Why does disney raise prices during their busiest times???

[dadddio]

Sooner or later Disney will price themselves out. Look at Sears, JC Penny's and KMART. It's a slippery slope. If Disney lowered their prices, in my humble opinion they will attract MORE CUSTOMERS that will buy disney merchandise/food/etc.

I believe that you are wrong. I don't believe that lowering prices would bring in so many additional guests that it would increase Disney's profit. The reason that I believe that is because they don't appear to be suffering for customers at the higher price point. If a company can raise prices and still attract a huge amount of customers, then the company has a responsibility to raise prices.

I also believe that your Costco analogy was not on point. After all, Costco hasn't kept their membership fees locked in or failed to increase prices on the bulk of their products. They merely have kept the price of a hot dog and soda combo the same. It should also be noted that many would say that the quality of this combo has declined from the Hebrew National dog of yesteryear to the generic dog of today. (Not to mention the whole Coke/Pepsi thing.)

 

[brunette8706]

I believe that you are wrong. I don't believe that lowering prices would increase so many more guests that it would increase Disney's profit. The reason that I believe that is because they don't appear to be suffering for customers at the higher price point. If a company can raise prices and still attract a huge amount of customers, then the company has a responsibility to raise prices.

I also believe that your Costco analogy was not on point. After all, Costco hasn't kept their membership fees locked in or failed to increase prices on the bulk of their products. They merely have kept the price of a hot dog and soda combo the same. It should also be noted that many would say that the quality of this combo has declined from the Hebrew National dog of yesteryear to the generic dog of today. (Not to mention the whole Coke/Pepsi thing.)

*
Maybe you missed the point. The point I am trying to convey here is that Costco is doing "What's right for the customer". Sure they could charge $2.50 or more for that hotdog and soda, but they are not because they are a BILLION DOLLAR sucessful business that like to keep customers loyal and satifisfied along with their employees. COSTCO pays their employees a decent wage and COSTO only inflates their products by only 15 percent that's all and they are making BILLIONS. Disney is doing what Sears and Kmart and remember Montgomery Wards did. Well we all know what happened to Wards right? In my humble opinion Disney is following the Sears and Wards business model. Not a good thing. Sure people will be paying these prices. But sooner or later there will be a tipping point.

Brunette

 

[dadddio]

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Maybe you missed the point. The point I am trying to convey here is that Costco is doing "What's right for the customer". Sure they could charge $2.50 or more for that hotdog and soda, but they are not because they are a BILLION DOLLAR sucessful business that like to keep customers loyal and satifisfied along with their employees. COSTCO pays their employees a decent wage and COSTO only inflates their products by only 15 percent that's all and they are making BILLIONS. Disney is doing what Sears and Kmart and remember Montgomery Wards did. Well we all know what happened to Wards right? In my humble opinion Disney is following the Sears and Wards business model. Not a good thing. Sure people will be paying these prices. But sooner or later there will be a tipping point.

Of course there is a tipping point. However, it is clear that that point hasn't been reached. If they increase prices to that point, we will see how they deal with it. As a stockholder, I'm not too worried.

 

[OklahomaTourist]

Of course there is a tipping point. However, it is clear that that point hasn't been reached. If they increase prices to that point, we will see how they deal with it. As a stockholder, I'm not too worried.

There's an age-old macroeconomic lesson about supply and demand curves here. From Disney's point of view, they haven't yet reached that point where people stop demanding what they're selling at the price they're selling it, and they'll continue to raise prices on (fill in the blank) so long as that marginal increase in price continues to result in an increase in profit. Ugly realities.

The only wrench in that scenario is that there are also all manner of leading and trailing indicators businesses can use to gauge the "temperature" of their customers and the relative elasticity of demand. For Disney, are people having that "experience" for which they pay a premium? And what's part of that "experience?" Clean parks? Good food? No hassles in check-in? Good transportation? Fastpasses out the wazoo?

If customers start to perceive the parks aren't as clean, or the resorts aren't as nice, or the rides are too often broken, or the CM's aren't as friendly, or (fill in the blank) is "wrong," then the perception that the value proposition that is the lifeblood of Disney is at risk. It doesn't result in an immediate change in demand, but over time it can. And if a customer perceives that a company only wants its money, and not its business (and there certainly is a difference), that company will eventually have issues. I have a feeling those in leadership at Disney made recent CEO changes for precisely these reasons.

 

[brunette8706]

There's an age-old macroeconomic lesson about supply and demand curves here. From Disney's point of view, they haven't yet reached that point where people stop demanding what they're selling at the price they're selling it, and they'll continue to raise prices on (fill in the blank) so long as that marginal increase in price continues to result in an increase in profit. Ugly realities.

The only wrench in that scenario is that there are also all manner of leading and trailing indicators businesses can use to gauge the "temperature" of their customers and the relative elasticity of demand. For Disney, are people having that "experience" for which they pay a premium? And what's part of that "experience?" Clean parks? Good food? No hassles in check-in? Good transportation? Fastpasses out the wazoo?

If customers start to perceive the parks aren't as clean, or the resorts aren't as nice, or the rides are too often broken, or the CM's aren't as friendly, or (fill in the blank) is "wrong," then the perception that the value proposition that is the lifeblood of Disney is at risk. It doesn't result in an immediate change in demand, but over time it can. And if a customer perceives that a company only wants its money, and not its business (and there certainly is a difference), that company will eventually have issues. I have a feeling those in leadership at Disney made recent CEO changes for precisely these reasons.

Perfectly said.

How many times on this very forum do we hear about rides (several at a time) that are broken, monorails that stop/break, rides looking worn out, some resorts in repair.

Disney used to build a brand new park every 10-15 years, no more. Yes, Disney expanded on the Fantasyland, but in my opinion it's more fluff than anything. Ariels ride is cute, but not WOW factor, there isn't anything in the new fantasyland except the Be Our Guest Restaurant that has a WOW factor. Of course that's just my opinon.

Brunette

 

[dadddio]

If customers start to perceive the parks aren't as clean, or the resorts aren't as nice, or the rides are too often broken, or the CM's aren't as friendly, or (fill in the blank) is "wrong," then the perception that the value proposition that is the lifeblood of Disney is at risk.

Of course, the needle moves in the other direction, also. If the company can make changes that can be seen by many as increasing the 'worth' of a visit, it will push the 'tipping point' higher. I am not going to debate in this thread whether NFL, queue upgrades, and MM+ does this, but it's not as if the company is sitting on it's hands.

Disney used to build a brand new park every 10-15 years, no more.

They have pretty much kept to that schedule or beat it. There was 16 years between DL and MK. Then it was eleven years before Epcot. From there, it went as follows: 1 year, 6, 3, 6, 3 (two parks, same year), 1, 3 and 11 (if SDL opens on schedule). If you add in the water parks, cruise ships, and (confirmed) abandoned theme park plans, the gaps pretty much close up.

That being said, I believe that it's unrealistic to expect the company to continue to aggressively build brand new theme parks in perpetuity.

 

[GordonD]

OK PEOPLE, to turn the conversation on its head, its the KINDNESS of Disney to raise prices. They know by raising prices it deters some people from visiting at high traffic times. Time is money, and keeping the people away with more time than money, makes it more enjoyable for those who can afford to go. Then they take the "excess profits" and give that money to charities and the needy so those people can visit too.

At this point I am not sure to cry over how kind Disney is, or Laugh on how funny (in my mind) I am.

 

[mom2rtk]

That being said, I believe that it's unrealistic to expect the company to continue to aggressively build brand new theme parks in perpetuity.

Then it's unrealistic of Disney to expect the sort of attendance gains I suspect they have in mind in perpetuity.

 

[dadddio]

Then it's unrealistic of Disney to expect the sort of attendance gains I suspect they have in mind in perpetuity.

Correct, I guess. It is unrealistic to believe that they will be able to run the parks beyond their capacity. Of course, I've read nothing that suggests that they are trying to do this.

 

[LilyWDW]

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Maybe you missed the point. The point I am trying to convey here is that Costco is doing "What's right for the customer". Sure they could charge $2.50 or more for that hotdog and soda, but they are not because they are a BILLION DOLLAR sucessful business that like to keep customers loyal and satifisfied along with their employees. COSTCO pays their employees a decent wage and COSTO only inflates their products by only 15 percent that's all and they are making BILLIONS. Disney is doing what Sears and Kmart and remember Montgomery Wards did. Well we all know what happened to Wards right? In my humble opinion Disney is following the Sears and Wards business model. Not a good thing. Sure people will be paying these prices. But sooner or later there will be a tipping point.

Brunette

But you can not realistically compare Disney and Costco. They are in different industries, different markets, different customer bases, and the list continues. It is an unrealistic way to look at things. Retail is only one part of the Disney business model so you can't say that Disney is like or should be like a specific retail (especially discount retail) establishment.

It is called supply and demand and price equilibrium.

So here is a question to those who are upset about Disney raising prices. Why shouldn't they? In a business sense and a logical non-emotional response... why should they keep prices the same when they are still seeing gains in demand?

 

[flicx]

Disney is not a charity, it is a publicly traded company. The people that run it have a fiduciary resposibility to their shareholders to be as profitable as possible. This is free market capitalism, i.e. the foundation of our economy. Just as Disney has the right to charge whaterver it wants for tickets, food, etc., we have the right not to buy what they are selling. When they raise prices so high that people stop buying, they will lower the prices. This is the Invisible Hand of regulation.

Please !!!! I really really tire of this excuse. Once you burn enough bridges with long time customers you will do alot of irrepairable damage to the product. I think disney has really lost touch with the "magic" they once had,now they come off as money grabbing and overcharging. Just look at these boards, there was a day when you would be run off to even speak of disney in a negative/greed tone. I see more and more of it every day. They are obviously doing something wrong when their biggest supporters are fast turning on them!

 

[maxiesmom]

Please !!!! I really really tire of this excuse. Once you burn enough bridges with long time customers you will do alot of irrepairable damage to the product. I think disney has really lost touch with the "magic" they once had,now they come off as money grabbing and overcharging. Just look at these boards, there was a day when you would be run off to even speak of disney in a negative/greed tone. I see more and more of it every day. They are obviously doing something wrong when their biggest supporters are fast turning on them!

As much as we here on the Dis like to think Disney lives and breathes by what we think, they don't. We are such a small percentage of the people that go to the parks that even if we all banded together and stopped going, they wouldn't blink.

I think we forget that most people don't go to a Disney park every year, or multiple times a year. If you do, you tend to notice more when a bench that was there last year is now gone, or that that feature on Splash Mountain is broken and has been so for months. The casual visitor doesn't notice all that we do.

 

[clareita]

Disney is not a charity, it is a publicly traded company. The people that run it have a fiduciary resposibility to their shareholders to be as profitable as possible. This is free market capitalism, i.e. the foundation of our economy. Just as Disney has the right to charge whaterver it wants for tickets, food, etc., we have the right not to buy what they are selling. When they raise prices so high that people stop buying, they will lower the prices. This is the Invisible Hand of regulation.

Please !!!! I really really tire of this excuse. Once you burn enough bridges with long time customers you will do alot of irrepairable damage to the product. I think disney has really lost touch with the "magic" they once had,now they come off as money grabbing and overcharging. Just look at these boards, there was a day when you would be run off to even speak of disney in a negative/greed tone. I see more and more of it every day. They are obviously doing something wrong when their biggest supporters are fast turning on them!

This is not an excuse, this is Econ 101. You offer a product at a price that you believe will bring you maximum profits. If people do not buy it, you lower the price. If you have more people that want to buy it than you have in stock, you raise prices. Adam Smith laid it all out in the The Wealth of Nations back in 1776. From what I'm reading about the crowds at Disney this month, there is no shortage of people willing to pay what Disney is charging, therefore they are not setting prices too high. Too high for some people to afford them, sure. Too high from a business perspective, no.

Disney is a business run by busines people - not Tinkerbell.

 

[flicx]

As much as we here on the Dis like to think Disney lives and breathes by what we think, they don't. We are such a small percentage of the people that go to the parks that even if we all banded together and stopped going, they wouldn't blink.

I think we forget that most people don't go to a Disney park every year, or multiple times a year. If you do, you tend to notice more when a bench that was there last year is now gone, or that that feature on Splash Mountain is broken and has been so for months. The casual visitor doesn't notice all that we do.

I never said we represent a majority of park goers. What I said is this site has some of disney's greatest supporters. Seems to me when your biggest supporters start fleeing the ship trouble follows. While there is no firm number on how many people who go are repeat customers, I think it is higher than you think. Obviously number of DVC owners represnts this fact. One thing I feel certain of, one more decade like the past one will be the straw that breaks the camels back.

 

[brunette8706]

But you can not realistically compare Disney and Costco. They are in different industries, different markets, different customer bases, and the list continues. It is an unrealistic way to look at things. Retail is only one part of the Disney business model so you can't say that Disney is like or should be like a specific retail (especially discount retail) establishment.

It is called supply and demand and price equilibrium.

So here is a question to those who are upset about Disney raising prices. Why shouldn't they? In a business sense and a logical non-emotional response... why should they keep prices the same when they are still seeing gains in demand?

*
I guess you didn't get my point. It's about customer loyalty. It is a business model that can be emulated. Sears and KMart and Wards saw gains in demand too. Sears is struggling and Wards went out of business 30 years ago. Prices keep soaring and guess what, food quality is going down, rides are broken, monorail issues, rides are in repair case in point Soarin film, Ellen DeGenerous show in EPCOT to name a few, resorts are in need of repair/cleanliness on and on. The holiday decorations are not what they once were, heck even the Disney Halloween and Christmas parties are not the same as say 3 years ago. The Disney Difference in my opinion is tarnished a bit.

 

[clareita]

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I guess you didn't get my point. It's about customer loyalty. It is a business model that can be emulated. Sears and KMart and Wards saw gains in demand too. Sears is struggling and Wards went out of business 30 years ago. Prices keep soaring and guess what, food quality is going down, rides are broken, monorail issues, rides are in repair case in point Soarin film, Ellen DeGenerous show in EPCOT to name a few, resorts are in need of repair/cleanliness on and on. The holiday decorations are not what they once were, heck even the Disney Halloween and Christmas parties are not the same as say 3 years ago. The Disney Difference in my opinion is tarnished a bit.

If enough people feel like you do, then profits will be negatively impacted, and Disney will need to either a) lower prices, b) spend more on infrastructure, or c) both. Like I said previously, Econ 101.

 

[brunette8706]

If enough people feel like you do, then profits will be negatively impacted, and Disney will need to either a) lower prices, b) spend more on infrastructure, or c) both. Like I said previously, Econ 101.

*
Shaking my head.

 

[Planogirl]

The trouble is that the casual visitor who has never been or feels that it's a duty to take their kids might never know that things are deteriorating. How far can that go before a reputation is damaged though? Disney has a stellar reputation but if more and more people talk about diminishing returns and high prices, will that eventually damage that reputation?

One unfortunate aspect to me is that WDW has apparently become more and more affordable to the foreign visitor. I admit to a bit of envy when I hear about the good deals Disney seems to offer.

 

[newdeal]

I totally understand why disney should/would raise prices for their resorts during "busy season", like most hotels do, but I have a problem with them putting a "surcharge" on character buffets for certain times of the year. Do they do this just to get a few extra bucks out of the visitors?

Why wouldn't they, if there are a huge number of visitors they can fill their restaurants at the higher prices easily so as a business that is seasonal you have to make money while you can to get through the slower times

 

[Planogirl]

Why wouldn't they, if there are a huge number of visitors they can fill their restaurants at the higher prices easily so as a business that is seasonal you have to make money while you can to get through the slower times

I agree except that some say that Disney has no actual slow times any more. That's too bad if true.