What is Disney doing to its customer life cycle?

[networkpro]

We must have been typing at the same time but kinda the reason why I don't think any thing significant is going to happen when the next recession roles around.
I just think this hope that the next recession is going to cause some massive emptying of the parks, management to get fired and a return to the old value is an exercise in futility.
At most we may get a 30% discount on room rates.

I have been wrong many many times so who knows.

That's about all I expect. We got a 30% discount for a suite in Sago Cay in 2009 and it still was over 700 a night.

 

[Goofyernmost]

I would offer the possibility that income/wealth doesn't stratify people into levels of interest in Disney, or other things for that matter. Further, I'd suggest that affluent people are less in need of showing their affluence than perhaps those on the cusp of it wanting to show neighbors/friends/the interwebs that they're well off enough to afford Disney. You might find the book "The Millionaire Next Door" interesting.

I agree but it is those on the cusp people that are Disney's main target. The very rich do not spend their vacations at WDW. The Riviera or perhaps a high end ski resort, but not WDW. Maybe once out of curiosity, but after that the normal reaction would be that WDW was way to unsophisticated for them. No matter they would probably not be return customers unless they came from poor to wealthy.

 

[SteveAZee]

I agree but it is those on the cusp people that are Disney's main target. The very rich do not spend their vacations at WDW. The Riviera or perhaps a high end ski resort, but not WDW. Maybe once out of curiosity, but after that the normal reaction would be that WDW was way to unsophisticated for them. No matter they would probably not be return customers unless they came from poor to wealthy.

I think that you may have an incomplete model of both 'sophisticated' and 'rich', or perhaps you and I have different ideas of what those terms mean. There are a lot of people who become rich but don't really become 'sophisticated' as a result and/or perhaps have their ties to Disney formed long before they achieved some level of wealth, for example. I suspect there are at least a few people on this board who both love Disney and have buckets of money. I suspect there are also people who lead a refined/sophisticated lifestyle, but do it on a budget. I just don't see them as mutually exclusive. I suspect that whoever does research for Disney into demographics of the overlap of 'loves Disney' and 'has lots of disposable cash' is pretty sure the market is there for what Disney seems to be doing, i.e. catering the experience of WDW to them.

 

[EPCOT-O.G.]

I think that you may have an incomplete model of both 'sophisticated' and 'rich', or perhaps you and I have different ideas of what those terms mean. There are a lot of people who become rich but don't really become 'sophisticated' as a result and/or perhaps have their ties to Disney formed long before they achieved some level of wealth, for example. I suspect there are at least a few people on this board who both love Disney and have buckets of money. I suspect there are also people who lead a refined/sophisticated lifestyle, but do it on a budget. I just don't see them as mutually exclusive. I suspect that whoever does research for Disney into demographics of the overlap of 'loves Disney' and 'has lots of disposable cash' is pretty sure the market is there for what Disney seems to be doing, i.e. catering the experience of WDW to them.

I appreciate a lot of your insight on this thread.

I also feel that, for a lot of Disney's attempts at offering "luxury" items or experiences, it feels like what Disney considers luxurious is no more than theming. Put simply, go to a legit five-star hotel or restaurant, and then go to the GF or Riviera - not even comparable experiences. To put those who have the wealth and means to vacation in the actual Riviera or the Mediterranean, then drop them into the Riviera Resort? Well, they'll feel like they were staying at a gussied up Holiday Inn Express.

 

[SteveAZee]

I appreciate a lot of your insight on this thread.

I also feel that, for a lot of Disney's attempts at offering "luxury" items or experiences, it feels like what Disney considers luxurious is no more than theming. Put simply, go to a legit five-star hotel or restaurant, and then go to the GF or Riviera - not even comparable experiences. To put those who have the wealth and means to vacation in the actual Riviera or the Mediterranean, then drop them into the Riviera Resort? Well, they'll feel like they were staying at a gussied up Holiday Inn Express.

Yes, good example.

It seems like they want to emulate some trappings of upscale resorts or hotels without really investing in what that means, so it's done mostly as a way to differentiate resorts on Disney property and then charge accordingly. It's their way of competing with themselves and making clear trade-offs of benefits for $ for people wanting to book on property.

It's what Disney does, right? Emulate things... create the illusion of something else while not really, actually being that thing.

 

[EPCOT-O.G.]

Yes, good example.

It seems like they want to emulate some trappings of upscale resorts or hotels without really investing in what that means, so it's done mostly as a way to differentiate resorts on Disney property and then charge accordingly. It's their way of competing with themselves and making clear trade-offs of benefits for $ for people wanting to book on property.

It's what Disney does, right? Emulate things... create the illusion of something else while not really, actually being that thing.

Yes. And again, I'm no snob. I love Disney. I appreciate EPCOT's version of countries I might never visit, as well as those I've been fortunate to have visited. It doesn't diminish my enjoyment of it. But I realize it is a pastiche of things, done for a mass consumer audience. But don't charge me the same cost *as the real thing* and act like that's okay.

It's one thing to convince some who've never been near a Ritz Carlton or the like to think the GF suites are the pinnacle of luxury. It's another to expect those who've become accustomed to that level of quality to pay those prices for what they're getting at WDW.

 

[SteveAZee]

Yes. And again, I'm no snob. I love Disney. I appreciate EPCOT's version of countries I might never visit, as well as those I've been fortunate to have visited. It doesn't diminish my enjoyment of it. But I realize it is a pastiche of things, done for a mass consumer audience. But don't charge me the same cost *as the real thing* and act like that's okay.

It's one thing to convince some who've never been near a Ritz Carlton or the like to think the GF suites are the pinnacle of luxury. It's another to expect those who've become accustomed to that level of quality to pay those prices for what they're getting at WDW.

It's part of the 'bubble', I think. The suspension of disbelief. I'm all for it too. I like going there to take a break from reality.

Yes, I personally don't understand who's paying those rates at GF and some of the other places, but there appears to be a customer base for it.

 

[Goofyernmost]

I think that you may have an incomplete model of both 'sophisticated' and 'rich', or perhaps you and I have different ideas of what those terms mean. There are a lot of people who become rich but don't really become 'sophisticated' as a result and/or perhaps have their ties to Disney formed long before they achieved some level of wealth, for example. I suspect there are at least a few people on this board who both love Disney and have buckets of money. I suspect there are also people who lead a refined/sophisticated lifestyle, but do it on a budget. I just don't see them as mutually exclusive. I suspect that whoever does research for Disney into demographics of the overlap of 'loves Disney' and 'has lots of disposable cash' is pretty sure the market is there for what Disney seems to be doing, i.e. catering the experience of WDW to them.

I believe my last sentence in my post covered that category. I'm painting with a wide brush here. You are trying to cover every individual as being a majority. I'm not attempting to do that! I'm saying that they have a target audience and that is who they are aiming for but if someone is extremely wealthy the majority of them will not be spending their free time in WDW. Those on the other hand sporting new money and jockeying for their spot in the upper crust will be the big achievement spenders and the people they hang with will also be in that same category. They are trying to out do each other for their place on the social ladder. If that group is considering WDW as a sophisticated location, then they are looking to impress those in the same line at the park. Those with unlimited wealth will also include some that think WDW is the final frontier in the upward moving ladder. Those will continue to be a part of Disney until some other thing comes up that is more of a place to be seen because someone from above them on the ladder is spending their time in some other endeavor.

 

[SteveAZee]

I believe my last sentence in my post covered that category. I'm painting with a wide brush here. You are trying to cover every individual as being a majority. I'm not attempting to do that! I'm saying that they have a target audience and that is who they are aiming for but if someone is extremely wealthy the majority of them will not be spending their free time in WDW. Those on the other hand sporting new money and jockeying for their spot in the upper crust will be the big achievement spenders and the people they hang with will also be in that same category. They are trying to out do each other for their place on the social ladder. If that group is considering WDW as a sophisticated location, then they are looking to impress those in the same line at the park. Those with unlimited wealth will also include some that think WDW is the final frontier in the upward moving ladder. Those will continue to be a part of Disney until some other thing comes up that is more of a place to be seen because someone from above them on the ladder is spending their time in some other endeavor.

Not to nitpick, but there are a lot of people who didn't go from poor to wealthy but instead went from middle class to wealthy.

I guess what I'm curious about is where you're getting your model for the people who are wealthy and what their behavior is in general. Is this from personal experience? Is this from movies, TV, and media making a caricatures of who those people are? I know you're painting with a wide brush, but in doing so you may be missing the actual demographic that Disney may be targeting, which is the point (I think) of this discussion. I come back again to "The Millionaire Next Door" where the point is that there are some wealthy (or very wealthy) people who don't exhibit their wealth nor act like Buffy and Tad at the country club. There are 18 million (or more) millionaires in the US alone. Now being a millionaire isn't what it used to be, but it's perhaps what you think of when you're talking about wealthy (that counts assets not including their residence). I don't believe most of them behave the way you describe them behaving. I could be wrong, but my personal experience (and the information in that book) say otherwise (as do the demographics in general).

 

[PolynesianPrincess]

I grew up going to WDW yearly. We've been passholders since 2010. We've always stayed on property because we felt the perks were worth it. DME (not having to deal with our luggage to or from the airport!) EMH, lots of great entertainment, the food quality was good, parks were clean.. Over the last 10 years we have seen a DRAMATIC decrease in what they're offering while they raise the prices. Want a ride to the resorts? Pay up! Want to skip the lines? Pay up! Want EMH? Pay up and stay deluxe! In 2013 we went on our first Disney cruise and we were BLOWN AWAY by the ships, the cast members, entertainment, food... The difference between WDW CM's and DCL CM's were night and day. Unfortunately, cruising with Disney is much more expensive than with other cruise lines. We wanted to cruise more but comparing WDW to DCL, WDW was always cheaper so we went there. Now, the difference in the price gap is slowly closing as WDW starts charging guests for everything. I wouldn't mind paying to go to WDW if we were getting the same kind of service and experience as we had been in the past but we're not. WDW is going to charge for EVERYTHING they can. If people keep paying, the more things they're going to charge for. Obviously it will hit a breaking point sometime. I'm wondering when Epic Universe opens at Uni if that will pull more families with tweens / teens over in that direction. I know a lot of people who used to spend all their vacation days at Disney are now spending 2-3 at Universal. When EU opens, I think that will definitely make more people start looking at Universal as a longer vacation and only spend a few days at Disney. Uni's deluxe resorts are MUCH cheaper than WDW and you get free express pass. APs to Uni are dirt cheap compared to Disney. Yes, I know they are 2 completely different experiences. Disney plays off the nostalgia factor (my parents took me to Disney and their parents took them to Disney, etc..) and Uni plays off of exciting, new experiences. I personally nostalgia can only go so far. Eventually Disney will see a shift in more guests staying offsite and spending more time at other attractions in Orlando.

 

[Goofyernmost]

Not to nitpick, but there are a lot of people who didn't go from poor to wealthy but instead went from middle class to wealthy.

I guess what I'm curious about is where you're getting your model for the people who are wealthy and what their behavior is in general. Is this from personal experience? Is this from movies, TV, and media making a caricatures of who those people are? I know you're painting with a wide brush, but in doing so you may be missing the actual demographic that Disney may be targeting, which is the point (I think) of this discussion. I come back again to "The Millionaire Next Door" where the point is that there are some wealthy (or very wealthy) people who don't exhibit their wealth nor act like Buffy and Tad at the country club. There are 18 million (or more) millionaires in the US alone. Now being a millionaire isn't what it used to be, but it's perhaps what you think of when you're talking about wealthy (that counts assets not including their residence). I don't believe most of them behave the way you describe them behaving. I could be wrong, but my personal experience (and the information in that book) say otherwise (as do the demographics in general).

Again wide brush. We cannot list every single possibility, we need to let that be part of everyone's logic and assumption.

 

[ThistleMae]

I almost brought up the Potter comparison, but I’ve said it so many times on these boards. “Generic space” was a mistake. The land is fine, but put me on Dagobah or Hoth, Bespin - so many ideas. I shouldn’t be able to tear myself away from a SW land.

I don't even have SW land on my radar, I'd rather go ride Toy Story Mania. HP is unbelievably awesome, and I'm not a Uni fan. I would never pay to ride ROTR. One and done for me.

 

[erasure fan1]

I think 2019 was instructive to them in this regard: they spent a billion on an entire new land that didn’t raise the needle in terms of attendance. If anything, it went down. But they made more money due to the variable ticket prices. I think they e (rightly) decided that they’ve reached a saturation point in terms of pure attendance numbers, and are instead focusing on squeezing more money out of those who do show up. It’s also a bad sign towards future big investments - again, from their perspective, if the Sure Thing of a Star Wars land doesn’t bring in the guests, what will?

It didn't raise the needle because they made so many mistakes with the land. A star wars land should have been a slam dunk. Unfortunately Disneys arrogance that what ever they built, people would flock to it in the millions bit them. So I'd hardly say Disney parks have reached saturation. Guest experience is not a Disney priority right now so adding capacity makes little sense in their eyes. The gates keep spinning so they're fine with the current strategy.

 

[MickeyLuv'r]

"- from “free” to “fee” changes all over the place…nickel and diming on a grand scale"

What has gone from free to fee, other than FastPass +?

Ooh - got one more cut to add. It isn't free to fee, but...

CRT cut the princesses, but not the price! It will still cost you $62 per adult to eat there, even though it isn't a character meal!

(Most of the locations that previously offered princess meals are currently closed, like 1900 Park Fare. )

But that's crazy! WDW's still charging $62 for a non-princess meal! Just wow!

 

[Disstevefan1]

Ooh - got one more cut to add. It isn't free to fee, but...

CRT cut the princesses, but not the price! It will still cost you $62 per adult to eat there, even though it isn't a character meal!

(Most of the locations that previously offered princess meals are currently closed, like 1900 Park Fare. )

But that's crazy! WDW's still charging $62 for a non-princess meal! Just wow!

Was the princesses cut in the name of COVID or was that done prior to the pandemic?

 

[EPCOT-O.G.]

I think she pops in and makes an appearance - waves and smiles - and then walks back out, IIRC

 

[MickeyLuv'r]

I’ll definitely miss Magical Express. But some of the things like buying 10d park hoppers with no expiration so we can use them some days here and some there were gaming the system. Cheap Annual Passes? Bad for the guests who don’t go 30+ times a year.

The pricing of AP's can be...I'm not sure how to say...but cheap AP's can be a way to lure repeat customers.

There was a time when a Universal AP was almost the same price as a 2-day park hopper. As folks were exiting the parks, they were offered the option of upgrading.

For just $15 a one-time visitor or rare visitor could be turned into a repeat visitor. (back then)

On top of that, a Universal AP came with a generous hotel room discount ($100 or more per night), plus food/merchandise discounts. It doesn't take many meals to accumulate $15 of savings in a theme park.

In that era, WDW also prominently tried to sell something they called a Bounceback offer. Every hotel room had a big glossy add offering the deal to every customer who promised to return quickly to WDW. In order to get the discount, customers had to book it before they left WDW.

 

[MickeyLuv'r]

How did the parks do after the housing market? (honest question, I didn't pay attention) Was there a precipitous drop in attendance?
Do you think the economy is going to free fall enough to make a significant hit on the parks to where the current leadership will make any changes? Personally I think if it did than than most folks are going to have way bigger issues than wdw and won't have time to be here

You seem to think that when we have a correction in the stock market that all of a sudden Disney is going to face some big comeuppance. LOL good luck with that. like any other "vice" folks are going to find a way to get their "fix". IMO when the market corrects itself at most the parks will lose a year.

After 9/11, WDW took a big hit. the strategy they took then was...I'm not sure, but it was like they tried to hide it by maintaining long park hours.

In the recession of 2008 era, WDW also took a hit. They attempted to counter it by offering big vacation package discounts. They especially offered discounts on higher-end hotel rooms and upsell items like park tours.

When people have to choose between food and vacations, I think folks do tend to eliminate vacations, no matter how much they may love vacations.

Or else they cut WAY back on the length/cost/extras. On a tight budget, a trip out for fast food can feel like a big outing.

 

[EPCOT-O.G.]

After 9/11, WDW took a big hit. the strategy they took then was...I'm not sure, but it was like they tried to hide it by maintaining long park hours.

In the recession of 2008 era, WDW also took a hit. They attempted to counter it by offering big vacation package discounts. They especially offered discounts on higher-end hotel rooms and upsell items like park tours.

When people have to choose between food and vacations, I think folks do tend to eliminate vacations, no matter how much they may love vacations.

Or else they cut WAY back on the length/cost/extras. On a tight budget, a trip out for fast food can feel like a big outing.

I am not a professional investor nor am I in finance. That said, my general feeling is that we're due for another correction, soon, and that, coupled with waning enthusiasm for travel after "revenge travel" occurs, ongoing COVID concerns and TSA masking and/or vaccine travel requirements, and increased costs of a WDW vacation, means the parks are going to be in a world of hurt again.

 

[Disstevefan1]

Disney’s customer life cycle today is the current fiscal quarter.