Will these prices ever cap out?

[Sirwalterraleigh]

The parks are not “packed”

Packed are capacity and they are never close.

Annual passes are also not “underpriced”. The goal of annual passes is not to take the retail daily price and multiply it by the number of days somebody uses it.
The goal is to incentivize frequent attendance that leads to higher profit spending. Tickets are to cover costs, not generate profits.

And so the story goes

 

[UNCgolf]

The parks are not “packed”

Packed are capacity and they are never close.

This is another effect of FastPass+ that people don't talk about. There are less people waiting in line for rides, so the rest of the park feels busier than it otherwise would. Of course attendance has increased as well which is another factor, but if people are at the park for 6 hours and spend an hour of that time waiting in line for rides instead of three hours, that's two extra hours of them milling about in common areas. That adds up quickly.

 

[Sirwalterraleigh]

This is another effect of FastPass+ that people don't talk about. There are less people waiting in line for rides, so the rest of the park feels busier than it otherwise would. Of course attendance has increased as well which is another factor, but if people are at the park for 6 hours and spend an hour of that time waiting in line for rides instead of three hours, that's two extra hours of them milling about in common areas. That adds up quickly.

The way to handle “packed” is to add RIDE Capacity...something the Iger regime frankly hasn’t done as crowds have risen.

It’s not about charging $500 a ticket to “limit” attendance.

Having fewer people in the park doesn’t generate more revenue/profit...that’s always the goal

 

[CastAStone]

The goal is to incentivize frequent attendance that leads to higher profit spending. Tickets are to cover costs, not generate profits.

And so the story goes

Bob Iger literally says in his book that raising ticket prices is done as a way to increase profits, essentially risk free. He's shockingly blunt about it.

 

[Sirwalterraleigh]

Bob Iger literally says in his book that raising ticket prices is done as a way to increase profits, essentially risk free. He's shockingly blunt about it.

I know...blue ocean theory applied.

Bob Iger also wrote that book on his retirement tour, has no obligation to care about Disney one second after cashout...

And I can personally guarantee is ignoring the culture/history he was brought into in 1996

Tickets are assigned to operation cost...a revenue generator, not a profit generator

He’s lying...to say it in few words

 

[Animaniac93-98]

This is another effect of FastPass+ that people don't talk about. There are less people waiting in line for rides, so the rest of the park feels busier than it otherwise would. Of course attendance has increased as well which is another factor, but if people are at the park for 6 hours and spend an hour of that time waiting in line for rides instead of three hours, that's two extra hours of them milling about in common areas. That adds up quickly.

And there are more strollers, wheelchairs, wagons etc filling up the parks sidewalks than before.

 

[Animaniac93-98]

Bob Iger literally says in his book that raising ticket prices is done as a way to increase profits, essentially risk free. He's shockingly blunt about it.

"When I'm President, I will run America just like I did WDW!

Everyone's taxes will go up 8-10% twice a year, every year. The country will be very profitable!"

- Bob

 

[RustySpork]

"When I'm President, I will run America just like I did WDW!

Everyone's taxes will go up 8-10% twice a year, every year. The country will be very profitable!"

- Bob

Anyone is welcome to enter the United States with the new USAP*.

Platinum, access to the US every day of the year. $2,000 per guest.

Gold, access to the US most days of the year. $1,500 per guest.

Silver, access to the US some days of the year. $1,000 per guest.

*Blockout dates may apply.

 

[Sirwalterraleigh]

Anyone is welcome to enter the United States with the new USAP*.

Platinum, access to the US every day of the year. $2,000 per guest.

Gold, access to the US most days of the year. $1,500 per guest.

Silver, access to the US some days of the year. $1,000 per guest.

*Blockout dates may apply.

Don’t forget the July 4th “premium dessert party” with exclusive fireworks viewing

 

[Mr Mindcrime]

Tickets are to cover costs, not generate profits

Generating "profits" ....... that's where Merch Chapek comes in .....

 

[Sirwalterraleigh]

Generating "profits" ....... that's where Merch Chapek comes in .....

Which is why it should be “hook” pricing...that’s the concept.

Buy more crap (as much as 85% profit) and drink your way around the world (can’t even imagine how that goes once you get to Germany...)

That is the point: drive other sales. But they’ve hurt that formula over the last 20 years

 

[Mr Mindcrime]

Have they? Parks are crowded, prices increases be damned.... $35 t shirts flying off the shelves, cha ching .... high margin food and drink is very popular all over the resort. Up-charge events out the wazoo still keep attracting suckers guests ..... and on and on. Heck, I'm part of the problem as I keep renewing my AP!

Not saying they have or haven't hurt the brand or the corporation or the formula. But .... repeat after me ..... it's all about the profit. And profits have been good. And stock prices (and those vesting stock options) are grateful.

The "guest experience" and the desires of the hardcores on this forum are only important insomuch as it translates into profits. There's your Wharton for ya.

 

[Sirwalterraleigh]

Have they? Parks are crowded, prices increases be damned.... $35 t shirts flying off the shelves, cha ching .... high margin food and drink is very popular all over the resort. Up-charge events out the wazoo still keep attracting suckers guests ..... and on and on. Heck, I'm part of the problem as I keep renewing my AP!

Not saying they have or haven't hurt the brand or the corporation or the formula. But .... repeat after me ..... it's all about the profit. And profits have been good. And stock prices (and those vesting stock options) are grateful.

The "guest experience" and the desires of the hardcores on this forum are only important insomuch as it translates into profits. There's your Wharton for ya.

The disease often takes along time to reveal itself.

They certainly find ways to make money...I just don’t believe that the way now is stable over time.

 

[Mr Mindcrime]

I agree.

This isn't Walt's Disney. Disney today isn't about art or entertainment or a family fun day in the park. Those concepts today are the mechanism to generate profits. Did Walt create Disney so that he could sell you a $16 coffee mug? Doubt it. He was a creator who wanted to entertain and provide family fun and oh by the way, he made a little money doing it. But profit was the result, not the reason. At least that's what my naive self chooses to believe.

But I agree that the current model isn't sustainable forever. When the creatives stop delivering profits (because the buying public isn't buying anymore), the MBA's will jump ship looking for profits elsewhere.

 

[UNCgolf]

I agree.

This isn't Walt's Disney. Disney today isn't about art or entertainment or a family fun day in the park. Those concepts today are the mechanism to generate profits. Did Walt create Disney so that he could sell you a $16 coffee mug? Doubt it. He was a creator who wanted to entertain and provide family fun and oh by the way, he made a little money doing it. But profit was the result, not the reason. At least that's what my naive self chooses to believe.

But I agree that the current model isn't sustainable forever. When the creatives stop delivering profits (because the buying public isn't buying anymore), the MBA's will jump ship looking for profits elsewhere.

It's not just Walt Disney. It's a significant shift in the corporate climate over the last 50-60 years. Quarterly earnings are now the most important number for companies (or rather investors) even at the potential expense of long term growth. Long term growth used to be significantly more important than it is now.

 

[TheDisneyDaysOfOurLives]

It's not just Walt Disney. It's a significant shift in the corporate climate over the last 50-60 years. Quarterly earnings are now the most important number for companies (or rather investors) even at the potential expense of long term growth. Long term growth used to be significantly more important than it is now.

Agreed. With bonuses tied into quarterly results, it's all about self-interest than the best interest of the company. With companies so eager to cut staff and replace with lower-wage workers, it then drives the self-interest and ensuring the ability to cash out when that time comes. Shareholders don't care because they're getting dividends.

For Disney, it ultimately comes down to diminishing returns. They'll keep increasing the cost on everything and it won't matter, especially with ticket price increases if they're still seeing increasing attendance each quarter/year. Even if attendance started to go down slightly, the increase in ticket prices will more than offset (and may not even be noticeable depending on the type of tickets not being sold for those who are no longer attending). While I wish it wasn't so expensive to go (taking the fam to DLR in May 2020, WDW in December 2021, and probably wife and I checking out TDR in 2022), the reality is it is and thus makes it more difficult to do trips like this.

Nothing is stopping that profit train (nor should it, though I definitely wish there was more CSR balanced with profits than what we're seeing today).

 

[disney4life2008]

15 for a terrible burger and 3 fries should tell you, no lol. Charging resort parking, no lol.

 

[Polydweller]

I agree.

This isn't Walt's Disney. Disney today isn't about art or entertainment or a family fun day in the park. Those concepts today are the mechanism to generate profits. Did Walt create Disney so that he could sell you a $16 coffee mug? Doubt it. He was a creator who wanted to entertain and provide family fun and oh by the way, he made a little money doing it. But profit was the result, not the reason. At least that's what my naive self chooses to believe.

But I agree that the current model isn't sustainable forever. When the creatives stop delivering profits (because the buying public isn't buying anymore), the MBA's will jump ship looking for profits elsewhere.

Oh please. I was there in 1957, and 1960 and mare after that. Don’t fool yourself. He sold as much merchandise throughout the park as he could. He even sold cells from his films on Main Street. I’ve got one in my living room that i’m looking right now that I got in 1960. He sold hats, mugs, Davy Crockett merchandise, anything he could. Walt was a tough determined business man who created an Uncle Walt persona that helped sell the park through his Disneyland show. If you want to learn about Walt the business do some research about that hard nosed negotiations he was in the middle of to build Disneyland (it wasn’t just Roy). And read about how he treated employees who tried to start a union. It will change your mind.

People have got to get over this myth of him just being a nice guy wanting to build a park for people’s enjoyment. That may have been part of it but the tough, determined businessman that learned a lesson from losing Oswald was a major component of who he was.

 

[Sirwalterraleigh]

Oh please. I was there in 1957, and 1960 and mare after that. Don’t fool yourself. He sold as much merchandise throughout the park as he could. He even sold cells from his films on Main Street. I’ve got one in my living room that i’m looking right now that I got in 1960. He sold hats, mugs, Davy Crockett merchandise, anything he could. Walt was a tough determined business man who created an Uncle Walt persona that helped sell the park through his Disneyland show. If you want to learn about Walt the business do some research about that hard nosed negotiations he was in the middle of to build Disneyland (it wasn’t just Roy). And read about how he treated employees who tried to start a union. It will change your mind.

People have got to get over this myth of him just being a nice guy wanting to build a park for people’s enjoyment. That may have been part of it but the tough, determined businessman that learned a lesson from losing Oswald was a major component of who he was.

My talk of management philosophy change has ZERO to do with Walt Disney or his old friendly animators...not a bit.

I’m talking about what they learned later in the latter part of the century. Built a very well oiled, profitable stable machine.

But I can’t speak for anyone else

 

[Trackmaster]

A drive down I 4 from the Florida Turnpike to Disney during that time period was very telling to see exactly how large the impact on the Orlando tourist industry was. Seeing hotel after hotel closed with For Sale signs facing the freeway, little traffic on I-Drive and the ability to walk into any restaurant without reservations and be immediately seated and served. Times were dismal.

I remember in 2012 I took my visit to WDW and Orlando in years since I was a kid. I was surprised that I was able to get a nice hotel room, with a free breakfast that was within a mile of DAK for $35 a night. It was a one week stay. I thought that it would always be like that in Orlando.