Is Disney a Greedy Business?

[networkpro]

Walt = guest experience, Roy=financial ROI
Too many Roys and no Walts.
Irretrievably broken once IPO and shareholder experience > guest experience. Slippery slope.
One interesting perspective could be to reverse the question to ask "What if Disney was NOT a greedy company?"

There would be someone elses' name out on the Marquee.

 

[networkpro]

But that's a binary point of view. Take Disney out of it for a second - Steve Jobs, Elon Musk, and many others have shown you can drive incredible financial ROI by providing an exceptional guest experience.

I dont think Steve Jobs is an example you want to use. His paridagm was all panache premium for average sometimes less capable products locked into an isolationist silo.

 

[JoMarch]

I’m confused over all the recent price raising. I know things cost more every year, but I feel if it’s all somewhat affordable, more people would come, spend money on food, etc

 

[PostScott]

I’m confused over all the recent price raising. I know things cost more every year, but I feel if it’s all somewhat affordable, more people would come, spend money on food, etc

But almost all the time the WDW parks are packed to the brim. There used to be an off season but now I feel like its a rare occurrence to see a park have an E-ticket below 60 mins at noon (Fastpass also contributed to that so I guess there's some leeway in my statment). It seems people are still willing to pay but I honestly think that sooner or later, it'll come to a halt and they'll have to lower them. However, when they lower them people will say "Disney lowered their prices!" and once again the parks will be filled. Just my thought though.

 

[Sirwalterraleigh]

A business cannot be greedy - that is an individual trait. IMHO the problem is Wall Street expectations that companies have to grow quarter over quarter and CEOs are expected to cater to that requirement if they want to keep their jobs.

I think that quarterly growth is not always a realistic expectation or requirement. A business can be very profitable and not grow each quarter. Hewlett-Packard used to be a great study in business school. The founders firmly believed in a quality product, treating employees well, innovation and that profits would follow (ref "The HP Way"). Now, HP is a study in a failing company (post the founders' deaths) that focused too much on quarterly results.

Personification of a business is irrational, but if you want to go down that path why wouldn't you also label lots of guests avaricious?

The Supreme Court of the United States has opened the door to allowing corporations to personify themselves and express their “opinion” through the use of money.

So give it time....pretty soon all $500,000,000,000 companies will have more “individual liberties” than an abuse victim without a dime.

 

[Chef Mickey]

Disney parks make reasonable operating margins, nothing extravagant....around 20%.

The parks are a tough, capital intensive business with some significant risk in operating.

There are many businesses that make a lot higher margins and provide a lot less value.

You might fall out of your chair when you see Visa and MasterCard‘s margins for literally allowing you to use their payment system network that costs very little to operate, but that’s the business. Their operating margin is something like 65%.

Some business makes great margin, some don’t. Disney is somewhere in the middle, particularly in parks.

 

[smooch]

I dont think Steve Jobs is an example you want to use. His paridagm was all panache premium for average sometimes less capable products locked into an isolationist silo.

Not to get off topic but I really liked how they showed the dispute between Jobs and Wozniak in Steve Jobs (2015). It's hard to say whether this is good or bad, I definitely think each side of the argument has merits. This is coming from someone who has an iPhone but only uses PCs, one I built myself and a Surface Pro for school. For tinkerers and hobbyists then open systems are better, but having a closed system lets Apple fine tune the experience very well and optimize software and hardware incredibly well, much better than you could with an open system.

This sort of thing applies to the parks in a way, it's all about finding a balance between the "Walt" and the "Roy" types of operation in my opinion, as well as balancing things for "theme park fans" and families to enjoy. Things like the playground areas in the parks like the Dinosaur Excavation Site in WDW and the Frontierland Playground in DLP (just off the top of my head) are really important for families to have access to so they can let their small children run around and not deal with all the stress of a Disney vacation going from line to line to line all day. Meanwhile, theme park fans might argue they take up valuable space and don't add much cause kids are moving around all day and doing other activities. That was a kinda weird example I just came up with but it's what made sense in my head, this whole discussion boils down to balance as I said before and I don't think many of us here are qualified to say what that balance should be. We can say what we want it to be, but it's a very very complicated question there probably isn't even a definitive answer to.

 

[Goofyernmost]

Its irresponsible for Disney not to charge what people are willing to pay.. they raise the price and people still come...so raise it again.. find the market value..

As long as they take that money and maintain and upgrade their product as well as bank roll for lean times, then that is not greedy...

If they just kept the money and gave it out as bonuses and let the parks / hotels slide and run down, then that would be greed..

I guess what you are saying is that it isn't so much that Disney charges to much now, it is actually that they had massively underpriced themselves for decades. Of course the upside to that was that Disney made profits and people, other then the elite and comfortably wealthy could actually experience the magic. So I guess it should be the way it is now because money is everyone's primary measurement of success. I suppose as long as credit exists, everyone can be wealthy even if just for that 15 minutes of fame.

My wife was born and raised in Montreal, so she was familiar with the city and that became a target location for us. I remember as a young married couple, with two children at the time, my wife and I would get a relative to take care of the girls and we would get a hotel room in downtown Montreal, go out to dinner, see plays, go over to the old Expo 67 site, explore the underground City of Montreal, and live like royalty. I can remember heading back home with credit cards maxed out and only pennies in my pocket, praying that nothing happened to my car (which at best would be considered a banger) and we could get home without incident. My motto at the time was... they don't know if I am J.D. Rockefeller or a pauper as long as my card still has room on it.

BTW, have you ever seen what they give out for bonus's to the upper echelon while the people that actually make the magic are having to eat noodles and sleep in their cars? At least we know where those extra charges go.

 

[John park hopper]

So how much of the park/resort profits go to prop up all of the other business/IP purchases Disney has made lately?

 

["El Gran Magnifico"]

I'm going to go with "predatory". There is not an avenue Disney would not exploit.

Sell a park 3 times in a day? Check. Continually raising prices for not only tickets but for food and beverage / merchandising that routinely outpaces CPI? Check. Nickel and Dime tactics throughout the resort? Check. Encouraging the utilization of credit/financing (DVC, Disney Credit Card Kiosks, MB charges)? Check. Catering "experiences" to the financial class of guests? Check.

 

["El Gran Magnifico"]

As long as they take that money and maintain and upgrade their product

And therein lies the problem. Because the food quality, the ride maintenance, and overall experience has gotten soooo much better. /sarc

 

[Lilofan]

I guess what you are saying is that it isn't so much that Disney charges to much now, it is actually that they had massively underpriced themselves for decades. Of course the upside to that was that Disney made profits and people, other then the elite and comfortably wealthy could actually experience the magic. So I guess it should be the way it is now because money is everyone's primary measurement of success. I suppose as long as credit exists, everyone can be wealthy even if just for that 15 minutes of fame.

My wife was born and raised in Montreal, so she was familiar with the city and that became a target location for us. I remember as a young married couple, with two children at the time, my wife and I would get a relative to take care of the girls and we would get a hotel room in downtown Montreal, go out to dinner, see plays, go over to the old Expo 67 site, explore the underground City of Montreal, and live like royalty. I can remember heading back home with credit cards maxed out and only pennies in my pocket, praying that nothing happened to my car (which at best would be considered a banger) and we could get home without incident. My motto at the time was... they don't know if I am J.D. Rockefeller or a pauper as long as my card still has room on it.

BTW, have you ever seen what they give out for bonus's to the upper echelon while the people that actually make the magic are having to eat noodles and sleep in their cars? At least we know where those extra charges go.

Cast member sleeping in their cars I can see. In my younger days working in hotels, I used to work turnaround shifts where I had a few hours in between shifts. It made no sense to go home so at times I just slept in my car and showered in the locker room. When I had jobs with increasing responsibility, I work with teams on all day and late into the night projects. With presentations the next morning, the hardwood floors in my office made for a few hours sleep instead of going home. Visine, coffee and a shave and I'm ready to go.

 

[Goofyernmost]

Cast member sleeping in their cars I can see. In my younger days working in hotels, I used to work turnaround shifts where I had a few hours in between shifts. It made no sense to go home so at times I just slept in my car and showered in the locker room. When I had jobs with increasing responsibility, I work with teams on all day and late into the night projects. With presentations the next morning, the hardwood floors in my office made for a few hours sleep instead of going home. Visine, coffee and a shave and I'm ready to go.

I guess as long as you are voluntarily sleeping in your car, hardwood floors, etc. then there is nothing wrong with it. However if you are doing it because you have no place else to go, there is something wrong with that in this country. Especially if someone is working their butts off to try and make a living from a massively rich company.

 

[MAGICFLOP]

I guess what you are saying is that it isn't so much that Disney charges to much now, it is actually that they had massively underpriced themselves for decades.

BTW, have you ever seen what they give out for bonus's to the upper echelon while the people that actually make the magic are having to eat noodles and sleep in their cars? At least we know where those extra charges go.

No offense, but you lost me with the Montreal story..

Early years, yeah it was a bit under priced.. My point is they need to get what is a fair price for the health and survival of the company.. what if, what if, what if, what it the corno virus hit WDW and Orlando hard for the next 2 months and they had to halt operations even, if they dont have the means to maintain and keep the employees, the parks could collapse.. thats the gist of my meaning..

 

[Goofyernmost]

No offense, but you lost me with the Montreal story..

Early years, yeah it was a bit under priced.. My point is they need to get what is a fair price for the health and survival of the company.. what if, what if, what if, what it the corno virus hit WDW and Orlando hard for the next 2 months and they had to halt operations even, if they dont have the means to maintain and keep the employees, the parks could collapse.. thats the gist of my meaning..

It was simple, people will spend what they don't have. That is why Disney gets away with it and why they could have done it years ago. Is it right to exploit people with no concern for their well being. Probably is legal, they don't owe the world a product that is affordable to everyone. It just seems that the more people you make happy, the larger families grow and become adults with children of their own the more future business they give to a place that the family used for vacations. My wife and I started out as the two of us. there are now 9 of us. Three of the older grandchildren are now able to become parents themselves. Can Disney charge more and more? Should they? Well that is a different question altogether.

Sorry I probably didn't tell that story in a clear way. What you said is true. Many things could knock the pegs out from under the parks. It wouldn't take all that much. If you make your paying audience smaller it is just that much harder to make up the difference. Just in the last two days the Dow Jones has dropped over 1900 points. That doesn't mean much to me, but for those with millions invested that amounts to a huge chunk of change. I've been watching the Market closely since I retired in 2010 and I don't recall it ever dropping that far in such a short time.

 

[MAGICFLOP]

It was simple, people will spend what they don't have. That is why Disney gets away with it and why they could have done it years ago. Is it right to exploit people with no concern for their well being. Probably is legal, they don't owe the world a product that is affordable to everyone. It just seems that the more people you make happy, the larger families grow and become adults with children of their own the more future business they give to a place that the family used for vacations. My wife and I started out as the two of us. there are now 9 of us. Three of the older grandchildren are now able to become parents themselves. Can Disney charge more and more? Should they? Well that is a different question altogether.

Sorry I probably didn't tell that story in a clear way. What you said is true. Many things could knock the pegs out from under the parks. It wouldn't take all that much. If you make your paying audience smaller it is just that much harder to make up the difference. Just in the last two days the Dow Jones has dropped over 1900 points. That doesn't mean much to me, but for those with millions invested that amounts to a huge chunk of change. I've been watching the Market closely since I retired in 2010 and I don't recall it ever dropping that far in such a short time.

Ok, after reading this post, I do understand where you were going..

The behavior you are describing in inconsequential to their spending at Disney. The behavior of over spending is their personal responsibility and not the fault of Disney. (to clarify) If Disney didn't get their money, someone or something else would.
You are a bit older than I am, I am in eyesight of retirement .. so I assume you will relate to this, in the past, when a trip to Disney was planned, it was a year out and a 'vacation club account was opened at the bank' and after one year you got your 52 x $25 plus one extra $25 from the bank and that was your money to go to Disney. If someone is so impulsive that they would drop money for the trip on a card, then they will be in trouble financially their whole life, even if Disney did not exist... I follow a simple rule.. nothing on the card that will not be paid in full at the end of the month..

People hate my previous post because they think Disney should be affordable to travel to 2-3 times a year.. In the 70's and 80's I never heard of people that went yearly.. I think what started it was 911 and then the 2008 housing, Disney was forced to become more of a value, 2001 I bought an annual pass for like $140 (there abouts) Disney was empty and hanging on. Now, we are back to reality.. Hey, I want a new car for $5000, but those days are gone too..

 

[Trackmaster]

People need to remember that there are alternative theme parks, and ways to get on rides if people can't afford Disney. Universal is a similar price, but you can get away with a trip a little cheaper or just go if you're sick of Disney. If you really want to save money, the SEAS parks (SeaWorld/Busch Gardens), Cedar Fair parks (Cedar Point, Knott's Berry Farms, Kings Island, etc.), the Six Flags Parks, Hershey Park, Silver Dollar City, and Dollywood are all great options too (and there are many more of course in America here).

I don't think that people should have a problem with a premium brand giving a premium experience charging premium prices. If people are being priced out, there are great parks all across the country that people will love at a huge discount compared to Disney.

Just like how middle income people shouldn't be ed about Porsche or Ferrari jacking their prices up where there are tons of safe, reliable, and affordable cars on the market that work fine.

 

[macefamily]

Disney is a business. Doesn't matter if they're manufacturing widgets or making wishes come true; it's a business. It's what our capitalistic society is built on. They're in it for a profit. Along the way they employ thousands of people who can raise their families because of the money that Disney pays them and the benefits they offer them. Those people chose to work for Disney. I have no problem with Disney making a profit, however, if they raise prices too much, my family may choose to find our entertainment elsewhere. Maybe Bernie can promise that admission to Disney will be free and everyone is invited to join the "33" club free of charge.

 

[OG Runner]

The Disney World Parks and Resorts, as mentioned are a dichotomy. You ask if Disney is greedy, and at the same time note
the parks are busier and busier all the time. They have increased their prices, but at the same time they are as busy as they
ever have been, even while adding more rooms. My thought is they are doing what the market will bear. If the attendance in
both the parks and resorts suddenly took a down turn due to a price increase, I am sure they would adjust, but as it is right
now, increases of all types are not keeping anyone away.

 

[debg32]

Disney is a business and of course wants to make profits. I have no problem with raising ticket prices, but not at the rate they have been, Yes, they have to add new attractions. However they are doing that and not fixing rides that have broken down areas. They are not taking care of the older rides. They are adding too many resorts. There is not enough room in the parks. I do not agree with allowing "off property" resorts access to what was only for resort guests. When they first had extra magic hours (I believe it was around 2003), it was only the Magic Kingdom and it was resort only guests and an additional $10 charge. As for these additional "after hour" parties, they are overpriced and cut into time that those who can only afford the park passes are being ripped off. They can't spend the time they want in the parks. Every park used to have extra magic hours now it is few because of these "special event/extra priced ticket" events. A family member is a DVC owner and even that is not worth it any longer. We go every other year, banking 1 year's points, so we can stay a longer period of time and try to do what we want to do. Would I purchase DVC now? NO! Not enough perks, parks overcrowded, have to plan everything months prior to your trip, some up to a year and then still unable to get something you may have wanted to do. Will I still go? Yes. However, we are all adults now and prefer time at the pool, golf, water parks, etc. We now plan our time around dining reservations in our favorite restaurants and not park time. Eventually I think this will be a place for the rich only. The rest of us are being priced out.