Len Testa - “Disney positions itself as the all-American vacation. The irony is that most Americans can’t afford it.”

[lentesta]

Do you see a way Disney could get to that scenario though?

I always got back to those old commercials with the parents around the computer and see the offer of, something like, "$1,600? For all of us? We can do that!"

Could they do some more structured all-in packages that are maybe limited in when valid but could allow a family to have a stay for like $2,500?

I just looked at undercover tourist and the 4-day tickets for that family alone are $2,579 ... So you basically would need to give them hotel and food for free

Could they do that? Obviously while trying to max out spending by guests from higher income brackets?

I'm just spitballing here, so approach all of this with a healthy dose of skepticism.

• Let's assume that no families in the bottom 60% of American households can afford the kind of multi-day Disney World trip you've outlined. (I'm sure some do. Work with me.)
  
  
• And let's assume that all theme parks have to participate, not just Disney, to make things fair across the industry. Not picking on Disney.
  
  
• And let's assume Disney's park attendance caps stay the same.
  
  
• Assume Disney held a fixed-price lottery for a certain number of 4-night, 5-day all-inclusive Value-resort vacation packages per year. The price is set to whatever amount the BLS said that the middle quintile spent on travel the previous year. So in this case, $1,900 for up to a family of 4. You win the lottery, you pay the $1,900, you get the trip, no questions asked.
  
  
• Let's cap the cash value of the lottery at $500MM per year. That works out to a bit over 260,000 trips at $1,900 each. Assuming each trip cost Disney $5,500, Disney's out-of-pocket costs would be ($5,500 - $1,900) x 260,000 = $936MM.

That would result in more middle-class families going to Disney World than do now. For under $1 billion.

There are obvious objections:

- The wealthy could also enter the lottery and win. Yes, they can. But more middle-class families would go, which is the goal. I'm assuming nobody wants to fill out a FAFSA form to go to Disney World, so means-testing isn't possible.

- Disney would earn $926MM less. The government already imposes on private capital to achieve desired social outcomes through (e.g.,) subsidies, tax rates and credits, and regulations. I'm not sure how this is conceptually different than electric vehicle incentives or pollution laws.

To put that in comparison, Disney's spent ~$2.8B on share buybacks in the last year and $45B since 2010. I'd need to be convinced that the entire house of cards would come crashing down if they only bought back $36B in shares since 2010. Not to harp on share buybacks, but I think until recently the stock was at the same $110 level that it was a decade ago. If the argument is that the share buybacks helped prevent further stock declines, I want to talk about management competency and compensation first.

 

[TheMaxRebo]

I'm just spitballing here, so approach all of this with a healthy dose of skepticism.

• Let's assume that no families in the bottom 60% of American households can afford the kind of multi-day Disney World trip you've outlined. (I'm sure some do. Work with me.)
  
  
• And let's assume that all theme parks have to participate, not just Disney, to make things fair across the industry. Not picking on Disney.
  
  
• And let's assume Disney's park attendance caps stay the same.
  
  
• Assume Disney held a fixed-price lottery for a certain number of 4-night, 5-day all-inclusive Value-resort vacation packages per year. The price is set to whatever amount the BLS said that the middle quintile spent on travel the previous year. So in this case, $1,900 for up to a family of 4. You win the lottery, you pay the $1,900, you get the trip, no questions asked.
  
  
• Let's cap the cash value of the lottery at $500MM per year. That works out to a bit over 260,000 trips at $1,900 each. Assuming each trip cost Disney $5,500, Disney's out-of-pocket costs would be ($5,500 - $1,900) x 260,000 = $936MM.

That would result in more middle-class families going to Disney World than do now. For under $1 billion.

There are obvious objections:

- The wealthy could also enter the lottery and win. Yes, they can. But more middle-class families would go, which is the goal. I'm assuming nobody wants to fill out a FAFSA form to go to Disney World, so means-testing isn't possible.

- Disney would earn $926MM less. The government already imposes on private capital to achieve desired social outcomes through (e.g.,) subsidies, tax rates and credits, and regulations. I'm not sure how this is conceptually different than electric vehicle subsidies or pollution laws.

To put that in comparison, Disney's spent ~$2.8B on share buybacks in the last year and $45B since 2010. I'd need to be convinced that the entire house of cards would come crashing down if they only bought back $36B in shares since 2010. Not to harp on share buybacks, but I think until recently the stock was at the same $110 level that it was a decade ago. If the argument is that the share buybacks helped prevent further stock declines, I want to talk about management competency and compensation first.

Guess that would be the key - be it a lottery or just they do a number of "special packages" like that available on a first come/first serve basis (similar to a free dining promotion) that they can show the long term benefit of these families fighting over the deals getting to experience the magic would increase the value of the company('s stock price) more than share buybacks or other things they could do with the money they would lose

Although it wouldn't be a full net loss as I would assume these packages would only be available during times that are seeing lower than average attendance so could be additive vs replacing higher cost stays

 

[Kingdom Konsultant]

The base rate for Caribbean in 2001 was $74…I think all stars was around $49

Wilderness Lodge was $130

I need to look at some old client files with the pricing. It’s insane how much it’s gone up

 

[monothingie]

Pm me the deets and I’ll check it out…

Hopefully it’s an Uber ship that can chomp the wonder in half and leave it in pieces off of Nassau…

Like the did to Quint

It is on the Star of the Seas so it is definitely a larger ship. It is cruising out of Port Canaveral going to Perfect Day at CocoCay in the Bahamas, then off to San Juan Puerto Rico, Philipsburg, St Maarten and then back to Port Canaveral (Orlando). I'll get you all of the other particulars when I get in this evening! Marie

You'll have to deal with me if you decide to book. Just had @wannabeBelle put the deposit down today. (Sorry in advance @Kingdom Konsultant)

 

[Sirwalterraleigh]

You'll have to deal with me if you decide to book. Just had @wannabeBelle put the deposit down today. (Sorry in advance @Kingdom Konsultant)

That’s ok…plenty of places to dump you overboard

 

[monothingie]

That’s ok…plenty of place to dump you overboard

@Kingdom Konsultant you may get some extra inquiries from my fans on the message board now that it seems like it's going to be a oneway cruise for @monothingie.

 

[Sirwalterraleigh]

@Kingdom Konsultant you may get some extra inquiries from my fans on the message board now that it seems like it's going to be a oneway cruise for @monothingie.

There’s a long list around here that will help you push

 

[Ayla]

Just for fun, I priced out a stay for a family of 4 (2 adults 2 kids) next June.

I did June 21-26:
- 5 nights at the All Star Sports
- 4 park days, one park per day
- Disney Dining Plan (so 1 TS, 1QS, 1 snack per day)
- I assume would get water park on arrival day

Subtotal: $ 4,680.68 ... For the whole stay including food, and this is before any hotel discounts are available (rack rate was $180/night) ... Not cheap but I think doable for many

Obviously not staying deluxe, does have LL, doesn't have trader to MCO, etc, but not crazy

Travel costs are another $2-3K.

 

[Disstevefan1]

Just for fun, I priced out a stay for a family of 4 (2 adults 2 kids) next June.

I did June 21-26:
- 5 nights at the All Star Sports
- 4 park days, one park per day
- Disney Dining Plan (so 1 TS, 1QS, 1 snack per day)
- I assume would get water park on arrival day

Subtotal: $ 4,680.68 ... For the whole stay including food, and this is before any hotel discounts are available (rack rate was $180/night) ... Not cheap but I think doable for many

Obviously not staying deluxe, does have LL, doesn't have trader to MCO, etc, but not crazy

No LLs ?

 

[Sirwalterraleigh]

No LLs ?

That’s top shelf

 

[Ayla]

Just reading this thread, I'm encouraged that everyone posting knows to be thankful for the trips we can afford to take the parks. I've read worse. Much worse. I'm thankful for this community.

When you grow up poor and basically have nothing of monetary value, you tend to value and be grateful for what you have when opportunity comes your way. I am thankful (and grateful!) every single day for the life we have, because I know what the other side of the coin is like.

 

[monothingie]

There’s a long list around here that will help you push

 

[Sirwalterraleigh]

I better be Kate in that scenario

 

[AidenRodriguez731]

No LLs ?

you really don’t need LLs, I would only even really consider them for HS and MK for a budget. Epcot and AK definitely don’t NEED them. Honestly with a simple rope drop with some basic planning during the early park opening as a park hotel, I could get everything I really needed to done in MK and HS in 1 day.

 

[TheMaxRebo]

No LLs ?

That would be extra, but not required so I didn't include that. Also would need to put in transfer from MCO which would be extra - just putting a baseline for a package

 

[Disstevefan1]

you really don’t need LLs

Shhhhhhhh.... Don't let Disney or the normies hear that!

 

[Splash4eva]

I am retired living on fixed income with my wife, but we still afford to go to WDW at least 2 times a year. We bought DVC 15 years ago. Get annual passes thru DVC, approx cost is $1000 per person, if we go 2times that is $500 per or $1000 for a trip (math gets even better if go 3 times). Biggest cost is food, but since we always book a 1 bedroom with full kitchen, order food to be delivered to room. This way we save mega bucks by NOT buying Disney food service which is not only costly but low quality. Want to save more dollars, fly out on Tues, Wed, or Thur--much cheaper than the weekends. Merchandise is rarely bought since we go so often there is not that great of new stuff each visit. Also, due to the elimination of package delivery to resorts, neither of us wish to lug around packages so even if we see something that catches our eye, we tend to pass buying. Our typical stay is about 8 nights with a cost of less than $3000 per trip. The advertising about buying DVC back in a day stated the great long term savings and boy has this turned out to be true-- our direct cost per point was Less than the current resale prices I see online.

Great post. Listen im not saying Disney is ever going to be cheap but to sit here and claim the middle class is completely priced out is just an outright lie

 

[Splash4eva]

I didn't claim the entire middle class is priced out. But that seems to be the demographic that is hit the most at this time. It isn't just the price of the resorts at Disney. It's the flights or drive, food while at Disney, souvenirs, tickets and the paid for line skip, and on and on. It all adds up for a vacation at Disney, or anywhere at this time.

Souvenirs are not a necessity on a vacation. Food there are ways to save there as well. Garden Grocer, Target etc delivery to hotel… no PH skip pricey meals. The list goes on and on. Again as you said its not just Disney and i think thats been one of my original points.

 

[Disstevefan1]

Great post. Listen im not saying Disney is ever going to be cheap but to sit here and claim the middle class is completely priced out is just an outright lie

I guess it depends on the size of your family. A couple of Disney adults can get a long fine.

 

[TheMaxRebo]

Travel costs are another $2-3K.

Depends where you are coming from - we are flying down this November from NY for $885 total for the four of us and that include bags

But for some it can be more - but you would have that cost if you went somewhere other than Disney too unless you stay local