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

[Vegas Disney Fan]

Prices never go down…not once

If they have “coupon” strategy return…they’re in more trouble than the customers are.

Things sound better when you put it that way

Prices may not go down but I’ve got some great deals before, free dining, 25% off rooms, etc. They have ways of lowering prices to fill the parks without actually lowering prices.

 

[Sirwalterraleigh]

Prices may not go down but I’ve got some great deals before, free dining, 25% off rooms, etc. They have ways of lowering prices to fill the parks without actually lowering prices.

That’s coupon day…and it’s their tacit admission that they needed you more than you need them

 

[Ayla]

I do see it more as Bob Chapek having a tin ear when talking.

To be fair, reading the actual comment, Chapek says prices will go up if demand continues to rise and can be lowered if it softens. So, that does suggest that if the travel surge wears off they can also adjust in the other direction. It's not pleasant to hear and there are a whole range of other issues involved (e.g. lack of investment in capacity, maintenance, other cutbacks, etc), but the comment is not that insane or out of line with how Disney has been operating for a long time.

When has Disney EVER lowered a price after raising it?

 

[NelsonRD]

I have argued on other threads like this that discuss cost, that increasing prices will not lower attendance, and can potentially increase attendance. The theory is people who were planning on vacations, will decide to go now, before the idea of costs going up even more. Those who were planning on going next year, may go now, and accept this price increase, and try to avoid another price increase next year.

 

[Sir_Cliff]

I have no problem with them raising prices to match demand, I just wish they’d drop the other “demand schemes” like reservations and Genie+ and simply offer the old product at a higher price, this hybrid strategy of raising prices while also becoming an inferior product is getting old.

This is the big issue for me. If demand really is this strong, they're only really doing what publicly traded companies are almost required to do in pricing accordingly. What gets me is that they are moving more and more toward premium pricing while cutting back the quality of the product they're offering.

Disneyland Paris still has its issues, but I think they would be wise to look at how management there has put so much effort into raising show standards in recent years in line with all the price rises. If the same type of approach was taking place at WDW (e.g. restoring old effects throughout the lands that people had forgotten about rather than going in the other direction), it would be easier to swallow the price increases.

Prices may not go down but I’ve got some great deals before, free dining, 25% off rooms, etc. They have ways of lowering prices to fill the parks without actually lowering prices.

Exactly. The prices technically can stay the same but in effect be lowered through discounts if need be.

 

[dreday3]

I have argued on other threads like this that discuss cost, that increasing prices will not lower attendance, and can potentially increase attendance. The theory is people who were planning on vacations, will decide to go now, before the idea of costs going up even more. Those who were planning on going next year, may go now, and accept this price increase, and try to avoid another price increase next year.

It's funny, the first thought in my head was "oh, I'm happy we are already booked with hotel/tickets for April before price goes up", then I'm like "oh well, I'm a statistic of increased guests".

 

[Disstevefan1]

Again. Problem they themselves created.

What problem?

The problem of too much demand or the problem of the leader of the company stating the facts?

BTW, I hate all the prices going up constantly too but since demand keeps going up what else is there to do?

FOLKS ARE STILL SHOWING UP. I have not been to WDW since December 2019 and frankly, I miss it.

 

[Nottamus]

It’s that half smile, half Dr Evil snarl in his pic that always gets me

 

[Andrew C]

What problem?

The problem of too much demand or the problem of the leader of the company stating the facts?

BTW, I hate all the prices going up constantly too but since demand keeps going up what else is there to do?

FOLKS ARE STILL SHOWING UP. I have not been to WDW since December 2019 and frankly, I miss it.

Capacity not keeping up with the increase in demand that they pushed forever. And the product essentially flatlining while new upcharges are created. Their long term strategy has sucked for a while. It been building for years. Sirens. Sirens. Sirens. But ignored. And here we are. They backed themselves into a corner and the guests suffer.

 

[Br0ckford]

So, admittedly, I don't know anything about Bob Chapek other then he took over for Iger. Until I joined these boards I didn't really pay attention to the behind the scenes stuff. I forked over my money to Walt Disney World. I have noticed decline, but, at least for me, not to the point to stop going. Not saying there isn't a point, but I haven't reached it yet. Yesterday was the first time I really paid attention during the quarterly call. Really just cause I read a lot of you on these boards and alot of it makes sense. 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. We are already booked for November, so we will see what happens after that.

 

[Sirwalterraleigh]

Exactly. The prices technically can stay the same but in effect be lowered through discounts if need be.

However that is NOT what Iger did

They increased the base price under the “discounts”…setting themselves up for huge revenue increases around 2015. Check your bank/credit card statements if you need proof

 

[hopemax]

Everyone knows that businesses have two possible strategies when demand is high. Increase prices to lower demand. Or increase capacity to meet demand. It’s just so incredibly frustrating to see a company that thrives on goodwill focusing on the former and paying so little attention to the latter.

It seems to me that this will help drive short term profits, but they’re creating a very unsustainable bubble.

I've said before, I don't get the sense that Disney's management team, going back to post-Wells Eisner has long-term confidence in Disney's product no matter what they say on camera. I think they avoided adding additional US parks or a 3rd Resort to focus on China, because they also keep expecting the domestic market to tighten up at some point, making the investment pointless. It's not just *us* sitting around wondering how long they can keep this up. IMO, there was genuine surprise coming from Chapek over how strong future bookings remain. However, the last 3 years has definitely shown how emotionally reactive people are about a litany of things, not just Disney vacations. Also, if you look around there are places where people have pulled back, just not yet on travel. We're getting a reprieve on energy based on how much demand pulled back recently, but supply is still going to be a concern as long as the war continues and climate change does its thing. That demand will creep back up, because people still want all the things, but I expect we're going to be in an annoying set of economic bunny hills until we get some clarity on the global geo-political situation. Including, our own country.

The earnings call, tipped their hand that they think they can just turn the AP spigot back on whenever they feel they might need to, but there is a lot of AP rage building up to replace all that pent-up demand. How this is all going to turn out in 5 years?

 

[Gringrinngghost]

Forum Title: Disney CEO Bob Chapek suggests price hikes

Everyone:

 

[Andrew C]

Forum Title: Disney CEO Bob Chapek suggests price hikes

Everyone:

It’s price hikes combined with no 5th gate or 3rd US resort that probably gets to many of us. Along with the current product mentioned previously. I’m not against price increases in general…but considering the full context of the parks right now, it’s annoying.

 

[Ricky Spanish]

Where’s the “self congratulatory fans” today??

I’m patting myself on the back right now

 

[The Colonel]

Bob Chapek goes to the hospital in an emergency having terrible chest pains. The surgeon tells him he needs emergency open heart surgery immediately to save his life. But it's going to cost you $100 million dollars. Chapek can't believe it. How can it be so much money? Dynamic pricing the surgeon says. Demand is very high right now.

 

[Sir_Cliff]

Capacity not keeping up with the increase in demand that they pushed forever. And the product essentially flatlining while new upcharges are created. Their long term strategy has sucked for a while. It been building for years. Sirens. Sirens. Sirens. But ignored. And here we are. They backed themselves into a corner and the guests suffer.

I wonder whether there is a school of thought within the company that is still cautious about growing capacity, at least at WDW. The fact that all but one of the parks are still light on attractions is evidence of where they could have been investing without substantially raising their fixed costs too much (at least I assume so). It also shows they went too far in the other direction in Iger's early years.

However, there is part of me that thinks they look at events like the pandemic as a sign that greater growth in the physical size of WDW also signifies greater vulnerability in times of crises, economic downturns, etc. and so they're still happy to inch along with a new attraction here and focus on more effectively monetising their existing capacity rather than really growing it.

 

[HauntedPirate]

Gee, Bob will increase prices fast and furious like he's done since 2015? Color me surprised... Not.

Where are my "BuT mY vAcAtIoN sPeNdInG cHoIcEs DoN't ImPaCt YoU!" people?

I guess it needs to be said again (and it's in my signature): VOTE WITH YOUR WALLET. STOP MAKING EMOTIONAL CHOICES AND GOING BECAUSE YOU THINK YOU AND/OR YOUR KIDS "DESERVE" IT. YOU AND THEY DON'T. Every single penny you give this bald crap peddler just reinforces their general belief that consumers are stupid and will pay anything. Stop proving them right.

 

[Andrew C]

I wonder whether there is a school of thought within the company that is still cautious about growing capacity, at least at WDW. The fact that all but one of the parks are still light on attractions is evidence of where they could have been investing without substantially raising their fixed costs too much (at least I assume so). However, there is part of me that thinks they look at events like the pandemic as a sign that greater growth in the physical size of WDW also signifies greater vulnerability in times of crises, economic downturns, etc. and so they're happy to inch along with a new attraction here and focus on more effectively monetising their existing capacity rather than really growing it.

Who knows what they are thinking now. I’m of the mindset that we should have seen a 5th gate a decade ago and a third US resort 5 years ago.

Bottom line, there is always going to be an excuse not to do something. Whether it’s a recession, a worldwide crisis, war, etc.. There are no perfect windows.

 

[tanc]

It's a good thing I had my last trip August 2020 before these crowds and price gouging. I saw the state of the parks and although it's better, it's never going to be like 2019 again.