I liked your post somewhere recently where you pointed out the absurd ... obscene price increase of a burger at Cosmic Ray's from $7.19 to $10 something. This is WDW. This is TDO. This is Iger, Rasulo, Staggs, Crofton, Kalogridis etc ...
They have already priced themselves out of the deluxe hotel business because they just couldn't make a profit selling 3-star hotels in disguise for $200-400 a night. Nope, they needed to get those prices double and triple. And that's why we have DVC at every deluxe now. Pretty soon, the rubes who stay at the mods will downgrade to the values ...if they don't buy DVC, head off-property or just stay away from O-Town.
Rest assured, they have models that show when they expect/plan that burger to hit $15. Maybe $18 too.
It's all about gouging guests for every last dime.
The problem for WDW today is that there already are signs that they are pushing prices to their limits, without providing a corresponding improvement in content.
The number of empty rooms at WDW is at an all-time high.
In 2013, WDW averaged about 5,700 empty rooms per night.
Excluding DVC, WDW has about 5,700 Deluxe Resort rooms. For some perspective, that means WDW averaged the equivalent of completely empty Grand Floridian, Polynesian, Contemporary, Beach Club, Yacht Club, Wilderness Lodge, Boardwalk Inn, and Animal Kingdom Lodge hotels.
2002 was a horrible year for WDW.
Yet in 2013, WDW averaged 400 more empty rooms per night than they did in 2002.
Empty rooms at WDW have become a major concern.
Let’s look at what has happened to Per Room Guest Spending since then. In 2002, it was $204. In 2013, it was $267. That’s an increase of only 2.5% annually.
The CPI has averaged 2.4% annually over the same period.
WDW’s hotel prices have stagnated and yet WDW has a record number of empty rooms.
Now let’s consider what’s happened to ticket prices.
A 4-day ticket was $199 in 2002. In 2013, it was $363, an annual increase of 5.8%. Compounded over 11 years, that's just painful.
Median household income has averaged only 1.7% over that same period.
The cold, hard reality is that when prices increase faster than wages, people have to make choices.
Right now, vacationers are choosing to stay offsite in order to afford WDW’s tickets.
Oh, and to be able to afford their $10.19 Wendy’s quality burger that used to be $7.39 only a few years ago.
International vacationers get a lot of attention right now but 80% of WDW “guests” still come from the U.S.A.
What happens when WDW ticket and food prices continue to increase?
What choice do people make next?
At what point do people decide that a WDW vacation simply isn’t worth it anymore?
At what point does WDW simply become unaffordable for Disney’s core audience?