Universal Orlando matches Disney price hike, reports 32% higher profit

It's also worth remembering that the destination parks (Disney, and to a lesser extent, Universal) play by different rules. At some level, WDW and Universal Florida are marketing to every man woman and child living east of the Mississippi river. When your market is that large, it only makes sense to target the highest-margin customers you can.

That said, we've seen the locals do this, too. It is abundantly clear to anyone who has visited this year that Cedar Point's "Great Price Drop Experiment of 2006" was declared a dismal failure by the executives running that park.

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It is abundantly clear to anyone who has visited this year that Cedar Point's "Great Price Drop Experiment of 2006" was declared a dismal failure by the executives running that park.

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Just as a few of us predicted it would be. :)

In a year (2006) where I called the most interesting story the juxtapostion between the way CF dropped prices at a few parks and sold the hell out of it and the way SF seemed to jack prices on everything up - a year later we see the results...CF prices are on the level of SF pricing in 2007.

Gonchar, if you price yourself out of the range of families then you have cut off anyne else below that line as well. The whole point of amusement parks was to be affordable to everyone not to the rich. Simple solution is once the park is full at a certain number then stop selling tickets. Let's say the number is at 15,000 for parks like Six Flags over Georgia then you close down the gate until some leave. You don't keep raising prices to the point where it becomes a burden for everyone but the very rich to go there. I haven't been to an big named amusement park in at least 6 years thanks to the big named parks pricing themselves out of the range of the everyday person. The nearest parks to where I live is either Dollywood or SFOG but when you charge an arm and a length to go to either one then the it's not worth it.

The point of amusement parks is to make money, not to be affordable to everyone. That's true of every business.

You guys are very good at showing your side of the argument and I respect you for that. I still believe that it would be not be financially impossible for an amusement park to offset long lines and large crowds by building more attractions and more stuff to do. I'm not talking 5 new multi-million dollar roller coasters. There are a lot of different things a park can build that has high capacity and still not cost so much.

It seems to me that the more people in a park, the more profitable your park will be. If a food stand sells more food throughout the day, it will be more profitable. Same with gift shops and arcades. What do we call that again? Captive?

Long lines, especially at food stands, can be easily fixed by having more food stands. Long lines at rides can be fixed by having more rides and more to do. Why can't more people buying food pay for more food stands? Why can't more admission tickets pay for more attractions?

You guys make some good points, and it all makes perfect sense, but I just believe that the amusement industry can be profitable without making itself an exclusive activity for people who make a higher wage.

I don't think anyone here wants amusement parks to struggle and face the possibility of closing as insinuated above. I just think there has to be a better way then to raise prices out of range of some people. That type of thinking is poisonous and reptilian to me.

What of the low wage workers at the parks. While prices theoretically could skyrocket (I don't see it happening though), would the parks keep paying a wage to their employees to the point that even they could not afford the "luxury" of visiting an amusement park? That's a problem in a lot of industries.

There is no right or wrong answer to this debate. There is just differing markets for which a business/park might better spend its effort luring.

For as long as we have known and up through present day...parks have been a volume entity. They indeed have thrived on and seeked ever-growing attendance to increase their bottom line. Without going into details of the recent failures of such strategy...suffice to say that parks are not growing attendance like they used to.

There is no responsibility for a park to practice entertainment welfare. Those of you who judge the success/failures of the park based upon attendance figures are missing the real point. The key is not to have the most bodies in the park, but rather...the key is to have the most dollars in the park.

We can argue about the appropriate means of achieving ever-increasing dollars through the gates. I think recent failures using the volume method (build a major attraction per year and they will come) necessitate a change in philosophy. The link for this thread indicates the first major attempt to trial a new means of doing things (The Gonch Theory).

Time will tell if the new method succeeds in getting more dollars in the park. I can't predict success either way as I'm generally pessimistic about the operational expenses regional themers have brought unto themselves through foolish spending in the late 80's and early 90's. I'm not sure there is any method that would make these park's so profitable that they would be safe from real-estate vultures. However, I applaud Six Flags for attempting a new plan.

If such methods prove successful in luring more dollars through the gate as opposed to the typical volume-strategies we've become accustomed to, then I suspect it may be more of a regional phenomenon that a industry-wide scenerio. I could see some parks catering to the higher-end clientele while others stick to a bottom-feeding volume strategy.

Contrary to popular opinion...I don't care which strategy works. I'm not going to these regional themers now based upon my perception of value. My interest is only that these parks may one day return to providing a consistent experience for the dollar spent. If the price to pay to achieve a consistent and valuable experience requires more out-of-pocket expense up front...I would be for it. If the parks decide to bottom-feed and continue the 2-hour waits, reduced-staff food options, etc...then my hope is that they figure out a way to do so and get more dollars through the gate at the same time. If current trends continue...we are going to lose a lot of history and good rides. And even though I'm not currently sampling most of the regional themer offerings...the loss of such parks would indeed make me sad.

P.S. That is about as emotional as I get about things as I prefer to use te brain over the heart! ;)

*** This post was edited by Jeffrey R Smith 8/15/2007 6:17:23 PM ***

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Majorcut:
The whole point of amusement parks was to be affordable to everyone not to the rich.

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The whole point of business is to make money. If it isn't then it's a hobby or interest.

Amusement parks are a business.

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Let's say the number is at 15,000 for parks like Six Flags over Georgia then you close down the gate until some leave.

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So reduce the money you can bring in so that everyone can can play in the sandbox? That's goodwill...not business.

Amusement parks are a business.

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I haven't been to an big named amusement park in at least 6 years thanks to the big named parks pricing themselves out of the range of the everyday person.

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Yet, attendance has only dipped slightly so far and revenue is reaching the highest levels ever at these places. Sounds like a good business decision to me.

Amusement parks are a business.

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The nearest parks to where I live is either Dollywood or SFOG but when you charge an arm and a length to go to either one then the it's not worth it.

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Not worth it to you. You have as many people in just this thread saying the value at the higher price is there for them. Again, the parks aren't exactly empty and the prices have never been higher. Revenue levels are up, up, up. They making smart business decsions.

Amusement parks are a business.

Now on to Dex:

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Dexter:
I still believe that it would be not be financially impossible for an amusement park to offset long lines and large crowds by building more attractions and more stuff to do. I'm not talking 5 new multi-million dollar roller coasters. There are a lot of different things a park can build that has high capacity and still not cost so much.

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Six Flags tried that for at least 5 or 6 years. They kept building more and hoping more people would come. We saw where that got them.

It's only now that Red Zone has come in and Shapiro has had his way with things (making all those nasty, bad, exclusive decisions) that the company looks even remotely hopeful for the future.

Flat out, man - what you're propsing didn't work. The alternative is working.

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It seems to me that the more people in a park, the more profitable your park will be. If a food stand sells more food throughout the day, it will be more profitable. Same with gift shops and arcades.

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That's elementary school economics. Real life situation aren't so simple or cut-and-dry.

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While prices theoretically could skyrocket (I don't see it happening though)...

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Then open your eyes. It is happening. All around you.

This very thread exists because a day at an amusement park in Orlando costs more than $75 total. And it's not just one park there. SFGAdv just raised their admision to $300 for one evening. If you think that's not a test of some kind - then you're just fooling yourself.

I agree in part with everything above... then again, all of you are wrong, too.

Disney has added attractions and made something worthwhile and new for people to visit.

Universal has done jack for years now to the point that it's aggravating.

I don't mind paying more if I'm getting something for it, but if all I'm getting is a somewhat-shorter line for 10 year old coasters with square wheels, I'll probably spend my money elsewhere.

I love the Universal parks, and really have no desire ever to set foot on Disney property until my son begs me to do so. I enjoy my least favorite attractions at IOA more than my most favorite at the Magic Kingdom.

That being said, Universal makes no argument for me to return. Local parks can get away with not adding new attractions because they're right down the road and sometimes there's nothing better to do. Destinations have to make it worth my investment. Universal of late has not done that, and the promise of re-themeing Dueling Dragons in the future does not warrant a price increase in my eyes.

(Fully aware that a 5-day 2-park pass is $85 so you're an idiot if you ever buy a one-day one-park ticket, but still, the point remains. I'd like some return on my investment in this park.)

There is something else in the pipe from what I hear at Universal, other than the Harry Potter stuff. I'm crossing my fingers that it pans out.

Gonchar, You still don't get it. Bush Gardens have tried this idea by closing down the gate after the park reaches a certain number of people. The parks are pricing themselves out of the reach of the person who only goes to a select number of parks a year. An then the only the rich will be able to go there. IF I lived closer to Six Flags then I would by a season pass since I have to would be going more. I can think of better ways to spend $71 plus parking plus your food inside the park. When you add all that up you might as well give the park your monthly house payment. I can understand about Disney and Universal since they are destination parks where you will want to spend more time to explore the parks.

I have no problem with the amusement parks as a whole but I have taken micro and macro economics when I was in college. One of the simulations was based on running an amusement park in the real world terms. Guess what, it shows that if you raise the admission price to a point then it will only serve the people who are making more than $100,000 a year in income then the parks themselves has priced themselves out of the range of those who are the backbone of what the amusement park industry is aiming to get back into the parks. I don't make anywhere near that amount. Gonchar and others who are in favor of this make some good arguments but they are flawed to some degree.

Busch Gardens and Disney will close their gates as a sheer issue of safety. It has nothing to do with preserving a level of guest experience. Furthermore it's so rare that it doesn't support your argument.

Gonch doesn't get it indeed.

the parks themselves has priced themselves out of the range of those who are the backbone of what the amusement park industry is aiming to get back into the parks.

Parks want "dollars" on property. They could care a less how many people or what "kind" of people these "dollars" come from. The key for the park is to find the easiest and most efficient way to collect these "dollars." The "backbone" of the amusement park industry and any business is money.

Parks might just now be realizing that they have been ignoring the "dollars" available from rich folk (those willing to spend more for a better experience) who desire a more efficient operating day. They are experimenting to find out if this is true.

That's an interesting point now, because it calls into question the usefulness of the attendance metric. The Internet used to value "eyeballs" as a measure of success, but said eyeballs don't necessarily equate to revenue. I'm starting to wonder if that might be true in this business as well.

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Majorcut:
Gonchar, You still don't get it.

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:)

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Bush Gardens have tried this idea by closing down the gate after the park reaches a certain number of people.

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Jeff already said it, but that's a capacity issue, not a customer service issue. Even funnier is that parks that are usually forced to do this (Disney, Busch) are among some of the most expensive parks to get into.

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I can think of better ways to spend $71 plus parking plus your food inside the park. When you add all that up you might as well give the park your monthly house payment.

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I wish I lived where you live. ;)

Gonchar, if you go down to Disney then you might as well get a 7 day pass and that is around a few hundred dollars for one person plus you have to pay for food, hotel for one person and gas to go down there. You are looking at well over $1,000 for that one week trip. If you are all for the parks pricing themselves out of the reach of the common everyday man then so be it. Then you will only have the elite going there who can afford it. Like I stated, I can find alot better uses for my money that will give me more bang for the buck.

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Gonchar, if you go down to Disney then you might as well get a 7 day pass and that is around a few hundred dollars for one person plus you have to pay for food, hotel for one person and gas to go down there. You are looking at well over $1,000 for that one week trip.

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I'd still say $1000 is lowballing it. We're hoping to get to Orlando (after putting it off for three consecutive years) for two weeks. As part of that time, we'd like to spend 4 days at Disney and probably in a Disney resort (the family seems to be leaning towards the AK Lodge) - the Disney site is telling me that it's going to cost $2839 for a Savannah View room at the AK Lodge and tickets for the family during our stay.

$1000 for a week? Pfft. They're telling me almost $3000 for 4 days!

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If you are all for the parks pricing themselves out of the reach of the common everyday man then so be it. Then you will only have the elite going there who can afford it.

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Depends on what you consider 'common man' and 'elite' I suppose. You do realize that 1-in-12 americans has a net worth of more than $1 million dollars and some of the most recent social models describe a household income of $90,000 as 'middle class', right?

And yes, I have no problem with parks pushing their pricing to whatever level they see fit. I don't expect any favors.

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Like I stated, I can find alot better uses for my money that will give me more bang for the buck.

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Cool. No one's making you go anywhere or pay anything. You have to choose to based on what makes sense for you.

And just to make the point again - that old school "fine, then you lost a customer" mindset doesn't apply to this switch-up in business approach. The point of it is to lose a segment of customers - those not willing to fork over big bucks for a big time. It will be more than made up for by those who are - everybody wins!

So are you arguing that attracting the customers who can spend the most money is wrong, or are you suggesting it's a moral issue?

That seems to be a line that gets blurred quite often in these debates.

Jeff, when you price something out of the range of the everyday person who has to balance value for price then you lose what the amusement park industry was founded on. I know that you will say that it is all about the money which is true. Think of it this way, if you only get the people who are rich then your figures will be screwed up. The rich have better things to spend thier money on. How high of a price would you pay before it is too much for you to pay? Remember that you have to pros and cons of how much value are you getting for your money.

So now you're worried about them pricing themselves out of the rich market too?