Bob Iger: "We Don't Believe We Have A Pricing Issue At Our Domestic Parks"

[Goofyernmost]

I agree - the only company that can do Disney in is... wait for it... Disney.

The problem is that Universal (that is not Disney) has both matched and exceeded Disney in many creative and exciting areas. They, of course, are blessed to not have a 75 year set of rules that they must follow in order to not experience the wrath of the purest's. They can experiment, shock and even alter their own image if they fell like it. For Disney to do anything they have a WED rule book that many feel must be followed to the letter. They are slowly (in some cases quickly, i.e. Epcot) creeping away from that book in order to compete for the younger generations that have no emotional connection to Walt Disney and his "old men" and their idea of entertainment.

 

[Goofyernmost]

This is the crux of where I disagree with you. everyone knows Disney theme parks are the best, BUT Disney is not only in competition with other theme parks... They are in competition with vacations EVERYWHERE! Caribbean Cruises, beach resorts, Hawaiian Islands, trips to Italy, Universal Studios, Pigeon Forge, etc. The crowd Disney runs the risk of losing (and already is losing) aren't all going to only shop a Universal trip and then decide between the two. These families take an annual vacation, and if Disney is a good value, then it will be in the rotation. But if the value is not there then it loses its spot to a beach house or a cruise or a trip overseas.

I was with you until you got to Pigeon Forge. Dollywood is a country western amusement park. They have some very nice attraction, a lot of very good entertainment (if you are into that venue), and some pleasant things, but it isn't even in the discussion when it comes to creative design or even basic theme park design. Very few people have come across oceans just to go to Dollywood. And the town itself has turned into a circus. Entertaining but no cigar.

 

[Laketravis]

"We don't believe we have a pricing problem" - famous last words that, unfortunately, when proven wrong are typically too late to recover from.

We got to the point where we were going to WDW two or three times a year for more than three weeks at a time. My "tween" suffered from burnout and we haven't been back since 2015. I'd love to go back, but every time I price out a new trip it blows me away compared to what I remember paying just 9 or 10 years ago when the deals were plentiful, prices were (somewhat) reasonable, and crowds were thin.

But then came FP+ and NexGen and resource optimization and even RFID controlled beverage dispensers and.....well, here we are. Just as Facebook knows more about it's users than they probably know about themselves, nothing at WDW is sacred when it comes to squeezing another point of profit out of it.

It's that myopic focus that prevents a successful corporation from realizing when critical mass has been reached. No pricing problem? One only has to read a diversified forum such as this to realize there is one.

 

[It Is What It Is]

This is the crux of where I disagree with you. everyone knows Disney theme parks are the best, BUT Disney is not only in competition with other theme parks... They are in competition with vacations EVERYWHERE! Caribbean Cruises, beach resorts, Hawaiian Islands, trips to Italy, Universal Studios, Pigeon Forge, etc. The crowd Disney runs the risk of losing (and already is losing) aren't all going to only shop a Universal trip and then decide between the two. These families take an annual vacation, and if Disney is a good value, then it will be in the rotation. But if the value is not there then it loses its spot to a beach house or a cruise or a trip overseas.

No doubt a family working their budget is going to weigh their options: Disney World for a week or a week on a Carnival ship in the Caribbean for half or a third of the Disney trip? And many will take the latter as you point out. The problem for Disney would be that same family considering the Carnival Cruise against some other destination that is non-Disney.

Most people are not the Disney die hards that post or visit forums. Consumer groups that track brand loyalty (at this time) will say Disney is one of the most respected brands on the planet. That is my rationale for saying Disney doesn't have a pricing problem.

Those who are frustrated here have most likely been to Disney multiple times and still want to go back. Even if two-thirds of the people who visit these forums think it's too expensive, that is a drop in the bucket of those that are interested in a Disney vacation.

A lot is being made of the 3% decline since GE has opened. After both GE's have been opened a year with both rides running well, and then you see declines, then yes, in my opinion, Disney has problems. If so, Disney will have free dining and whatever it takes to get people in the park. But if attendance spikes up, the prices will too. It is also suggested that a lot of people are putting their Disney vacations on hold until GE is up and running and all the bugs are worked out.

Another tell that Disney is concerned: they will build more value resorts. Currently, moderate and deluxe are the ones I see rumors of.

Time will tell.

 

[Chef Mickey]

That's what happened to GE, bought to many businesses and didn't have focus on what they actually do.

GE has power, aerospace, lightning, insurance, etc. Those are very different businesses.

Disney is buying content and pushing people through the circle through movies, TV, parks, and merchandise. It's a very natural path they have been doing well for decades. Disney is just buying more content.

Again, completely different situations.

 

[eliza61nyc]

That's what happened to GE, bought to many businesses and didn't have focus on what they actually do.

What does Disney actually do?? Lol entertainment. I'd say they are perfectly focused. They do entertainment. The parks are just one piece of it.

 

[zurj]

Consumer groups that track brand loyalty (at this time) will say Disney is one of the most respected brands on the planet. That is my rationale for saying Disney doesn't have a pricing problem.

Those who are frustrated here have most likely been to Disney multiple times and still want to go back. Even if two-thirds of the people who visit these forums think it's too expensive, that is a drop in the bucket of those that are interested in a Disney vacation.

A lot is being made of the 3% decline since GE has opened. After both GE's have been opened a year with both rides running well, and then you see declines, then yes, in my opinion, Disney has problems. If so, Disney will have free dining and whatever it takes to get people in the park. But if attendance spikes up, the prices will too. It is also suggested that a lot of people are putting their Disney vacations on hold until GE is up and running and all the bugs are worked out.

Another tell that Disney is concerned: they will build more value resorts. Currently, moderate and deluxe are the ones I see rumors of.

Time will tell.

I maybe completely wrong about what I'm about to say, and it may just be me feeling frustrated because they are pricing me out of the parks... I'm one of those who has been brand loyal to Disney as I think most people on this forum are, and I'm losing my loyalty. I believe Disney is hitting a tipping point where they are losing even those loyal Disney supporters, and the brand loyalty is eroding. It just feels like they are taking us for suckers.

And you may be right about Galaxy's Edge being huge for Disney when they get things going, but I'll believe it when I see it. I don't buy that people "really want to come, just not yet." I strongly believe that if Universal down the street had built even an incomplete Harry Potter land/attraction people would be flocking to see it, even if they couldn't see all of it. That's not happening with Star Wars (at least in California... we'll see about Florida in 9 days).

You're absolutely right that time will tell... I just think it will tell a different story than you do.

 

[OneofThree]

It just feels like they are taking us for suckers.

That's a very personal statement made about people making decidedly impersonal decisions based on metrics. After evaluation, they'll decide whether to stay the course in respect to the current pricing trend. IMO, the only way they'd accept -3% would be as a part of a change in strategy (sales mix here, specifically). I personally don't see that happening as I'm convinced they're going to continue to want the parks to be body-to-body.

 

[Chef Mickey]

"We don't believe we have a pricing problem" - famous last words that, unfortunately, when proven wrong are typically too late to recover from.

We got to the point where we were going to WDW two or three times a year for more than three weeks at a time. My "tween" suffered from burnout and we haven't been back since 2015. I'd love to go back, but every time I price out a new trip it blows me away compared to what I remember paying just 9 or 10 years ago when the deals were plentiful, prices were (somewhat) reasonable, and crowds were thin.

But then came FP+ and NexGen and resource optimization and even RFID controlled beverage dispensers and.....well, here we are. Just as Facebook knows more about it's users than they probably know about themselves, nothing at WDW is sacred when it comes to squeezing another point of profit out of it.

It's that myopic focus that prevents a successful corporation from realizing when critical mass has been reached. No pricing problem? One only has to read a diversified forum such as this to realize there is one.

Tough to defend any doom and gloom or “famous last words.”

We just have seen much impact in the data. A 3% decline in attendance? Hardly even a blip, particularly with increased revenue (assumingg no major accounting fraud). The parks could use some thinning.

I don’t think the pricing needs to change because people have shown they are willing to pay. Disney’s challenge is and always will be maintaining the quality standard people expect when paying those prices.

 

[It Is What It Is]

I maybe completely wrong about what I'm about to say, and it may just be me feeling frustrated because they are pricing me out of the parks... I'm one of those who has been brand loyal to Disney as I think most people on this forum are, and I'm losing my loyalty. I believe Disney is hitting a tipping point where they are losing even those loyal Disney supporters, and the brand loyalty is eroding. It just feels like they are taking us for suckers.

And you may be right about Galaxy's Edge being huge for Disney when they get things going, but I'll believe it when I see it. I don't buy that people "really want to come, just not yet." I strongly believe that if Universal down the street had built even an incomplete Harry Potter land/attraction people would be flocking to see it, even if they couldn't see all of it. That's not happening with Star Wars (at least in California... we'll see about Florida in 9 days).

You're absolutely right that time will tell... I just think it will tell a different story than you do.

Zurj, I support you in your frustration. I apologise if it comes off that I don't get people being upset. Disney used to be affordable for the middle class family in the US, but that has changed. My viewpoints come through a business lens, as the dollar is what Disney values most.

 

[eliza61nyc]

I noticed you've been quiet on the recent rumblings.

lol my 22, 24 and 27 yo's sons are moving into their own apartment so I've been drinking heavily to lower my stress level.
I'm going to need a trip after this.
I don't really follow the D23 events so can only read on those threads.

 

[eliza61nyc]

No it works like this. Separate companies brought together under an umbrella of management with that umbrella concerned about the financials and nothing else. They run the operation and it means very little what businesses they are in. The whole thing is run on growth and budgets, operational margins etc. The higher up management has no interest in day to day business going on in their different business groups. The different groups have heads who are supposed to deal with and manage day to day operations. The problem their is the upper management manages them by goals for financial goals with nothing else as a concern.

Same thing that happened at GE in their different divisions. Their appliance businesses are a prime example. Upper management moved manufacturing to China with little concern about quality, end result was GE had a good name in that business which after a decade the goodwill was gone and so was GE's appliance business. GE had a strong brand, when was the last time you heard someone say I got GE appliances? They don't because it is a low end no name brand now.

Agreed but remember the consumer had a part to play into this.. we advocated heavily for cheap China goods and now that we've got what we asked for we're recognizing what we lost.
ok, this is getting a bit OT so I' apologize. I'm old enough to remember when walmarts brand was that they sold well made, made in American goods. Now what are they known for?? cheap junk or at least getting stuff as low as possible.
the problem is NOW we want that GE refrigerator and we want it for 100 bucks and we want it to last 15 years.

 

[spock8113]

Waaaaayyyyy too many pages to read what I can say in one sentence: "We Don't Believe We Have A Pricing Issue At Our Domestic Parks"
They are Egyptian and live in Da Land of De' Nile.

 

[Laketravis]

A 3% decline in attendance? Hardly even a blip, particularly with increased revenue (assumingg no major accounting fraud). The parks could use some thinning.

A 3% decline is a decline nonetheless and would receive attention at the board level because it's simply not growth. The focus now would be to determine if that decline trends.

I don’t think the pricing needs to change because people have shown they are willing to pay.

Yes, they have. And now we are hearing growing rumblings from even devout fans that they are no longer willing to.

Disney’s challenge is and always will be maintaining the quality standard people expect when paying those prices.

Absolutely. And again, we are hearing from people who have historically praised Disney in this arena that they are noticing a decline.

Perception is reality.

 

[John park hopper]

Got my youngest living at home (returnee) Bought a house with previous girlfriend (plan to marry found out while my son was traveling for work she was screwing another guy. Got out of that situation and is back home. Helping him out-- bought a piece of property and will build small house in the next year. Do your kids ever really leave?????? PS has a new girlfriend and she is a sweetheart. all things happen for a reason.

 

[erasure fan1]

I maybe completely wrong about what I'm about to say, and it may just be me feeling frustrated because they are pricing me out of the parks... I'm one of those who has been brand loyal to Disney as I think most people on this forum are, and I'm losing my loyalty. I believe Disney is hitting a tipping point where they are losing even those loyal Disney supporters, and the brand loyalty is eroding. It just feels like they are taking us for suckers.

I agree with you 100%. I'm in the same spot as you. I've been a loyal Disney parks guy for 40 years or so. It's extremely frustrating watching this pricing strategy unfold knowing you are basically being told, we don't need you as a customer. What they forget, is the free advertising and endorsing of the parks we give. I can't remember the last time I told someone a Disney trip is totally worth it and I recommended going. Maybe I'm the only one, and thats fine. But I have a feeling I'm not alone.

 

[ColdSarsaparilla]

I've been going to Walt Disney World since childhood. I'm a lifer. I've been fortunate enough to bring my own family now.

I feel loyalty to the brand. But cracks have been forming.

A few years ago, we stayed longer in the resorts and spent more days in the parks. Lately, we've been doing split stays and limit our time on property based on the cost/value proposition alone. I've also been researching other vacation destinations more seriously, which is something I never used to do.

I know it's anecdotal, but it's real for me. And I don't seem to be alone. Eventually, that will catch up to them.

 

[Chef Mickey]

A 3% decline is a decline nonetheless and would receive attention at the board level because it's simply not growth. The focus now would be to determine if that decline trends.



Yes, they have. And now we are hearing growing rumblings from even devout fans that they are no longer willing to.



Absolutely. And again, we are hearing from people who have historically praised Disney in this arena that they are noticing a decline.

Perception is reality.

The decline of 3% is not yet a trend. Attendance has steadily increased the entire time the prices increased. Rumbling aren't data and besides the recent 3% decline, ALL the data in parks has been favorable to Disney's strategy. Unfortunate maybe, but true nonetheless. We'll see how attendance looks in the next few quarters.

 

[erasure fan1]

The decline of 3% is not yet a trend. Attendance has steadily increased the entire time the prices increased. Rumbling aren't data and besides the recent 3% decline, ALL the data in parks has been favorable to Disney's strategy. Unfortunate maybe, but true nonetheless. We'll see how attendance looks in the next few quarters.

True, the 3% isn't a trend by any stretch. But a 3% decline after opening the "greatest land we've ever done!" shows a flaw in the armor. Is it the start of a landslide? Probably not, but it could be an indicator of them starting to push too far.

 

[Chef Mickey]

True, the 3% isn't a trend by any stretch. But a 3% decline after opening the "greatest land we've ever done!" shows a flaw in the armor. Is it the start of a landslide? Probably not, but it could be an indicator of them starting to push too far.

I think it might say people DID hold off going to avoid Star Wars crowds at DL, particularly since DL relies on locals more than WDW.

It appears to have coincided exactly with Star Wars opening, so I believe that's a legitimate excuse to explain at least part of it.