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

[Laketravis]

The skyrocketing costs are no longer skyrocketing. The company is investing more in WDW projects than they have in my entire lifetime, which will drive attendance to the resort.

Meanwhile, their competition is evidently increasing prices at a rapid pace. I simply cannot find a room at Endless Summer for anywhere near as cheap as you snagged it. For me, neither a cooler fridge that I would never take advantage of nor a fitness center I would never use are worth the paper thin walls that prevent me from getting a good night’s rest.

To each their own. The reality doesn't support your view but fortunately pixie dust is still free for consumption.

 

[Tom P.]

"Borrowing is no way to start a vacation in America."
"Well why not? That's the way Americans always start their vacations."
- Mario Orsatti and Lucy Ricardo, I Love Lucy, episode "Visitor from Italy" aired October 29, 1956

Vacations being so expensive that people go into debt to afford them is hardly a new concept pioneered by Disney. Just saying.

 

[Laketravis]

Meanwhile, the almost 1200 comments to the WSJ article are overwhelmingly negative.

 

[JoeCamel]

"Borrowing is no way to start a vacation in America."
"Well why not? That's the way Americans always start their vacations."
- Mario Orsatti and Lucy Ricardo, I Love Lucy, episode "Visitor from Italy" aired October 29, 1956

Vacations being so expensive that people go into debt to afford them is hardly a new concept pioneered by Disney. Just saying.

The episode was created to highlight that going in debt for frivolous things is not a good idea?

 

[Coaster Lover]

So, isn't the best option truly to build a third U.S. destination and pump it full of a ton of clones? Building more in Orlando will only get more people to go to Orlando making the current issues worse. Building a third destination in Texas or the North East that is full of stuff you can already find in Orlando or LA gives guests in those regions less reasons to visit Orlando (improving the overcrowding issues in Orlando) as often while putting more money in Disney's pockets (especially if people don't have to travel as far and can spend more at the parks). Would seem like a situation where canibilazation of your own business may be a good thing...

 

[JD80]

To each their own. The reality doesn't support your view but fortunately pixie dust is still free for consumption.

So your response to the conversation is to give up and insult someone? Nice.

 

[DarkMetroid567]

I won’t speak further on current prices (bc they are indeed insane and I am lucky that I can finally afford an AP/magic key) but I’ll always push back on Disney being “affordable” or even a fantastic value in the past 25 years. I really don’t think people here understand that if you got to grow up going to Disney more than once every four-five years, you were lucky. I have numerous friends who never made it to Disneyland until Grad Nite or well into adulthood.

 

[Sirwalterraleigh]

Gift link here.

I started working with the WSJ on this back in November. I pointed out - as I've said here - that Disney prices its theme parks for the top 20% of American households by income - those with pre-tax earnings of $264K. And if we're being honest, Disney really focuses on the top 10%, 5%, and 1% of incomes.

Backing up those two sentences ended up being its own 40-page blog post, covering 150+ datasets on everything from household income, to consumer expenditure surveys, to metropolitan populations around NFL cities. Links to the datasets are in the post.

Here's the post: How Much Disney Can America's Middle Class Afford?

Thanks to @wdwmagic for letting me post this. And thanks to all of you for letting me try out here how I ended up explaining it. I appreciate you.

…I knew your greasy paw prints were all over this

 

[RSoxNo1]

Here's a misleading line of text in the context of WDW:

"When Bob Iger took over as CEO in 2005, he continued Eisner’s investments in theme park expansion. U.S. ticket prices rose, usually in line with inflation, according to Disney parks executives and analysts. "

Executives including Iger and Chapek have acknowledged the price of a Disney vacation before. They're not changing anything.

 

[Sirwalterraleigh]

Here's a misleading line of text in the context of WDW:

"When Bob Iger took over as CEO in 2005, he continued Eisner’s investments in theme park expansion. U.S. ticket prices rose, usually in line with inflation, according to Disney parks executives and analysts. "

Executives including Iger and Chapek have acknowledged the price of a Disney vacation before. They're not changing anything.

It’s a bold faced lie…

Iger immediately locked down investment and started pushing pricing to increase margins on what Eisner had built…

History is what it is

 

[RSoxNo1]

The price actually depends on WHERE YOU ARE IN THE PARK!

I believe one includes tax and one doesn't?

I don't believe it does, but I'll check. It would be unusual for one place to be tax-inclusive and the other not.

Disney has done this for years where some carts have tax posted and others don't. I'm not sure the "why" of it, but I've 100% seen it before. I imagine the Touring Plans menu item search can probably confirm this.

 

[TrainsOfDisney]

Building more in Orlando will only get more people to go to Orlando making the current issues worse.

Disney and Universal both need more people to go to Orlando. Not less.

 

[Stripes]

To each their own. The reality doesn't support your view but fortunately pixie dust is still free for consumption.

I mean the reality is that in the past 4 quarters Disney’s parks have been maintaining or improving the financial performance of their parks and resorts business while the Comcast parks have been seeing substantial weakness, including an 11% decrease in revenue and a 24% decrease in EBITDA during the April-June quarter.

And Comcast’s poor performance wasn’t attributable to any goodwill price decreases, in case you were wondering.

 

[Sirwalterraleigh]

I make well over the $264k and the cost is getting ridiculous for me.

I don’t really understand how they plan to push prices even higher.

At some point no matter how much you make you just say “That’s a rip off, not gonna do it”.

Once a consumer product is viewed as a ripoff…it is very difficult to pull out of that dive

It all depends on the person. There are some people who make $500k a year and just throw money around like it's confetti. Those folks wouldn't bat an eye at a week-long $12,000 WDW vacation with all the extras. There are others in that income bracket, one in particular who I'm thinking of, who act like they make $30k a year and will go so far as to cut paper towel rolls in half to save money.

My take is that one's attitude towards money, no matter how much you have or do not have, is heavily influenced by your parents' financial situation while you were growing up.

But as they make more money…they will gravitate towards things with more quality/value organically…and may never realize it

Declining value is never smart business

This was another thing that the WSJ article didn't have room for, but deserves analsis.

They appear to have hit limits in 2018 with budget-conscious guests around hotel and sit-down food prices. Those have either tracked inflation or fallen slightly for the last ~6+ years.

Charging more for on-site Value hotels will just drive people offsite or to shorter trips. And we've already seen evidence of drops in sit-down dining numbers.

That's why Lightning Lane is so important to them. It's a new source of revenue that they can grow faster than inflation, and that's tailor-made for the richest guests.

Their clientele is never “rich”…it never was…and it never will be

It’s why 15 years of impossible philosophy has been disastrous for parks.

You’re in Orlando…I know some try to convince themselves they can serve the upper crust…but it’s a ridiculous stance

 

[Stripes]

Meanwhile, the almost 1200 comments to the WSJ article are overwhelmingly negative.

Of course they are. It’s the internet.

More specifically, the WSJ.

 

[Sirwalterraleigh]

I mean the reality is that in the past 4 quarters Disney’s parks have been maintaining or improving the financial performance of their parks and resorts business while the Comcast parks have been seeing substantial weakness, including an 11% decrease in revenue and a 24% decrease in EBITDA during the April-June quarter.

And Comcast’s poor performance wasn’t attributable to any goodwill price decreases, in case you were wondering.

That is a comparison fallacy

It’s not a “battle” between Disney and universal

It’s that Disney is leaning on parks to supply 55% of their money to pay for everything they do…

And they are admitting they are losing or flat on customers in good economic times and using price increase only to keep the revenues up. Which means they will continue to lose more people and sell less volume of product.

Keep that up..4th dimension type stuff

 

[RSoxNo1]

The fact that they called attention to "price of parking" and the concession was no longer itemizing out Parking on your resort fees is in itself laughable as a "concession" from Disney.

I've also seen this figure several times:

"A Disney spreadsheet exposed in a hack of its internal Slack communication system this summer indicated that the Genie+ passes generated more than $724 million in pretax revenue between October 2021 and June 2024 at Walt Disney World alone. "

Is it just me or does that seem light? Depending on whether we're counting October of 2021 and June 2024 in the math, you've got 2 years, 8 months of data and they're "only" getting $272 million annually out of Lightning Lane? That's obviously not nothing, but as a guest dissatisfier that's not enough in my mind to make up for it. Again, this goes out to the a la carte approach under Chapek. If you spread out that $272 million across every guest that visited the parks in 2022 (47.06 per TEA), you're talking about $5.78 per guest.

They can get to those numbers the same way by increasing prices on tickets, lodging, parking, etc. This all points to one more thing in the "nickle and diming" approach that detracts from the value of a Disney trip.

The D'Amaro comment about needing to keep prices flat isn't a bad one, except I don't recall that they've ever done that. There are numerous pressure release valves that Disney can tap into without flat out reducing the price of tickets:

• More perks for Annual Passholders. Eliminate the park reservations, add back PhotoPass
• Increase various discounts, free dining, Buy 5, get 2 nights free, that sort of thing. Back in 2008, they were doing Buy 4, get 3 nights free.
• Bring back Magical Express. The article says "only 1/3rd of guests used it". The word "only" is a Disney word. You can re-write that sentence a few different ways depending on the story you want to tell. The fact of the matter is, rental cars are expensive, and if Disney builds in the Magical Express cost into their hotel, it would still be an overall decrease in vacation cost for the guest. If a family has $6K for a vacation, Disney wants to get as much of that $6K as possible. If that family doesn't have to rent a car, Disney has a better chance of getting a larger percentage.
• Simplify the line skipping program. A reversion back to a digitized version of the original Fastpass with no price point (at least for resort guests) would be a huge step in the right direction. Having experienced the ability to always hold 3 LLMP is nice, but practically speaking you really only need 2. You can go deeper into different scenarios on this, but the short answer is it needs to be simplified and it needs to be included either as part of your ticket or as part of your hotel reservation.

 

[surfsupdon]

Disney has thousands more rooms than Universal does and doesn’t contract out the operations of the hotel to a third party. Loews pays their employees less than Universal or Disney

I expect daily housekeeping on vacation- it's a vacation!
I cannot believe Disney has not brought this back daily at Values and Moderates. Or at least given a giftcard to compensate for the lack of it.
Pre covid, if you denied housekeeping, you were given a gift card. Now you pay full price for less. When I stay at Pop or Caribbean, I order towels and trash service on each non housekeeping day.

 

[Laketravis]

I mean the reality is that in the past 4 quarters Disney’s parks have been maintaining or improving the financial performance of their parks.........

At the expense of declining attendance and mounting bad press. Downward spirals are often first manifested outside of P&L's and balance sheets.

As far as Universal goes, let's compare notes in a few months.

 

[Laketravis]

I expect daily housekeeping on vacation- it's a vacation!
I cannot believe Disney has not brought this back daily at Values and Moderates. Or at least given a giftcard to compensate for the lack of it.
Pre covid, if you denied housekeeping, you were given a gift card. Now you pay full price for less. When I stay at Pop or Caribbean, I order towels and trash service on each non housekeeping day.

Same here. I travel a lot, and regardless of what I pay for a room I expect it to look the same every night I return as it did the first day I checked in. Using Covid as a springboard for every other day or less housekeeping was/is a crappy move.