WSJ: Even Disney Is Worried About The High Cost Of A Disney Vacation (gift link)

[MickeyLuv'r]

Someone catch me up, what are we arguing about again? I skipped ahead when you guys were saying everyone had an AP so AP discounted hotels are a thing everyone uses.

Um, nobody said that.

I've discussed what I assumed to be a standard consumer skill: always checking for discounts when booking vacations to WDW and Universal.

Please forgive me if I was mistaken.

WDW and Universal almost always offer a discount or coupon of some kind.

If nothing else, one can always knock off 5% off WDW prices via buying e-gift cards at Target. Membership stores like Sam's Club also offer Disney gift cards at a discount.

Discounted gift cards are also part of why Yak and Yeti is always full. Yak is Landry's Restaurant Group. Sam's Club and other places sell Landry gift cards at a 20% discount.

Perhaps this forum needs a more robust section on the topic of discount deals!

 

[flynnibus]

That's exactly why I'm wondering if the number of those AP holders who spend less in the parks each day (and I'm most certainly one of them) are tipping the scales so much that WDW has to continue raising the prices for those who do spend in order to maintain margins.

No - because they simply influence the APs behavior by limiting their access or driving up their costs if they want to alter how their influence is impacting the business.

APs are a problem when they DISPLACE or crowd out other full priced guests. They also can be a drag on metrics because of their spending patterns, but that is a metrics issue, not a revenue issue - they know those AP visits are inherently 'additional' spending dollars to begin with, even if low compared to a full priced guest. So they don't need to sweat the AP not spending high per day... as long as the AP is not replacing/displacing typical guests.

Disney isn't going to drive pricing strategy based on the daily average spend metric on its own. The metric is a view into the business, it's not what drives the business.

 

[Laketravis]

No - because they simply influence the APs behavior by limiting their access or driving up their costs if they want to alter how their influence is impacting the business.

Other than stopping the sale of AP's completely (Covid), I don't think I've seen an instance where WDW throttles AP access (aside from established blackout dates for FL passholders) or drives up their cost to suppress sales beyond their typical annual price increases that are in lockstep with other price increases. In other words, there have been no variable real time adjustments based on real time demand. Park reservations may still be in place in order to do that but seldom if ever have I seen those used either.

APs are a problem when they DISPLACE or crowd out other full priced guests. They also can be a drag on metrics because of their spending patterns, but that is a metrics issue, not a revenue issue - they know those AP visits are inherently 'additional' spending dollars to begin with, even if low compared to a full priced guest. So they don't need to sweat the AP not spending high per day... as long as the AP is not replacing/displacing typical guests.

Let's also not forget that there is an incremental cost to operate the park each day associated with passholders who are there but don't make purchases. That's a flat out operating loss per guest even if you want to amortize the revenue from the AP over future anticipated visits (which I'm positive they don't).

Cost vs. Revenue doesn't care about metrics or KPI's. If $100 was collected today in the MK and it cost $110 to have it open, that's a loss. Investigation could reveal that 5 of the 10 guests admitted were AP holders and didn't spend a dime. That's a metric that explains the loss.

Disney isn't going to drive pricing strategy based on the daily average spend metric on its own. The metric is a view into the business, it's not what drives the business.

I beg to differ. Metrics are what support a pricing strategy, and daily average spend is most certainly a metric used to determine success and drive the business. Similar to ARPU in other industries.

 

[flynnibus]

Other than stopping the sale of AP's completely (Covid), I don't think I've seen an instance where WDW throttles AP access (aside from established blackout dates for FL passholders) or drives up their cost to suppress sales beyond their typical annual price increases that are in lockstep with other price increases. In other words, there have been no variable real time adjustments based on real time demand. Park reservations may still be in place in order to do that but seldom if ever have I seen those used either.

Disney does this a ton - just not as much in WDW. Split reservation pools, changing blackout dates, changing the access the APs have. All of this is just in recent history. And no, AP prices haven't been 'lockstep with other price increases' - and also why there are multiple tiers now when there wasn't in the past (beyond the special case FL ones).

Let's also not forget that there is an incremental cost to operate the park each day associated with passholders who are there but don't make purchases. That's a flat out operating loss per guest even if you want to amortize the cost of the AP over future anticipated visits (which I'm positive they don't).

The cost to operate is not per head though - it's more like bands of crowd levels and has very high minimums. It's the entire reason you can offer discount admission w/o much peril... because the majority of the time you are not operating at the top of the band... and have slack in the current operating point. Which is exactly why my comments aid 'not displacing' full price guests. They are taking up slack you couldn't free up anyways.

Cost vs. Revenue doesn't care about metrics or KPI's. If $100 was collected today in the MK and it cost $110 to have it open, that's a loss. Investigation could reveal that 5 of the 10 guests admitted were AP holders and didn't spend a dime. That's a metric that explains the loss.

Your point is based on flawed logic from above...

I beg to differ. Metrics are what support a pricing strategy, and daily average spend is most certainly a metric used to determine success and drive the business. Similar to ARPU in other industries.

Disney has incredible visibility into what ever AP is spending and doing - They can easily back that kind of data out of their overall spending metrics and not have to worry about APs muddying the picture.

 

[Disstevefan1]

Everybody is trying to figure out reasons why prices on everything in Disneyparks are constantly going up?

Disney wants to MAKE MORE MONEY than last quarter.

 

[Tha Realest]

Everybody is trying to figure out reasons why prices on everything in Disneyparks are constantly going up?

Disney wants to MAKE MORE MONEY than last quarter.

And they’ve likely maxed out their possible customer base (which is likely also shrinking) so to keep those quarterlies looking good they have to extract more and more from those who do choose to show up.

 

[Disstevefan1]

And they’ve likely maxed out their possible customer base (which is likely also shrinking) so to keep those quarterlies looking good they have to extract more and more from those who do choose to show up.

Exactly Correct come and get me wdwmagic forums coppers

 

[Laketravis]

And no, AP prices haven't been 'lockstep with other price increases' - and also why there are multiple tiers now when there wasn't in the past (beyond the special case FL ones).

AP prices seem to go up every year around the same time park tickets do which is what I meant by lockstep.

I also wasn't aware there are tiered AP's available outside of FL, pretty sure the Incredi-Pass is all that's available.

 

[HauntedPirate]

AP prices seem to go up every year around the same time park tickets do which is what I meant by lockstep.

I also wasn't aware there are tiered AP's available outside of FL, pretty sure the Incredi-Pass is all that's available.

DVC members have the ability to purchase the Sorcerer Pass (formerly the Gold pass).

 

[flynnibus]

AP prices seem to go up every year around the same time park tickets do which is what I meant by lockstep.

I also wasn't aware there are tiered AP's available outside of FL, pretty sure the Incredi-Pass is all that's available.

If you are only focusing on WHEN change happens - your logic would apply - but that would be missing the forest for the trees. Obviously Disney isn't making changes dynamically day to day or week to week - that would be incredibly disruptive. A business doesn't change it's pricing strategy and models that frequently for countless reasons. Meanwhile, Disney's AP offerings have dramatically changed in the last 15yrs. Remember when you used to debate if an AP upgrade was the right choice at just about 10+ ticket days? Now APs are almost double the price of a 10 day EXPIRING ticket. AP costs have soared even relative to ticket prices. The except is the extremely malluable limited FL passes... because.. wait for it... they are able to better control their impact of use.

As to your last comment... it's called 'incredi-Pass' for a reason - aka it had to be differentiated from the other 'pass' options they have since evolved to beyond what in the past was only 'annual passes'. There are what... 4 different types for WDW... and even more for Disneyland.

 

[MickeyLuv'r]

A part of the AP discussion is also that - like other guests- at least some AP's are now paying for the extra-admission fees, such as after parties, holiday parties, LLMP, and maybe even LLPP.

I am inclined to think that WDW has tried to create products that appeal to AP holders, or at least make more money off of them.

On the surface, popcorn buckets appeal to everyone, but sacrificing 2+ hours of park time to buy one (when the line was that long), is somewhat more appealing to AP's than regular ticket holders.

At the recent Art Festival, it seemed many of the people buying art were AP's. The 10% discount was an incentive to have an AP, but I also saw a good number of people who appeared to be leaving the park as soon as they bought their art. I'm sure some regular ticket holders are willing to do that, but it makes more sense an AP holder is more willing to do that.

Some of the other special festival events also appear to be at least somewhat marketed to AP's, like the music concerts and special dining events. It's not that regular ticket holders don't buy them, but rather AP's are eager to be offered that type of special event. I don't think they were offered this year, but in the past Epcot Artfest had offerings like the Paint w a Disney Artist Class that cost $300+ on top of park admission.

 

[Laketravis]

If you are only focusing on WHEN change happens - your logic would apply -

Pretty much the definition of "lockstep"

As to your last comment... it's called 'incredi-Pass' for a reason - aka it had to be differentiated from the other 'pass' options they have since evolved to beyond what in the past was only 'annual passes'. There are what... 4 different types for WDW... and even more for Disneyland.

Unless you live in Florida, the Incredi-Pass is the only annual pass you can get for WDW. (Unless you have DVC as @HauntedPirate later pointed out).

 

[Laketravis]

A part of the AP discussion is also that - like other guests- at least some AP's are now paying for the extra-admission fees, such as after parties, holiday parties, LLMP, and maybe even LLPP.

True. The mindset could very well be that they didn't have to pay to get into the park that day so spending on the party or LL is actually a good deal.

 

[flynnibus]

Pretty much the definition of "lockstep"

Ehh.. if you only look at ONE dimension... yes. But "price increases" are not only about DATES - but also the actual thing people look at - the price changes.

Unless you live in Florida, the Incredi-Pass is the only annual pass you can get for WDW.

Yeah - but the entire topic of 'spending in WDW' is not separated between those in FL.. and those not in FL. Nor does Disney report avg spends based on the different demographics.

You're chasing meaningless distinctions to the actual conversation.

 

[Laketravis]

You're chasing meaningless distinctions to the actual conversation.

No, just trying to keep up with the morphing from differences in resorts to what a "typical" park visitor is to what percentage of guests visit multiple times a year to how many of those could be FL passholders to how many versions of AP's there are............

Have you heard? Even DIsney is worried about the high cost of a Disney vacation.

 

[DarkMetroid567]

im tired

 

[MickeyLuv'r]

Obviously Disney isn't making changes dynamically day to day or week to week - that would be incredibly disruptive. A business doesn't change it's pricing strategy and models that frequently for countless reasons.

But businesses do this all the time!

When was the last time you shopped at Macy's, Kohls, or Gap/ON? The prices change dramatically from day to day. Literally, a shirt that cost $13 on Sunday jumps to $31 the next day, then $33, then $19. Or $5 when combined with incentives like Kohlscash, Macys Starcash, or Gap/ON cash. (which help dissuade shoppers from returning items).

When was the last time you bought airfare?

I was just reading, the next big idea is targeting product prices to each individual via all the information they collect (via coupon programs and aps people have). Kroger and Target are already trying this it via their apps by offering personalized coupon deals and digital price tags.

 

[MickeyLuv'r]

True. The mindset could very well be that they didn't have to pay to get into the park that day so spending on the party or LL is actually a good deal.

I think it is called chunking?

You get customers to pay in chunks: pay a portion 30 days before arrival, another part 7 days out, and another portion in the moment.

Once people (pre)pay for something many of them kinda forget how much they already spent.

Or maybe different people pay each portion - like if grandma/grandpa paid for the bulk of the trip, the other adult children might feel like they should buy one of the extras.

Anyhow, people are less inclined to add it all up if they pay in chunks.

 

[MickeyLuv'r]

Nor does Disney report avg spends based on the different demographics.

They don't?

 

[flynnibus]

But businesses do this all the time!

When was the last time you shopped at Macy's, Kohls, or Gap/ON? The prices change dramatically from day to day. Literally, a shirt that cost $13 on Sunday jumps to $31 the next day, then $33, then $19. Or $5 when combined with incentives like Kohlscash, Macys Starcash, or Gap/ON cash. (which help dissuade shoppers from returning items).

You do realize the difference between "pricing strategy and models" and "price charged" right? Rethink that and re-read the post.