SamusAranX
Well-Known Member
Disney wants to be a luxury destination yet that never is gonna happen
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Is attendance really down at WDW this or…
- Thread starter coachb
- Start date
PREMiERdrum
Well-Known Member
The sweater insists that Parks & Resorts will drive growth in the next FY. There's only a couple ways that can actually happen:
- they tear down and rethink their pay-as-you-go model and refocus back to an inclusive and approachable package model, in the process admitting that they nickle-and-dimed their way out of the reach of the meat of their market. Unlikely.
Or,
- they continue trying to discount and market their way out of this skid. Less disruptive to their overall business, but does not address the root problems.
Unless they order in a truckload of hubris, current leadership is ill-equipped to handle the structural and cultural issues that have brought them here.
Grab your popcorn (collectable Pixar PLAY Pavillion bucket not included).
- they tear down and rethink their pay-as-you-go model and refocus back to an inclusive and approachable package model, in the process admitting that they nickle-and-dimed their way out of the reach of the meat of their market. Unlikely.
Or,
- they continue trying to discount and market their way out of this skid. Less disruptive to their overall business, but does not address the root problems.
Unless they order in a truckload of hubris, current leadership is ill-equipped to handle the structural and cultural issues that have brought them here.
Grab your popcorn (collectable Pixar PLAY Pavillion bucket not included).
wannabeBelle
Well-Known Member
"The Sweater" I love it!!!! Marie
BuddyThomas
Well-Known Member
Well, it’s apparently for people who have luxury budgets. That ain’t me.
SamusAranX
Well-Known Member
I feel ya. If you are nearby and can make it work though, the pixie pass is actually a value. Who woulda thunk
some other guy
Well-Known Member
okay last couple of weeks were hot but not _that_ bad
this week is _that_ bad
this week is _that_ bad
As an agency owner does this make you concerned and does it make you consider strategically shifting the focus of your agency to other vacation segments?
84% occupancy is awful, and that’s including a bump from DL so who knows what the true WDW level actually is - and it will be worse in Q4 than it was in Q3 if this thread is anywhere near accurate.
Tha Realest
Well-Known Member
They’re in a catch-22. Those new pay as you go models are what’s boosted a bunch of their revenue gains. If they got rid of G+ and ILL tomorrow, would they make up revenue in terms of new bookings? Not so certain. So, while they may want to quit in a way, they can’t - they’re addicted.
surfsupdon
Well-Known Member
I don’t go as nearly as often as I once did. Sure I runDisney, but now those trips don’t even always include a park day. I miss going as often, but I cannot justify.
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Willmark
Well-Known Member
Disney might want to be or think of themselves as a luxury destination and have luxury pricing, but what about them is truly luxury? Certainly not the hotels which are nice, but not luxury, nor are the rides or the dining. That doesn’t leave much.
Then there is pricing, raising them in the past made sense as it was their only lever as it were to throttle demand. I say “only” because everyone knows their glacial pace of building anything other than DVC hotels. That and outside of the afore mentioned nickel and dime approach to cover for lack of increasing capacity in the parks. Then add new rides only replacing existing rides.
Add to this the confluence of outside events and here they find theme selves: a split fanbase, high prices, dwindling occupancy, high inflation etc and people wonder why the parks are light and they are shuttering resorts?
Sure it’s been hot on Florida this summer, it always is. But that ain’t the sole reason.
Finally back to price the customer they seem to want is a one and done customer, non-AP, Top decile earner, family of four staying on premises, buying merchandise, eating on prem for a week asking little to no questions and never questioning LL or Genie+ and then is gone. Repeat customer and AP holders are likely not welcome as they ask too many questions.
Problem for Disney is this type of customer likely has more vacation options and the rest of everyone is staring at inflation and calculating the cost vs return. Even if affordable for the average person (debatable) I would think value has to come into the equation at some point, I just don’t see it, but for others? I’m not poor nor am I rich but could go, but as I’ve stated before, I just don’t see a cost vs benefit that makes sense to me.
Certainly curious times and always YMMV.
Then there is pricing, raising them in the past made sense as it was their only lever as it were to throttle demand. I say “only” because everyone knows their glacial pace of building anything other than DVC hotels. That and outside of the afore mentioned nickel and dime approach to cover for lack of increasing capacity in the parks. Then add new rides only replacing existing rides.
Add to this the confluence of outside events and here they find theme selves: a split fanbase, high prices, dwindling occupancy, high inflation etc and people wonder why the parks are light and they are shuttering resorts?
Sure it’s been hot on Florida this summer, it always is. But that ain’t the sole reason.
Finally back to price the customer they seem to want is a one and done customer, non-AP, Top decile earner, family of four staying on premises, buying merchandise, eating on prem for a week asking little to no questions and never questioning LL or Genie+ and then is gone. Repeat customer and AP holders are likely not welcome as they ask too many questions.
Problem for Disney is this type of customer likely has more vacation options and the rest of everyone is staring at inflation and calculating the cost vs return. Even if affordable for the average person (debatable) I would think value has to come into the equation at some point, I just don’t see it, but for others? I’m not poor nor am I rich but could go, but as I’ve stated before, I just don’t see a cost vs benefit that makes sense to me.
Certainly curious times and always YMMV.
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el_super
Well-Known Member
I think it is happening. The parks are making more and more money even with lower attendance.
Everything being outlined by Iger from way back in 2019 seems to be coming true: higher prices and lower crowds = happier guests. Happier guests spend more money. Happier guests are more willing to return later at higher prices.
I think the whole notion of revaluing the experience and realigning it to something closer to the mid 1980s is really the best course to go. Hopefully if the parks continue to make as much money as they have been, investments will come more easily in the future.
It's not an either/or scenario. They don't have to see themselves as a luxury product to justify needing to raise prices. The crowds and the lines in 2019 were out of control and the parks were too accessible. Raising prices fixes that.
This isn't really a problem at all. There were too many people going to the parks before. Changing the audience behavior to visit less frequently was part of the revaluing effort they've been engaged in since 2019. If people visit less frequently, the parks become less crowded. If they are less crowded, the guest satisfaction goes up and people are more likely to return. Maybe just every 3 to 4 years instead of every year.
PREMiERdrum
Well-Known Member
In balance, yes. This is a workable approach.
However, there have been plenty of alarms going off internally that they had pushed it too far too quickly... and their window to more easily course-correct is largely closed. They've had every tool needed to fine-tune pricing on individual components based on real time feedback - heralded as a huge benefit of this model - but instead they got themselves addicted to what they *could* charge instead of what data was telling them they *should* charge.
As other divisions increasingly returned losses, Consumer Experiences (Parks / Resorts / Retail) became leaned on more and more as a cash cow. We've been in this stage for well over a decade now, and the corporate culture and expectations have all evolved just to accept this as the norm. Underdeveloped parks with misguided and (at times) creatively bankrupt additions have compounded the issues. Continuing to demand more and more for less and less was always going to find a tipping point. Unfortunately, they blew by that several miles ago.
The Parks are still profitable, spectacularly so. But their continued placement as a one-way revenue generator is shortsighted.
There used to be a great, balanced, clear understanding that the parks could deliver much more than straight cashflow to the company. You have millions of people paying handsomely to come into your place willing and happy to be marketed to. The fact that today's WDC - a CONTENT and DISTRIBUTION company - neglects this opportunity is baffling. When was the last time we saw some in-park muscle used to promote new films or projects? We used to see special parades, shows, etc, and now that's given way to "special" cupcakes or a trailer in One Man's Dream.
With the seemingly endless chain of box office disappointments, it's easy to see at least some correlation. Are films failing due to poor awareness and marketing? Or are they not investing in this marketing because they lack confidence in the release? And if so, how have they missed on so many projects in a row?
This cycle of reverse synergy is unsustainable.
If *anyone* in the C-suite would start to understand all that they're leaving on the table, we could begin to see change.
Knowing what I know, I'm not optimistic.
erasure fan1
Well-Known Member
Or maybe not at all. The charge more to less customers is a slippery slope. It doesn't always work out so great.
el_super
Well-Known Member
I thought people generally hated it when the parks were used to just push IP? If that's really important, rest assured that some form of AVATAR EXPERIENCE may or may not eventually be put into Disneyland.
Going back to the example of Eisner, when he came in he started charging more and more for the experience and plunging more and more dollars into the parks until he realized it didn't work. Maintaining growth in the parks absolutely means spending fantastic sums of cash on the parks, and it's always been easier to pivot to a volume business where you sell cheap APs driven by cupcake sales. That was always the easy way out, so it's weird to see people advocate for it to return.
Of course though, there is really only minimal risk in trying to pivot the business now. If spending money and building new attractions doesn't work, they can always go back to cheap admissions and popcorn buckets.
el_super
Well-Known Member
It can if the customers you are shedding are the ones inclined to spend the least per visit. I think that was the whole point in making the park a better experience for fewer people. If you have to choose which group gets voted off the island, you're going to choose the ones that spend the least.
Willmark
Well-Known Member
Sure.
The old adage was “the customer is always right.”
Then it became:
“The customer who is spending dollars is always right.”
Now it’s:
“The customer in the top three deciles is always right.”
Or put another way a store is much more interested in the customer who spend $100 as opposed to $1. This should surprise no one reading this. Disney likely has mounds of marketing data, likely more than they know what to do with.
The problem for Disney is they are trying to get the customer who spends the $100
but is left wondering why they aren’t spending it.
Jrb1979
Well-Known Member
Funny how just about every other park including Universal feel the opposite. You need to keep adding new attractions to keep drawing guests.
Wendy Pleakley
Well-Known Member
Yep, Disney attendance has been "inflated" in the last decades compared to earlier because they used cheap annual passes to fill the parks. People were going to Disney parks for less than a dollar a day. Disney was fine with this because if someone paid almost no admission but bought a $20 lunch they were making $20 instead of $0 from that guest.
It did cause some degree of backlash and hesitancy from some people to drop hundreds of dollars to visit, given the impact that strategy had on crowds.
Lower crowds isn't a bad thing if the revenue per guest is better than what it was. They're also potentially providing a better experience to those people who buy full price tickets and hotel stays. Bringing them back is where the big bucks are made.
Disney parks are doing far better than they were decades ago. They may be on a downturn from the last few years but anyone who looks it from a longer term perspective can see they're doing just fine.
erasure fan1
Well-Known Member
I would agree, but I was just in Disney for a week. And by no means was it at all a better experience. It was more expensive, it was a much bigger hassle, the lines were about what they were in 2016, and there was overall less to do. So a better experience it wasn't. I've been fairly straightforward in my time when it comes to price hikes. If we are getting a better experience than I'm fine with them. I'd rather a top flight experience every couple years than a sub par experience every year. I just can't say it's a better experience.
Disstevefan1
Well-Known Member
If they wanted the family from Denver to show up every two years instead of every year for a “better experience” it looks like they are getting what they are getting.