ParentsOf4
Well-Known Member
It looks like "Gold days" would be about 25% of the year, with "Silver days" and "Bronze days" roughly splitting the remaining 75%. However, with 49 weekends being either Silver or Gold and the survey's plan to upcharge for stays that split across 2 categories, these percentages are deceptive. Effectively, this could be the biggest ticket price increase since the 1980s.Yeah, but the "premium" is 2/3 of the year.
Perhaps more surprising, pricing would seem to punish those who decide to spend more than 5 days at WDW. Is Disney trying to encourage shorter stays, where the per day ticket price is higher?
Can't have profit without revenue. I'll take lots of revenue and figure out ways to grow profit from it but if the revenue goes away, so does the profit.
Any pointy haired boss can jack up prices and improve short-term profitability. The more complex balancing act is maximizing long-term profitability. Are aggressive price increases without offsetting Guest enhancements healthy for WDW's long-term business?
Hotels and amusement parks cost structures are different than goods (i.e. concessions). Goods typically have per unit cost of sales. Hotels and amusement parks have relatively fixed costs regardless of usage. Thus, relatively small gains in occupancy or attendance can lead to appreciable gains in profitability.
WDW's attendance has climbed steadily by about 2% annually since opening, with hotel occupancy hovering around 85-90% when the business was healthy. Prices typically have risen 3-5% annually, resulting in a steady growth of revenue and profitability.
Over the decades, there have been 2 major factors altering this pattern.
First, the economy. As a luxury item, a WDW vacation is affected by the economy but, as a result of higher prices relative to household income, WDW has become increasingly susceptible to recessions. During difficult economic times, consumers seek value. Relative to other vacation options, WDW used to offer a better value in decades past and, therefore, profitability was less affected by economic downturns. Today's WDW is priced as a premium product which is why, for example, Disney's Parks & Resorts operating margin plummeted to an all-time low of 12.2% during the last recession but averaged a healthy 20.3% during all recessions before that. WDW's higher prices are making Disney's Parks & Resorts segment more susceptible to recessions.
Second, investment. WDW has seen large jumps in revenue and profitability through investments in its theme parks. It's only through investment that WDW has become the financial juggernaut that it is today. This pattern is repeating itself at today's Universal, where Diagon Alley has led to a tremendous jump in the profitability of Universal's Theme Parks division. A smart investment in WDW will lead to further profitability for Disney in Orlando.
Moving forward, perhaps the single largest challenge facing WDW is that their per theme park attendance is approaching a level where Guests are increasingly dissatisfied with the overall experience, potentially damaging repeat business.
This doesn't mean WDW won't have repeat business; only that they will see less of it, affecting long-term profitability. A family who could have visited once every two years might instead cut back to once every three or four years if they feel they've paid too much for what was a less than "magical" experience.
Remember, most WDW Guests visit only once every few years. Many visiting today last visited when crowds were considerably lower. They arrive at WDW with one crowd level in their memories, only to experience something altogether different today. What they experience in crowds and prices this year will affect their vacation decisions for years to come.
Disney needs to do something to address this growing concern. Raising ticket prices at theme parks that are increasingly overcrowded ain't it.
Last edited:
