Magenta Panther
Well-Known Member
Meanwhile, the Yeti AA in Everest remains broken, and all Iger does is put a strobe light on it. THAT'S his legacy.
-
Welcome to the WDWMAGIC.COM Forums!
Please take a look around, and feel free to sign up and join the community.
News Walt Disney Company First Quarter 2020 Earnings report shows increased spending at the parks and resorts and slight attendance gains
- Thread starter wdwmagic
- Start date
Meanwhile, the Yeti AA in Everest remains broken, and all Iger does is put a strobe light on it. THAT'S his legacy.
John park hopper
Well-Known Member
Disney reports guest spending is up duh! you keep raising prices on everything of course guests have to spend more
jt04
Well-Known Member
Not objectively if you consider DS, infrastructure (roads, hotels, skyway) Pandora, and SWL. Shanghai Disney did impact WDW for a few years but they are making up for that now.
jt04
Well-Known Member
I'm sure this era will be judged by a single effect most guests aren't even aware has changed. They would remember if it had of broke and a piece hit a train however.
the.dreamfinder
Well-Known Member
Where those price increases are going.
These words seem oddly familiar, like I've read them in a Disney financial report before... "Guest spending growth was primarily due to higher average ticket prices and an increase in food, beverage and merchandise spending."
I haven't read the quarterly report yet. Anyone know if they broke down the number of paid vs. free Disney+ subscribers? (Verizon for sure, are there others?) I just wouldn't jump for joy at that subscriber number on its face. Talk to me in a year and I will definitely be more excited if they keep those and add even more. For now, I'm much more measured that it's the excitement around the initial launch.
So, Iger ignored the parks for a decent chunk of his first decade as CEO, but he's being celebrated for approving an admittedly non-trivial amount being spent in the parks now? You can't have your cake and eat it too.
I haven't read the quarterly report yet. Anyone know if they broke down the number of paid vs. free Disney+ subscribers? (Verizon for sure, are there others?) I just wouldn't jump for joy at that subscriber number on its face. Talk to me in a year and I will definitely be more excited if they keep those and add even more. For now, I'm much more measured that it's the excitement around the initial launch.
So, Iger ignored the parks for a decent chunk of his first decade as CEO, but he's being celebrated for approving an admittedly non-trivial amount being spent in the parks now? You can't have your cake and eat it too.
Texas84
Well-Known Member
On the drive to work I heard about 11 million were 'free' with Verizon and phone deals.
From Engadget:
"Iger later said about 50 percent came through direct sign-ups, about 20 percent via Verizon, and others via options like Apple or Roku"
Disney reported only 20% of their Disney Plus customers were from Verizon. Therefore 20% of 28.6 million customers is only 5.72 million. Tham means they should still pick up at least another 2 to 3 million Verizon customers in the coming months. Realistically, Disney Plus should end thecyear with between 35 and 40 million North American Customers and 10 to 15 million European Customers. The unknown number is how many Indian Customers will signup for Disney Plus Hostar VIP memberships. The Walt Disney Company is being very smart in trying to keep expectations low given that in the last quarter Direct to Consumer and International was 20% of revenue and will be the fastest growing Division.
Kevin_W
Well-Known Member
Right. If prices increase 8-10% per year and the average American wage increases 2.5% per year then at some point this doesn't work out. It will be interesting to see when that point is.
You can make numbers say anything you want, it's a great way to pull people into an arguement. But that 8-10% is quite generious. Even the Magic Kingdom one day pass, which has seen larger increases than most, has only averaged an increase of 4.7% per year over the last 10 years. Also, I am not sure where you get the 2.5%, but there is all sorts of ways you can look at wage increases. For instance, the most recent data I saw showed from December 2018 to December 2019 the US saw an average wage increase of 5.2% Regardless of what data you look at, these numbers will assume all classes, but as much as we wish it were possible, not all americans can afford WDW, and those portions of the US unable to afford a trip traditionally have a much slower average growth of wage. What does that mean, the average person that goes to WDW (or any vacation for that matter) will have a much higher average wage increase then what the national average is. So based on those "numbers" one could argue the average WDW guest is having a larger wage increase than the average ticket price increase.
Again, you can make numbers say anything. I just had to point that out because your numbers were certainly being generious to try to make your point.
Did someone say numbers? 
Since the start of 2006:
- One-day ticket prices have risen 109%
- 7-day park hopper prices have risen 120%
- A regular Annual Pass has risen 183%
* One day ticket price is calculated with the posted "regular" season price on AllEars. Annual pass price is based on what pass is available to the general public.
Since the start of 2006:- One-day ticket prices have risen 109%
- 7-day park hopper prices have risen 120%
- A regular Annual Pass has risen 183%
* One day ticket price is calculated with the posted "regular" season price on AllEars. Annual pass price is based on what pass is available to the general public.
Kevin_W
Well-Known Member
Fair enough, I'm probably overstating price increases. From @HauntedPirate numbers, AP"s have increased on average 7.7% per year and 1-day tickets by only 5.4%. Over the past 10 years, Mickeys Bars have also gone up an average of 7.7% per year as a benchmark.
My wage data came from here: https://tradingeconomics.com/united-states/wage-growth
Maybe there was a 4.2% increase somewhere last year, but that chart isn't showing it. My industry has tracked at 2.0-2.6% for several years (less in actual money since healthcare as a % of salary has risen drastically). It's good to see there might be an uptick.
Chef Mickey
Well-Known Member
The ARPU for Disney+ was something like $5.56, indicating most people are paying since the "street price" is $6.99. This surprised analysts too as they expected it to be lower with the discounts offered by Disney themselves and the VZ customers getting it free. We now know the VZ customers are only about 20%.
Chef Mickey
Well-Known Member
Pricing is fluid. The economy is tremendously strong with very low unemployment. Pricing can be changed instantly. I don't know why people act like pricing is some iron clad concept that you can never roll back. Clearly, the pricing strategy is working...no issues. Attendance is up, guest spend is up, profits are up, etc.
The average increase for wages is largely irrelevant for 2 reasons.
1) A family going to Disney isn't necessarily a 1:1 relationship with the average American, so it's entirely possible the Disney going American families have wages increasing faster than the average of 2.5%.
2) Disney is in demand. People might decide to spend more of their earnings on a trip to Disney because it's a place they want to go.
If either of these things impact profitability and attendance, the pricing strategy can be modified. The data indicates there is no need to change the strategy, particularly in US markets. In fact, the numbers are saying to do more of the same.
Chef Mickey
Well-Known Member
Not true.
If you didn't have a product people wanted, increased prices would deter many people from coming and could lower guest spend. If a brand raised their price by 20% on a commodity like milk, people would try to buy it cheaper from another brand. Disney isn't a commodity, so they are willing to pay more for it.
Which is exactly why no one can recall the last time we heard/read the words, "Disney has lowered prices...".
As with anything, there are limits to what a large number of people are willing to spend on something. Disney just hasn't reached those limits yet.
John park hopper
Well-Known Member
The Disney discount illusion --raise prices -reduce what you get (DDP) and then give a discount that doesn't equal what the charge was pre price increase. People think what a deal
Epcot82Guy
Well-Known Member
For short-term economics, everyone is right. Disney is in demand, and the pricing strategy is working. The main concern I would always raise is how much damage (if any) that does to your legacy base. They are combining price changes with a change in strategy. And, again, it is working right now.
The main question and test is how a downturn would impact this. There is no dispute they are alienating a material portion of their historic base for the parks. That group could come back if pricing slides back. And, it may be offset by new groups that will become replacement die hard, "ride or die" fans. But, there is no doubt alienating a portion of your historic base is a gamble.
Wall Street often doesn't look at that level of long-term strategy, so you should always view "good" decisions with that lens for a consumer product. Especially for one where you can't pivot as easily as you can your merchandise or film outputs. Running physical parks and hotels is different than the shelves of Target and content you make available for streaming.
The main question and test is how a downturn would impact this. There is no dispute they are alienating a material portion of their historic base for the parks. That group could come back if pricing slides back. And, it may be offset by new groups that will become replacement die hard, "ride or die" fans. But, there is no doubt alienating a portion of your historic base is a gamble.
Wall Street often doesn't look at that level of long-term strategy, so you should always view "good" decisions with that lens for a consumer product. Especially for one where you can't pivot as easily as you can your merchandise or film outputs. Running physical parks and hotels is different than the shelves of Target and content you make available for streaming.
Chef Mickey
Well-Known Member
Right. The numbers prove lowering prices wouldn’t make sense..:yet. Maybe it will, but not there yet as you say. People are surprised, but comparable values are as if not more expensive.Which is exactly why no one can recall the last time we heard/read the words, "Disney has lowered prices...".
As with anything, there are limits to what a large number of people are willing to spend on something. Disney just hasn't reached those limits yet.
Goofyernmost
Well-Known Member
Trust me... at some point that is going to catch up with them, big time. For the wealthy the economy is still strong and others may be so mentally sure that the end is near that they are just running up debt because they figure they will never have to repay it. But, eventually people will decide that there are many things that people can do that don't require taking out a mortgage and then standing in line b itching because the are hot, miserable and that they already have seeing most of this stuff for decades.
That has probably already started to happen and explains why, all of a sudden, Disney decided that they needed to spend billions to build new stuff to alleviate the Guest boredom. Catch 22: getting to see the new stuff, at least for now, involves jumping through many, many hoops to even have a chance to experience them. Disney parks, like vaudeville will someday be just a thing that a lot of people used to do.