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

[Sirwalterraleigh]

And how does that reflect in lack of meaningful additional capacity?

They don’t care Martin…they just don’t care. The consumers are the only ones who can force new capacity - through their actions. There was never any other way…except recessions.

I have warned for years that we are already heading to “block pricing”. It’s only gonna accelerate on this path.

 

[marni1971]

They don’t care Martin…

Oh I know that. One reason I loathe current management.

 

[Sirwalterraleigh]

That's what they are really mad at. That people still want to go. So they usually end by saying we're stupid or some equivalent

So let me just make sure I’m following:

Yesterday I was told that “value” was subjective - some psychology nonsense there, but whatever. Ok.

Now I’m gonna accept that.

Today, Bob says “we may HAVE or increase prices”
So say they go up 20% in the next year…high but not impossible.

So if it costs 20% more next year than today…doesn’t “value” become objective and declining?

…use small words to explain arguing all sides to me, please?

 

[Sirwalterraleigh]

Oh I know that. One reason I loathe current management.

I’m in the front of that column with you…

 

[Sirwalterraleigh]

I dare this guy to show his face at D23.

…I bet he’s quaking…

A crowd of diehards in mouse ears and Star Wars lanyards who bring empty suitcase to haul the merch home

 

[matt9112]

What would you do different to lower demand?



A lot of chatter today has been focused on recession cues lifting. Specifically the falling gas prices spurring more travel (and lower airfare costs too). It isn't just a post-covid boom as it is a return to "normalcy." Demand at the parks was strong pre-COVID, so no reason to assume that isn't still the case post-COVID.

Lol build attractions at the same pace as attendance….. I mean ?

Also fuel prices are dropping because demand is falling….chinas factory’s are not doing what they once were.

 

[Vegas Disney Fan]

Today, Bob says “we may HAVE or increase prices”
So say they go up 20% in the next year…high but not impossible.

You’re more optimistic than me, I‘m expecting more than a 20% increase, more like 33% for everything, tickets, hotels, food, merchandise… with Chapek I think the skies the limit, why stop at 20% if you can fleece people for 33% or more?

 

[tnemgif]

I sympathize, but there is a real, tangible cost associated with increasing capacity, especially with how long and costly new projects are. In fact, if you look back, you could argue that most construction projects in the last two decades have done nothing to truly increase capacity, but rather, replaced existing attractions in a way that had a negligible (if not negative) impact on the overall capacity. It's much cheaper (and beneficial from a purely financial standpoint) to just increase prices to adjust to demand, rather than building another $300M attraction to "increase" capacity.

I think we agree on this point. They build attractions that are marketable and help sell/raise tickets. But these huge projects do little to increase capacity or actually create a more enjoyable/comfortable experience. That’s unsustainable.

 

[Tha Realest]

…I bet he’s quaking…

A crowd of diehards in mouse ears and Star Wars lanyards who bring empty suitcase to haul the merch home

The beard is an outward sign of confidence. He just had his contract extended three years, has operated under enormous pressure, and now sports facial hair in a way that would have been forbidden company wide a year or two ago and is certainly unconventional at the CEO level. It also signals - as does his statements on CNBC this morning - a heel turn of sorts.

We're about to get the Full Chapek.

 

[Lilofan]

You’re more optimistic than me, I‘m expecting more than a 20% increase, more like 33% for everything, tickets, hotels, food, merchandise… with Chapek I think the skies the limit, why stop at 20% if you can fleece people for 33% or more?

Disney pushed the needle and the tour sold out, 75 guests, 24 days, visit all parks around the world including landmarks like Taj Mahal in India, lodging, private plane with chef and doctor. $110K per person.

 

[Disstevefan1]

And how does that reflect in lack of meaningful additional capacity?

Sorry I was not clear. Apparently from the looks of the Disney's Q3 FY22 Earning Results, there is no business need for additional capacity. Demand is up, spending is up, regardless of capacity.

 

[marni1971]

You’re more optimistic than me, I‘m expecting more than a 20% increase, more like 33% for everything, tickets, hotels, food, merchandise… with Chapek I think the skies the limit, why stop at 20% if you can fleece people for 33% or more?

Yep.

His end game is screw the consumer as much as possible. Now he’s gone public and said to expect it. And to blame the very people he intends to shaft - although a lot of them will be priced out.

 

[Javier Antonio Nisa Avila]

Congratulations rich people, middles classes are forbidden for Bob Chapek. I don't understand why. I think he is killing the company. However , many people are happy with this. I hope they have fun.

 

[Vegas Disney Fan]

I sympathize, but there is a real, tangible cost associated with increasing capacity, especially with how long and costly new projects are. In fact, if you look back, you could argue that most construction projects in the last two decades have done nothing to truly increase capacity, but rather, replaced existing attractions in a way that had a negligible (if not negative) impact on the overall capacity. It's much cheaper (and beneficial from a purely financial standpoint) to just increase prices to adjust to demand, rather than building another $300M attraction to "increase" capacity.

That’s probably true at MK but there was a significant attendance jump at AK (11 million to 14 million) with Pandora and I suspect we’ll see a similar jump at HS now with Galaxy’s edge, unfortunately it’s going to be harder to gauge with Covid and reduced attendance happening right after it opened, my guess is 2023 HS numbers will demolish 2020 numbers though.

 

[marni1971]

Sorry I was not clear. Apparently from the looks of the Disney's Q3 FY22 Earning Results, there is no business need for additional capacity. Demand is up, spending is up, regardless of capacity.

Oh absolutely.

Maybe they should rename it Bob World.

 

[Tay]

He’s so out of touch like most “leaders”. I seriously believe they don’t add anything and just replace so they could use the capacity excuse to raise prices.

 

[el_super]

This guy just seems like a smarmy, double talking, wall street guy who doesn't care about the families/fans he is raising prices on. Very eye opening.

Chapek isn't all that great at communicating, but these calls are meant for investors and not consumers. Disney has to show the people that actually own the company, that they are capable of making money, and to some degree, make it better than the next guy. Capitalism isn't great, but it's the system we've got.

Lol build attractions at the same pace as attendance….. I mean ?

New attractions don't lower demand... it raises it. And I'm coming off another thread where I was assured that Disney has to appeal to the middle class (and keep prices low) because they fundamentally can't attract higher spenders.

So you've painted them into a corner where they need to
-Radically increase spending on multiple new attractions and increase capacity
-Reduce revenue to keep prices low so more and more people can come into the park.

So a perfectly built out MK under this scenario would be free to enter and have 300+ E tickets over 20 square miles?

 

[Lilofan]

Yep.

His end game is screw the consumer as much as possible. Now he’s gone public and said to expect it. And to blame the very people he intends to shaft - although a lot of them will be priced out.

If to screw the consumer, there seems to be a number that are willing to pay for it. Lets see how robust or not the next company earnings conference call with Wall Street will be.

 

[marni1971]

If to screw the consumer, there seems to be a number that are willing to pay for it. Lets see how robust or not the next company earnings conference call with Wall Street will be.

I’d say give it five years. Or so. Maybe more. Then see the earnings calls.

 

[Vegas Disney Fan]

He’s so out of touch like most “leaders”. I seriously believe they don’t add anything and just replace so they could use the capacity excuse to raise prices.

Most “leaders” have no clue how us “commoners” live, it’s easy to say we don’t need better police or better schools from guard gated communities while your kids attend elite prep schools, I’m sure Chapek feels like a few hundred dollars for a ticket and $500 for a hotel is a great deal while he’s counting his millions.