Disney planning dynamic pricing for domestic parks

There's been a lot of talk around here about economics and how affordable Disney is...

He noted that Disney park-goers tends “to be at the higher-income deciles, and those consumers continue to do well. So we certainly broadly feel good about where the consumer is.”

I would be curious about how broadly they're defining "higher-income". I still contend that there's no way the parks are being filled with only the wealthy.

And aren't they already dynamic with their gate, lodging, and virtual queue prices? I guess maybe the story is that they are looking at expanding or going beyond that. Or is what they're doing now not truly dynamic.

He said deciles (plural). So, divide everyone up into 10 groups. Multiple deciles means at least to 20%. Top 30% and top 40% would also be high income deciles though 40% would be a stretch to me to say it fits.

And there is some subjectivity when it comes to determining who is "rich" or "wealthy." To a certain extent, its someone who makes more than the given person making the determination. I know people worth north of $10 million who think you need to have at least $100 million to be wealthy. Sure there are people worth $100 million who view the threshold as hundreds of millions. And someone making $50,000 may well have a different view of rich/wealthy than someone making $150,000 or $250,000.

They have something of a hybrid dynamic pricing model now. More popular dates come with higher prices. But those are established in advance. Sounds like they are looking at making it more dynamic meaning prices would change on the fly as the given day approaches. If demand is higher than expected for a given date, they would increase the prices for that date. Could reduce them as well if demand is less (though some visitors paying the higher price may balk when they see lower prices being offered).

GoBucks89:

Could reduce them as well

Ha ha. Good one.

bigboy:
I still contend that there's no way the parks are being filled with only the wealthy.

I asked ChatGPT what he meant by higher-income deciles.

Bottom line: I think “higher-income deciles” in that piece most likely refers to the top 10% (or maybe top 20%) of U.S. households by income — people who make well above the median, likely $200,000+ annually, depending on the exact metric.

Top 20% starts at around $175K. The source is census.gov.

So I think GoBucks is right. It depends on what you consider wealthy. My household is in the top 10% but I don't feel wealthy. I feel comfortable but I can't just spend whatever I want whenever I want.

I can't just spend whatever I want whenever I want.

I think of that not as wealthy, but "post-economic." That's a whole different kettle of fish.

Using these stats, I'd say the top half can probably do Disney, at least in a basic way. It just depends on your priorities.

Elsewhere in the results, or maybe it was the call, they said domestic attendance is down 1%, and honestly I expected more just by eyeballing the crowds.

I imagine this lets them more precisely calibrate exactly how high they can raise prices and the consumer will still tolerate it.

Let us not forget that plenty of people (I don't know how to Gonch-back, but I know I've posted about some folks I know) are perfectly comfortable slipping into massive credit card debt that they won't pay off until 2067 in order to "do Disney".

I agree that it's all about 1) priorities, and 2) perspective. If it's super important, you'll make it happen. And everyone has different opinions about debt (I think that got covered in the other thread about Six Flags); some people just don't care.

I feel like the conversation here is implicitly about Orlando, when dynamic pricing is probably more important in Anaheim. Folks plan their Disney World vacations months in advance, and buy 5-day park hopper passes, and they're not going to change their plans because suddenly tickets in March jumped $10, or Magic Kingdom became more expensive on Tuesdays. People deciding whether to go to California Adventure might be motivated by lower prices the first week of school.

from LendingTree last year…

Approximately 24% of consumers have incurred financial debt to fund a Disney trip, which is higher than the 18% that did so in 2022.

Additionally, 45% of consumers with young children went into debt to fund a Disney trip.

Also, 65% of consumers with Disney debt said in-park food or beverages was what broke the budget, while 48% said general transportation costs and 47% said accommodations.

Also worse from Forbes and others..

Disney’s annual filings continue to claim that the Experiences segment—home to the theme parks, cruise line, and consumer products—“generally” sees increased revenue during the first and fourth fiscal quarters. The first quarter boost is accurate. But the fourth quarter?

In fact, Disney Parks Summer revenue has repeatedly hit the lowest level of the year, contradicting the exact language Disney continues to publish in its SEC documents.

They don't generally report specific attendance numbers, but the segment revenue and profit continues to climb, so I don't know what Forbes is talking about. Also, every time they add a new ship, they tend to book it pretty solid. With the fleet so small, adding the Treasure, for example, increases their total cruise days by 20%.

from LendingTree last year…

And? People make choices. We get it, you hate Disney and corporations and whatever.

And? People make choices. We get it, you hate Disney and corporations and whatever

I actually like Disney quite a bit; it’s just that the constant price hikes and the sense of squeezing every last dollar have taken away some of the magic. I also agree that the Cruise Line is one of their smartest moneymakers, and Imagineering is really thriving there.

I think capitalism is generally a good system, but it isn’t sustainable in its current form—just look at Zohran and Trump suddenly reversing course on him. And it doesn’t take a rocket scientist to see that wealth distribution is nowhere near what it was in the ’90s.

The top 1% of global wealth holders captured 38% of all additional wealth accumulated since the mid-1990s, while the bottom 50% captured just 2%.

Every quarterly report says a K shaped curve has developed, and when only the wealthiest 20% are driving growth, I don’t have to mention to many historical points where that will all end up.

Back to Disney if a 1/4 of your visitors have to finance their vacation, (and considering the number of auto loan defaults is at all time high, same for college loan payments, and we are likely facing a bursting AI bubble) Those 1/4 of your visitors cant afford another trip anytime soon. And the other 2/4 are prob stretching too.

Im also sure their are crazy middle income Disney fans who are going to be fed up with Lighting Plus, and people who can afford it having a better time. And kids with rich parents being able to buy the fancy ears, and character dinners, and staying on resort, and early entry, etc, etc. The overall experience was income agnostic in the 90s mostly.

Im not even going to be silly and use a 1955 pricing but 1979.

1979 Disneyland 1-Day price: $8.50
Today’s equivalent: $38

Disney World 1-Day price: $10.50
Today’s equivalent: $48

That being said SF still needs to raise ticket prices, and adjust food pricing.

Sharpel007:

...taken away some of the magic.

As clearly evidenced by the 9% increase in operating income. No one wants the magic anymore.