Opinion: Disney price hikes about more than profit

And Veegaland. At my old coaster internet forum we discussed Veegaland once every year, without fail. Maybe that's why it went under... not sure... Josh???

Sigh. I miss Veegaland. :-/

Well if you think about it, the Disney Parks weren't originally designed to handle the current size of the crowds, and they haven't expanded sufficiently quickly to offset them. The American population was only about 166 million in 1955 when Disneyland opened at (roughly) it's present size. The population has almost doubled now, and I'm relatively certain there are far more foreign visitors today than there were back then. Building new parks helps stave off some of the glut of the crowd, but at this point, the only thing that's going to keep crowds down is to make stuff too expensive for the lower income people. Short of that, the only other option would be to cap ticket sales per day, which we all know will never happen.

WDW went from one park to four, plus a retail district, sports complex and several resort areas. How is that not expanding? Disneyland roughly doubled, but they don't have a lot of room to grow.

I don't think people give Disney enough credit. The experience is so good that they draw gigantic crowds and people are willing to pay dearly for them.

^you missed a crucial adverb in my post. I never said they didn't expand. I said they haven't expanded "sufficiently" quickly enough. That is why they must now resort to cutting out lower income people by raising ticket prices to control crowds. Unfortunately, "paying dearly" for some people is a lot more than for others. From what I understand about old Walt, it wasn't what he wanted.

Not sure I buy a high demand premium experience as "cutting out lower income people" - if anything the market has spoken.

I always dislike the "what would Walt do" angle. Walt didn't live long enough to know what he had, nor would he ever know the context in which the current product is offered. His idea of the theme parks rested on the cornerstones of extraordinary detail, excellent service and a high quality experience. Our consumer culture doesn't offer much of that. We also, as it turns out, will pay top dollar for entertainment. What good would it have done for Walt, or the current Disney, to take less money?

If Disney expands to meet its peak demand periods (which amount to only a handful of weeks a year) at regular prices (or maybe reduced prices so even more lower income people can go), what happens during the rest of the year when demand is lower? During the lower demand periods (the majority of the year), they would have overcapacity and the revenues in the high demand periods wouldn't be sufficient to pay for the greater capacity.

I'm not sure "lower income people" are relevant to the conversation. As noted by the Unofficial Guide folks, a few days at Walt Disney World is financially out of reach for 70-80% of the US.

Based on what math? I just priced Nov. 1-5, 5-day tickets, 2 adults and 2 children, staying in All-Star Resort, for under $1,800. According to this site, a person making $40k a year would be in the bottom 47%. And mind you, that's one person... not household income. Is an $1,800 vacation really out of the realm of feasibility for someone making $40k a year? It's not even a valid question, considering the family I priced would more than likely have two working parents.

This is a little dated, but in 2011, households with income between $25K and $50K had an average annual discretionary spend of $8K. Would that family spend almost 1/4th of their entire annual discretionary total on a WDW vacation? They could, but it would be an awfully big stretch.

http://www.experian.com/assets/simmons-research/white-papers/2011-d...report.pdf

Edited to add: I don't think this is a bad thing. A Disney vacation is not a birthright, and there is no reason to expect that every family should be able to take one. I'm a lot more worried about kids without enough to eat or a place to sleep. One in every 30 children was homeless for at least part of 2014.

http://www.newsweek.com/child-homelessness-us-reaches-historic-high...ays-285052

But it's like anything else... people can make decisions and prioritize. I am not rich, but I can spend what I do at WDW because of other choices I've made. I don't have a ridiculous house to pay for. (Can't say the same thing about the car, obviously, but I can afford that too because of how I spend the rest of my income.) Even in the day when my previous wife and I made $50k combined, with her in grad school, we found a way to spend $2k a year on a big vacation.

Discretionary spending dollars were a lot easier to find before I had kids.

That's why we only have one. :) Well, that, and I got too late of a start to have more than one.

Not at all Jeff, One is definitely the correct amount of kids. Don't let anyone tell you differently. :)

I must be fiscally irresponsible but I think I would have trouble putting food in my mouth, shelter over my head and a car to get me around on 40K per year before taxes. My "vacations" would probably consist of sitting on the rocks of the breakwall by Lake Erie.

Disney is really not any more expensive than other vacations but many Americans can't afford any substantial vacations whether that is a trip to WDW, a trip to Europe, a trip to the Caribbean, etc. There is nothing wrong with pricing a product that is out of the reach of low income people, it is what it is.

Pete said:

Disney is really not any more expensive than other vacations but many Americans can't afford any substantial vacations whether that is a trip to WDW, a trip to Europe, a trip to the Caribbean, etc.

There are lots of vacations that don't involve going overseas. We had an outstanding week on Hilton Head this summer, and it was much less expensive than a typical Disney trip. Our entertainment costs were about half what we would have spent on Disney tickets, and that included a kayak trip, a couple of movies, a couple rounds of mini-golf, and plenty of beach time. We also spent less on food, though not by as much. Lodging was comparable, but that's because we use timeshares in both places. I don't know if HHI summer rentals are more or less than WDW in peak season, but I'd be surprised if they were more.

We had a similar experience the summer before going to Sedona and the Grand Canyon---great time, MUCH less expensive. Entertainment costs were very low; a couple of guided hikes, and some vehicle park passes. Food was again a bit less. We're planning a trip to Hawaii next summer, and that one will be much more expensive, but it's also Hawaii.

I've often compared the price of Disney to that of the ski industry. Ticket, lodging and season pass prices are similar, with Disney maybe being just a little less expensive, and both are family vacation destinations.

The Denver Post had a recent article on the state of the ski industry and the challenges it faces and one statistic was really kind of surprising:

"The economics of skiing, even with low-priced season passes, have pushed the income threshold for a typical ski-vacation family beyond $100,000 a year and the high price of the dollar is costing international vacationers at least 15 percent more than last year."

As I said, I think there are a lot of parallels here and to me it gives credibility to those that say Disney is more and more an upper class vacation. Not a bad thing at all, it is just changing times.

That's an interesting anecdote, but while I don't like to generalize based on appearances, the families visiting WDW are not all $100k families. The cars in the parking lot are not representative of that high demographic either. I just don't see a world where, with median household income being $51k a year, more than half of Americans can't spend $2k on a 5-day Disney vacation for four.

Here's an interesting question: how many people actually visit WDW, ever? Here's a back-of-the-envelope/order-of-magnitude guess.

Total 2014 attendance is 51.5M. If average trips are three park days, that's 17.2M distinct people per year. If average family size is 3, that's 5.7M families. Figure half of total attendance is either repeating families or international travelers, and you have about 2.9M families per year experiencing WDW for the first time. In 2014, per Census data, there were 35M families in the US with kids under 18. Figure the years from about 5 to about 11 are the peak "Disney" years, which gives you a 5 (two kids, two years apart) to 7 (one kid) year window you might want to visit WDW. Call it 6 years on average. Over 6 years, 17.1M families visit for the first time, or almost half of all US families with kids.

That's probably on the high side---that 50% number of first-time visitors is a wild guess, and it might be lower with more repeat/international business. And, plenty of other assumptions are there as well. But, a non-trivial number of families get there, for sure.