Why or for what is DCL cutting costs and increasing prices for?

[cgolf]

Just a change of pace thread to try and keep the personal out of the discussion.

Why has DCL done all these changes in such a short period of time. From the alcohol policy, price hikes, limiting TA commissions.......

I understand policy changes, just am surprised how many in such a short amount of time.

Is DCL's profit margin not in the right spot being that they don't really have a big boozing crowd to make money on and of course no casino? Are they getting greedy? Are they putting away profits to bankroll new ships?

I would like to do a poll, but would be curious for some option ideas before I do.

Personally I wonder if the Disney umbrella profits are suffering, I read somewhere the ESPN is laying off people. In a large company if one area is under-performing, it is possible they could push another area that is doing well to help make up for the areas not doing as well.

Curious on everyone's thoughts. If this is a repeat then it can get deleted.

 

[KLB9]

I think one general misconception about economics/business is that if a business is doing "well" and/or making "enough" money. They "should" forgo methods of increasing profits further (price increases, cost decreases).

The Law of Supply and Demand has not been repealed. All business entities price products at the highest price at which they can be sold. Of course sustainability and customer retention is also a factor, but most posts on this topic put far to much emphasis on it.

 

[sweetpee_1993]

Increase the profit margin. There's no other reason. That's how CEOs score the obscene bonuses.

 

[starvenger]

it is true that ESPN is not as profitable, and that is mainly due to having less subscribers and higher rights fees for live sports.

But I don't think that the issues there have a correlation to DCL's changes.

 

[HookdonWDW]

I think it's the concept of just ripping off the band-aid quickly instead of slowly. DCL has a list of changes that they want to implement. Better to implement them back to back and let people complain and get over it or leave and make room for new cruisers than to change slower and prolong the moaning and groaning.

 

[cgolf]

Poll has been added.

 

[wcw57]

why is an i-phone $600? Because people will pay it. starbucks coffee $6? same thing. bottled water $3? people just shake their heads, shrug their shoulders, and move on.
Price increase on a cruise ship? Holy cow! the sky is falling!!!!!!

 

[sweetpee_1993]

why is an i-phone $600? Because people will pay it. starbucks coffee $6? same thing. bottled water $3? people just shake their heads, shrug their shoulders, and move on.
Price increase on a cruise ship? Holy cow! the sky is falling!!!!!!

Actually, since AT&T rolled out their Next program we have allowed our contract with them to expire and refuse to take part in their racket program. Our next phones, IF they are iPhones, will be purchased outright and not tied to their company. We've been loyal customers for almost 16 years following from Bellsouth Mobility thru Cingular then AT&T. Even with cell phones there comes a breaking point.

Starbucks = $3.50-ish for a Trenta for me. Why? I know what to order & how to get the occasional fix on the cheap still.

Bottled water? There are filter bottles out there. Still $3.50 for 24 bottles isn't terrible.

 

[PrincessTrisha]

why is an i-phone $600? Because people will pay it. starbucks coffee $6? same thing. bottled water $3? people just shake their heads, shrug their shoulders, and move on.
Price increase on a cruise ship? Holy cow! the sky is falling!!!!!!

No, there's lots of us that don't buy into the expensive gadgets or expensive stuff.

For me, when Tim Horton's did their latest price hike which put the extra large coffee (which I used to get twice a day) up to $2.10, I switched to a large coffee which is $1.90 (I used to pay $2.00 for an extra large). The kicker is, since I drink less coffee in the morning, I have a tendency to enjoy something else (like the iced tea mixes or Mio's) so not only did they lose the dime from me each morning but it's only about every other day now that I get a second coffee.

Oh, and I have never and will never buy an apple product. There are lots of alternatives that give you a better price / quality ratio.

This year I've taken a 14 night Carnival cruise (repositioning from Tampa to Baltimore), a 7 night Celebrity cruise to Bermuda, and I have a 4 night Royal cruise and a 5 night Disney cruise coming up. People say I'm lucky but it's not luck. I am financial savvy and quite frankly, don't buy into brand hype that wastes money while not providing the value associated with so-called "lesser" brands.

Disney isn't loyal to me, so there's no reason for me to be loyal to Disney. This isn't a marriage, it's a consumer relationship. If I don't like what they are selling or how they are selling it, or how much they are selling it for, I'm going to tell them. And frankly, I'm going to tell others as well. Consumers who like a brand will spread the news but so will consumers who dislike a brand or have had a lesser experience.

Oh, and I believe that recent changes are to maximize profits. Someone realized how other cruise lines make money and decided a few quick changes on DCL could bump up the bottom line.

 

[starvenger]

No, there's lots of us that don't buy into the expensive gadgets or expensive stuff.

For me, when Tim Horton's did their latest price hike which put the extra large coffee (which I used to get twice a day) up to $2.10, I switched to a large coffee which is $1.90 (I used to pay $2.00 for an extra large). The kicker is, since I drink less coffee in the morning, I have a tendency to enjoy something else (like the iced tea mixes or Mio's) so not only did they lose the dime from me each morning but it's only about every other day now that I get a second coffee.

Even L is too much Timmys for me to take at one time (although I will gladly take Timmys over whatever that swill DCL and other cruise lines call coffee is). Luckily my company has one of those fancy single cup grind/brew machines so I can get my fix without paying for it. Or resorting to Maxwell House.

Disney isn't loyal to me, so there's no reason for me to be loyal to Disney. This isn't a marriage, it's a consumer relationship. If I don't like what they are selling or how they are selling it, or how much they are selling it for, I'm going to tell them. And frankly, I'm going to tell others as well. Consumers who like a brand will spread the news but so will consumers who dislike a brand or have had a lesser experience.

This. I like Disney, but I don't like them enough to pay a premium for a ship that is, at it's core, really not much different from (and in some aspects not even as good as) the competition.

 

[The Sasquatch]

The goal of every public company in the world is to increase revenue year over year and make more money for its shareholders. If you have a business with limited areas to increase that profit, you must get creative and try new things. Its very simple...

 

[SonicGuy]

Increase the profit margin. There's no other reason. That's how CEOs score the obscene bonuses.

Thats how companies stay in business for years to come

 

[texas disney mom]

why is an i-phone $600? Because people will pay it. starbucks coffee $6? same thing. bottled water $3? people just shake their heads, shrug their shoulders, and move on.
Price increase on a cruise ship? Holy cow! the sky is falling!!!!!!

We buy used phones (and use no contract). Cheaper and less stress. Same sprint network. No big deal if it breaks. No insurance costs. Have a galaxy 4 right now. Great phone.

 

[RedM94]

No, there's lots of us that don't buy into the expensive gadgets or expensive stuff.

For me, when Tim Horton's did their latest price hike which put the extra large coffee (which I used to get twice a day) up to $2.10, I switched to a large coffee which is $1.90 (I used to pay $2.00 for an extra large). The kicker is, since I drink less coffee in the morning, I have a tendency to enjoy something else (like the iced tea mixes or Mio's) so not only did they lose the dime from me each morning but it's only about every other day now that I get a second coffee.

Oh, and I have never and will never buy an apple product. There are lots of alternatives that give you a better price / quality ratio.

This year I've taken a 14 night Carnival cruise (repositioning from Tampa to Baltimore), a 7 night Celebrity cruise to Bermuda, and I have a 4 night Royal cruise and a 5 night Disney cruise coming up. People say I'm lucky but it's not luck. I am financial savvy and quite frankly, don't buy into brand hype that wastes money while not providing the value associated with so-called "lesser" brands.

Disney isn't loyal to me, so there's no reason for me to be loyal to Disney. This isn't a marriage, it's a consumer relationship. If I don't like what they are selling or how they are selling it, or how much they are selling it for, I'm going to tell them. And frankly, I'm going to tell others as well. Consumers who like a brand will spread the news but so will consumers who dislike a brand or have had a lesser experience.

Oh, and I believe that recent changes are to maximize profits. Someone realized how other cruise lines make money and decided a few quick changes on DCL could bump up the bottom line.

Yes, you are correct; "there's lots of us that don't buy into the expensive gadgets and or expensive stuff." The larger issue at hand is that DCL is selling capacity far beyond their break even point. They raise prices, and the market continues to baer.

As long as they are exceeding their break even capacity break even bench marks they will continue to raise prices. Statistics and probabilities will rule initial price points, if demand does not meet price, they just lower prices to increase demand.

I don't like the price increases as much as the next person and I'm close to my breaking point with DCL. The truth of the matter is that 20% of the population does 80% of the travel. As long as they are booking beyond a certain capacity, expect price to continue to increase.

 

[tvguy]

[QUOTE="KLB9, post: 54670160, member: 508934" ]
The Law of Supply and Demand has not been repealed. All business entities price products at the highest price at which they can be sold. Of course sustainability and customer retention is also a factor, but most posts on this topic put far to much emphasis on it.[/QUOTE]

All supply and demand. And sustainability and customer retention are huge issues, and given that apparently Disney has the highest percentage of repeat cruisers and appears to be filling their ships, the market will support the price increases.

There was some concern expressed when the Fantasy and Dream launched that that would make too many cabins available for a Disney product, and for the Disney price. That apparently hasn't happened.
About the only apparent stumble Disney has made was with California Adventure Park in that opened in 2001. Many consider it just another land at Disneyland, which forced Disney to offer Park Hopper Tickets, because folks balked at paying 2 full admissions. Disney being Disney, threw another Billion dollars at California Adventure in an effort to remodel it in such a way that they can get people to consider it a different par.

 

[kdecroo]

Corporate Greed.................................

 

[JW9DVC]

Why not? Just because maybe some can't afford it. Doesn't mean that most can't. They will stop when the bookings are less. They are seeing how far they can go to increase. It's no cooperate greed. They are in the business to provide entertainment. If you are not willing to spend. Someone else is apparently. Consumer driven.

JW

 

[JW9DVC]

[QUOTE="KLB9, post: 54670160, member: 508934" ]
The Law of Supply and Demand has not been repealed. All business entities price products at the highest price at which they can be sold. Of course sustainability and customer retention is also a factor, but most posts on this topic put far to much emphasis on it.

All supply and demand. And sustainability and customer retention are huge issues, and given that apparently Disney has the highest percentage of repeat cruisers and appears to be filling their ships, the market will support the price increases.

There was some concern expressed when the Fantasy and Dream launched that that would make too many cabins available for a Disney product, and for the Disney price. That apparently hasn't happened.
About the only apparent stumble Disney has made was with California Adventure Park in that opened in 2001. Many consider it just another land at Disneyland, which forced Disney to offer Park Hopper Tickets, because folks balked at paying 2 full admissions. Disney being Disney, threw another Billion dollars at California Adventure in an effort to remodel it in such a way that they can get people to consider it a different par.[/QUOTE]
California Adventure is truly a separate park from Disney. It was considered almost another land, before like you mention the major overhaul. Disney apparently knows what they are doing. I'm glad I own stock. JW

 

[tvguy]

All supply and demand. And sustainability and customer retention are huge issues, and given that apparently Disney has the highest percentage of repeat cruisers and appears to be filling their ships, the market will support the price increases.

There was some concern expressed when the Fantasy and Dream launched that that would make too many cabins available for a Disney product, and for the Disney price. That apparently hasn't happened.
About the only apparent stumble Disney has made was with California Adventure Park in that opened in 2001. Many consider it just another land at Disneyland, which forced Disney to offer Park Hopper Tickets, because folks balked at paying 2 full admissions. Disney being Disney, threw another Billion dollars at California Adventure in an effort to remodel it in such a way that they can get people to consider it a different par.

California Adventure is truly a separate park from Disney. It was considered almost another land, before like you mention the major overhaul. Disney apparently knows what they are doing. I'm glad I own stock. JW[/QUOTE]

I am glad I own stock too. But I still get mad when I go to the parks and see prices. Especially since they eliminated the discounts for stockholders.

 

[MunFam]

I agree with supply and demand. They have a supply, and the demand is high so they can raise the price...

Its just like any other high end travel provider, they sell at a high price...because they can. There is a demand for the supply they have, so they can charge a premium.