News Chapek FIRED, Iger New CEO

Sirwalterraleigh

Premium Member
This Wednesday at 4:30 ET is the Q3 call. Thread for it here:

Can’t wait 🤪
 

Sirwalterraleigh

Premium Member
I'm not arguing about whether the parks need to remain cheap vs. crowd levels from a customer perspective -- I'm arguing from a Disney business perspective. I think they have to keep them relatively cheap and crowded or they're going to lose revenue and profits.

It's not like they can just flip a switch to dump the middle class and pull in the upper class. Their entire business model is built around the middle class -- even their "deluxe" hotels aren't remotely similar to an actual upper class luxury resort -- and I don't see any avenue for them to change that (at least not any way that would be worth doing due to the expense required). They can't get enough attendance at true luxury prices to offset the F&B and merchandise losses, because they don't offer the kind of experience (in multiple ways) that can attract that clientele in large enough numbers to make up the difference.

They have to walk a fine line. Increasing the price in an attempt to lower demand is something they can try (and I'm on board with that), but they can't afford to price out their customer base because there's no easy way to replace them.
👆🏻👍🏻
 

el_super

Well-Known Member
They have to walk a fine line. Increasing the price in an attempt to lower demand is something they can try (and I'm on board with that), but they can't afford to price out their customer base because there's no easy way to replace them.

But we're talking about the parks being overcrowded today. This isn't a matter of changing the demographic of people going to the park and/or trying to acquire a new audience. This is about reducing the number of people that are already able to afford the place. For some, maybe reducing the number of visits per year.

In the 70s and 80s MK was pulling what.... 10 million a year? What would the price need to be to return to that .
 

Sirwalterraleigh

Premium Member
But we're talking about the parks being overcrowded today. This isn't a matter of changing the demographic of people going to the park and/or trying to acquire a new audience. This is about reducing the number of people that are already able to afford the place. For some, maybe reducing the number of visits per year.

In the 70s and 80s MK was pulling what.... 10 million a year? What would the price need to be to return to that .
They weren’t drawing 10 million a year because people “couldn’t afford it”…

Disney was actively building to draw in more people from their target demographics to increase consumption and loyalty. Just like Disneyland and really any other amusement parks - which are not luxury enclaves.

Now if your point is: times change! Then I can agree. So they can increase prices that will decrease consumption, loyalty and revenues/profits. It’s rather a binary choice. So Disney can splain that to Wall Street.
 

el_super

Well-Known Member
Now if your point is: times change! Then I can agree. So they can increase prices that will decrease consumption, loyalty and revenues/profits. It’s rather a binary choice. So Disney can splain that to Wall Street.

Yep. Times change. Population and air travel and everything else has made it easier to get to Florida and made access to the parks cheaper and easier for everyone. That would normally be a good thing, but the actual capacity of the parks is generally fixed... you can't keep cramming an unlimited number of people into the parks.

So again, when supply is low and demand is high... what's supposed to happen?

Disney keeps the park prices artificially low to foster good feelings toward the brand as a whole. You could try making the case that there is still a negative impact from the overcrowding, but that doesn't seem to be dramatically impacting the brand (or attendance).

I'd personally prefer a system without private parties and Genie+, where wait times are closer to what I remember them back in the old days... but I realize I am being outvoted here.
 

UNCgolf

Well-Known Member
In the 70s and 80s MK was pulling what.... 10 million a year? What would the price need to be to return to that .

I don't think it's actually possible to return to that via pricing, at least on a long-term basis (it might be possible during certain periods due to a recession or whatever else). I don't think there's a price that's high enough to dissuade enough customers to make crowds manageable but not so high that it prices most of them out completely. The population has grown too much.
 

HauntedPirate

Park nostalgist
Premium Member
Ruh roh, someone go check on $lappie!


Take this with a grain of salt, but there has to be some truth in this:

“We’re sitting at a moment in time where there is more pressure on the consumer’s pocketbook than ever,” Symson said in a recent interview. “We’re reading every day about ‘plus fatigue.’ Consumers are frustrated by the fact they have five video streaming subscriptions and they are not sure what value they are getting out of them.”
 

el_super

Well-Known Member
I don't think it's actually possible to return to that via pricing, at least on a long-term basis (it might be possible during certain periods due to a recession or whatever else). I don't think there's a price that's high enough to dissuade enough customers to make crowds manageable but not so high that it prices most of them out completely. The population has grown too much.

You might be right, but the flip side to that is accepting park pass reservations, discounts for value days, and weird pricing schemes like Genie+. The success of Genie+ proves that some people (even maybe the majority) are willing to pay more for a better experience, which confirms what Iger was saying back in 2019, but it seems Disney is reluctant to take it too far.
 

Sirwalterraleigh

Premium Member
Yep. Times change. Population and air travel and everything else has made it easier to get to Florida and made access to the parks cheaper and easier for everyone. That would normally be a good thing, but the actual capacity of the parks is generally fixed... you can't keep cramming an unlimited number of people into the parks.

So again, when supply is low and demand is high... what's supposed to happen?

Disney keeps the park prices artificially low to foster good feelings toward the brand as a whole. You could try making the case that there is still a negative impact from the overcrowding, but that doesn't seem to be dramatically impacting the brand (or attendance).

I'd personally prefer a system without private parties and Genie+, where wait times are closer to what I remember them back in the old days... but I realize I am being outvoted here.
Disney prices are not “artificially low”. They are set by about 1,000 people with experience to maximize yield/return and limit costs.

It’s really silly to even say that.

Here’s what would happen if they doubled the price: probably 30%-50% would be priced out immediately, and the “whales” would begin to outwardly request more…better…no limits. And that would load on overhead for less revenue/return.
Disneynomics. They don’t take their lead from a freshman textbook. Even if the current management is bad…which it is.
I don't think it's actually possible to return to that via pricing, at least on a long-term basis (it might be possible during certain periods due to a recession or whatever else). I don't think there's a price that's high enough to dissuade enough customers to make crowds manageable but not so high that it prices most of them out completely. The population has grown too much.
It is not…the product would collapse and be sold off on the way down if they tried that…which is why they won’t.
 

UNCgolf

Well-Known Member
You might be right, but the flip side to that is accepting park pass reservations, discounts for value days, and weird pricing schemes like Genie+. The success of Genie+ proves that some people (even maybe the majority) are willing to pay more for a better experience, which confirms what Iger was saying back in 2019, but it seems Disney is reluctant to take it too far.

Which is likely why Disney is doing all of those things -- they know that raising prices too high isn't a feasible option because they'd lose too much elsewhere with the attendance drop.
 

Sirwalterraleigh

Premium Member
Is BC gonna take credit for gas prices going down? 🤔 ( maybe forecasting more can drive to WDW )
He can, but nobody will believe it

“Half” of the people are so cynical (it’s actually more like 55-65%) that they don’t believe anyone about anything

The other “half” (35%) are being told prices aren’t actually going down and it’s an Alien engineered conspiracy.
 

Sirwalterraleigh

Premium Member
Ruh roh, someone go check on $lappie!


Take this with a grain of salt, but there has to be some truth in this:
Would you be the least bit shocked if it becomes known in the next couple of years that the entertainment companies completely overplayed their streaming hands under cover of Covid and the consumers will wake up/defect from it?

Novelties always become “unnovel”…and then people lose all desire to pay for it.
 

kingdead

Well-Known Member
I think that demand is going to go down naturally: recession, higher prices in general, higher prices for gas in particular. The people who rescheduled their COVID cancellations will be done with their trips. This should make the parks less crowded at the same prices.

Whether this improves customer service and maintenance remains to be seen. There's a faint possibility that the complaints switch to "ugh, a deserted dump" :)
 

MrPromey

Well-Known Member
Yep. Times change. Population and air travel and everything else has made it easier to get to Florida and made access to the parks cheaper and easier for everyone. That would normally be a good thing, but the actual capacity of the parks is generally fixed... you can't keep cramming an unlimited number of people into the parks.

If they'd actually tried to address this, I'd consider your argument here but point to one of the four parks that doesn't have unused expansion pads and/or shuttered attraction space that, as far as we know, isn't under development.

And lets not forget that if Universal can find the space half way across town from their existing parks at lord knows what prices to build a new park, Disney surely could within the continuous body of land they already own.

They certainly haven't had trouble finding space to build DVC, have they?

I'm aware of the "if they build, more people will just come" rebuttal but please hold that until the end of this post.

Through continued inaction, they've made supply low relative to demand and at least for part of it, you'd have a difficult time convincing me wasn't intentional. (though the snowball may have gotten bigger than they expected, faster than they expected)

They talked publicly about improving guest satisfaction in the parks with FP+ and they talked publicly about reducing crowds with their new variable pricing model because, of course you're not going to tell your fans these things are really attempts to squeeze more money out of them but here we are and the results suggest that what they told the fans is not what they were internally looking to accomplish in any way.

So again, when supply is low and demand is high... what's supposed to happen?

Disney keeps the park prices artificially low to foster good feelings toward the brand as a whole. You could try making the case that there is still a negative impact from the overcrowding, but that doesn't seem to be dramatically impacting the brand (or attendance).

I don't think that's what they're doing at all.

As others have repeatedly stated, their profits don't come from park admission. They come from the crap people buy once there and as others have also pointed out, the top 10% aren't idiots. Cheap overpriced crap from China is cheap overpriced crap from China. They're only going to buy so much of it and just because they can afford to spend more on landfill and middling food doesn't mean they see the value in doing so if Disney tries to up the price to help offset the difference in volume.

Disney would have to spend considerably more on their experiences, merchandise and food to cater to a smaller audience that they wouldn't be able to so easily spread costs across.

They'd have to spend a lot to make money this way with no real guarantee the pivot would work.

I'd personally prefer a system without private parties and Genie+, where wait times are closer to what I remember them back in the old days... but I realize I am being outvoted here.

For the record, they could reduce the flow any time they wanted. Quit advertising for a year and focus that money on improving the resort experience. I mean, if people coming is what it is and they have no control over it, why waste all that money on entirely unneeded advertising?

What was this stupid thing even for?:


Make no mistake, Disney is actively pushing the crowds we're seeing and then feigning concern.

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Sirwalterraleigh

Premium Member
Yep. Times change. Population and air travel and everything else has made it easier to get to Florida and made access to the parks cheaper and easier for everyone. That would normally be a good thing, but the actual capacity of the parks is generally fixed... you can't keep cramming an unlimited number of people into the parks.

So again, when supply is low and demand is high... what's supposed to happen?

Disney keeps the park prices artificially low to foster good feelings toward the brand as a whole. You could try making the case that there is still a negative impact from the overcrowding, but that doesn't seem to be dramatically impacting the brand (or attendance).

I'd personally prefer a system without private parties and Genie+, where wait times are closer to what I remember them back in the old days... but I realize I am being outvoted here.
When were “the old days”? I’ll try and see if I can remember back that far? 😎
 

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