A Spirited Perfect Ten

[ParentsOf4]

Are we sure that $60 is accurate as 1994's average rack rate?

WDW's price increases have consistently outpaced inflation for decades. Each year, a WDW vacation costs the average family a bit more of their income than the year before, so it really shouldn't be surprising that inflation-adjusted prices are higher.

I'm too lazy right now to create another graph but the following graph compares WDW ticket prices against Median Household Income. Data that I have suggests similar price increases for hotels and food, so this should give you an idea of long-term price trends:

 

[gmajew]

The average rack rate for a single room at one of the All Star Resorts is $140/night.

Using the numbers you provided, if $60 in 1994 has the same buying power as $95 today, then WDW's rack rate represents a 47% inflation adjusted price increase.

I agree it is high but as others have pointed out very few pay if anyone the rack rate.
it is a cheap promotional ploy by companies to let everyone think they get a deal.

 

[gmajew]

Are we sure that $60 is accurate as 1994's average rack rate?

No we are taking others word for it.

 

[gmajew]

WDW's price increases have consistently outpaced inflation for decades. Each year, a WDW vacation costs the average family a bit more of their income than the year before, so it really shouldn't be surprising that inflation-adjusted prices are higher.

I'm too lazy right now to create another graph but the following graph compares WDW ticket prices against Median Household Income. Data that I have suggests similar price increases for hotels and food, so this should give you an idea of long-term price trends:

View attachment 91262

Universal etc are about the same price for a single day in the park today. That inflation is way crazy.

 

[GoofGoof]

I can't fathom why, but many people DO pay rack rate. The current model allows for a (perfectly legal) system of price discrimination. Disney can collect $100 a night from those willing to pay it and/or too lazy and/or uninformed to look for discounts. They also collect $70 from the guest who knows about the discounts, seeks them out, and wouldn't stay on property otherwise.

If they JUST charged $70 for everyone, they'd miss out on the incremental $30 that the first guest is willing to pay. Likewise, if they JUST charged $100 for everyone, they'd lose the $70 guest entirely. It's no different than airline tickets, cruise fares, rental cars, etc. Once announced, Disney won't adjust rack rates up in a given year. Since it essentially functions as a self-imposed price ceiling, it makes sense to set it much higher than projected market rates so that if guest demand and the economic climate slide market rates above projections, Disney has the ability to adjust up. From an optics perspective, it's better to offer fewer discounts than to raise prices. In other words, Disney might expect All Star to rent at $70 per night. They set rack rates to $100 and plan on a 30% room-only offer. If the market indicates that guests are willing to pay $80, Disney simply tweaks the promotions schedule and releases a 20% offer instead of the 30%. This all happens behind the scenes, which would not be the case if they had ANNOUNCED $70 as the rack rate and then suddenly raised it to $80.

Agreed. The rack rate system allows them to discount and even deep discount. It's a psychological thing. Everyone wants to feel like they got a bargain. Did you ever go to a site or forum here where there are people literally gushing over their pin codes? It's especially powerful when they make the person feel "special" since the discount isn't available to just anyone off the street.

With WDW a lot of people end up paying rack because they don't know better. Maybe it's their first trip or they just don't bother to do a lot of research for deals. They decide to do a trip to WDW, see an offer from Disney on their website and book it. They don't realize they might get a better deal if they wait to book or call back after discounts are announced to use one. In some cases you actually can't do much better than rack. If it's a busy time of year or you either need to book really early (before seasonal discounts come out) or really close to your arrival time there may not be discounts available.

Another reason why rack rates are high but deeply discounted to a lot of guests is "free DDP". Lots of people get very excited for "free dining". With that deal you have to pay rack. The higher you make rack rates the less of a discount free dining becomes for Disney, but the psychological factor is huge. I've seen many people say that there's no way they could afford their trip without free dining. That may very well be true for some people, but if you do the math a lot of times it may actually be cheaper to pay for meals and take the 30% discount on your room. What Disney counts on is a lot of people don't like doing math.

 

[George]

I would say condescending contempt. Especially for those paying attention.

But that's ok, the feeling is mutual.

We almost completely agree. I might say that disdain is condescending contempt. Here is the official definition of disdain using google and copying and pasting the first thing that came up through the internetz and managed to push electrons in an appropriate fashion on this slowly failing motherboard that the wife will kill me if I don't replace and instead keep babying it along just because I enjoy babying it along

"disdain: the feeling that someone or something is unworthy of one's consideration or respect; contempt:"

@jakeman I'd say apathetic would also describe some percentage of executives. No emotional attachment at all would make sense to me and lead to many of the same behaviors.

There have got to be some in the upper echelons that care about WDW and have a bigger vision for the property. Or, if not bigger, at least a vision that can increase EPCOT attendance without Frostrom.

 

[ParentsOf4]

Universal etc are about the same price for a single day in the park today. That inflation is way crazy.

Interestingly, up through 2009, I remember buying 7-day tickets (good for 7 consecutive days) at Universal for $95.

That all changed with the crazy success of the Wizzarding World Of Harry Potter in 2010.

At Universal, inflation is not crazy. It's success that's crazy.

 

[gmajew]

Interestingly, up through 2009, I remember buying 7-day tickets (good for 7 consecutive days) at Universal for $95.

That all changed with the crazy success of the Wizzarding World Of Harry Potter in 2010.

At Universal, inflation is not crazy. It's success that's crazy.

Would that not be the same argument on WDW Inflation? That it was so crazy because of how successful it was?

 

[CaptainAmerica]

WDW's price increases have consistently outpaced inflation for decades. Each year, a WDW vacation costs the average family a bit more of their income than the year before, so it really shouldn't be surprising that inflation-adjusted prices are higher.

I'm too lazy right now to create another graph but the following graph compares WDW ticket prices against Median Household Income. Data that I have suggests similar price increases for hotels and food, so this should give you an idea of long-term price trends:

View attachment 91262

Luxury goods should absolutely outpace income growth in general. If you're a WDW visitor, your basics (food and shelter) are already paid for so any income growth is disposable. If your chart adjusted income to reflect strictly DISPOSABLE income, those lines would be much closer (I suspect).

 

[englanddg]

http://www.computerworld.com/articl...es-at-disney-over-use-of-foreign-workers.html

 

[gmajew]

Interestingly, up through 2009, I remember buying 7-day tickets (good for 7 consecutive days) at Universal for $95.

That all changed with the crazy success of the Wizzarding World Of Harry Potter in 2010.

At Universal, inflation is not crazy. It's success that's crazy.

The one day ticket proce is also a joke as it is just a way to get people to buy two days as the price is so much better that way.

 

[ParentsOf4]

Would that not be the same argument on WDW Inflation? That it was so crazy because of how successful it was?

Since today's WDW charges so much more than WDW of old, are you suggesting that the WDW of the 1970s, 1980s, and 1990s was less successful?

Seriously though, WDW is simply charging what the market will bear.

What I've explained in another post on these threads is that, IMO, WDW's increasingly higher prices have made it more susceptible to recessions:

 

[George]

The one day ticket proce is also a joke as it is just a way to get people to buy two days as the price is so much better that way.

I believe they sell more one day tickets than any other type.

 

[ParentsOf4]

The one day ticket price is also a joke as it is just a way to get people to buy two days as the price is so much better that way.

Several CMs who have spent time selling tickets have posted that a surprisingly large number of one-day tickets are sold.

My personal favorite story regarding ticket prices involves a family I met a few years ago while staying at the Dolphin. We happened to get onto the subject of tickets. They explained to me that they were buying one-day tickets every day. I repeatedly tried to explain to them that they were paying far more than if they simply bought a multi-day ticket but, no matter what I said, they were convinced that buying one-day tickets every day was less expensive.

 

[Disneyhead'71]

I believe they sell more one day tickets than any other type.

The one day tickets sell more than any other single ticket. But they sell more multi-day tickets than single day tickets. Meaning they sell more one day tickets than 2 day tickets, and 3 day tickets, and 4 day tickets, etc. But if you add all the 2 day, 3 day, 4 day, etc, together, the multi-day tickets win.

 

[Nemo14]

When we first started bring our kids (back in the 80's) we were amazed at how inexpensive the ticket prices were. It was actually cheaper to go there than to go to our local rickety amusement park since your ticket allowed you access to everything all day.

 

[Clamman73]

The average rack rate for a single room at one of the All Star Resorts is $140/night.

Using the numbers you provided, if $60 in 1994 has the same buying power as $95 today, then WDW's rack rate represents a 47% inflation adjusted price increase.

I got the room only discount for the fall at Sports for $78.40 5 nights...$443 w/ tax total. I just looked up for fun...GF garden view standard room rate excl tax for the same period of time...$531/night - I'm actually feeling nauseous.

 

[bhg469]

Several CMs who have spent time selling tickets have posted that a surprisingly large number of one-day tickets are sold.

My personal favorite story regarding ticket prices involves a family I met a few years ago while staying at the Dolphin. We happened to get onto the subject of tickets. They explained to me that they were buying one-day tickets every day. I repeatedly tried to explain to them that they were paying far more than if they simply bought a multi-day ticket but, no matter what a said, they were convinced that buying one-day tickets every day was less expensive.

Now that's just bad math!

When I'm there I either have only one day off or I am there because it's part of a trip wit my wife. Neither of us wants multiple days there because it's no longer necessary.

 

[George]

http://www.computerworld.com/articl...es-at-disney-over-use-of-foreign-workers.html

Interesting article. Interesting comments under the article including a Disney/concentration camp mash up word that seemed WAAAAAY over the top and inappropriate. It doesn't seem like anyone did the public relations cost calculation. The article says they laid of 135 IT workers. Dude under the article says they're lying and it was 400. I'm going to use 200 cuz I'll be multiplying and the like. It says by law the new employees have to get 60K. Let us assume the old employees earned 100K. Let us also assume the old IT employees had an extremely generous benefits package, etc. and are on the whole about 100k a year more expensive than the dude from India who was told we have universal health care so the no health insurance isn't a big deal.

So, 100K * 200 = chicken for Disney.

 

[Disneyhead'71]

I got the room only discount for the fall at Sports for $78.40 5 nights...$443 w/ tax total. I just looked up for fun...GF garden view standard room rate excl tax for the same period of time...$531/night - I'm actually feeling nauseous.

While $531 seems crazy, it's not uncommon to see them over $700/night.