Possible Increase in Ticket Prices

[CaptainJackNO]

What do you think?

Anyone else think it's bad business to raise ticket prices in the middle of a recession where the company is already giving away free dining and hotel discounts to encourage people to vacation at WDW? Lower prices would eliminate some of the need to give away dining and hotel discounts, right?

Just my thinking. What do ya'll think?:shrug:

I mean, when you have to offer freebies to encourage people to choose WDW, isn't raising ticket prices counter productive? Puzzling to me. Especially when virtually every economist predicts 2011's economy to be worse than 2010. I am happy with many of the management decisions regarding expansion and refurbishments around WDW, but these decisions concerning cost do not make any sense to me. Seems that holding all prices where they are would be the best decision. The way the economy is, it seems that 15 to 20 bucks per person could be enough to change a mind. I just think that holding prices stable would, at least, reduce the need to offer freebies. For many people, the second they read the headline "Disney increases park entrance fees" will stop them from even looking into whether they can afford a trip. I know you get alot for your money at WDW, it just appears that timing is no where near right for ANY prices increases.

 

[Ziffell]

Anyone else think it's bad business to raise ticket prices in the middle of a recession where the company is already giving away free dining and hotel discounts to encourage people to vacation at WDW? Lower prices would eliminate some of the need to give away dining and hotel discounts, right?

Just my thinking. What do ya'll think?:shrug:

I mean, when you have to offer freebies to encourage people to choose WDW, isn't raising ticket prices counter productive? Puzzling to me. Especially when virtually every economist predicts 2011's economy to be worse than 2010. I am happy with many of the management decisions regarding expansion and refurbishments around WDW, but these decisions concerning cost do not make any sense to me. Seems that holding all prices where they are would be the best decision. The way the economy is, it seems that 15 to 20 bucks per person could be enough to change a mind. I just think that holding prices stable would, at least, reduce the need to offer freebies. For many people, the second they read the headline "Disney increases park entrance fees" will stop them from even looking into whether they can afford a trip. I know you get alot for your money at WDW, it just appears that timing is no where near right for ANY prices increases.

Has the company announced a price increase?

 

[CaptainJackNO]

Has the company announced a price increase?

No, not yet, but all the speculation that I have read here and on other sites is that an increase is expected. While I understand the need to make money and keep people working, I just don't see now as the time for price increases, if, in fact, there is one.

 

[Ziffell]

No, not yet, but all the speculation that I have read here and on other sites is that an increase is expected. While I understand the need to make money and keep people working, I just don't see now as the time for price increases, if, in fact, there is one.

Well hopefully your logic will win out. I agree with your rationale. I don't think a price increase would be wise business.

 

[CaptainJackNO]

Ziffel, that's what puzzles me. They are offering free dining which, for a family of four for a five day trip runs about 110 bucks a day. Why raise admission prices by a few dollars a day while giving away anywhere from 42 to over 100 dollars away on food? As you said, does not make sense.

 

[Ziffell]

Ziffel, that's what puzzles me. They are offering free dining which, for a family of four for a five day trip runs about 110 bucks a day. Why raise admission prices by a few dollars a day while giving away anywhere from 42 to over 100 dollars away on food? As you said, does not make sense.

If anything, it should be the other way around. There should be an enticement to get people through the gates (e.g. lower admission price). Once there, people would likely pay full price because they have no choice.

The only possible explanation I can think of is that maybe through guest surveys they have found that a lot of people decide not to go at all because of the high food prices. So then the strategy might be, lower the food prices and advertise that as a great deal. Then compensate for that lost revenue by raising ticket prices and hope no one notices.

Any word on when the prices might supposedly go up? I'm going in a few weeks and haven't bought tickets yet.

 

[CaptainJackNO]

If anything, it should be the other way around. There should be an enticement to get people through the gates (e.g. lower admission price). Once there, people would likely pay full price because they have no choice.

The only possible explanation I can think of is that maybe through guest surveys they have found that a lot of people decide not to go at all because of the high food prices. So then the strategy might be, lower the food prices and advertise that as a great deal. Then compensate for that lost revenue by raising ticket prices and hope no one notices.

Any word on when the prices might supposedly go up? I'm going in a few weeks and haven't bought tickets yet.

I read on Mouseavers that the rumors are that prices are going up. They are pushing people to purchase now before the increase. I tell you though, Disney must have a bunch of pinheads for corporate finance guys because anyone with common sense knows you hold prices steady during a recession. Regardless of giveaways, I think ticket and hotel price increases are going to hurt attendance long term. Especially if the recession deepens as is now being predicted.

 

[Rob562]

Ziffel, that's what puzzles me. They are offering free dining which, for a family of four for a five day trip runs about 110 bucks a day. Why raise admission prices by a few dollars a day while giving away anywhere from 42 to over 100 dollars away on food? As you said, does not make sense.

The hotels are a big money maker for Disney. Empty hotel rooms are bad for the bottom line. Free Dining (which is only free when paying Rack Rate for the room) is used to increase the occupancy rate in the hotels.

Having the hotel rooms filled (at Rack Rate) is worth more than the relativly smaller loss on food revenues.

-Rob

 

[CaptainJackNO]

The hotels are a big money maker for Disney. Empty hotel rooms are bad for the bottom line. Free Dining (which is only free when paying Rack Rate for the room) is used to increase the occupancy rate in the hotels.

Having the hotel rooms filled (at Rack Rate) is worth more than the relativly smaller loss on food revenues.

-Rob

I understand what you are saying. But, it still affects the bottom line. The problem, in my opinion, is that the value resorts aren't so value anymore. So, even with free dining, they will get to a point where they will out price a significant number of people within that value profile. Also, some people who have been staying moderate may have to drop down to value due to cost and some people are unwilling to do so. The hardcore fanatic like many of us would, but the average visitor, I am not so sure.

Clearly you must be correct on your assertion;however, we cannot deny that, as many people on here have been warning over the years, that Disney will begin, if they are not careful, to begin pricing some people out of the market for a WDW vacation. Eventually, that can cause more harm than good.

Also, if you have to keep raising hotel rates for profit reasons, isn't the free dining plan kind of driving the monster in some way?

 

[powlessfamily4]

I think the big question is if they go up what % are we talking about? If they raise the ticket prices even as much as $3, given the sheer volume of people attending the parks, you stand to recoupe substantial revenue that will offset the giveaways. As far as the free dinning, does anyone have the financial breakdown on what each meal actually costs WDW to produce? I wouldn't be suprised to find out that two paying families levels the playing field of three freebies. Which breaks you even on the food and adds resort and ticket revenue to your bottom line

Reality is that to date, they are open and operating and and it is lucrative. being a business woman I can tell you that from a street prospective often times the whys and what fors are confusing and make no sense, but the business plan in place balances the P & L in the long run.

 

[mickaroonie]

Disney has raised ticket prices Aug. 1st for I know the last 3 years, so I just expect it to happen every year on Aug. 1st.

 

[toetheline29]

I think the big question is if they go up what % are we talking about? If they raise the ticket prices even as much as $3, given the sheer volume of people attending the parks, you stand to recoupe substantial revenue that will offset the giveaways.

This is a great point. AllEars* has a page that lists historic ticket prices, including what increases have been the past few years; I quickly looked again just now, and according to this, the increases last year seem to have been pretty consistently less than $10 per person ($6 for adults, $8 for child tickets). I realize that for a family, for example, this can add up quick, but it's not like the price of a single ticket jumped $30 overnight. I read on another Disney board* the other day that the ticket increases amount to about a 3% increase. According to that thread (and my limited economic knowledge...), a "normal" rate of inflation for the United States is 3%. If this is all correct, it's possible Disney is simply adjusting it's prices for inflation. If they did not do so, they would make increasingly less of a profit over time. Thus, if this is all correct, it makes good business sense to raise ticket prices even though the economy is still not what it was.

If and how the Dining Plan is profitable for Disney is a whole separate discussion, and my understanding of it isn't good enough to comment one way or the other. I will point out though that the Dining Plan covers less now than it used to (something about desserts and/or appetizers, I believe).

*I would provide links to these, but I don't think we're allowed to (certainly not to the other Disney board). The AllEars page shouldn't be too hard to find, though.

 

[majorrfb]

Price increase-bet on it.

Disney has raised ticket prices Aug. 1st for I know the last 3 years, so I just expect it to happen every year on Aug. 1st.

Price increases appears to be a right of passage for Disney. Your statement is right on, so expect the increase tomorrow (Aug. 1). I (we) love going to the world yearly. Most years we try to attend twice yearly. No longer, only
one annual trip now during the Christmas Holiday season. With a slow economy, constant price increases in every facet of life, the average American has to select how money is being spent very carefully. :shrug:

 

[timeman]

I doubt we will see the increase this Sunday. If they were increasing the ticket prices tomorrow you would have heard about it on the news yesterday or today. The last two years they have announced the price increase on Friday for that Sunday. It has been the first weekend of August both years. If they do decide to increase ticket prices again this year it will probably again be the first full weekend of August, which isn't until next weekend.

The last time there was no price increase on ticket prices was in 1988, so expect a price increase either next weekend or sometime before the end of the year.

 

[muse1983]

I really dont have a huge problem with a price increase as long as it's minimal. I mean think about it, they increase the tickets by $2.00 and bring in a few mill extra strictly from that.

 

[Testtrack321]

I think there will be a hike this year, but not an across the board increase. Harry Potter while not threatening attendance averages, is threatening the 7 day WDW only vacation.

My bet is that they'll increase the 1-4 day magic your way tickets to varying degrees, and anything beyond that will be the same price, making it look even cheaper to stay longer on property.

 

[wizards8507]

Ziffel, that's what puzzles me. They are offering free dining which, for a family of four for a five day trip runs about 110 bucks a day. Why raise admission prices by a few dollars a day while giving away anywhere from 42 to over 100 dollars away on food? As you said, does not make sense.

Key distinction there. You're assuming that people who didn't get free dining would go ahead and either purchase the plan or buy the food themselves. A bunch of those people would either skip the trip all together of find other ways to save on food (eating off site, etc etc). Free dining keeps them on property and encourages them to spend more money in shops etc, or to just come in the first place, which, as I mentioned, is no guarantee without free dining. Furthermore, when Disney "gives away" a hamburger, for example, they're not losing the $10.00 selling price. They're losing the COST for them to purchase the equivalent of one beef patty, one bun, 1oz ketchup, etc. Considering a McDonald's hamburger costs the company $0.15 to make (including paper goods), giving away a quick service meal is only about a $1 to $2 expense for the company, considering the bulk in which they purchase. Giving away $2 worth of product is fantastic if the customer perceives this as a $10 savings and then goes and spends that $10 (or even half, $5) elsewhere.

 

[wizards8507]

I think there will be a hike this year, but not an across the board increase. Harry Potter while not threatening attendance averages, is threatening the 7 day WDW only vacation.

My bet is that they'll increase the 1-4 day magic your way tickets to varying degrees, and anything beyond that will be the same price, making it look even cheaper to stay longer on property.

Another possibility is a return of the "buy 4 days, get 3 free" as a replacement of free dining. The PERFECT demographic as far as WDW is concerned is 36 year old mother and father, 12 year old son, 8 year old girl who stay ON PROPERTY for six or seven nights and DO NOT RENT A CAR. This is why they are so happy to provide Magical Express service. If you're *trapped* on property, then there's nowhere to spend money *except* at WDW-owned locations. Free hotel stays, free dining, etc, are all designed to make that week-long vacation exclusively Disney. It's not just keeping people away from Universal or Sea World. It's keeping people away from Medieval Times, the gift aisle at Wal-Mart, Applebees, etc.

 

[Horizons19]

I asked on another thread related to this last night, if you already have a package (resort & park tickets) reservation in place but have only paid the deposit to date, would my package price increase if they do raise the ticket prices? Am I locked in just having the reservation or only locked in if it is fully paid? In the past when I have called about an existing reservation they always say they can't change anything on it unless I say to (as I usually say to them I just want to double check not change anything! ). This also makes me wonder if you are not locked into the price on your reservation until you pay it off fully then can they also take away discounts that my be on your reservation?

Thanks!

 

[Hrudey3032]

This is a great point. AllEars* has a page that lists historic ticket prices, including what increases have been the past few years; I quickly looked again just now, and according to this, the increases last year seem to have been pretty consistently less than $10 per person ($6 for adults, $8 for child tickets). I realize that for a family, for example, this can add up quick, but it's not like the price of a single ticket jumped $30 overnight. I read on another Disney board* the other day that the ticket increases amount to about a 3% increase. According to that thread (and my limited economic knowledge...), a "normal" rate of inflation for the United States is 3%. If this is all correct, it's possible Disney is simply adjusting it's prices for inflation. If they did not do so, they would make increasingly less of a profit over time. Thus, if this is all correct, it makes good business sense to raise ticket prices even though the economy is still not what it was.



If and how the Dining Plan is profitable for Disney is a whole separate discussion, and my understanding of it isn't good enough to comment one way or the other. I will point out though that the Dining Plan covers less now than it used to (something about desserts and/or appetizers, I believe).

*I would provide links to these, but I don't think we're allowed to (certainly not to the other Disney board). The AllEars page shouldn't be too hard to find, though.

The thing is less than 10 years ago I was able to buy a 3 day pass for $129 where as now it is like $230. In another 10 years it maybe $330. At what point does Disney overdo it?? Some feel they already have. While I think most of us on here wouldn't usually buy a 1 day pass there are those out there that do and probably won't be back if the cost stays that way.