Demand Based Pricing Will Be A Reality - Let's Be Objective

[CaptainAmerica]

Don't be fooled. The price of the dining plan is fully calculated and understood by Disney. It is spread out across the price of other things. Probably all other things.

Not really. The dining plan cost isn't baked into the room and ticket prices. It's essentially a marketing cost, the same as a 30% room discount.

 

[jloucks]

I actually think the crowds at Magic Kingdom would be extremely low if they never added anything, because it would be so outdated that no one would want to go. There also wouldn't be as much to do so less would come. If they stopped adding any attractions for 15 years, I'm almost positive the crowds would go down. 70% of people that visit Disney World are return visitors, so if they stopped adding things, there wouldn't be much incentive for people to go back. Like I said before, unless there's actual numbers that say crowds thin out when attractions are added, I'm not buying it. I think price raises are the only way to lower crowds.

My gut tells me new rides or attraction only play a small role in drawing a crowd. I go to places I have been before all the time that have not changed a bit since I was there last. WDW for example.

I'm with you. Prices are the only way.

 

[CaptainAmerica]

My gut tells me new rides or attraction only play a small role in drawing a crowd. I go to places I have been before all the time that have not changed a bit since I was there last. WDW for example.

I'm with you. Prices are the only way.

Yup. Magic Kingdom is a unique beast. Don't build anything new? Crowds. Build new stuff to increase capacity? Even worse crowds showing up to see the new stuff you built. Build new stuff at the other parks to draw people away from MK? More people come to WDW overall, a disproportionate amount of whom go to MK.

 

[jloucks]

Not really. The dining plan cost isn't baked into the room and ticket prices. It's essentially a marketing cost, the same as a 30% room discount.

I guess I would have to know where marketing funding comes from. I thought it came form the existing revenue streams and therefore a certain percentage could be tagged to whatever they want. ...and wouldn't they want to tag it to what was being directly affected? I don't know this for sure, but it seems logical.

 

[CaptainAmerica]

I guess I would have to know where marketing funding comes from. I thought it came form the existing revenue streams and therefore a certain percentage could be tagged to whatever they want. ...and wouldn't they want to tag it to what was being directly affected? I don't know this for sure, but it seems logical.

Marketing is marketing, they don't really assign it to a specific line of business. The Food and Beverage people have their own P&L that they're evaluated on, and it wouldn't make sense to whack an F&B exec for decisions that a Marketing exec makes over which he has no control. The F&B guys are evaluated as if dining plan meals were ordered at menu price. Otherwise it would look like they were giving food away for free.

 

[ULPO46]

Price alone would thin crowds....not a price you might like, but I can assure you $1000 daily tickets would thin out the crowds. I am not recommending $1000 tickets, just pointing out that in this model, price always always affects demand.

Premium Ticket is already 1,000 here in Cali for Disneyland. Honestly nothing special about the two parks here to be more expensive than the WDWR. How ever it is inevitable for TWDC to jack up the prices at WDW to 1,000+ in the near future. Not to concern the people of this forum but I think we all are smart enough to know that it will happen eventually. As for the crowds, eventually there will be so many humans on this planet that the MK hits capacity every day. Will this happen in our lifetimes, probably not. But maybe by then, there's a Disney's Lunar Kingdom.

 

[copcarguyp71]

1) Agreed! They are pouring gas on the fire here. Not sure what their end game is.

2) Wait, wut? Extreme discounts?! That is annoying. I wonder what they are trying to accomplish. Probably a marketing initiative and the prices will return to normal at some point?

3) Don't be fooled. The price of the dining plan is fully calculated and understood by Disney. It is spread out across the price of other things. Probably all other things.

RE #2 - yea..pretty extreme discounts courting South/Central America and Brits (no offense to either...I am jealous of you both)

RE #3 - while they well know the price of the dining plan the food, service and experience was far better before they decided to give it away instead of having it be a tiered option in order to court customers...which they should not have had to do if the ROI of the vacation dollar was congruent to the experience.

 

[1023]

Actually, the issues with crowds is two fold (one intentional and one not):

Unintentional reason: Payment plan Annual passes. By allowing people to pay a monthly charge instead of a lump sum, it allows a larger group of undisciplined consumers to figure the lower amount into their budget.

Intentional reason: By running attractions at set operational levels at specific times, wait times can be kept constantly long. This reduces staff needs and encourages other profitable activities in the parks. Once you are in the door, they don't want you to ride, they want you to spend.

*1023*

 

[Disneyhead'71]

At some price point it is essentially a bottomless pit of demand. We are right at that price point currently,, based on what seem to be a bottomless pit of demand.

No, not at all. It's just that the MK is that far behind in capacity that it seems that way. They need to add, not replace, a major attraction in the MK at least every 4 years to stay ahead of demand. Based on the 2% yearly increase they have been seeing since '89. They haven't added one since '92. The MK should be sitting there today with 5-6 additional E Tickets and the associated infrastructure and amenities. That park would have absolutely no problem absorbing the demand we see now, plus the additional demand the novel attractions create.

It's just the brain trust is so CapEx adverse, they intentionally and knowingly created this mess. They are truely so inept that they actually have a 25 year old park that still only has 5 rides. In the #1 attraction (WDW) in the #1 tourist destination (Orlando) in the entire county. And then scratch their heads wondering why they are experiencing capacity issues.

 

[jloucks]

No, not at all. It's just that the MK is that far behind in capacity that it seems that way. They need to add, not replace, a major attraction in the MK at least every 4 years to stay ahead of demand. Based on the 2% yearly increase they have been seeing since '89. They haven't added one since '92. The MK should be sitting there today with 5-6 additional E Tickets and the associated infrastructure and amenities. That park would have absolutely no problem absorbing the demand we see now, plus the additional demand the novel attractions create.

It's just the brain trust is so CapEx adverse, they intentionally and knowingly created this mess. They are truely so inept that they actually have a 25 year old park that still only has 5 rides. In the #1 attraction (WDW) in the #1 tourist destination (Orlando) in the entire county. And then scratch their heads wondering why they are experiencing capacity issues.

You're right, because your tinkering with supply in your model. The model I am talking about has fixed supply because the park is fully flushed out and within it's borders. If you add park/supply all the rules shift around.

I cannot quite think thru what happens when you increase supply and demand also increases accordingly. I suppose at some point supply has to exceed demand. ...but that point is not attainable in an amusement park model?

 

[CaptainAmerica]

I cannot quite think thru what happens when you increase supply and demand also increases accordingly. I suppose at some point supply has to exceed demand. ...but that point is not attainable in an amusement park model?

I think where @Disneyhead'71 misses the mark is that he misunderstands the impact that new rides and attractions have at the Magic Kingdom. Increasing capacity increases supply, he's correct there. But at the Magic Kingdom specifically, it also disproportionately increases demand. In other words, if you build new attractions that can accomodate 30,000 guests, 35,000 people are going to show up to experience them. Those numbers are obviously 100% fabricated, but the idea that new MK attractions draw more people than they're able to absorb is a fact. This doesn't seem to hold true at the other three parks, but at the MK for sure.

Further, all of this puts additional strain on Magic Kingdom's pinch points. Namely parade routes, fireworks, egress, and transportation. Even if you build tons and tons and tons of new stuff such that MK can handle 200K visitors a day, those people are all going to congregate around the hub for parades and fireworks, and a large chunk of them are going to try to exit the park and try to board the monorails immediately thereafter. There's a fundamental limit on the capacity of those pinch points.

 

[disneyflush]

I think where @Disneyhead'71 misses the mark is that he misunderstands the impact that new rides and attractions have at the Magic Kingdom. Increasing capacity increases supply, he's correct there. But at the Magic Kingdom specifically, it also disproportionately increases demand. In other words, if you build new attractions that can accomodate 30,000 guests, 35,000 people are going to show up to experience them. Those numbers are obviously 100% fabricated, but the idea that new MK attractions draw more people than they're able to absorb is a fact.

Further, all of this puts additional strain on Magic Kingdom's pinch points. Namely parade routes, fireworks, egress, and transportation. Even if you build tons and tons and tons of new stuff such that MK can handle 200K visitors a day, those people are all going to congregate around the hub for parades and fireworks, and a large chunk of them are going to try to exit the park immediately thereafter. There's a fundamental limit on the capacity of those pinch points.

I agree with this. On the pinch points narrative I believe a simultaneous 2nd parade would need to run at the opposite end of the park somewhere to stem the crowd congregation along Main Street.

 

[Disneyhead'71]

I fully understand the demand that new attractions create. And the required infrastructure and transportation upgrades necessary to deal with it.

It is not impossible to stay ahead of demand. Disney just chose not to. It's that simple.

They don't seem to have a problem staying ahead of resort room demand. Nor DCV inventory. All that adds bodies to the parks. Where they haven't done much since DAK was added.

 

[POLY LOVER]

As a business person I wish my problem was incredibile demand for my product and billions in profits and unlimited acres to expand. I think I could have an ongoing expansion budget worked out.

 

[danyoung56]

Effective crowd control...

1 - Decist huge resort and DVC expansions

2 - Decist giving extereme discounts overseas

3 - Stop giving away the company store with free dining

...seems like a good start to me.

Desist misspelling the word desist.

 

[copcarguyp71]

Desist misspelling the word desist.

turned off the grammar and spelling nazi off on my phone and was without laptop for a week...the message still rings true spelling error not withstanding. Honestly I do not see a reason to correct peoples posts without contributing content but hey whatever makes you happy. Have a magical day.

 

[jloucks]

Desist misspelling the word desist.

 

[LilWalt]

What will have to happen to control attendance is to make it where only onsite guest can get into the parks and/or start to limit the sale of non-resort guest tickets.

Say WDW parks as a whole can hold 200,000 people. Then once you get to that number of ticket sales for a specific day then no one is able to purchase tickets for that day. It would have to work like airline tickets and cruises and concerts, etc., with all tickets being pre-sale. At some point you have to limit access way before that day gets here. If you only can hold 200,000 guests then why sell 300,000 tickets? Not sure how to control Annual Pass holders.

 

[Raineman]

Not really. The dining plan cost isn't baked into the room and ticket prices. It's essentially a marketing cost, the same as a 30% room discount.

I am very curious, and would love to find out, how the dining plans figure into WDW's overall profit. A certain percentage of visitors will most likely intentionally order the most expensive items available on the plan, which would probably add up to more than what the dining plan costs. A certain percentage of visitors will order whatever they like, which would probably average out to being close to the dining plan cost. And, a certain percentage of visitors, however small, will end up ordering the cheaper items, not using the plan fully. Do the percentages work out so that it is basically a wash for Disney, or can Disney actually make a profit with the dining plans?

 

[danyoung56]

Honestly I do not see a reason to correct peoples posts without contributing content but hey whatever makes you happy. Have a magical day.

It's what I live for! Seriously, it's all in fun, even if I forget to put in a or two.