Original FP was introduced to have people out of attractions quicker with more time to spend on food and merch. IIRC Paul Pressler was a key instigator.
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The Spirited Seventh Heaven ...
- Thread starter WDW1974
- Start date
ParentsOf4
Well-Known Member
In recent years, WDW’s prices haven’t simply increased at more than twice the rate of inflation. They’ve increased significantly faster than household income; faster than people’s ability to pay them.
WDW has never been so unaffordable.
The WDW theme parks are as popular as ever. However, Disney’s relentless price increases are costing the company profits.
As prices outpace income, people modify their purchasing behavior, especially for discretionary spending items such as vacations.
In the case of WDW, spiraling prices are causing two changes in behavior.
First, onsite occupancy rates have dropped from over 90% in 2008 to under 80% in 2013. WDW now has over 5,000 empty hotel rooms most nights.
Disney’s hotel (vs. DVC) occupancy rate is now below that of Lake Buena Vista area hotels. Given the advantages WDW hotels have over other hotels, corporate Disney should be embarrassed by this performance.
More than the theme park tickets, Disney’s hotels are insanely profitable and represent tremendous opportunities for revenue growth. Disney would be much better off adapting a strategy that not only fills those 5,000 empty rooms but gives corporate a reason to build more onsite hotels.
Second, in the most recent earnings quarter, Disney reported that Per Capita Guest Spending (i.e. spending at the theme parks) was up only 4%, by far the lowest quarterly increase since “The Great Recession”.
This increase is less than half the price increases of tickets, food, beverage, and merchandise over the prior 12 months. As Disney charges more and more, people buy less and less.
People want to stay onsite. People want to spend at the theme parks. However, the continued climb in prices forces guests to alter their spending patterns.
The smart strategy would be to offer discounted length-of-stay theme park tickets to onsite guests (something WDW used to do) and provide onsite guests with additional low-cost (to Disney) perks, such as additional FP+ selections. At the hotels, provide guests with more reasons to stay onsite.
At the theme parks, pay closer attention to income changes within the target demographics when determining price increases. Look for creative pricing strategies that encourage more spending, rather than discourage spending with higher prices.
WDW’s business nosedived after 9/11. It remained soft until 2005 when Disney offered a new cheaper theme park ticket option (Magic Your Way) and a new onsite perk (Disney’s Magical Express).
From the last full year before these changes (2004) to the first full year after these changes (2006), P&R revenue increased 28% while P&R operating income increased 37%. Revenue and profits lost from lower ticket prices were more than offset by increased hotel occupancy (which went from 77% to 86%) and theme park attendance (up 10%).
Go figure. Charge the customer less, offer the customer more, and earnings go up.
Disney needs to look at its own recent history to realize what drives improved profitability.
Simply raising prices on everything is an unsustainable long-term business model that acts as a drag on profitability.
Corporate Disney needs to wake up and adapt a sane business strategy.
Soarin' Over Pgh
Well-Known Member
Interesting (new?) ad for Universal Orlando showed up for me today
(and yes I was reading an article on John Carter, on that website)
I've also seen several ads for HP/ Universal even though I don't go out of my way to look at Universal pages... but I do, Disney. Funny when the UO ads show up on the Disney pages. Like the one above.
The only Disney ads I've seen lately are for FastPass + and free dining. That's it.
Anyone else see any interesting advertisements?
(and yes I was reading an article on John Carter, on that website)
I've also seen several ads for HP/ Universal even though I don't go out of my way to look at Universal pages... but I do, Disney. Funny when the UO ads show up on the Disney pages. Like the one above.
The only Disney ads I've seen lately are for FastPass + and free dining. That's it.
Anyone else see any interesting advertisements?
tamotu99
Active Member
@ParentsOf4 , my comment was said tounge in cheek, i actually agree with your viewpoint, but am glad you argued it better than simply saying it is more than inflation
Soarin' Over Pgh
Well-Known Member
Another fantastic post, Parentsof4.
I carved out the points above that I'd like to address. DME was an incredible idea- get people from airport to hotel room and lock 'em in it. It works! It works BRILLANTLY. Probably better than they thought it would. It has allowed fresh out of high school, fresh out of college students to celebrate at WDW without worrying about having someone 25 or older (in my state, at least, the minimum age is 25) present to sign for and rent a car. It's allowed families who don't want to drive, or are afraid of driving in a 'foreign' city, a chance of getting directly from airport, to hotel. Once you're dumped off at the hotel, Disney got you. Everything from that point on you're buying off of them, unless you're one of those smart folks who orders from local grocery stores and has delivered, which to be honest, not many people are aware that you can do that. When your trip is done, Disney hauls you and your bags back to the airport and dumps you off once again.
The 'not dealing with luggage' is also a huge, HUGE turn on for people. Disney hit it out of the park with DME. I could see how that alone would increase revenue in just about every part of the business.
HOWEVER... not doing much since then to boost sales besides gimmicks and "gotchas" is not a healthy way to keep such a massive business model afloat. It's twofold:
- It has become more affordable to rent a car, stay offsite, and eat offsite than it has been to use DME and eat/sleep onsite
-Other Orlando theme parks are doing a solid job of upkeep and adding new and exciting things to their parks, swaying those who would stay exclusively on Disney property to venture out. Even if these folks still stay onsite, they are renting a car, and thus spending dollars elsewhere.
Disney isn't getting the full pie anymore, they're getting a piece or two.
Just my two cents, but I thank you again for your insightful post.
jdmdisney99
Well-Known Member
I know, it just seems like a stupid concept altogether, from a business standpoint. Sure, people may not be in line, but who's to say they'll be in a shop or restaurant after that? They may just go into a stand-by line or another FastPass line, or just walk around out in the open. I never visited pre-FastPass, but Disney is trying to solve a problem it created with FP+ scheduled ahead. They say you don't have to be so frantic, but you wouldn't need to be frantic if FP never existed. I don't know, I just feel like they should either get rid of all FP or just go with a modified (digital) version of the original system.
Mike S
Well-Known Member
I just think it would be a great fit for Pixar Place and a much needed new family ride for DHS to take the pressure off Toy Story. It would also finally bring an LPS ride to WDW at a cheaper price than building a completely new and original LPS ride.
Because I see no reason to spend the $150 million on it, there isn't enough room, and it would be odd to have France in the middle of Pixar Place (especially since you already have it at EPCOT). Not only that, but Toy Story needs more of a presence anyway.
You build walls for the Studio Catering Co. and make it a proper Pizza Planet and refurb the toy store into Al's Toy Barn. For maybe $10 million, you greatly upgrade the area and make it a destination for Toy Story fans.
Common sense. If you're not standing in line, you're walking from one place to another, infinitely increasing the possibility you'll stop at a shop or buy a Mickey Ice Cream Bar.
Goofyernmost
Well-Known Member
Actually, I think everyone would be surprised how little it really does affect your time in the parks. FP+ with pre-done passes might actually speed things up, but, the time spent gathering FP from the past took up a lot more time then we think.
Goofyernmost
Well-Known Member
Nothing, and let me emphasis this, NOTHING would ever stop me from having a Mickey Bar even if the lines stretched all the way to Myrtle Beach.
Soarin' Over Pgh
Well-Known Member
Same.
Line, no line, in line, what line? Doesn't matter. Will seek out and hunt down Mickey Bar.
raymusiccity
Well-Known Member
In recent years, WDW’s prices haven’t simply increased at more than twice the rate of inflation. They’ve increased significantly faster than household income; faster than people’s ability to pay them.
WDW has never been so unaffordable.
The WDW theme parks are as popular as ever. However, Disney’s relentless price increases are costing the company profits.
As prices outpace income, people modify their purchasing behavior, especially for discretionary spending items such as vacations.
In the case of WDW, spiraling prices are causing two changes in behavior.
First, onsite occupancy rates have dropped from over 90% in 2008 to under 80% in 2013. WDW now has over 5,000 empty hotel rooms most nights.
Disney’s hotel (vs. DVC) occupancy rate is now below that of Lake Buena Vista area hotels. Given the advantages WDW hotels have over other hotels, corporate Disney should be embarrassed by this performance.
More than the theme park tickets, Disney’s hotels are insanely profitable and represent tremendous opportunities for revenue growth. Disney would be much better off adapting a strategy that not only fills those 5,000 empty rooms but gives corporate a reason to build more onsite hotels.
Second, in the most recent earnings quarter, Disney reported that Per Capita Guest Spending (i.e. spending at the theme parks) was up only 4%, by far the lowest quarterly increase since “The Great Recession”.
This increase is less than half the price increases of tickets, food, beverage, and merchandise over the prior 12 months. As Disney charges more and more, people buy less and less.
People want to stay onsite. People want to spend at the theme parks. However, the continued climb in prices forces guests to alter their spending patterns.
The smart strategy would be to offer discounted length-of-stay theme park tickets to onsite guests (something WDW used to do) and provide onsite guests with additional low-cost (to Disney) perks, such as additional FP+ selections. At the hotels, provide guests with more reasons to stay onsite.
At the theme parks, pay closer attention to income changes within the target demographics when determining price increases. Look for creative pricing strategies that encourage more spending, rather than discourage spending with higher prices.
WDW’s business nosedived after 9/11. It remained soft until 2005 when Disney offered a new cheaper theme park ticket option (Magic Your Way) and a new onsite perk (Disney’s Magical Express).
From the last full year before these changes (2004) to the first full year after these changes (2006), P&R revenue increased 28% while P&R operating income increased 37%. Revenue and profits lost from lower ticket prices were more than offset by increased hotel occupancy (which went from 77% to 86%) and theme park attendance (up 10%).
Go figure. Charge the customer less, offer the customer more, and earnings go up.
Disney needs to look at its own recent history to realize what drives improved profitability.
Simply raising prices on everything is an unsustainable long-term business model that acts as a drag on profitability.
Corporate Disney needs to wake up and adapt a sane business strategy.
I don't understand the persistent Disney bashing over ticket prices. Industry wide it has always been a simple matter of supply vs. demand. When we first moved to Nashville years ago, Opryland Amusement Park and WDW were both charging $8.00 admission and there was no rushing the gates over such a bargain. Universal, Sea World, and all the other theme pares have gone along with the rising tide of charging more and more, yearly, or more often than that. Disney always winds up as the scapegoat for being 'greedy'. I still say that you get your money's worth. I don't agree with how fast that they've all risen, but, it will set you back $18.00 or more to watch the Guardians of the Galaxy opus in 3-D IMAX, plus $8.50 for popcorn, another $4.00 for soda....and that's just for 2 hrs of hopefully, good entertainment.
Of course, his not wanting that issue rehashed in this thread didnt stop him from rehashing it himself and firing up the topic.
I bet that Disney has run the numbers and come to a different conclusion than you did.In recent years, WDW’s prices haven’t simply increased at more than twice the rate of inflation. They’ve increased significantly faster than household income; faster than people’s ability to pay them.
WDW has never been so unaffordable.
The WDW theme parks are as popular as ever. However, Disney’s relentless price increases are costing the company profits.
As prices outpace income, people modify their purchasing behavior, especially for discretionary spending items such as vacations.
In the case of WDW, spiraling prices are causing two changes in behavior.
First, onsite occupancy rates have dropped from over 90% in 2008 to under 80% in 2013. WDW now has over 5,000 empty hotel rooms most nights.
Disney’s hotel (vs. DVC) occupancy rate is now below that of Lake Buena Vista area hotels. Given the advantages WDW hotels have over other hotels, corporate Disney should be embarrassed by this performance.
More than the theme park tickets, Disney’s hotels are insanely profitable and represent tremendous opportunities for revenue growth. Disney would be much better off adapting a strategy that not only fills those 5,000 empty rooms but gives corporate a reason to build more onsite hotels.
Second, in the most recent earnings quarter, Disney reported that Per Capita Guest Spending (i.e. spending at the theme parks) was up only 4%, by far the lowest quarterly increase since “The Great Recession”.
This increase is less than half the price increases of tickets, food, beverage, and merchandise over the prior 12 months. As Disney charges more and more, people buy less and less.
People want to stay onsite. People want to spend at the theme parks. However, the continued climb in prices forces guests to alter their spending patterns.
The smart strategy would be to offer discounted length-of-stay theme park tickets to onsite guests (something WDW used to do) and provide onsite guests with additional low-cost (to Disney) perks, such as additional FP+ selections. At the hotels, provide guests with more reasons to stay onsite.
At the theme parks, pay closer attention to income changes within the target demographics when determining price increases. Look for creative pricing strategies that encourage more spending, rather than discourage spending with higher prices.
WDW’s business nosedived after 9/11. It remained soft until 2005 when Disney offered a new cheaper theme park ticket option (Magic Your Way) and a new onsite perk (Disney’s Magical Express).
From the last full year before these changes (2004) to the first full year after these changes (2006), P&R revenue increased 28% while P&R operating income increased 37%. Revenue and profits lost from lower ticket prices were more than offset by increased hotel occupancy (which went from 77% to 86%) and theme park attendance (up 10%).
Go figure. Charge the customer less, offer the customer more, and earnings go up.
Disney needs to look at its own recent history to realize what drives improved profitability.
Simply raising prices on everything is an unsustainable long-term business model that acts as a drag on profitability.
Corporate Disney needs to wake up and adapt a sane business strategy.
I'm not getting your logic.
If I didn't have FPs, I'd be waiting in lines. I'd probably have to rush even harder to get as many attractions in.
Plus, you often have a couple minutes to kill while you are waiting for your FP window. Why not pop into a shop or buy a snack?
I think that we get hung up on that ride being themed to Ratatouille. The fact is, it can be themed to about any IP that the company decided to run with.
ParentsOf4
Well-Known Member
Ever since Disneyland opened in 1955, Disney was the industry leader in family vacation entertainment. They didn't follow what everyone else did; they blazed their own path. "The Disney Difference" really meant something.
For its first 25-30 years, WDW's price increases closely followed changes to U.S. median household income. Despite these modest price increases, P&R gross margins ran about 3-to-5% higher than they do today.
WDW charged less, maintained superior standards of quality, built more, and yet remained more profitable.
Today's corporate Disney has abandoned the philosophy that made WDW something special.
It was a philosophy that included a pricing strategy created by Walt Disney, who believed in providing paying customers with "good value". Quoting from Walt Disney, An American Original:
Disneyland's Town Square "would be a place with flower and balloons, costumes and a brass band. Handsomely wrought surreys, a fire wagon and a house-drawn trolley would take people down Main Street and to the rest of the realms. The vehicles would not have enough capacity to make a profit but they contributed to the entire experience. Walt insisted on fine furnishings for the restaurants even though they would be serving reasonably priced meals. He believed that if a family sat under a $50,000 chandelier and ate good food at a fair price, their experience would add to their enjoyment of the park."
It was a philosophy that included the following (quoting Walt Disney):
"Everybody thinks that Disneyland is a goldmine but we have had our problems. You've got to work it and know how to handle it. Even trying to keep that park clean is a tremendous expense. And those sharp-pencil guys tell you, 'Walt, if we cut down on maintenance, we'd save a lot of money.' But I don't believe in that. It's like any other show on the road; it must be kept clean and fresh."
Back in the old days (OK, only the 1980s), we used to make fun of "old school" business strategies that thought "perpetual price increase" was the solution to all financial problems. That thought that the way to higher profits was to cut quality and reduce investments. We admired "The Disney Difference", wanting to emulate it within our own businesses.
Right now, corporate Disney is operating its theme parks using a strategy that was widely discredited decades ago, thinking it represents some cutting-edge Blue Ocean Strategy.
Instead, it's a strategy more akin to P.T. Barnum.
I have some ties from decades ago that have gone in and out of style, some more than once:
Don't throw the past away
You might need it some rainy day
Dreams can come true again
When everything old is new again
You might need it some rainy day
Dreams can come true again
When everything old is new again
Or perhaps a populist quote is more appropriate:
Meet the new boss
Same as the old boss
Same as the old boss
Walt Disney thought outside the box.
Today's Disney corporate leadership is the box.
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RSoxNo1
Well-Known Member
Absolutely not. $18 million relative to $2 billion is nothing.
Potter has been the best weapon Universal has had, but King Kong, Transformers, Despicable Me, Jurassic Park, etc are all valuable. They are collecting IP and having an IP driven experience. That allows them to remain relevant. Yes they're still playing catch up, but they're actually playing the game. Disney isn't.
Strictly an opinion, but one you're entitled to. Having said that, Harry Potter 1 paid for itself a lot quicker than New Fantasyland will pay for itself. That shows me that the public disagrees with you. A huge component of that is the franchise popularity of Harry Potter, but another component that can't be ignored is the execution.
From looks, I would argue New Fantasyland looks as good, if not better than Hogsmead, but that's just an opinion. Both look great.
Epcot is driven by seasonal events. The park can probably survive on this, but otherwise feels quite stale. It needs to be revitalized if it wants to be anything more than the place you go to have dinner.
I don't buy it at all. Yes, I'd prefer something new, but Disney loves sharing development costs. If anything they're waiting to see if the ride is successful.
A big component is union workers (Disney) vs. non union workers (Universal). Another big component is the overhead costs of Imagineering vs. Universal Creative. This (among other things) causes Disney to push for projects to be spread out across multiple fiscal years.has anyone seen the latest pics of potter 2.0,my god it blows the first one right out the water,plus it was built quicker than it took Disney to do the SDMT...........my question is,why the hell does it take Disney so long to build things?dont get me wrong, new fantasyland looks amazing,but so does anything universal has done,and it usually is done in half the time Disney does it in.........im honestly sure universal built the whole transformers ride quicker than what it took Disney to build those tangled bathrooms?
That's really would it would take too. Things like the Dining Plan and Magic Your Way tickets have evolved into something entirely different than the original intent. The Dining Plan used to be a discount if you pre-pay, now it's only a convenience to make it more like a cruise line/all inclusive mentality. Magic Your Way Tickets used to be $2-3 more per day after day 4. That's been elevated to $10 more per day and a much higher starting base.In recent years, WDW’s prices haven’t simply increased at more than twice the rate of inflation. They’ve increased significantly faster than household income; faster than people’s ability to pay them.
WDW has never been so unaffordable.
The WDW theme parks are as popular as ever. However, Disney’s relentless price increases are costing the company profits.
As prices outpace income, people modify their purchasing behavior, especially for discretionary spending items such as vacations.
In the case of WDW, spiraling prices are causing two changes in behavior.
First, onsite occupancy rates have dropped from over 90% in 2008 to under 80% in 2013. WDW now has over 5,000 empty hotel rooms most nights.
Disney’s hotel (vs. DVC) occupancy rate is now below that of Lake Buena Vista area hotels. Given the advantages WDW hotels have over other hotels, corporate Disney should be embarrassed by this performance.
More than the theme park tickets, Disney’s hotels are insanely profitable and represent tremendous opportunities for revenue growth. Disney would be much better off adapting a strategy that not only fills those 5,000 empty rooms but gives corporate a reason to build more onsite hotels.
Second, in the most recent earnings quarter, Disney reported that Per Capita Guest Spending (i.e. spending at the theme parks) was up only 4%, by far the lowest quarterly increase since “The Great Recession”.
This increase is less than half the price increases of tickets, food, beverage, and merchandise over the prior 12 months. As Disney charges more and more, people buy less and less.
People want to stay onsite. People want to spend at the theme parks. However, the continued climb in prices forces guests to alter their spending patterns.
The smart strategy would be to offer discounted length-of-stay theme park tickets to onsite guests (something WDW used to do) and provide onsite guests with additional low-cost (to Disney) perks, such as additional FP+ selections. At the hotels, provide guests with more reasons to stay onsite.
At the theme parks, pay closer attention to income changes within the target demographics when determining price increases. Look for creative pricing strategies that encourage more spending, rather than discourage spending with higher prices.
WDW’s business nosedived after 9/11. It remained soft until 2005 when Disney offered a new cheaper theme park ticket option (Magic Your Way) and a new onsite perk (Disney’s Magical Express).
From the last full year before these changes (2004) to the first full year after these changes (2006), P&R revenue increased 28% while P&R operating income increased 37%. Revenue and profits lost from lower ticket prices were more than offset by increased hotel occupancy (which went from 77% to 86%) and theme park attendance (up 10%).
Go figure. Charge the customer less, offer the customer more, and earnings go up.
Disney needs to look at its own recent history to realize what drives improved profitability.
Simply raising prices on everything is an unsustainable long-term business model that acts as a drag on profitability.
Corporate Disney needs to wake up and adapt a sane business strategy.
As you said, the prices are increasing faster than the income of the average person. A reset of hotel rooms and tickets would go a long way. Either that or substantial additions to validate the increased cost.
I would much rather see Ratatouille in Hollywood Studios than the France pavilion. Count me amongst those that want to see half of Hollywood Studios leveled. Start over. Keep Hollywood and Sunset Boulevard, keep Star Tours and Toy Story. Everything else is fair game.