The “wealthy” is not going to work

[Tha Realest]

Disney must be seeing a big boost from all the current forgiveness programs also, last year millions of people didn’t have to pay rent, this year millions of people aren’t making student loan payments… that “creates” hundreds, if not thousands, of dollars of disposable income, I wouldn’t be surprised if a lot of that isn’t ending up in Disneys pockets.

Being told you don’t have to repay your debt just incentivizes going deeper into debt.

I think there's a lot to this. We have friends that never left town for the last two years, and finally went on a vacation, dropping big bucks at Disney. That is not replicable. There are tons of people that are still cash heavy, or using credit from cancelled vacations.

What happens when that sugar rush is over, and the market corrects and interest rates rise to stymie inflation and...there's a recession on par with 2001/2008? What will attendance look like then?

 

[mkt]

As an idea of the area, if someone is looking for a small 1-2 bedroom 1100sqft home is 110k vs 4bed/5000+sqft/3 acre McMansion is 850k at the top end even with housing prices what they are now.

What area? I'm a cash buyer at those prices.

 

[Trauma]

I also think about the new Universal Park. If the recession comes (and it will eventually) will the more attractive pricing of a Universal vacation coupled with a 3rd gate make a dent in Disney?

Someone told me that Disney is happy that the 3rd park is being built because it will help lower attendance.


I’m pretty sure Disney is going to want every guest it can get in a downturn.

 

[Patcheslee]

What area? I'm a cash buyer at those prices.

Jackson Co Indiana

 

[jloucks]

Its costing more and more to vacation at WDW, absolutely true.

Annual income is not the measuring stick.

Disposable income is the measuring stick.

There are many families that make less than 200K but have no debt and have low monthly costs.

They can save up and use their disposable income to feed the Mou$e

More to the economics core would be "Demand is the measuring stick"

 

[jloucks]

Disney is catering to the wealthy.

They don’t want the middle class.

They can upcharge all they want the wealthy will pay for it!

These are things I see here daily to explain away the fiscal policy of the mousetrap.

Now let’s use a liberal definition of the word “wealthy” as a household making 200k a year or more.

That puts us somewhere around 26 million households in the states. I’m aware that the Mouse gets overseas visitors, but they seriously expect 30% of the households to not only visit but repeat visit on a yearly basis?

Let’s not forgot the more $$$ people make the more they expect. When your used to the Four Seasons the Contemporary is going to seem lacking.

It’s often discussed here that Disney can’t fail. It’s impossible.

However the idea that the “wealthy” are going to carry this company is ridiculous.

It has to be the middle class.

What’s the long term game plan?

What happens if the recession does come?

I would be interested to hear everyone’s thoughts.

You do know, that if you go at all, you are part of the global elite? Congratulations! Reminder: WDW is a luxury item that ZERO people have to have.

I get it, you are talking about the middle class in the United States and not globally. That makes a huge difference.

However, it really all boils down to who will fill the parks, and ideally WDW will increases prices as high as demand will support. Obviously filling the parks up with people as wealthy as possible, is a pretty straight-forward profit maximizing target for WDW.

Here is another way to look at it... WDW needs to get as many wealthy people in the parks as possible, and then IF there is supply(space) fill in the gaps with less wealthy people while not driving out the wealthy people with seething mobs of people in general.

They have failed at that balance for me, and many of my peers. Starcruiser was a good example of getting the balance right.... the rest of the parks, no so much.

 

[jloucks]

$200k in my city is middle class for a family of 4, but they still might be renters and the kids are going to public school.

Granted, they'll be renters in a neighborhood with good schools.

With housing prices, I think that may becoming true in my area as well!

 

[Walt Disney1955]

I know Walt never wanted the company to cater to the rich. He wanted it to be for everyone. The truth is, a family of 4 can go, but it will cost $450 for a day. Then about $2000 for a 4-day pass. That's a lot. And it shouldn't be that much.

 

[Lilofan]

With housing prices, I think that may becoming true in my area as well!

Good luck buying a newly built home minus the garage door. Supply chain issues have affected the garage door market. A new home for sale near me is missing the garage door and temporary plywood is in its place.

 

[Raxel7851]

Good luck buying a newly built home minus the garage door. Supply chain issues have affected the garage door market. A new home for sale near me is missing the garage door and temporary plywood is in its place.

Is the plywood hooked up to the garage door opener?

 

[jloucks]

I know Walt never wanted the company to cater to the rich. He wanted it to be for everyone. The truth is, a family of 4 can go, but it will cost $450 for a day. Then about $2000 for a 4-day pass. That's a lot. And it shouldn't be that much.

If it was not that much, you would be pressed up against sweaty Bruno all day long.

But I think I know what you are saying, the prices should be capped AND park attendance limited.

I think that might sorta be what Walt would do if he were alive today. ...and if the Shareholders would not tear him a new one.

 

[Pepper's Ghost]

I think there's a lot to this. We have friends that never left town for the last two years, and finally went on a vacation, dropping big bucks at Disney. That is not replicable. There are tons of people that are still cash heavy, or using credit from cancelled vacations.

What happens when that sugar rush is over, and the market corrects and interest rates rise to stymie inflation and...there's a recession on par with 2001/2008? What will attendance look like then?

I hope this is accurate. Prices will continue to increase until they find equilibrium. If they continue to jack up prices and attendance continues at the same clip or continues to increase, prices truly will increase so only the truly wealthy can afford it or families are way overpaying for the experience received.

On the other hand, if they've now priced things to a point where it deters attendance, then we'll finally get parks to a point where we're not all sardines waiting three and four hours in stand-by. If prices continue to go up, eventually attendance will fall. When they find the proper equilibrium between price and attendance, they'll stop the increases and hopefully parks will be less packed enough to be enjoyable. Only if attendance plummets will you see real change.

 

[DfromATX]

Most of the wealthy will go once and done. They have the budget to go anywhere else they want, and they will.

That's what I was thinking. Sure, it takes money to go to Disney, but the "wealthy" are busy going to other destinations as well - you know like their villa in the south of France or spending time on their yacht in the Fiji islands... but I doubt they plan Disney trips with us commoners.

 

[Lilofan]

That's what I was thinking. Sure, it takes money to go to Disney, but the "wealthy" are busy going to other destinations as well - you know like their villa in the south of France or spending time on their yacht in the Fiji islands... but I doubt they plan Disney trips with us commoners.

Went to school back in the day with some rich kids. Talking about WDW , no interest from them. They advised skiing in Switzerland, beach time in Bermuda , or family vacation in Italy, France etc.

 

[correcaminos]

With housing prices, I think that may becoming true in my area as well!

Or really it means your area will be for wealthy only. It's sad how some areas are pricing out average people or requiring legacy transfers

 

[DfromATX]

Went to school back in the day with some rich kids. Talking about WDW , no interest from them. They advised skiing in Switzerland, beach time in Bermuda , or family vacation in Italy, France etc.

Exactly! See, for me, all that would be once in a lifetime IF I ever got to do any of those "fancy" things. Disney World? Easy. (And I still feel very lucky.)

Maybe the real issue is Disney is not for poor people or those struggling to pay bills. Or perhaps those struggling have to save for years for a once in a lifetime Disney trip.

 

[Walt Disney1955]

If it was not that much, you would be pressed up against sweaty Bruno all day long.

But I think I know what you are saying, the prices should be capped AND park attendance limited.

I think that might sorta be what Walt would do if he were alive today. ...and if the Shareholders would not tear him a new one.

No, I wouldn't say the park attendance should be limited. If the crowds are getting too big you build more. Not do the opposite and take away things like Snow White and add a meet and greet. Add things that spread out the crowds. Disneyland does this much better by utilizing their space than WDW does, despite WDW having a ton more space.

 

[eliza61nyc]

I think there's a lot to this. We have friends that never left town for the last two years, and finally went on a vacation, dropping big bucks at Disney. That is not replicable. There are tons of people that are still cash heavy, or using credit from cancelled vacations.

What happens when that sugar rush is over, and the market corrects and interest rates rise to stymie inflation and...there's a recession on par with 2001/2008? What will attendance look like then?

It will look the same because Disney will DO something to ensure attendance doesn't sink.
Personally I think this site has some type of delusion that soon the parks are going to crumble and we're going to see some huge sink in attendance.

 

[eliza61nyc]

Went to school back in the day with some rich kids. Talking about WDW , no interest from them. They advised skiing in Switzerland, beach time in Bermuda , or family vacation in Italy, France etc.

Was Disney EVER for that set??

 

[Lilofan]

Exactly! See, for me, all that would be once in a lifetime IF I ever got to do any of those "fancy" things. Disney World? Easy. (And I still feel very lucky.)

Maybe the real issue is Disney is not for poor people or those struggling to pay bills. Or perhaps those struggling have to save for years for a once in a lifetime Disney trip.

If Chapek is targeting the rich, think again. The rich in my area , highly educated and successful look to spend their money in many other places that peak their curiosity interest etc. The masses should be targeted , find ways for repeat visits. How strange in that vacationing in parts of Europe and South America is more cost effective and enjoyable than at WDW.