Your thoughts on this graph from the NYT article. I think both you and
@WDW1974 would disagree.
"Disney tends to increase ticket prices once a year — recently, at well above the rate of inflation — and it always prompts
a degree of consumer outrage. But in pure economic terms, Disney’s price increases have been modest considering the soaring demand, analysts say."
The article is generally correct, even if the chart showing one-day ticket prices is somewhat misleading.
First, this chart uses
$3.50 as the starting point which, in 1971, only covered admission. This does not include most attractions. Throw those in and the price in 1971 was
$9.35, more than 2 1/2 times higher. Second, it focuses exclusively on one-day tickets, failing to take into consideration changes to more commonly purchased multiday tickets, where the long-term price trend is less severe. For example, since 2005, the price of a Magic Kingdom one-day ticket has increased by
76% while the price of a 5-day MYW base ticket has increased by
63%.
With the exception of a few years, most notably Michael Eisner's first 4, price increases for any one year have been only modestly higher than income. "This year's prices are only a few percent higher than last year's; what's the big deal?"
The big deal is the cumulative effect of ticket price increases since 1984. Excluding a few robust years in the 1990s, increases have outpaced income.
It's somewhat like what has happened to the cost of college education.
Decades ago, my freshman year at a private university cost
$10,340 including tuition, room, board, and fees. (It's funny how certain numbers stick with you.) At the time, it was (and still is) among the most expensive colleges in the World. Adjusted for inflation, that comes out to
$26,950 today. Instead, this year's cost is
$61,640.
Most undergraduates attending my alma mater today receive significant needs-based scholarships; only top earners actually pay today's total amount. (When I attended, less than half qualified for needs-based scholarships.) As a result, even today, my alma mater costs less than many state universities, especially for out-of-state tuition.
WDW is not like that. It is a for-profit business providing entertainment for the masses. WDW needs to attract tens-of-millions every year in order to survive. To do so, it needs to adjust to recognize trends in its customer base.
In 2005, Disney did exactly that with the creation of the Magic Your Way (MYW) ticket. If you wanted to continue to have gold-plated WDW vacations (park hoppers, water parks, no expiration), Disney would sell you that (at a much higher price
). However, if you were content to visit one theme park per day, MYW represented a return to the prices of the early 1990s. Disney effectively rebaselined the price of a WDW vacation.
For more than a decade since, Disney has done nothing to rebaseline its tickets. To the contrary,
as noted in my earlier post, prices have outpaced earning across the entire spectrum of household income.
Currently, Orlando is experiencing an economic boom. Florida recently reported its best tourism year ever, breaking through 100 million visitors. When times are good, it's easy to forget the cyclical nature of markets.
Companies don't survive by ignoring market cycles. They certainly don't survive by pricing themselves out of their markets. Disney's executive leadership needs to devise schemes to drive value back into the theme parks instead of relying so heavily on extracting value from their "Guests".