I agree with you but I disagree with you.
- But I disagree about in-park revenue. In my opinion, that doesn't necessarily go up on a linear scale based on how many park are at the park.
Right on! Most people make the linear assumption and don't realize it is a curve, with diminishing returns involved, hence the curve. At some point it tracks back downward. My comment is extremely over-simplified, but holds true
Well if you have MORE paying customers, they bring in more money. Increased lines at the register grow, but eventually the waiting customer does hand over their money. Disney doesnt have really a finite supply of merchandise, they continue to restock, yes, until a peice is sold out. Its different at the restaurants because you can only seat a number of guests in any dining period.
At some point the additional guest does not equate to additional customer spending money, or more specifically, does not equate to spending the same amount of money......
Nah, especially with merchandise, you can only turn over so many people at the register. This is especially true at the over the counter food places. I can't count how many times I've been more than willing to trade my hard earned cash for food but opted to wait until after the park due to the long lines. So clearly, there's not a linear relationship with guests in the park, and revenue earned from concessions. And as far as retail goes, who's to say that people wouldn't just order the same stuff online if it wasn't available in the park? Other than incidentals that you need that day, what kind of a fool uses a park like a shopping mall, and carries bags around all day?
You sound as if you have an Economic background (I'm not being sarcastic)?
I'd say more important than raising prices on tickets would be to get the price that you pay to be more in line with the number of days that you're going to parks. People freak out about $110, $120, $130+ ticket prices, but they forget that only fools really ever actually pay that. Almost everybody is in the park on APs, multiday tickets, touring/group rates. Disney already doesn't do many discounts, but they need to get rid of any and all discounts that they currently have for starters. No economy of scale discounts. Maybe offer lesser prices for longer stays, but don't make it so ridiculous.
Now, a big culprit are the APs, but they're hands are tied with them. The stupid cheap rates for FL residents is more of a political maneuver than anything. The best way to lessen the impact from the FL residents like me who get to spam tons of free visits would be to close the Pound the App loophole, shorten the window for FP+ window. I'd say that AP holders should get the same window as CMs: seven days. Most AP holders make last minute visits anyway, so they don't need to plan out ahead. And when you're on vacation, you really need to get guaranteed production in. If you can't get on as a local AP holder, you can always come back.
And FP+ production is crucial. There's a 4:1 priority ratio over stand-by, so if low price per visit visitors are clogging up the FP+ line and making the stand-by line the "stand-still line" there's your problem right there. No amount of raising prices will solve these congestion issues unless you address the issues from low price per day guests.
Well done!
The APs
are the issue with crowding of the Parks. Raising the ticket prices would do little to reduce the crowds.......the Economics of it are the Demand Curve is set, and has little if anything to do with Supply. The problem is more Micro, than Macro. In the Disney Attendance specific Macro, there are several Demand Curves in play. They would include AP Demand, Multi-Day, Single Day, International, etc....
The
Price Elasticity would dictate what happens when the price is changed. Any change in price would result in a change the QUANTITY DEMANDED.....a movement along the existing Demand Curve, not move the Demand Curve.
Looking at all non-AP ticket sales, it appears Disney is operating on the Demand Curve where the price is
Inelastic. There in lies the issue. When the price is Inelastic, you can increase the price without an inverse movement of the Quantity Demanded. So, Disney could raise the ticket prices, and not only
not see a reduction in Quantity Demanded, but the continued increasing crowds. This is horrifying to think the current relationship with
raising price and quantity demanded is a Direct Relationship, as they both move in the same direction. At some point prices would reach peak, and the relationship would become inverse, as higher prices would result in less ticket sales (this is the Law of Diminishing Returns). At this point the Price would be
Elastic, and the Guest could expect less price volatility. When Price is Elastic, an increase in price would result in a decrease in Quantity Demanded.....we are nowhere near that part of the Curve.
One last note on Diminishing Returns........if Disney reached the point where a price increase reduced the quantity demanded, it would still be feasible, and quite likely the Revenue, AND Income form that next group of higher paying guests would not reduce......still more people buying tickets....
This was greatly over-simplified and was specific to Non-AP tickets sales......Disney is not really a place to attempt to apply any Economic principles or theory.....