News Disney CEO Bob Chapek suggests price hikes are coming to the parks thanks to guest demand

[Sirwalterraleigh]

Eh thinking people that like something, on a fan community, are stupid for liking that thing is .... certainly a take.

I’m not disagreeing with you…too far. I certainly spend my time in the penalty box for that…

 

[HauntedPirate]

No; in fact, you could argue we go more (even thought the length of stay may have declined).
Bottom line: TWDC is in business to make $, and you could see (even before COVID) that the only way to reduce crowds long-term is through price hikes. If you read about the history of the company (like Disney War), you would find price hikes from the 80's that would give today's a run for their money (no pun intended)!

You mean the 1982 price hike when EPCOT Center opened? Or the other two price bumps that happened in 82-83? Raising prices a dollar or two a ticket in the latter half of the 80's and into the 90's is a far cry from what has happened since Iger took over.

They have no desire to reduce crowds.

 

[Phicinfan]

I don't believe they are trying to "decrease demand with increased prices."

What I think they are doing is decreasing daily ticket sales (they can control it via limiting available reservations, which makes crowds smaller) but then they will increase prices to make the same or more money.

You guys want less people in the parks, but they can't make less money. So, if you want to make the parks more exclusive, limit tickets and raise prices to offset the loss in volume.

Agree with this, yes they will make their $$$$, which means they price up, fully expecting to price out some, but gain those who want less folks there to compete with

 

[Phicinfan]

You mean the 1982 price hike when EPCOT Center opened? Or the other two price bumps that happened in 82-83?

They have no desire to reduce crowds.

I disagree here, if they can make as much or more, on less folks, which also equates to less staff, then its an all over win

 

[Sirwalterraleigh]

I mean, the only thing that made a true impact on attendance was a global pandemic.

The increase price to lower demand thing has been trotted out for years now and has that actually happened? No. It’s a line to get in front of Wall Street IF that ever happened.

Their goal was never to “reduce” attendance.

People are insane to consider it. Less attendance is a “loss” for 43% of their revenue/profit center and that leads to what they can sell the stock at…

It was never an option. It was a typical corporate excuse/misdirection. Watch it play

Bob: “we’re getting more money from everyone and getting rid of those that can’t spend”
Wall st: “great…now get more people that can spend to replace them”

This isn’t hard.

 

[HauntedPirate]

I disagree here, if they can make as much or more, on less folks, which also equates to less staff, then its an all over win

Again - They CANNOT make as much off of fewer people via ticket prices. They would have to double prices on everything to make the same amount of revenue on fewer gate taps. It ain't happenin'.

 

[Sirwalterraleigh]

No; in fact, you could argue we go more (even thought the length of stay may have declined).
Bottom line: TWDC is in business to make $, and you could see (even before COVID) that the only way to reduce crowds long-term is through price hikes. If you read about the history of the company (like Disney War), you would find price hikes from the 80's that would give today's a run for their money (no pun intended)!

My point is they’ve driven you to modify your spending habits to continue to consume while “fitting” around their price goals/structure.

I’m never gonna tell you not to enjoy yourself and have fun…but from a business perspective they’re getting more than they couldn’t asked for…

 

[el_super]

They have no desire to reduce crowds.

They do have a desire to reduce crowds. They've stated as such and taken actual action to do so. That's indisputable.

Where maybe you are getting confused is, they are trying to limit attendance and capacity in a way that doesn't put off most of their customer base. So many people want to do, and they realize it's hard to hear "no," whether that be in blockouts or restrictions or lack of reservations.

It's easier to do this the fairest way: through price increases and convincing some people they don't want to go.

 

[DCLcruiser]

Their goal was never to “reduce” attendance.

People are insane to consider it. Less attendance is a “loss” for 43% of their revenue/profit center and that leads to what they can sell the stock at…

It was never an option. It was a typical corporate excuse/misdirection. Watch it play

Bob: “we’re getting more money from everyone and getting rid of those that can’t spend”
Wall st: “great…now get more people that can spend to replace them”

This isn’t hard.

So then what is the goal (besides more money)? What issue are they trying to solve for?

I thought the issue was overcrowding was reducing guest satisfaction. That, to me, is solved by either allowing less people inside or dispersing them more evenly across the park(s).

Are they just increasing prices to keep up with inflation?

 

[el_super]

Again - They CANNOT make as much off of fewer people via ticket prices. They would have to double prices on everything to make the same amount of revenue on fewer gate taps. It ain't happenin'.

It could happen.

 

[HauntedPirate]

They do have a desire to reduce crowds. They've stated as such and taken actual action to do so. That's indisputable.

Where maybe you are getting confused is, they are trying to limit attendance and capacity in a way that doesn't put off most of their customer base. So many people want to do, and they realize it's hard to hear "no," whether that be in blockouts or restrictions or lack of reservations.

It's easier to do this the fairest way: through price increases and convincing some people they don't want to go.

Get back to me when attendance is actually lower year-over-year and the marketing machine has been turned off.

 

[HauntedPirate]

It could happen.

Oh, it certainly could. But I don't think the newly-bearded one has the stones to actually do it. He needs his golden goose to keep laying eggs.

 

[Sirwalterraleigh]

So then what is the goal (besides more money)? What issue are they trying to solve for?

I thought the issue was overcrowding was reducing guest satisfaction. That, to me, is solved by either allowing less people inside or dispersing them more evenly across the park(s).

Are they just increasing prices to keep up with inflation?

Do whatever you can to push quarterly profits as long as you can…that’s the “goal”

At this rate….chapek can “get fired” with maybe $300,000,000+ in 4 years?

Anyone miss Eisner yet? The guy who wanted to be remembered forever?
I remember.

 

[Sirwalterraleigh]

They do have a desire to reduce crowds. They've stated as such and taken actual action to do so. That's indisputable.

Where maybe you are getting confused is, they are trying to limit attendance and capacity in a way that doesn't put off most of their customer base. So many people want to do, and they realize it's hard to hear "no," whether that be in blockouts or restrictions or lack of reservations.

It's easier to do this the fairest way: through price increases and convincing some people they don't want to go.

It’s absolutely disputable. That dispute could last for days…but it would be rather one sided.

 

[mightynine]

They do have a desire to reduce crowds. They've stated as such and taken actual action to do so. That's indisputable.

Where maybe you are getting confused is, they are trying to limit attendance and capacity in a way that doesn't put off most of their customer base. So many people want to do, and they realize it's hard to hear "no," whether that be in blockouts or restrictions or lack of reservations.

It's easier to do this the fairest way: through price increases and convincing some people they don't want to go.

You realize what you are saying is not a desire to reduce crowds, but to have the same or even higher amount, just move them around.

A desire to reduce crowds would lead to fewer people overall going to the parks. That's not your argument.

And again, if a price increase convinces some people not to go, but the exact same amount of other people or more decide to go....how were crowds reduced?

 

[JMcMahonEsq]

By definition, if cost increase, and no useful addition or development happens, then value reduces. God I feel dirty agreeing with you

No if costs increase, then all that happens is the cost increases. Cost and Value (in non indexed commoditized purchases) are not linked. First, useful is again subjective. Second, in the sense of a vacation what something cost last year, two years ago, or ten is pretty irrelevant. I don’t have a time machine. If I want to go on vacation next year, i am not comparing prices of past trips, i am comparing prices of where you can go next year. It’s like going car shopping. Your not comparing prices of a car today vs what you could pay in 2017. Who cares what it cost in 2017, you need a car now. You compare what the car your looking to buy today is, vs what other dealerships are selling their cars for today.

And in looking at a vacation, cost vs value is even more subjective/useless of a comparison. In my car analogy at least a car has some intrinsic objective value. A vacation is a consumable, it’s gone after use and completely subjective. You could sell me a week long vacation to the Jersey shore for a $1, is that value? Considering i am a pasty Irish guy who 1) hates the beach: 2) hates the sun: 3) hates Jersey shore people, even at a dollar that vacation has no value to me.

The only question as far as pricing that matters is is the price of a Disney vacation today, more favorable than the price of an alternative trip now.

 

[Sirwalterraleigh]

You realize what you are saying is not a desire to reduce crowds, but to have the same or even higher amount, just move them around.

A desire to reduce crowds would lead to fewer people overall going to the parks. That's not your argument.

And again, if a price increase convinces some people not to go, but the exact same amount of other people or more decide to go....how were crowds reduced?

Exactly.

If they wanted to reduce demand/crowds…here’s how they’d do it:

DVC construction: done
Annual passes: over
Reduced prices on multi day tickets: over
“Plus” features: done

 

[Sirwalterraleigh]

No if costs increase, then all that happens is the cost increases. Cost and Value (in non indexed commoditized purchases) are not linked. First, useful is again subjective. Second, in the sense of a vacation what something cost last year, two years ago, or ten is pretty irrelevant. I don’t have a time machine. If I want to go on vacation next year, i am not comparing prices of past trips, i am comparing prices of where you can go next year. It’s like going car shopping. Your not comparing prices of a car today vs what you could pay in 2017. Who cares what it cost in 2017, you need a car now. You compare what the car your looking to buy today is, vs what other dealerships are selling their cars for today.

And in looking at a vacation, cost vs value is even more subjective/useless of a comparison. In my car analogy at least a car has some intrinsic objective value. A vacation is a consumable, it’s gone after use and completely subjective. You could sell me a week long vacation to the Jersey shore for a $1, is that value? Considering i am a pasty Irish guy who 1) hates the beach: 2) hates the sun: 3) hates Jersey shore people, even at a dollar that vacation has no value to me.

The only question as far as pricing that matters is is the price of a Disney vacation today, more favorable than the price of an alternative trip now.

 

[mightynine]

Exactly.

If they wanted to reduce demand/crowds…here’s how they’d do it:

DVC construction: done
Annual passes: over
Reduced prices on multi day tickets: over
“Plus” features: done

Or go to the park ressie system and lower the "MAX PARK ATTENDANCE" value.

In a nutshell:

 

[JohnD]

Wait. If there is increased demand, why have price hikes at all as the increased demand will bring in more revenue. The only reason for a price hike is to milk more out of guests because there is increased demand.