Disney World tickets reach $67

Posted | Contributed by Lord Gonchar

Walt Disney World is hiking ticket prices for the second time in 2006, raising the cost of a basic one-day, one-park admission to $67, according to a pricing chart posted on the company's media Web site.

Read more from Reuters.

Lord Gonchar's avatar
Disney clearly does not want you to visit one park for one day. They want you to come to Orlando and stay with them the whole time. It gets progressively cheaper to visit Disney with each additional day - to the point of ridiculousness. (By day 5, it's only $2 for each additional day you tack on to your visit)

Five days at WDW is $206, but 10 days is just $216 - they're trying to keep you once you hit Orlando. Even still, a 5-day stop at WDW is less than $42 a day.

Disney Ticket Prices

I've been saying it for way too long and way too often - the game is changing. This is the future of what it costs to visit the large theme parks. Six Flags listed gate is closing in on $60, Disney is closing in on $70. Hell, even Holiday World is flirting dangerously close to the $40 mark. I'm still wondering how long it's going to be before CF realizes dropping prices at CP did no good and that they're sorely underpriced compared to similar product and starts bumping the gate back up - I'm guessing it will be sooner than later. If not, they're leaving money on the table and that's the number one 'no-no' of running a solid business financially.

I suspect it will get worse industry-wide before things level off.

eightdotthree's avatar
Its one thing to price a park like Disney, Cedar Point, or Great Adventure high, but I don't think the little parks like can get away with the same idea.

Man, you need a degree to figure out Disney tickets. My gf and I are going to one of the waterparks and Animal Kingdom and we are having a hard time finding the best deal.

Lord, it will get to the point where only the rich will go to the large amusement parks because they can afford it. People are fools if they think that they are getting thier money's worth with only riding a few rides on the busiest days of any amusement park.

What the major parks need to realize is that they are pricing themselves out of the reach of most families can afford to spend. They want to be family oriented but in reality they aren't. The attendance at Six Flags has dropped 14% from last year. I am sure that other chains who are doing price increases are doing the same with thier attendance. Simple Economics dictates that lower prices will bring in the revenues at a higher rate than with a high price and low attendance.

Lord Gonchar's avatar
I'd argue that pricing has had little to do with SF's declining attendance - it's the experience in the park that's driving people away.

I'd back that by pointing out that WDW prices have risen 22% since 2004, but the attendance at those for parks continues to rise at levels the other parks can only dream of (between 11% and 14% depending on the park) during the same time frame.

I'd also back it by pointing out that CP lowered prices at the gate and in the park this year and saw an attendance drop in the most recent quarterly report. Dropping the price didn't attract more customers.

Simple Economics dictates that lower prices will bring in the revenues at a higher rate than with a high price and low attendance

Yeah, that's simple allright. :)

I've never bought into the 'volume' method of making money. I say it all the time, but I'd rather make $1000 by selling something to 50 people for $20 than by selling it to 100 people for $10.

Why? Because the revenue is the same, but my costs are lower thus making my bottom line higher.

Of course the key is to not go too high. Say I tried to sell that same item for $50 (with the reasoning that now I only have to sell 20), but the market won't bear that kind of rate - now I only sell 12 and end up with less revenue because I priced myself too high.

With annual attendance jumps of 5 to 9 percent, Disney is clearly not pricing themselves out of anything. They're selling 50-for-20 and doing just fine. How long before other parks realize it will work for them too and will cut costs, reduce staffing needs and subsequently issues with that staffing (it's easier to make sure less people are providing satifactory service, etc.).

I honestly don't think the parks have priced themselves out of anything yet.

(sorry for the oversimplifying of all concepts and opinions in this post, but the basic point is there and it would take a novel-sized post to cover every detail and angle)

Simple Economics dictates that lower prices will bring in the revenues at a higher rate than with a high price and low attendance.

You are assuming that the new prices will change demand in a significant way. I'm not so sure. For example, we have to pay about $1000 just to get to Orlando, not to mention the rental car, lodging costs, food, etc. etc. In light of that, an extra $60 on tickets for the four of us for the week (and that's all we are talking about here) just doesn't matter that much.

Furthermore, as Gonch pointed out, longer stays are much more affordable---and as it happens, longer stays are *cheaper* under this admission plan than they were two years ago, even with this price increase.

7-day park hopper tickets (2 adults, 2 children, purchased in advance) would cost our family about $990 with current prices, or about $141 per day. In late 2004, 5-day parkhopper tickets (the longest duration you could buy) would have cost $956 or about $191 per day. For the other two days, we'd have to buy single-day WDW tickets, or we'd have to do something else with our time (which would also have cost more money).

We don't go to waterparks at WDW (February isn't quite reliably hot enouhg), but if we did, the price under the new structure is $1162 for seven theme park visits and six water park visits. Under the old pricing structure, 7-day parkhopper plus tickets (with only four waterpark visits) would have been $1310.

True, the "old" tickets never expired, and the "new" ones do, but so what? I'm still paying less per entry than I would have two years ago, so I'm still a pretty happy camper. In contrast, shorter trips are now much more expensive. But, I don't care about that, because I've got to fly to get there, and if I'm flying anyway, I'm making at least a very long weekend out of it.

Lord Gonchar's avatar

You are assuming that the new prices will change demand in a significant way.

How many times have I had to say I hate the way you can reduce an entire post of mine to a single sentence and get the same point across?

Because I do hate it. ;)

Jeff's avatar

I've never bought into the 'volume' method of making money. I say it all the time, but I'd rather make $1000 by selling something to 50 people for $20 than by selling it to 100 people for $10.
I don't buy it either, unless it's some kind of commoditized product (which theme parks certainly are not). And even then I'm not sure.

Look at Apple. They sell computers, and thanks to Dell and HP, that's a total commodity market. Margins are so ridiculously thin. However, they sell stuff at an enormous profit, and they get away with it presumably because of better marketing, design and product. (Disclaimer: I'm aware that today's Mac Pro's are actually cheaper than comparably equipped Dell's.)

I don't know if Cedar Fair made the right decision for Cedar Point, but I guess time will tell. They absolutely made the right decision for Geauga Lake.

Lord Gonchar's avatar
Well, in the case of Cedar Fair, I have to add the disclaimer we go over in the newest podcast (yet to be posted as of my writing this) which is - it's only the second quarter. The third quarter is the one to watch and even then if revenue stays constant in the face of dropping attendance then technically, no harm done.

CP's second quarter is just a good example to cite for why dropping prices doesn't guarantee people are flocking to the gate. No dissing intended. :)

Cedar Fair is in a unique market which is trending opposite most of the country for the past few years. I'm not sure they can afford to raise prices when their consumer base is declining.

Disney...no doubt needs to jack prices higher. I've always thought that these Orlando parks were under-priced. I think they need to jack up the multi-day tickets too.

But then the big "what if" in the case of Cedar Point is what if they hadn't lowered the admission? It could be argued that the attendance might have dropped even further resulting in lower revenue if they kept the prices at last year's level or even raised them slightly.
Lord Gonchar's avatar
That's a good point, RGB. But there's no way to accurately judge or track that and it all comes down to gut feeling and opinion.

That's the beauty of business in general. There is no magic formula for success. Amusement parks have so many variables (pricing, location, market, competition, product, service, weather, dumb luck, etc.) that sorting it all out into one neat equation is feasibly impossible.

If it were as simple as any of the quick fixes we often spout, then we'd all just apply the 'magic equation' and make a small fortune.

Actually amusement parks are in a way a commidity in which we go there for the experience. I have never been to Disney nor do I wished to since they are priced way beyond what I can afford and the same goes for any Six Flags Park.

The price can play a role into attendance since the cost can affect the experience as much as anything. If you don't have the money to experience everything then you will rate it a disaster. Also you have to factor in at how many of those 9 million visitors at Six Flags are season pass holders and if you do then you will see the numbers drop even further when you factor them out and you will get the actual number of visitors who only come once or twice a year.

Except they aren't commodities. A commodity market is one in which the only differentiatikon is price---there is little differentiation between suppliers, because the products offered by two different suppliers are generally indistinguishable.

This is absolutely not the case for amusement parks. For one, they are geographically differentiated---CP and SFMM may both have tons of coasters, but one is a 2 hour drive, and the other is a $300 flight.

rollergator's avatar
"CP and SFMM may both have tons of coasters, but one is a 2 hour drive, and the other is a $300 flight."

They're BOTH flights to me, but WDW is a 2-hour drive... ;)

Consider also that my Disney "Fastpasses" ;) cost me nothing...that makes the $67 seem lower than say, SFGAdv or SFNE where I'd be unlikely to get many rides without spending extra for *RIDE admissions*...

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