A lower attendance future for WDW?

[CastAStone]

You're basically in the same boat as me. Disney probably can't raise prices so high that I can't afford it and still be able to stay in business.

However, just because I can afford to pay for it doesn't mean it's worth paying for. I already find the deluxes mostly too expensive for what they're offering, which is why I've stayed at POR the last two trips. But they're not far off from raising the prices too high there to be worth it too, and I already think the values cost too much for what they offer.

Yes I was looking at DVC pre-Covid and now I am debating whether I will stay on site again. Pre-FP+ I loved staying off-site!

 

[Sirwalterraleigh]

Yes I was looking at DVC pre-Covid and now I am debating whether I will stay on site again. Pre-FP+ I loved staying off-site!

Wait for a market correction on DVC...

I remember a time when the General consensus was real estate would never go down.
They were wrong.

You’ll see the same platitudes about DVC as well...

They’ll be wrong too.

 

[UNCgolf]

Yes I was looking at DVC pre-Covid and now I am debating whether I will stay on site again. Pre-FP+ I loved staying off-site!

Staying off-site is definitely an option, but not having to drive to/from/around the parks and Disney Springs every day is one of the biggest benefits of Disney hotels to me -- especially if you park hop and go to Disney Springs for meals as much as we normally do on trips. It's just a giant added annoyance. I'd also rather not pay for regular Uber/Lyft rides because I'm not a fan of either company, and using them several times a day adds up quickly to where I end up feeling like I've just lit money on fire.

 

[DisneyHead123]

But if your charging more wouldnt you expect more? Look at everything the parks have taken away? So this new theory is basically pay alot more but i dont wait in lines as much? Are there enough well off people that would rather go to disney than to Europe or anything else that is a more luxurious vacation? Disney seems to think it is some ultra luxurious destination but....its just not...at all.

There's been various lines of thought in this thread about whether or not Disney wants to be a truly 'luxury' destination. My opinion is that there is a weird divide now between the sewper, like I mean sewper wealthy and everyone else (cue outraged political soapbox about oligarchs, if you are so inclined). I think people who have Serious Cash travel kinda behind the curtains away from the rest of us already. I'm sure they probably go to Disney but it's probably like when a high roller goes to Vegas, they are taken care of via a separate system. (I'm not "in the know" on this or anything, so maybe I'm totally wrong, but it just seems like the only logical option. I mean celebs visit Disney and they stay somewhere, so they must have their ultra luxury penthouse suites or whatever.)

On the other hand, many "average Joes" make some serious bank these days. I've known people who you would think of as probably working class, in terms of attitude, who were pulling in hundreds of thousands or even low millions on things like construction contracting or a car dealership. Many government jobs pay six figures if you have them for long enough, which means quite a bit if two people in a married couple are in that position. Random "contractors" and "trainers" with descriptions like The Positive Mental Wellbeing Inclusivity Visualization Training Seminar Institute seem to abound these days. The people I know who fall into this category aren't looking for Disney to be anything other than what it already is (although they may get very angry if it becomes less than what it is - a la the loss of the Magical Express.) And honestly, in that world, I don't think the "vacation price bubble" is just an issue at Disney. It seems like the prices on east coast beach rentals in the popular areas have absolutely skyrocketed in recent years, starting with the northern areas and now moving to places like the ever-beloved OBX (one of the few places that could compete with Disney in terms of obsessive fans, ha ha!). Granted, a house or condo rental is different from a hotel room, but it's still becoming kinda par for the course that you're expected to shell out minimum $200-300 a night for an accommodation that is nice and modern and charming and in a great place but otherwise not leaps and bounds above other rentals in the area.

It just seems to me that the demand for vacations and recreation has jumped significantly in the last decade, and so right now the top spots are all doing nothing but raising their prices. In time, hopefully there will be more offerings (I certainly hope so... a decade ago I saved up and spent a week on a European cruise for less than the price I would now pay for a week in a condo on parts of the Jersey shore. It's getting ridiculous.)

 

[TrainsOfDisney]

I guess to me I really don’t care much about the increasing prices. I am very concerned about the decreasing value. Disney is unlikely to price me out, but it seems entirely possible that they will degrade themselves below my willingness to pay.

Same. The annual pass price rising each year is not the problem. It’s Disney taking away many of the reasons I want to go to Disney.

 

[DavidNoble]

What a bunch of crap...

They want higher attendance, higher prices, and lower employees/overhead

They float this “luxury, lower crowd” nonsense to run interference for jacking prices.

Disney parks are mass destinations...not luxury. It’s not a country club.

At the same time, you can't have higher attendance and lower employees/overhead. They work counter-intuitively. More people in the park, more employees you need to have (unless you want satisfaction numbers to crater).

The sweet spot is finding a price point that will maximize revenues while minimizing costs. Disney wants exclusivity I think.

 

[CastAStone]

I guess to me I really don’t care much about the increasing prices. I am very concerned about the decreasing value. Disney is unlikely to price me out, but it seems entirely possible that they will degrade themselves below my willingness to pay.

PS I think the biggest difference between Iger and Chapek is that Iger understood this to be a risk, even if we quibble with his thresholds. Chapek seems to be oblivious to it.

 

[havoc315]

But if your charging more wouldnt you expect more? Look at everything the parks have taken away? So this new theory is basically pay alot more but i dont wait in lines as much? Are there enough well off people that would rather go to disney than to Europe or anything else that is a more luxurious vacation? Disney seems to think it is some ultra luxurious destination but....its just not...at all.

Yes, there are enough people willing to pay Disney prices. As shown by: the attendance.

If nobody was willing to pay the high prices, then nobody would be there.
You think if they shift prices up another 3-5%, that’s going to be the straw that breaks the camel’s back and turns WDW into a ghost town?

And I’ll note — wealthy tourists from Asia and Europe make up a good portion of the visitors to WDW.

 

[DisneyHead123]

And I’ll note — wealthy tourists from Asia and Europe make up a good portion of the visitors to WDW.

I think another aspect to remember is that international travelers can often take advantage of an exchange rate in their favor, meaning they pay relatively "lower" prices, albeit with international airfare.

 

[Sirwalterraleigh]

At the same time, you can't have higher attendance and lower employees/overhead. They work counter-intuitively. More people in the park, more employees you need to have (unless you want satisfaction numbers to crater).

The sweet spot is finding a price point that will maximize revenues while minimizing costs. Disney wants exclusivity I think.

Labor has always been a problem.

They can’t really find it...if we’re Honest.

But as much as the boogeyman of the $15 dollar an hour wage is used to scare the children...if they condition millions of visitors to pay the kinda daily prices they have been conditioning them for...the overhead would still allow for profits.

 

[CastAStone]

I think another aspect to remember is that international travelers can often take advantage of an exchange rate in their favor, meaning they pay relatively "lower" prices, albeit with international airfare.

Those airfares are no joke though. Let’s be clear - the median affluence of a foreign (or at least non-AmeriCanadian) visitor greatly exceeds the median affluence of a domestic one.

 

[Sirwalterraleigh]

Yes, there are enough people willing to pay Disney prices. As shown by: the attendance.

If nobody was willing to pay the high prices, then nobody would be there.
You think if they shift prices up another 3-5%, that’s going to be the straw that breaks the camel’s back and turns WDW into a ghost town?

And I’ll note — wealthy tourists from Asia and Europe make up a good portion of the visitors to WDW.

International travelers make up 15% of the travelers to wdw over the year...wealthy or not.

So where do the lions share come from?

 

[havoc315]

International travelers make up 15% of the travelers to wdw over the year...wealthy or not.

So where do the lions share come from?

Not sure if your point? 15% is a good portion. Over 20,000 international guests a day.. willing to pay international airfare, pay Disney’s expensive prices.
And over 100,000 domestic visitors per day, willing to pay those prices.

All the evidence shows— there is a huge market willing to pay the prices.

 

[Sirwalterraleigh]

Not sure if your point? 15% is a good portion. Over 20,000 international guests a day.. willing to pay international airfare, pay Disney’s expensive prices.
And over 100,000 domestic visitors per day, willing to pay those prices.

All the evidence shows— there is a huge market willing to pay the prices.

The point is where is the largest segment coming from?

...it’s an easy answer.

 

[havoc315]

The point is where is the largest segment coming from?

...it’s an easy answer.

??? I already said domestic.

Again, I don’t get the point. The question is: are people willing to pay Disney prices. And is Disney willing to accept lower attendance with even higher prices.
Now, they have been raising prices for years— and attendance keeps increasing! (Pre-covid).

 

[Sirwalterraleigh]

??? I already said domestic.

Again, I don’t get the point. The question is: are people willing to pay Disney prices. And is Disney willing to accept lower attendance with even higher prices.
Now, they have been raising prices for years— and attendance keeps increasing! (Pre-covid).

It’s the domestic MIDDLE CLASS....

...and now we can pass go and collect $200.

 

[havoc315]

It’s the domestic MIDDLE CLASS....

...and now we can pass go and collect $200.

Unless you have any evidence of income class demographics at Disney, you really are just guessing.

I’d say all economic classes visit Disney, but few from the bottom 20-40%. And most domestic visitors come from the upper 60% of earners. So I’d estimate they range from middle class (the 40-60th percentile), upper middle class (60-80th percentile), and the upper quintile.

Moving beyond guesses and looking at actual evidence, we see that the average WDW guest is actually a bit ABOVE the middle, with double the median income:

Theme park demographics changing: Higher incomes and more millennials - Theme Park Tribune, theme park news

Theme Park Tribune offers news and reviews of major theme parks in Orlando, California, and beyond, including Disney, Universal, and SeaWorld parks.

www.themeparktribune.com

“The average annual household income for guests at theme parks was $86,000, according to the study. That’s twice the $43,000 that residents in Greater Orlando bring home and way above the $55,775 median annual household income nationwide, according to the most recent data from the U.S. Census Bureau.”

So the AVERAGE theme park visitor is in the top 40% of earners. So that makes the average visitor upper middle class. (Average... not majority. About half are higher than that, half lower).

But again... so?? You’re implying that “if Disney dares to raise their prices any more, nobody will show up anymore!!!”

But so far... they keep raising prices... and attendance keeps rising! And as I posit in my original post, seems they don’t care if attendance does drop a bit with further cost increases.

 

[UNCgolf]

Unless you have any evidence of income class demographics at Disney, you really are just guessing.

I’d say all economic classes visit Disney, but few from the bottom 20-40%. And most domestic visitors come from the upper 60% of earners. So I’d estimate they range from middle class (the 40-60th percentile), upper middle class (60-80th percentile), and the upper quintile.

Moving beyond guesses and looking at actual evidence, we see that the average WDW guest is actually a bit ABOVE the middle, with double the median income:

Theme park demographics changing: Higher incomes and more millennials - Theme Park Tribune, theme park news

Theme Park Tribune offers news and reviews of major theme parks in Orlando, California, and beyond, including Disney, Universal, and SeaWorld parks.

www.themeparktribune.com

“The average annual household income for guests at theme parks was $86,000, according to the study. That’s twice the $43,000 that residents in Greater Orlando bring home and way above the $55,775 median annual household income nationwide, according to the most recent data from the U.S. Census Bureau.”

So the AVERAGE theme park visitor is in the top 40% of earners. So that makes the average visitor upper middle class. (Average... not majority. About half are higher than that, half lower).

But again... so?? You’re implying that “if Disney dares to raise their prices any more, nobody will show up anymore!!!”

But so far... they keep raising prices... and attendance keeps rising! And as I posit in my original post, seems they don’t care if attendance does drop a bit with further cost increases.

Any average is going to skew higher because there's essentially a cap on how little someone can make and no cap whatsoever on how much someone can make. If you have 100 guests all making 50k a year, and 10 guests making 750k a year, the average income for those 110 guests is about $113,500. That's obviously not an accurate representation of what the average guest actually makes.

I'm not suggesting these numbers are skewed to that extent, but I doubt they're an especially accurate indicator of an average guest. Every super high income visitor is going to drag the overall average upwards.

The other issue, of course, is that your status as lower/middle/upper class can vary wildly depending on where you live. Someone who makes 75k in Decatur, Alabama would almost certainly be upper class, while someone making the same salary in NYC would be likely be on the low end of the middle class.

 

[havoc315]

Any average is going to skew higher because there's essentially a cap on how little someone can make and no cap whatsoever on how much someone can make. If you have 100 guests all making 50k a year, and 10 guests making 750k a year, the average income for those 110 guests is about $113,500. That's obviously not an accurate representation of what the average guest actually makes.

But same is true for average incomes. If the world has 100 million people making 50k... and 10 million making 750k... then the average income is $113,500.

So if the average income for a WDW guest is higher than the average national income, then that means the population of WDW guests skews higher in income than the general population.

I'm not suggesting these numbers are skewed to that extent, but I doubt they're an especially accurate indicator of an average guest. Every super high income visitor is going to drag the overall average upwards.

The other issue, of course, is that your status as lower/middle/upper class can vary wildly depending on where you live. Someone who makes 75k in Decatur, Alabama would almost certainly be upper class, while someone making the same salary in NYC would be likely be on the low end of the middle class.

Median household income in NYC is 64k... so even in NYC, 75k is slightly above median. (But yes, definitely middle class).
But that 75k earner in NYC is going to have more trouble going to WDW than someone earning 75k from Decatur..as the Decatur 75k will have far greater discretionary income.

And that’s the reality — there is often a distorted view of middle class, where people who consider themselves middle class are really at least upper middle class.

Most American families can’t afford annual vacations to WDW. Sure, there are median earners who visit Disney... but unless they are local, they aren’t going regularly. And when they do go, they drive there, stay off property or value or campgrounds, and they brown bag their meals. They aren’t the guests that are making Disney lots of money.

How much does a week-long WDW vacation for a family of 4 cost... for the guests that actually do drive Disney profits?

I priced out a family of 4, June 26-July 4. Used Disney’s 30% off.

picked Wilderness lodge, 1 of the cheaper deluxe resorts..
With park hopper tickets, $6400.

Add 1 week of on-site dining. Just eating pretty typical meals, easily will spend another $1000-$1500. Could easily spend over $2,000 with a lot of buffets, signature meals, alcohol. But I’ll go low at $1200.

So now at $7600 for food, tickets and lodging. Easily another $400 for incidentals, souvenirs, etc. even $8000.
Still need airfare to get to Orlando.. airport transfers, etc. At least $1,000
So a week long typical Disney vacation to a cheaper deluxe resort.. at least $9,000.

Median household income in the US is around $60,000. Most such families aren’t going to spend 15% of their entire income on a vacation.
Families that can spend $9,000+ on a vacation are above-median earners. And this is who Disney wants to concentrate on. They want to focus more on this family that spends $9,000+...
And focus less on that off-site guest who brown bags their lunch.

 

[UNCgolf]

But same is true for average incomes. If the world has 100 million people making 50k... and 10 million making 750k... then the average income is $113,500.

So if the average income for a WDW guest is higher than the average national income, then that means the population of WDW guests skews higher in income than the general population.

Right, but that should be obvious. People who make 20k a year aren't going to Disney (I'm sure there are a few scattered here and there who do, but they are a miniscule percentage of guests).

I wasn't suggesting it meant WDW guests are exactly the same as the average American household, just that the actual average household income number for WDW guests is probably inaccurate. Even moreso if international guests are included in that calculation, since, as discussed, they almost certainly skew to higher income levels than American visitors.

As for the rest of your calculations -- that's why there are more value and moderate resort rooms on property than deluxe rooms. I think a family of four could do a Disney vacation for half of your calculations, if not even lower, and that's just if they're choosing to stay on site. Going off site could cut that number even more, as well as a choice to drive to Disney, which is doable for maybe 75 million people if not more.

None of that is to suggest that there are a massive amount of lower class Disney guests; just pointing out that it can absolutely be done for 2-3k (and possibly even less than that if staying at some of the off-site hotels and not eating many Disney meals). Those aren't the kind of guests Disney cares about because they aren't making much money off of them, but they're out there.