Lightning Lane at Walt Disney World

[Laketravis]

WDW has been playing this yield management game for almost a decade now, burying themselves deeper and deeper into the hole they are digging. During the last "Great Recession" they were begging people to come - perhaps in the near future they will need to revisit those marketing strategies.

 

[Chip Chipperson]

The pre booking is what totally screwed up their capacity (along with no investment)…

They are not doing prebooks. No one is booking a ride months out. Again.

The problem is “negative capacity”. It’s math and very real.

So I have to post the video again? Defunct land?

It’s 100% real and explains why fastpass works and why plus did NOT.

I was only saying that date-based pricing is not a barrier to pre-booking. Obviously, capacity is a big issue - and likely will be for several years to come (if not longer). However, there are things that the math on FP vs. FP+ vs. G+ can't account for and that's:

1. People are often willing to make sacrifices for convenience and FP+ was convenient for many people (and, yes, inconvenient for others).
2. Perception is reality and the perception among many users was that FP+ was much easier to use. Virtually nobody wants to go back to the days of running all over the park to grab paper tickets even if the result was more rides/shorter wait times, because who wants to do all that running? G+ runs into that same problem (with less running, but plenty of extra walking) since you are at the mercy of the system's algorithm that decides what times to show you for the ride you want to book.

So "better" is in the eye of the beholder and I don't think too many people will change their minds about what worked better for them, but the fact remains that variable pricing alone doesn't prohibit pre-booking. It's unlikely to return any time soon (if ever), but that's not the point I was trying to address in my original post.

 

[Animaniac93-98]

They don’t get it and as much as I’m not a fan of Chapek’s this didn’t start with him

It is amazing to me though how quickly even casual observers have been blaming Chapek for everything wrong with Disney, even though some of his faults can be traced back to parks management in the mid-90s. Paul Pressler had a notorious reputation within the fan community, but outside of it no one ever heard of him. Chapek? Even your relatives know who he is and don't think much of him.

He's been CEO for less than 3 years and the public hates him more than they ever did Iger or even Eisner in his later years.

 

[Sirwalterraleigh]

I know you know this, but it's a short-term/long-term problem.

Everything you say above is the short-term problem in a nutshell.

There are two ways to grow revenue... rate and volume. Volume can only be solved in the long-term with investment in new capacity. They're not stupid, they know this. But they have PTSD from 9/11 and COVID, plus forward-looking fear about the upcoming economic implosion, and they're not willing to invest what they need to invest.

If interest rates were still near zero and/or the economy was booming (and expected to continue booming), I think the "beyond Big Thunder Mountain" and Animal Kingdom projects teased at D23 would have been greenlit by now. But they're too afraid of the coming climate and aren't willing to spend to address the long-term.

Their thinking is: If everything goes to hell and demand falls off a cliff, they can curb price increases and even introduce price reductions in the form of targeted discounts. But they can't un-spend CapEx, and they can't un-build attractions.

So we're in this Red Queen situation where we never reach the long-term because we're stuck on the treadmill just keep trying to patch the short-term as it comes.

For the first time ever…I think I agree with you here…partly

Because you’re not describing a simplified S&D problem…

And you’re right because it NEVER applied to Disney. Disney is the outlier…that’s why we’re all here.

Not many People on the six flags forum…or Sears

Disney has its unique standards and requirements and these stewards ain’t cutting it.

This has nothing to do with hedging capex. That’s not what Disney sells based on. They sell mostly on mystique and emotional attachment.

Overproduction is a problem for Chevy.

 

[Sirwalterraleigh]

I was only saying that date-based pricing is not a barrier to pre-booking. Obviously, capacity is a big issue - and likely will be for several years to come (if not longer). However, there are things that the math on FP vs. FP+ vs. G+ can't account for and that's:

1. People are often willing to make sacrifices for convenience and FP+ was convenient for many people (and, yes, inconvenient for others).
2. Perception is reality and the perception among many users was that FP+ was much easier to use. Virtually nobody wants to go back to the days of running all over the park to grab paper tickets even if the result was more rides/shorter wait times, because who wants to do all that running? G+ runs into that same problem (with less running, but plenty of extra walking) since you are at the mercy of the system's algorithm that decides what times to show you for the ride you want to book.

So "better" is in the eye of the beholder and I don't think too many people will change their minds about what worked better for them, but the fact remains that variable pricing alone doesn't prohibit pre-booking. It's unlikely to return any time soon (if ever), but that's not the point I was trying to address in my original post.

I gotcha

But the reason they killed it was operational failure. It was “costing” then money in many ways. They don’t care about fastpass+ Nostalgia. That’s the bottom line

 

[lazyboy97o]

I know you know this, but it's a short-term/long-term problem.

Everything you say above is the short-term problem in a nutshell.

There are two ways to grow revenue... rate and volume. Volume can only be solved in the long-term with investment in new capacity. They're not stupid, they know this. But they have PTSD from 9/11 and COVID, plus forward-looking fear about the upcoming economic implosion, and they're not willing to invest what they need to invest.

If interest rates were still near zero and/or the economy was booming (and expected to continue booming), I think the "beyond Big Thunder Mountain" and Animal Kingdom projects teased at D23 would have been greenlit by now. But they're too afraid of the coming climate and aren't willing to spend to address the long-term.

Their thinking is: If everything goes to hell and demand falls off a cliff, they can curb price increases and even introduce price reductions in the form of targeted discounts. But they can't un-spend CapEx, and they can't un-build attractions.

So we're in this Red Queen situation where we never reach the long-term because we're stuck on the treadmill just keep trying to patch the short-term as it comes.

Even with a drop off of significant proportion, the parks would still likely be in a place of having insufficient capacity. The fundamental problem is that they decided they could save money by driving down attractions per guest per hour.

 

[crazy4disney]

WDW has been playing this yield management game for almost a decade now, burying themselves deeper and deeper into the hole they are digging. During the last "Great Recession" they were begging people to come - perhaps in the near future they will need to revisit those marketing strategies.

& if and when this happens noone will blame Disney it will be excuse after excuse that the economy is to blame just like they did in 09 and with Covid....

 

[CaptainAmerica]

For the first time ever…I think I agree with you here…partly

Because you’re not describing a simplified S&D problem…

And you’re right because it NEVER applied to Disney. Disney is the outlier…that’s why we’re all here.

Not many People on the six flags forum…or Sears

Disney has its unique standards and requirements and these stewards ain’t cutting it.

This has nothing to do with hedging capex. That’s not what Disney sells based on. They sell mostly on mystique and emotional attachment.

Overproduction is a problem for Chevy.

What's your theory about Cruise Line, where they seem to get it? Ostensibly the same people.

Demand is high? Moar ships! Not upcharges and microtransactions.

 

[Sirwalterraleigh]

Even with a drop off of significant proportion, the parks would still likely be in a place of having insufficient capacity. The fundamental problem is that they decided they could save money by driving down attractions per guest per hour.

Agreed…the parks are way under ride capacity. I state the numbers over and over and it never penetrates the “shields” of the Klingons around here.

This is not a debate on the microecon curve. It’s not S+D+P

Parks weren’t built that way and could never function profitability if they try and depress attendance with price. It will never Happen.

And yet we get the kinda CC grade lecture on it all the time

 

[mightynine]

I won’t be happy until they start charging $150 for Genie.

They do, they just call it an After Hours event.

 

[Sirwalterraleigh]

WDW has been playing this yield management game for almost a decade now, burying themselves deeper and deeper into the hole they are digging. During the last "Great Recession" they were begging people to come - perhaps in the near future they will need to revisit those marketing strategies.

Correct

& if and when this happens noone will blame Disney it will be excuse after excuse that the economy is to blame just like they did in 09 and with Covid....

Also correct

 

[Sirwalterraleigh]

They do, they just call it an After Hours event.

…winner

 

[CaptainAmerica]

Even with a drop off of significant proportion, the parks would still likely be in a place of having insufficient capacity. The fundamental problem is that they decided they could save money by driving down attractions per guest per hour.

Eh, maybe, but I think attractions per guest per hour is a crappy metric anyways. In an hour I can ride Kilimanjaro Safaris once (including queue time), or Prince Charming's Carousel ten times. The former is going to leave me much happier.

 

[Sirwalterraleigh]

What's your theory about Cruise Line, where they seem to get it? Ostensibly the same people.

Demand is high? Moar ships! Not upcharges and microtransactions.

Cruiseline works because they didn’t really commit to them.

Until April…they had 4 rather small ships. All were horribly outdated…the wonder pathetically so.

Their competitors - or the most comparable ones - are sailing fleets or 20+ of modernized “mega ships”

Not carnival…don’t get confused there

So in that case their name pull…”demand”…allows them to sell at higher prices because of undersized “supply”

That is much more of an Econ 002 situation.

 

[lazyboy97o]

What's your theory about Cruise Line, where they seem to get it? Ostensibly the same people.

Demand is high? Moar ships! Not upcharges and microtransactions.

Cruising is a respectable leisure activity. Theme parks are not. People who work in cruising are smart and can be listened to, theme parks are full of dumb, glorified carnies.

 

[Jrb1979]

Eh, maybe, but I think attractions per guest per hour is a crappy metric anyways. In an hour I can ride Kilimanjaro Safaris once (including queue time), or Prince Charming's Carousel ten times. The former is going to leave me much happier.

You need those Carousel rides to fill out the parks. That's what AK, DHS and Epcot lack.

 

[Chip Chipperson]

I gotcha

But the reason they killed it was operational failure. It was “costing” then money in many ways. They don’t care about fastpass+ Nostalgia. That’s the bottom line

Agreed. They definitely think G+ offers them more control over guest behavior (where you're standing at a particular moment, not whether you get into a fight over line-cutting at Philharmagic, unfortunately), which in turn gives them some degree of theoretical control over guest spending (but then again they thought the same thing about FP+). I think the jury is still out on whether this solution is better or worse than the problem they were trying to fix, but it's obviously not all roses and kittens so far if the rumors posted on this forum are true that they've already started looking at how to change the system after so much negative feedback. My G+ experiences have been pretty "meh" but my ILL experiences have worked out pretty well so far, although they really need to fix the issue of the time changing after you click an allegedly "available" time.

 

[Sirwalterraleigh]

Eh, maybe, but I think attractions per guest per hour is a crappy metric anyways. In an hour I can ride Kilimanjaro Safaris once (including queue time), or Prince Charming's Carousel ten times. The former is going to leave me much happier.

They’re driving down attractions per hour to then resell attractions in small format offerings…

Yep…parties.

They’re creating “revenge travel” inside their own compound each week. At $150 a head

Those that don’t want to pay are forced to go to Springs and buy food and lily pulitzer

 

[CaptainAmerica]

Cruiseline works because they didn’t really commit to them.

Until April…they had 4 rather small ships. All were horribly outdated…the wonder pathetically so.

Their competitors - or the most comparable ones - are sailing fleets or 20+ of modernized “mega ships”

Not carnival…don’t get confused there

So in that case their name pull…”demand”…allows them to sell at higher prices because of undersized “supply”

That is much more of an Econ 002 situation.

Woof, I'd rather sail on the Magic than the Odyssey of the Season any day of the week.

 

[lazyboy97o]

Eh, maybe, but I think attractions per guest per hour is a crappy metric anyways. In an hour I can ride Kilimanjaro Safaris once (including queue time), or Prince Charming's Carousel ten times. The former is going to leave me much happier.

Which is why it’s not a static figure. Smaller scale means a higher count, bigger scale can justify a lower count. What other metric should be the basis of design for a park?