It seems like more competition in the Orlando theme-park space is bad for the consumer.

[HansGruber]

Competition is always supposed to benefit the consumer by keeping companies in check but it seems like in the Orlando theme park space, this notion is non-existent. If either Disney or Universal were to magically drop off the map, I can't foresee the surviving company having much more room to actually gouge the customer any further; both companies are already on the verge of pricing-out consumers. Which begs the question, how exactly does the consumer benefit from this competition?!

Even Sea World, who is a step-sibling, has joined the fray with single day ticket prices that are almost in line with both Disney and Universal. None of these parks, not even Sea World, attempts to cannibalize the customer-base of the other. These parks are so incredibly brash, they price their tickets with an all-or-nothing approach; pay an outrageous price for a few days, or pay a little more on top of that for a full week (or more).

Given Universal's Epic Universe plans, I would argue that such an inclusion into the Orlando theme park arena will actually hurt the overall consumer as Universal will most certainly increase prices on the new park which will lead Disney to justify an increase in their prices as well.

Thoughts?

 

[bUU]

Competition is always supposed to benefit the consumer by keeping companies in check but it seems like in the Orlando theme park space, this notion is non-existent.

There is no reason to believe that that is true. What would "the Orlando theme park space" look like for the consumer if there weren't any competition? If you think it would look the same as it looks now, then you're mistaken.

I would guess that your concern stems from a belief that competition should make everything excellent and affordable to all - that's not the case.

If either Disney or Universal were to magically drop off the map, I can't foresee the surviving company having much more room to actually gouge the customer any further; both companies are already on the verge of pricing-out consumers.

Your foresight is pretty limited, then. The pricing wouldn't be the variable that would change - rather, what's offered and how would change.

The reality is that both companies are aces at riding the crest of the wave - ascertaining the available discretionary income, and determining the optimal pricing model to extract the greatest amount of it. The way free markets work, the available discretionary income doesn't change based on the amount of competition, but it does affect how much each competitor will do to acquire that income for themselves.

It's a hard lesson for consumers, I know, but whether we're talking about theme parks, or video entertainment, or airline travel - even though it doesn't seem like it, consumer are already greatly benefiting from competition as compared to how things would be without it.

 

[Touchdown]

Single tickets are high because each chain wants you to spend your entire week with them. Stretch out pricing to five-six days and you will notice that SWAPs (Sea World, Aquatica, BGT, Discovery Cove) are by the cheapest option, followed by Universal and then most expensive Disney.

 

["El Gran Magnifico"]

The "Theme Park" competition is overstated. Sure Disney and Uni (and to a lesser extent Sea World) do have a sort of competition/one upmanship thing going on. And of course, they are always trying to gain more of the "Theme Park" market, and the revenue associated with it. And to that extent they compete.

Disney and Universal's main competitors are other forms of vacations. They compete against the land based destinations (Vegas, Europe, Hawaii, The Caribbean etc) and cruises. That is their true competition. In order for Disney and/or Universal to go after the discretionary spending of the "theme park" visitor, they first must get that prospective visitor to make the decision to go to a theme park in the first place vs spending a week in Spain or Italy.

Regardless if there were only 1 theme park or 16 of them, if they can't present value and experience for the consumer to visit a theme park vs other forms of vacation options.......there are your checks and balances.

 

[MrMcDuck]

Price competition is not the only form of competition. There are other ways to get customers. In the theme park world, one major and obvious way is to build new attractions (and sometimes new parks).

Anyway, if one of the big two were to magically drop out, you'd still ticket increases from time to time.

As for SeaWorld, you will notice that the single day price is almost the price of their cheapest annual pass. That's no mistake. They seem to be taking the Six Flags approach to their parks.

 

[MisterT800]

Disney and Universal's main competitors are other forms of vacations. They compete against the land based destinations (Vegas, Europe, Hawaii, The Caribbean etc) and cruises. That is their true competition.

BINGO! For our family, the price increases the past 4 years pushed us over the tipping point where we would prefer to use the $$$ to go to Hawaii or a cruise which we did last year. This year, it will be 10 days in Italy.

 

[Shouldigo12]

The competition is less "who can offer the lowest prices" and more "who can make their park attractive enough that the consumer is willing to pay what we want to charge". The competition comes from knowing that if they're not able to make their product worth the price, there's an alternative right now the road for consumers to go to instead. Lowering the price would add more value to the tickets, sure. But they don't want to lower the price, they want customers to see their current price as worth it, if that makes sense.

 

[Disstevefan1]

I see your point, when Disney, as the leader, raises prices it allows the others to raise their prices too, but all must provide competitive value to make it worth the price of admission.

What someone sees as Value is subjective. I love SeaWorld and one its (possibly former values) to me is its “a vacation from the crowds”.

That said SeaWorld is getting more and more crowded as it recovers from the fake news in Blackfish.

 

[JIMINYCR]

I see it much differently. Competition helps the consumer by bringing in new ideas, concepts, types of entertainment and thrills that provide entertainment. There cannot be stagnation with a competiitor biting at your heels, you must move forward. Yes, theres going to be a cost for improvement which gets passed onto the consumer but the consumer also gets more value for what they are paying for in the additional of and improvement in the entertainment they receive. No matter what form of entertainment you look for, youre going to pay for it and the price you are willing to save for and pay out will be determined by how much you want it. Disney and all the others provide the thrills no others provide, so they do hold all the cards because of their uniqueness. The consumer decides its value is enough to budget and save for it.

 

[HansGruber]

Universal' AP is wayyyy cheaper than Disney.
Universal is the only thing that is keeping B Iger and Disney Corp from completely price gouging.

So, Disney is just moderately price gouging due to competition instead of completely price gouging?

We wanted to spend a day or two at Universal on our most recent trip. Our pricing options for a family of 4 were either $700 for a single day pass or $1,100 for a 5 day pass (they were running a 3 for 2 special). Needless to say, we skipped Universal and went to SW for $400. Arrogant pricing model on their part.

 

[HongKongFu]

Thoughts?

"Mclaaaaaaaane"

 

[HongKongFu]

The way free markets work, the available discretionary income.......

I'm sorry but once you invoke such a rhetorical nugget with the full intention of applying it to USA you lose credibility no matter what fancy economic term comes after it.

What's all this "free markets" stuff you're talking about????

 

[Benjamin_Nicholas]

Competition is always supposed to benefit the consumer by keeping companies in check but it seems like in the Orlando theme park space, this notion is non-existent. If either Disney or Universal were to magically drop off the map, I can't foresee the surviving company having much more room to actually gouge the customer any further; both companies are already on the verge of pricing-out consumers. Which begs the question, how exactly does the consumer benefit from this competition?!

Even Sea World, who is a step-sibling, has joined the fray with single day ticket prices that are almost in line with both Disney and Universal. None of these parks, not even Sea World, attempts to cannibalize the customer-base of the other. These parks are so incredibly brash, they price their tickets with an all-or-nothing approach; pay an outrageous price for a few days, or pay a little more on top of that for a full week (or more).

Given Universal's Epic Universe plans, I would argue that such an inclusion into the Orlando theme park arena will actually hurt the overall consumer as Universal will most certainly increase prices on the new park which will lead Disney to justify an increase in their prices as well.

Thoughts?

You clearly didn't go to business school.

They are nowhere near pricing out the consumer. Just look at attendance figures. Parks are doing fine, even if the blogosphere would like to think otherwise. They claim the sky is falling on a weekly basis.

Bottom line... Competition benefits the consumer if it first benefits the company. Look at the theme parks like the airline industry and you'll have an easier time swallowing the price hikes.

You're only considering ticket prices in your schpiel. What you're not saying is the investment that all parks are making and how much that costs. BILLIONS. That's not a gift to us. That needs to be returned (and then some).

More bottom line, not everything in life is affordable (especially for a family). Disney and Uni aren't in the business of just giving it away and frankly, if it's too expensive, you always have other options. Like the airline industry, there will always be someone there to buy that available coach or first class seat at full-fare.

 

[No Name]

Which begs the question, how exactly does the consumer benefit from this competition?!

If it wasn’t for Universal’s increased investment and success, I can guarantee you that the majority of investments greenlit in the past decade wouldn’t exist. For better or for worse, but let’s face it, mostly for worse. Remember Iger claimed the Orlando market was mature, and the company invested in the NGE system that was intended to carry the resort for years without them having to build new attractions. Universal had to hand Disney’s to them multiple times for Disney to finally change their stance.

So while prices haven’t been affected much, the competition has put pressure on the quality of the parks.

 

[HansGruber]

You clearly didn't go to business school.

They are nowhere near pricing out the consumer. Just look at attendance figures. Parks are doing fine, even if the blogosphere would like to think otherwise. They claim the sky is falling on a weekly basis.

Bottom line... Competition benefits the consumer if it first benefits the company. Look at the theme parks like the airline industry and you'll have an easier time swallowing the price hikes.

You're only considering ticket prices in your schpiel. What you're not saying is the investment that all parks are making and how much that costs. BILLIONS. That's not a gift to us. That needs to be returned (and then some).

More bottom line, not everything in life is affordable (especially for a family). Disney and Uni aren't in the business of just giving it away and frankly, if it's too expensive, you always have other options. Like the airline industry, there will always be someone there to buy that available coach or first class seat at full-fare.

“Giving it away”?! Did you go to school for hyperbole?
An enterprise that PROFITS over 4 BILLION dollars in a single year is hardly close to “giving it away.”

And clearly I’m only considering price in my “schpiel” because it’s the single greatest factor for the wide majority of park visitors.

 

[HansGruber]

If it wasn’t for Universal’s increased investment and success, I can guarantee you that the majority of investments greenlit in the past decade wouldn’t exist. For better or for worse, but let’s face it, mostly for worse. Remember Iger claimed the Orlando market was mature, and the company invested in the NGE system that was intended to carry the resort for years without them having to build new attractions. Universal had to hand Disney’s *** to them multiple times for Disney to finally change their stance.

So while prices haven’t been affected much, the competition has put pressure on the quality of the parks.

Disney Parks operating profit increased 100% over the past 5 years. How exactly did Universal impact such a growth?

 

[Tom Morrow]

Universal' AP is wayyyy cheaper than Disney.
Universal is the only thing that is keeping B Iger and Disney Corp from completely price gouging.

If you're a Florida resident...
Universal's cheapest Florida resident AP for two parks is $269.99 = $134.99 per park.
Disney's cheapest Florida resident AP for four parks is $349.99 = $87.50 per park.

So it is cheaper, but Disney's is a better value.

 

[No Name]

Disney Parks operating profit increased 100% over the past 5 years. How exactly did Universal impact such a growth?

Yes, operating profit increased in part because attendance increased in part because investment increased. And Universal prompted that investment.

If you’re making a point of some sort it’s been missed.

 

[seascape]

The basic premise of the original posters is right. After Epic Universe opens, Universal will be able to fully compete with WDW for international tourists and full vacationers. Neither company will need the local residents. Locals don't stay in hotels or timeshares and eat all their meals at restaurants. Both Disney and Comcast are only interested in maximizing their profits. That is why Epic Universe is next to the Orlando Convention Center and Disney expanded CS. They want business customers with their big expense accounts.

The one thing Universal is missing is the timeshare portion of the business and that is a major problem if and when we have a major recession. Disney has all those timeshare owners who are guaranteed to visit every year and if there is a problem with themepark attendance, they can offer some great discounts without needing to offer them bgg to everyone. If Universal really wants to compete with WDW they should make that nice big building in Epic Universe a timeshare, guaranteeing yearly customers.

 

[dreamfinder912]

I don't know that Uni and Disney can directly compete over the same vacationer. I think the person who said both companies compete to keep people from doing a different TYPE of vacation are if not correct, more accurate. Uni and Disney both satisfy two totally different wants from the same theme park visiting guest. Growing up we went to Disney several times a year but once my sister and I were the right age our parents took us to Universal, because what we wanted to do/see wasn't something Disney could reeeeally provide.

For a better example, take a look at their Halloween activities. Disney has MNSSHP, which has some great shows, a parade that's...well it still has a great soundtrack and elements even if some things have been shoved into it...new fireworks, and characters and candy EVERYWHERE. It screams PLEASE TAKE YOUR YOUNG CHILD HERE (or for those of us who don't have/want kids...take your inner child here) Meanwhile at Universal the goal is "we're gonna scare the ever living crap outta you AND YOU'RE GONNA LIKE IT" and for the most part...that represents two completely different types of theme park goers. MNSSHP and HHN aren't competing for the same family. They're each there for the people who don't want to be at the other's event.