDW did add the "The Magic Memories and You" show this year and opened a new refurbished attraction in Star Tours at HS. So it is not like people are lacking for things to do at WDW. I still think the cost of WDW is a great value when you look at other entertainment options as pointed out above and thus I will continue to bring my family down year after year.

I am less concerned about the ticket price increases because of the entertainment value when compared to prices for other shows and/or sporting events. IMHO, it is the dining price increases that seem exorbitant and all too frequent, but, as you say, it is all based on supply and demand. We continue to dine at the signature restaurants thanks to the TIW card, but perhaps less often.

 

[Paul in CT]

The Union got 3% raises. Bob Iger got 28%.

That's probably because Bob Iger has a lot more responsibility for profits and he has turned things around for the company and for stockholders since he replaced Eisner.

If there were no union, the higher performers would probably do much better than 3%. The union executives probably do much better than 3%.

 

[pittsburghmarc]

I am less concerned about the ticket price increases because of the entertainment value when compared to prices for other shows and/or sporting events. IMHO, it is the dining price increases that seem exorbitant and all too frequent, but, as you say, it is all based on supply and demand. We continue to dine at the signature restaurants thanks to the TIW card, but perhaps less often.

Menu increases are tough to swallow sometimes. Pun intended... But here is what people need to understand:

1. A year ago corn was selling for about $3.50 a bushel. Last Wednesday's price was $7.60 per bushel. That doesn't mean corn on the cob we eat will be more expensive, but about eighty percent of all corn grown in the U.S. is consumed by domestic and overseas livestock, poultry, and fish production. That means things such as beef and pork are going to cost more.

2. Hog prices are about 50% higher than they were two years ago.

3. Soybean prices are about 40% higher than they were last year. Soybeans are used to create a variety of food products. Primarily vegetable oil. Which is used to deep fry most everything, salad dressings, processed foods, etc.

4. Wheat - If you don't live in the South or Midwest, you may not be thinking about the flooding along the Mississippi River or the Delta flooding and wet conditions in the Ohio Valley and the drought in Texas, Oklahoma and Kansas. Well guess what...those conditions have caused wheat prices to increase about 20%. Bread, pizza, etc. You get the idea.

I could go on about beef, gasoline (the food has to get to the kitchen somehow) and plastic (restaurants use a lot of Saran Wrap), but you get the picture. Disney is not operating in a vacuum. You see it at the grocery store and when you go out to eat. Notice fast food restaurants don't have as many items on their $1 menu?

To make matters worse, countries such as China are willing to pay more for our agricultural products and livestock than we do. So our producers are selling overseas to make more money thus driving up our prices even more.

Sorry to be such a downer. Again, Disney is not going to absorb these increases. They get passed on to us. When Applebee's or Olive Garden raise their prices annually, nobody discusses it on a podcast.

 

[Cheshire Figment]

Minor Points Of Order.

There has been no change in the pricing of Water Park or Disney Quest Annual Passes for at least the last three years.

And the price of a hopper add-on to a one-day ticket has decreased from $54 to $35.

 

[Paul in CT]

Menu increases are tough to swallow sometimes. Pun intended... But here is what people need to understand:

1. A year ago corn was selling for about $3.50 a bushel. Last Wednesday's price was $7.60 per bushel. That doesn't mean corn on the cob we eat will be more expensive, but about eighty percent of all corn grown in the U.S. is consumed by domestic and overseas livestock, poultry, and fish production. That means things such as beef and pork are going to cost more.

2. Hog prices are about 50% higher than they were two years ago.

3. Soybean prices are about 40% higher than they were last year. Soybeans are used to create a variety of food products. Primarily vegetable oil. Which is used to deep fry most everything, salad dressings, processed foods, etc.

4. Wheat - If you don't live in the South or Midwest, you may not be thinking about the flooding along the Mississippi River or the Delta flooding and wet conditions in the Ohio Valley and the drought in Texas, Oklahoma and Kansas. Well guess what...those conditions have caused wheat prices to increase about 20%. Bread, pizza, etc. You get the idea.

I could go on about beef, gasoline (the food has to get to the kitchen somehow) and plastic (restaurants use a lot of Saran Wrap), but you get the picture. Disney is not operating in a vacuum. You see it at the grocery store and when you go out to eat. Notice fast food restaurants don't have as many items on their $1 menu?

To make matters worse, countries such as China are willing to pay more for our agricultural products and livestock than we do. So our producers are selling overseas to make more money thus driving up our prices even more.

Sorry to be such a downer. Again, Disney is not going to absorb these increases. They get passed on to us. When Applebee's or Olive Garden raise their prices annually, nobody discusses it on a podcast.

I don't disagree that these are factors affecting price increases now. However, the large increases at the signature restaurants became noticeable to me 3-4 years ago.

 

[NancyIL]

Actually - the 10-day ticket went up $30, and annual passes went up $20...go figure! I am the only one in my family who goes to WDW on a regular basis, so an increase of $20 + tax for an AP isn't much. I will get a new annual pass in October, after upgrading an 8-day park hopper I bought in 2009. I will probably get 4 trips out of my AP, and I feel that I get a lot of value out of that ticket.

Where I don't see good value is in the area of food. I enjoy an occasional table service meal, especially if I'm sharing it with a friend. I'd love to eat at Cinderella's Castle again, but I'm not too keen about paying for a photo package, in addition to the meal. (Same reason I don't eat at Akershus.) Other character meals have also increased a lot of price. I love the Food & Wine Festival, but I pass over their pricey "dining experiences."

Not only has WDW raised resort prices (expected), but they have been shrinking the value season at their resorts. From the end of Thanksgiving weekend until a few days before Christmas used to be value season, but not in 2011! That's now fall season, and the only value season is January through mid-February, and late August through September.

 

[PeterPan09]

This is not accurate.

At least for the hourly workers, which is definitely the largest portion, whether you are Union or not the pay raise is the same.

actually...it is. The pay raises were not identical across the board at WDW. Some salaried workers got more than others, some hourly workers got more than others. Within specific lines of business raises were the same across the board-however all individual workers did not receive the same. I worked directly with people who got zero raise this last April because they already were "topped out". Custodial people did not get the same as bus drivers who did not get the same as housekeeping.

I don't want to burst people's pixie dust here, but Disney is not known for paying it's people well. The reason there are unions at Disney in the first place is because they were not interested in paying their people well. At one time Disney paid their employees more than other companies, but that is no longer the case. I'm certainly not going to say that the unions are blameless and innocent of causing any problems-but I'm not ready to call them useless and the cause of all that's wrong in the world just yet.

You don't go to work at Disney for the money-you go to work there and you stay there because you love what you do. You love the guests and you love making their visit special. Bob Iger would not have been able to have a 28% increase if his employees were not doing their jobs as well as they are doing them. Like many other large corporations, those at the top tend to forget how dependent they are on the performance of those low wage people at the bottom when it's time for salary increases.

As has been explained really well in this thread, salary increases are only part of a factor when prices increase. Energy costs, food prices..there are many factors that enter into it. However, the first blame always goes on the workers who dared to ask for a raise to help them cope with rising prices in their own homes.

 

[PeterPan09]

I don't disagree that these are factors affecting price increases now. However, the large increases at the signature restaurants became noticeable to me 3-4 years ago.

When did Disney start offering the dining plans? (I really don't remember) I've thought food quality has diminished for quite a while and I've been blaming the dining plans.

We went to Cali Grill 10 years ago and LOVED it. We went 2 years ago and did not think it was worth the money we paid. It wasn't horrible, it was good-but just "good" is not worth the price.

 

[cyberbox2]

Well, like Pete said, if I'm gonna keep buying the tickets then I should not complain. I agree but in my opinion, when Disney does this, they are simply taking money out of one of their pockets and putting it in another. What I mean is if I had that extra money I didn't have to spend on a ticket increase, I might have bought that one extra meal or that cool Disney souvenir I wanted, but could not because that money was already spent at the gate. So I won't be spending any more money, I'll just be spending it differently.

 

[SnackyStacky]

When did Disney start offering the dining plans? (I really don't remember) I've thought food quality has diminished for quite a while and I've been blaming the dining plans.

We went to Cali Grill 10 years ago and LOVED it. We went 2 years ago and did not think it was worth the money we paid. It wasn't horrible, it was good-but just "good" is not worth the price.

The dining plan was initially offered in January of 2005. At that time, there was (so far as I can remember) only ONE dining plan. It included 1 table service meal, 1 counter service meal, and 1 snack per guest, per night. It was about $30 per adult - I'm not recalling the child's price.

The table service meal included an appetizer, an entree, a dessert AND the gratuity.

While I get that there was no way that pricing structure could last - $53 per adult for an entree and dessert on that table service meal? While choices and quality have been dumbed down?

There's a lot of talk about inflation and such - but really - if you have to offer promotions for 50 weeks out of the year to fill your rooms, I think it's time to take a long, hard look at your pricing structure.

 

[dansyr2514]

I don't think the dining plans have necessarily affected the food quality. Previous to the current dining plans we used to purchase the gold plan which is similar to the premium plan now that includes recreation. The food quality was great and this was back in early 2000. I think free dining has affected the food quality.
However there is a trade off. We paid for the dining plan and the price of rooms were more reasonable. Now with free dining, the rack rates of the rooms are skyrocketing.
I think if they'd make the room rates more reasonable, people would purchase the dining plan and everyone would be happy. Well, maybe not everyone but sure would.