Survey suggests that Disney is considering dynamic pricing

It's not a bad thing. They want to use dynamic pricing to try to manage capacity crowds. A certain segment of customers see the price increase and will hold off going. But we've seen Disney steadily raising it's base admission price twice a year for several years now and it doesn't stop people from coming. If they were to raise the price during Christmas say $20, $30 or even $50, it would do little to stop a lot of people from coming. They want that experience that Disney provides. I think for dynamic pricing to work in this case they would have to apply today's base price to each guest buying a onsite hotel package for each day of their stay. Walkups, the price would have to look like something closer to double the current standard pricing. I'm using these figures because we all know that very few people actually pay that base price, especially when buying hotel combos. Also with dynamic pricing the guest is going to expect more otherwise you devalue the entire experience and brand. You would have to black out season pass and resident discount tickets as well. Universal already does that especially during HHN.

Now this is where we come full circle with the discussion the other day about itinerized vacations to Disney. If they want manage capacity, that is the more likely way they are going to have to do it.

One final comment. I wasn't trying to make a direct comparison of SF and Disney. They are two completely different animals. Disney has a lot more going for it than Six Flags does with many more revenue streams. Wall Street loves Disney. And while Six Flags is making a comeback, Disney doesn't have to depend only on it's theme parks to make that bottom line look good. Where do you feel you'd get a better value for your money? $500 spent in a day at Six Flags or $5000 spent at Disney on a vacation. I say Disney gives you more bang for the buck. But Dynamic pricing will only been seen as a way to pad the bottom line if they don't up anti while doing it. Jeff, you've spoke of VIP tours and other perks. Both parks offer them but as an add-on. So that makes them available to anyone willing to pay. We're talking about raising the price to reduce the crowd a bit. I think Disney has to resources to do it successfully without hurting it's brand. Six Flags on the other hand does not.

I often wonder why the two U.S. Disney destinations don't build another park, or two, or three. Avatar is coming, and more is rumored, but I think they need to keep up with demand by adding more attractions. They keep building. It just seems to me like they just can't expand fast enough.

Dynamic pricing may or may not be a minor solution to their crowd problem, if it is in fact considered a problem. How busy is too busy? How many people have to be using the park before the funfactor goes down to a point of dissatisfied guests? Once they get to that point, the only solution is to build more for them to do. Or maybe not...

I know not the questions, therefore, I know not the answers. :)

I think the California resort faces space limitations. There's plenty of talk/speculation about a third gate in Anaheim, but it seems like that third gate would be it -- insufficient room to add another gate.

And I don't think dynamic pricing is being used to address over-crowding, I think it's used to maximise profits. That's how we use it at the theatre.

Disney has the space in Anaheim for a 3rd park since 1998(currently used as employee parking). If/When they will build one, who knows?

Even though the Disney Parks & Resorts segment generates less than 25% of the total revenues for the Disney Company, they still have a responsibility to their shareholders and Wall Street likes to see growth.

To me, it is a simple strategy of continued revenue growth; and dynamic pricing (which is what this really is) is just a different way to mask a price increase. It really has nothing to do with a bunch of suits sitting in a conference room trying to figure out how to make the parks less crowded.

As long as the demand is there (which it currently is), you are going to see these kinds of top line revenue growth initiatives from Disney for the foreseeable future.

In my opinion, the reason why WDW is so popular currently is because it truly offers a unique vacation resort model that appeals to just about every budget or socio-economic income group (perhaps with the exception of the very lowest).

The 1%ers have the Grand Floridian, fine dining options and other high end amenities to suit their fancy. Budget minded travelers have value lodging options, packages with free dining, and/or a vast inventory of rental inventory available off property which in certain scenarios can be way cheaper than staying on Disney property.

I really disagree with people when they say that Disney is too expensive. It really isn't if you do your homework and are flexible with your travel schedule/habits. Even for the lower income folks, while it can take some strategy, you really can do Disney "on the cheap" if you want.

It really is a one stop vacation option that appeals to just about everyone.

I don't want to get into semantics or definitions, but I'm not sure which "lower income folks" can afford even the off property or value lodging. Throw food, airfare, and park tickets on top of that and I'm not sure how you can do a family of 4 for less than $1K a head. We did 4 adults and 2 kids for 4 days and 5 nights at DL and it ran us a cool $8K before we even set foot on property. Then again, maybe I'm just doing it wrong (or right, if you believe Gonch).

To me, "lower income folks" here would be relative to the higher income folks staying on property.

The first time we stayed at Fort Wilderness in early December, we were frankly amazed at how many people check in and stay for weeks on end (with their RVs decorated for the holidays). Not everyone can afford to do that, or stay at Grand Floridian for a week or two -- but staying at one of the All-Star resorts, or staying with Aunt Amy in Windermere, among other things, can make it an affordable vacation for those a little lower on the income scale.

slithernoggin said:

To me, "lower income folks" here would be relative to the higher income folks staying on property.

The first time we stayed at Fort Wilderness in early December, we were frankly amazed at how many people check in and stay for weeks on end (with their RVs decorated for the holidays). Not everyone can afford to do that, or stay at Grand Floridian for a week or two -- but staying at one of the All-Star resorts, or staying with Aunt Amy in Windermere, among other things, can make it an affordable vacation for those a little lower on the income scale.

A lot of those folks are either snowbirds (and some work at Disney during the winter, so are staying at a good discount), or have been regulars at Ft. Wilderness for years, some since 1971, usually in the same exact lot every year. I know this because my wife's family was one of those regular families (though they didn't have a specific lot they occupied) until they sold their RV a few years ago. We always go over and take a stroll through the section that is typically the most decorated (can't remember the name of it off the top of my head) every Christmas now.

The All-Star resorts this year bottomed out at $96/night. I seriously don't see how you'd spend less than that off-property without staying in a total dump. Then add in the cost of transportation, since Disney will get you to and from the airport for free. I really don't see why anyone would stay off-property unless they intended to do non-Disney stuff.

Last time I stayed on property, I went to Universal for 2 days and just paid a taxi. It was still cheaper overall than anything else I found.

Alexatucla said:

Disney has the space in Anaheim for a 3rd park since 1998(currently used as employee parking). If/When they will build one, who knows?

They can use the property if they demolish the cheap housing that surround the guest parking lot. They own that housing, but if they do demolish it, watch out for the media backlash! It would be something like "Disney evicts their own employees!" as it is used by many lower income families who sometimes work at the resort as cast members. The only way they could realistically do it is if they rebuilt cheap housing elsewhere in town to relocate them.

As for the Dynamic Pricing, it is a cash grab based on the proposed rules. Only "Bronze" days would stay at the current price and if any of the day you visit happen to be a "Silver" (10-20$ more than the current prices) or "Gold" (20-40$ more), your whole ticket has to be that higher tier. Seeing as no weekend days are forecast as a Bronze, you'd have to visit during the week, not go during the weekend and then resume your visits when "Bronze" starts again.

A true dynamic pricing approach that I would agree on is what Disneyland Paris and most british parks are doing: select a day in advance and depending on crowd forecasts and how many days in advance you buy it, you get a discount on the regular price. Like, I can pay 53$ on some days on the Disneyland Paris website, but if I go at the door that day, I will pay the regular price of 78$. If I book a ticket online for a peak day, I will also pay the regular price 78$.

ApolloAndy said:

I don't want to get into semantics or definitions, but I'm not sure which "lower income folks" can afford even the off property or value lodging. Throw food, airfare, and park tickets on top of that and I'm not sure how you can do a family of 4 for less than $1K a head. We did 4 adults and 2 kids for 4 days and 5 nights at DL and it ran us a cool $8K before we even set foot on property. Then again, maybe I'm just doing it wrong (or right, if you believe Gonch).

For me I have 3 versions of guests who go to Disney (and Universal somewhat)

1. The "low income" class, these are the families that save up for years (sometimes decades) for the once in a lifetime trip to Disney. These families may have lots of disposable income on this vacation (so spending lots on souvenirs, meals, and even hotels) or may be doing it as cheap as possible

2. The locals, these are the people who live within a day drive of Orlando, they usually have season passes or enough disposable income to visit a few times a year. They are there more than once a year, and may be there everyday. Also this can be the ones who go once every few years just because a group of friends want to go. They would have more income to spend on items at the park, maybe a hotel room if treating themselves, but mostly they just show up, maybe get a meal or snack in the park, but don't spend a lot on each trip.

3. The "high income" class, these are families who have enough disposable income to make multiple trips a year, they are also staying in the premier hotel rooms and spending money in the parks. These are the ones you usually see on the VIP tours (though again the other 2 categories could be on these, depending on how much they want to save). They are also the ones who are not watching the wallet so much, they are willing to spend the money on last minute things.

Of course these are just rough groupings. There are cross overs from all, and some family in the first group may save up enough to experience the same things that someone in the last group is.

Morté615 said:

ApolloAndy said:

I don't want to get into semantics or definitions, but I'm not sure which "lower income folks" can afford even the off property or value lodging. Throw food, airfare, and park tickets on top of that and I'm not sure how you can do a family of 4 for less than $1K a head. We did 4 adults and 2 kids for 4 days and 5 nights at DL and it ran us a cool $8K before we even set foot on property. Then again, maybe I'm just doing it wrong (or right, if you believe Gonch).

For me I have 3 versions of guests who go to Disney (and Universal somewhat)

1. The "low income" class, these are the families that save up for years (sometimes decades) for the once in a lifetime trip to Disney. These families may have lots of disposable income on this vacation (so spending lots on souvenirs, meals, and even hotels) or may be doing it as cheap as possible

2. The locals, these are the people who live within a day drive of Orlando, they usually have season passes or enough disposable income to visit a few times a year. They are there more than once a year, and may be there everyday. Also this can be the ones who go once every few years just because a group of friends want to go. They would have more income to spend on items at the park, maybe a hotel room if treating themselves, but mostly they just show up, maybe get a meal or snack in the park, but don't spend a lot on each trip.

3. The "high income" class, these are families who have enough disposable income to make multiple trips a year, they are also staying in the premier hotel rooms and spending money in the parks. These are the ones you usually see on the VIP tours (though again the other 2 categories could be on these, depending on how much they want to save). They are also the ones who are not watching the wallet so much, they are willing to spend the money on last minute things.

Of course these are just rough groupings. There are cross overs from all, and some family in the first group may save up enough to experience the same things that someone in the last group is.

This is a very good overview and sums up my point as to why WDW is only growing in popularity (in my opinion). WDW is unique because it appeals to a broad range of socio-economic levels.

If you travel to a resort in the Rivera Maya, Napa Valley, Fiji, USVI/BVI, or even Ocean City, NJ for that matter, you will likely be surrounded with a more sophisticated/well traveled guest population, typically from higher ends of the disposable income spectrum.

WDW in contrast is really a melting pot for many income levels, especially in the theme parks where everyone is together as one; which is just fine and works (until some knucklehead runs over your foot in their scooter on Main Street USA). It isn't until the end of the night when the "have's" take the monorail back to their resort and the "have not's" hop in their car and drive back to their condo/hotel on 192.

In the end, I truly believe that the WDW model is so popular because it appeals across most of the socio-economic spectrum. There are not many other vacation destinations out there that resembles this characteristic.

.

I worked at Ticketmaster when they introduced dynamic pricing, and there, at least, it was presented to clients as a way to increase ticket prices in real time in response to ticket sales.

For example, if on Tuesday the box office manager notices a surge in sales for Saturday's late show, with a few clicks the Saturday late show's prices go up and the theatre makes more money.

What Absimilliard suggests seems to be more the parks managing ticket sales by offering discounts to encourage attendance on slower days rather than quickly taking advantage of changes in ticket sales to adjust pricing, which is what dynamic pricing is to me.

Jeff said:

The All-Star resorts this year bottomed out at $96/night. I seriously don't see how you'd spend less than that off-property without staying in a total dump. Then add in the cost of transportation, since Disney will get you to and from the airport for free. I really don't see why anyone would stay off-property unless they intended to do non-Disney stuff.

With one exception, I completely agree with you and I think that too make people automatically dismiss considering staying at a value resort with the blanket misconception that staying off property will significantly cut your overall costs. Especially with all of the perks and "magic" you get staying on Disney property.

The one exception in my opinion is larger families or small groups. There are lots of 3-5 bedroom full service condos available (some are actually really nice, in gated communities) along the 192 corridor and at least during slow periods, you can grab one of them in the $120-$150 a night range. If you are traveling with 6, 8 or say 10 people that can stay under one roof, you can save some coin even with the added car rental and parking expenses (compared to staying in 2-3 resort rooms on property).

And yes, I also agree that if you are paying anything less than say $80 a night in a hotel off property, you better be real prepared for a less than opulent experience.

Morté615 said:

1. The "low income" class, these are the families that save up for years (sometimes decades) for the once in a lifetime trip to Disney. These families may have lots of disposable income on this vacation (so spending lots on souvenirs, meals, and even hotels) or may be doing it as cheap as possible

I suspect this group is more populated by people who don't want to do Disney every year or multiple times a year rather than people who can't afford to do Disney every year. For instance, my family could certainly afford a Disney vacation every other year, we just don't see the value in doing it that frequently (compared to other travel alternatives).

I just don't understand this idea that everyone can afford to Disney if they want. If you can save up disposable income for a trip like this, you're not lower class. If you're at Disney at all, even if you're hopping in your car to your roach motel, you're not a "have not." Maybe we're talking about relative to the rest of the guests at Disney, but this terminology is borderline offensive regarding people who are barely scraping enough together to keep a roof over their heads.

Hanging n' Banging said:
...along the 192 corridor...

Well there's your problem. :)