5 ms·

Is it an expensive day? Sure. Would almost every guest prefer to pay less? Absolutely. But just to be a contrarian and play Devil's Advocate, what if one were

Is it an expensive day? Sure. Would almost every guest prefer to pay less? Absolutely. But just to be a contrarian and play Devil's Advocate, what if one were to make the argument that Disney is actually severely, ludicrously underpriced? Despite allegedly being at a fraction of capacity, the place is still uncomfortably jam-packed, with obscene waiting times at most rides. That's indicative of a venue that hasn't reached price equilibrium. There's so many Disney fanatics, I bet they could double or triple prices and still only take a minor hit to overall attendance. And actually, many guests might actually prefer paying more, despite any preferences they might initially express. Think about it, if could ride 2 or 3 times as many rides in a day due to reasonable crowds, then you might be happier spending 1 or more fewer days in Orlando and save time and money overall paying more per day for a much better experience.

xapata 5y ago
If word-of-mouth marketing is important ("Mom, my friend went to Disneyland last year, why can't we go?") then attendance may drop off more quickly with a price increase than for other goods. The cost of recovery might be high. Also, we don't know the balance of sunk costs and operating expenses, and the expense of a marginal guest. Walt Disney designed the company to have its various activities support each other, so each in isolation might appear underpriced. Is the goal of Disneyland to make a profit on tickets, or to sell toys and a Disney+ subscription when the kids go home?
- logicalmonster 5y ago
  You might be correct, but just to play Devil's advocate a bit more, in the social media age, word of mouth marketing might be overshadowed in importance by the importance of social status in marketing, which a more exclusive experience would be. Imagine if Disney was a bit more of exclusive experience, and people felt they could truly boast about visiting Disney that year. That's a powerful thing in marketing. People who were on the fence might feel compelled to save every spare dollar they could to try and make the trip happen. I understand that they don't want to be seen as elitist, there's probably a fine line that would have to be made here. And I'm sure that Disney employs a number of analysts who have tried to figure out all of these scenarios already. Just interesting speculation. I think the safest path for them is keeping prices high, but not out of reach for most families to reasonably aspire towards.
onlyrealcuzzo 5y ago
I have often wondered why they don't charge >$1,000 per ticket. I imagine this wouldn't deter 90% of their guests, but I'm sure Disney has done the math. If it worked out, they would've done it.
- flybrand 5y ago
  … and with all the premium opportunities with fast passes etc, they’re profit per ticket must be huge. They know how to price, and they know stories drive attendance.
- ghayes 5y ago
  For strict entry, Disney might face sticker shock at that price level, but they could probably derive as much revenue from people with up-sells and nibbles. E.g. charging for FastPass, pre-booked meals, etc.
- listenallyall 5y ago
  For the same reason popular bands don't charge $500 for a concert ticket, even when they regularly sell for that much by scalpers. There is a certain amount of "available to everyone"-ness that is important to the brand in order not to alienate people by appearing elitist and out of touch. Bands have gotten better at capturing the full amount people are willing to spend by selling expensive "golden circle" packages, backstage passes, ticket + merch packages, etc. Disney does the same with VIP "tours" (a personal escort to skip lines), hotels that include early/late admission, visits from characters, lunch with Mickey, etc.
- daniel-cussen 5y ago
  I suspect if the entry tickets go above a certain point, I think a big round $500 per person, people say "Disney is for rich brats" and that's really hard to undo. Some companies have gone there. I can't think of any that have come back.
deleted 5y ago
[deleted]
tapoxi 5y ago
They just need to build more parks. I typically have a better time at Six Flags because they're regional. They're smaller sure, but they're cheaper, easier to get to, and less overwhelming. Disney actually tried this approach in the 90's with the DisneyQuest VR parks, but it was too early for the technology at the time.
- koheripbal 5y ago
  You are not really the target audience for Disney. My 6 and 8 year old daughters are Disney park's target. Six flags is targeted for teenagers and young adults.
  - tapoxi 5y ago
    Me, no. But all these horror stories means it’s probably a one-time thing for my kids instead of going regularly. While Six Flags does have a lot of coasters, I went pretty frequently as a kid and there were plenty of rides for younger kids, probably 8+.
  - quintushoratius 5y ago
    > You are not really the target audience for Disney. My 6 and 8 year old daughters are Disney park's target. I would argue that they're not the target audience. Disney is hella fun for adults, and they have a lot more money than kids. The target audience is you and me. The biggest Disney spender I ever met was a post-middle-aged, childless adult that I used to work with. He and his wife sunk a fortune into DVC, took the cruises, and spent pretty much every vacation day at Disney World (or, if they needed a fresh change of venue, Disney Land). Disney may strategically appear to be marketing to the kids, but they're using the kids to coax us into going.
brutal_chaos_ 5y ago
Price doesn't have to be the gatekeeper. That is an artificial division that leaves out hard working individuals who happen to be making money for someone else rather than themselves (among others). (Also "Get a better job," only goes so far.) What they could do, is, idunno, set a capacity limit based on experience of users and develop changes for their users and not just their pocket books.
- crooked-v 5y ago
  So how do you actually enforce that capacity limit? Take reservations at the current price levels and the parks will just end up pre-booked for the next decade within the month.
  - deleted 5y ago
    [deleted]
  - ghayes 5y ago
    A mix would probably be better. Allow some folks to (over-)pay their way in, and then give others cheap or free access through a raffle or community-building programs.
    - kelseyfrog 5y ago
      The only problem with this is the same reason taxes are compulsory.
  - t0suj4 5y ago
    If we're making up ways on letting more people getting the Disneyland experience why can't we just build more of them?
  - brutal_chaos_ 5y ago
    > So how do you actually enforce that capacity limit? Any company can set cap limits and wait limits. "Sorry, we're booked out 1 month, check back soon." (Don't major restaurants do this?) More people want to visit than cap or time allows, open more locations. &c.
sokoloff 5y ago
We went to DisneyWorld for a company trip one year (back in the late 90s). Every single interaction, I thought “holy cow, they could be charging so much more here! Why is this so cheap?!” Going back later with kids in the last 10 years, they’ve clearly corrected a lot of their prior underpricing, but it still felt like a generally okay value.
koboll 5y ago
The "secret VIP" he mentions in the article is called VIP Tours, which cost at least $425 per hour for a minimum of 7 hours. They're the only reliable way to skip the line. So there is a pay-a-lot-for-the-best-experience tier. Much like nightclub VIP, however, you can also bring nine other people with you, which brings the total cost down to under $300 per person for the whole day. Probably the best way to do Disney, if you can get a large enough group together.
- leetrout 5y ago
  You still have to buy a ticket to the park so it's more like $400 per person which is still not bad if you only go once, to one park, on one day and want a special experience. I wonder if you should tip your guide?
- kcplate 5y ago
  I’ve done a VIP tour 11-12 years ago (won it as a prize giveaway). It is pretty amazing and without a doubt if I had an extra $10-15k that I could spend painlessly on a family Disney vacation over the normal ton of money—I’d do it in a heartbeat. It’s not just walk on to the rides, but special seating at the shows and depending on the guide you get some pretty good backstory and insider lore which was fascinating as well.
- IdontRememberIt 5y ago
  Actually, it is not the VIP package. Disney replaced the free fastpass by a paying "Lightning Lane" pass: https://disneyworld.disney.go.com/genie/lightning-lane/ https://disneyworld.disney.go.com/genie/lightning-lane/ The prices are adapting dynamically to trafic to maximize revenues.
whatgoodisaroad 5y ago
You could make the argument that Disneyland is designed to be a loss-leader, and there's no reason for the parks to reach a price equilibrium per se. In its original formulations, the parks are one link in a much larger business model [1]. [1] https://www.businessinsider.com/1957-drawing-walt-disney-brilliant-strategy-2015-7 https://www.businessinsider.com/1957-drawing-walt-disney-bri...
- dangus 5y ago
  Perhaps they were originally loss-leaders, but today I wouldn't make that argument: "In 2019, the segment, which includes cruises and hotels, accounted for 37% of the company's $69.6 billion in total revenue" https://www.cnbc.com/2021/08/12/disney-earnings-theme-parks-post-first-profit-since-covid-struck-in-2020.html https://www.cnbc.com/2021/08/12/disney-earnings-theme-parks-...
  - listenallyall 5y ago
    Revenue alone doesn't tell you anything about profit. (I doubt it's a loss leader either, but this isn't evidence to contradict the claim)
  - daniel-cussen 5y ago
    Well yeah it's a lot of revenue, you're housing people in the Disney universe. The question is how much profit those hotels and cruises generated.
EMM_386 5y ago
> Despite allegedly being at a fraction of capacity, the place is still uncomfortably jam-packed, with obscene waiting times at most rides. That's indicative of a venue that hasn't reached price equilibrium. This is exactly how I used to feel at the top ski resorts. They were extremely expensive, but absolutely jam-packed. Everyone complained that the wait for the lifts was too long, and that there were too many people on the trails. The only logical way to handle this is to increase the price and use that to thin the crowds. It's the same thing with Disney. The only other thing they could do is sell cheap tickets and limit the number of people, so you have to plan years in advance. But these are for-profit companies and not charities, so that approach won't happen. I'm not saying I agree with it, but this is the free market at work.
- irrational 5y ago
  Another option is to build more parks. Spread out the people more.
  - dougmwne 5y ago
    That’s quite curious, as that was my first thought as well. Disneyland sits on 100 acres. That’s about the same a small golf course. Why aren’t there parks outside of every major city?
    - EMM_386 5y ago
      > Why aren’t there parks outside of every major city? Brand dilution. You can have your local Six Flags but that isn't Disney.
      - NullPrefix 5y ago
        There's already Disneyland and Disneyworld and also Disneywhatever in France.
        EMM_386 5y ago
Someone 5y ago
> I bet they could double or triple prices and still only take a minor hit to overall attendance. Maybe slowly, but if they did that overnight, I guess visitors would want to see shorter queues. I also expect that, for Disney, queues are the cheapest part of the park, so shorter queue means costs per visitor-hour would go up. I also guess that non-ticket revenues per visitor-hour would go down (can’t buy an ice-cream while sitting in an attraction; customers that grow tired from standing in line will spend more time sitting at eating stands) ⇒ It wouldn’t surprise me if they’re already trying to get as much as possible out of die-hard fans by maximizing the time they spend in queues. That’s also better for their image, as visitors will (partially) blame other visitors for waiting times, not Disney.

xapata 5y ago

If word-of-mouth marketing is important ("Mom, my friend went to Disneyland last year, why can't we go?") then attendance may drop off more quickly with a price increase than for other goods. The cost of recovery might be high. Also, we don't know the balance of sunk costs and operating expenses, and the expense of a marginal guest. Walt Disney designed the company to have its various activities support each other, so each in isolation might appear underpriced. Is the goal of Disneyland to make a profit on tickets, or to sell toys and a Disney+ subscription when the kids go home?

logicalmonster 5y ago
You might be correct, but just to play Devil's advocate a bit more, in the social media age, word of mouth marketing might be overshadowed in importance by the importance of social status in marketing, which a more exclusive experience would be. Imagine if Disney was a bit more of exclusive experience, and people felt they could truly boast about visiting Disney that year. That's a powerful thing in marketing. People who were on the fence might feel compelled to save every spare dollar they could to try and make the trip happen. I understand that they don't want to be seen as elitist, there's probably a fine line that would have to be made here. And I'm sure that Disney employs a number of analysts who have tried to figure out all of these scenarios already. Just interesting speculation. I think the safest path for them is keeping prices high, but not out of reach for most families to reasonably aspire towards.

onlyrealcuzzo 5y ago

I have often wondered why they don't charge >$1,000 per ticket. I imagine this wouldn't deter 90% of their guests, but I'm sure Disney has done the math. If it worked out, they would've done it.

flybrand 5y ago
… and with all the premium opportunities with fast passes etc, they’re profit per ticket must be huge. They know how to price, and they know stories drive attendance.
ghayes 5y ago
For strict entry, Disney might face sticker shock at that price level, but they could probably derive as much revenue from people with up-sells and nibbles. E.g. charging for FastPass, pre-booked meals, etc.
listenallyall 5y ago
For the same reason popular bands don't charge $500 for a concert ticket, even when they regularly sell for that much by scalpers. There is a certain amount of "available to everyone"-ness that is important to the brand in order not to alienate people by appearing elitist and out of touch. Bands have gotten better at capturing the full amount people are willing to spend by selling expensive "golden circle" packages, backstage passes, ticket + merch packages, etc. Disney does the same with VIP "tours" (a personal escort to skip lines), hotels that include early/late admission, visits from characters, lunch with Mickey, etc.
daniel-cussen 5y ago
I suspect if the entry tickets go above a certain point, I think a big round $500 per person, people say "Disney is for rich brats" and that's really hard to undo. Some companies have gone there. I can't think of any that have come back.

deleted 5y ago

[deleted]

tapoxi 5y ago

They just need to build more parks. I typically have a better time at Six Flags because they're regional. They're smaller sure, but they're cheaper, easier to get to, and less overwhelming. Disney actually tried this approach in the 90's with the DisneyQuest VR parks, but it was too early for the technology at the time.

koheripbal 5y ago
You are not really the target audience for Disney. My 6 and 8 year old daughters are Disney park's target. Six flags is targeted for teenagers and young adults.
- tapoxi 5y ago
  Me, no. But all these horror stories means it’s probably a one-time thing for my kids instead of going regularly. While Six Flags does have a lot of coasters, I went pretty frequently as a kid and there were plenty of rides for younger kids, probably 8+.
- quintushoratius 5y ago
  > You are not really the target audience for Disney. My 6 and 8 year old daughters are Disney park's target. I would argue that they're not the target audience. Disney is hella fun for adults, and they have a lot more money than kids. The target audience is you and me. The biggest Disney spender I ever met was a post-middle-aged, childless adult that I used to work with. He and his wife sunk a fortune into DVC, took the cruises, and spent pretty much every vacation day at Disney World (or, if they needed a fresh change of venue, Disney Land). Disney may strategically appear to be marketing to the kids, but they're using the kids to coax us into going.

brutal_chaos_ 5y ago

Price doesn't have to be the gatekeeper. That is an artificial division that leaves out hard working individuals who happen to be making money for someone else rather than themselves (among others). (Also "Get a better job," only goes so far.) What they could do, is, idunno, set a capacity limit based on experience of users and develop changes for their users and not just their pocket books.

crooked-v 5y ago
So how do you actually enforce that capacity limit? Take reservations at the current price levels and the parks will just end up pre-booked for the next decade within the month.
- deleted 5y ago
  [deleted]
- ghayes 5y ago
  A mix would probably be better. Allow some folks to (over-)pay their way in, and then give others cheap or free access through a raffle or community-building programs.
  - kelseyfrog 5y ago
    The only problem with this is the same reason taxes are compulsory.
- t0suj4 5y ago
  If we're making up ways on letting more people getting the Disneyland experience why can't we just build more of them?
- brutal_chaos_ 5y ago
  > So how do you actually enforce that capacity limit? Any company can set cap limits and wait limits. "Sorry, we're booked out 1 month, check back soon." (Don't major restaurants do this?) More people want to visit than cap or time allows, open more locations. &c.

sokoloff 5y ago

We went to DisneyWorld for a company trip one year (back in the late 90s). Every single interaction, I thought “holy cow, they could be charging so much more here! Why is this so cheap?!” Going back later with kids in the last 10 years, they’ve clearly corrected a lot of their prior underpricing, but it still felt like a generally okay value.

koboll 5y ago

The "secret VIP" he mentions in the article is called VIP Tours, which cost at least $425 per hour for a minimum of 7 hours. They're the only reliable way to skip the line. So there is a pay-a-lot-for-the-best-experience tier. Much like nightclub VIP, however, you can also bring nine other people with you, which brings the total cost down to under $300 per person for the whole day. Probably the best way to do Disney, if you can get a large enough group together.

leetrout 5y ago
You still have to buy a ticket to the park so it's more like $400 per person which is still not bad if you only go once, to one park, on one day and want a special experience. I wonder if you should tip your guide?
kcplate 5y ago
I’ve done a VIP tour 11-12 years ago (won it as a prize giveaway). It is pretty amazing and without a doubt if I had an extra $10-15k that I could spend painlessly on a family Disney vacation over the normal ton of money—I’d do it in a heartbeat. It’s not just walk on to the rides, but special seating at the shows and depending on the guide you get some pretty good backstory and insider lore which was fascinating as well.
IdontRememberIt 5y ago
Actually, it is not the VIP package. Disney replaced the free fastpass by a paying "Lightning Lane" pass: https://disneyworld.disney.go.com/genie/lightning-lane/ https://disneyworld.disney.go.com/genie/lightning-lane/ The prices are adapting dynamically to trafic to maximize revenues.

whatgoodisaroad 5y ago

You could make the argument that Disneyland is designed to be a loss-leader, and there's no reason for the parks to reach a price equilibrium per se. In its original formulations, the parks are one link in a much larger business model [1]. [1] https://www.businessinsider.com/1957-drawing-walt-disney-brilliant-strategy-2015-7 https://www.businessinsider.com/1957-drawing-walt-disney-bri...

dangus 5y ago
Perhaps they were originally loss-leaders, but today I wouldn't make that argument: "In 2019, the segment, which includes cruises and hotels, accounted for 37% of the company's $69.6 billion in total revenue" https://www.cnbc.com/2021/08/12/disney-earnings-theme-parks-post-first-profit-since-covid-struck-in-2020.html https://www.cnbc.com/2021/08/12/disney-earnings-theme-parks-...
- listenallyall 5y ago
  Revenue alone doesn't tell you anything about profit. (I doubt it's a loss leader either, but this isn't evidence to contradict the claim)
- daniel-cussen 5y ago
  Well yeah it's a lot of revenue, you're housing people in the Disney universe. The question is how much profit those hotels and cruises generated.

EMM_386 5y ago

> Despite allegedly being at a fraction of capacity, the place is still uncomfortably jam-packed, with obscene waiting times at most rides. That's indicative of a venue that hasn't reached price equilibrium. This is exactly how I used to feel at the top ski resorts. They were extremely expensive, but absolutely jam-packed. Everyone complained that the wait for the lifts was too long, and that there were too many people on the trails. The only logical way to handle this is to increase the price and use that to thin the crowds. It's the same thing with Disney. The only other thing they could do is sell cheap tickets and limit the number of people, so you have to plan years in advance. But these are for-profit companies and not charities, so that approach won't happen. I'm not saying I agree with it, but this is the free market at work.

irrational 5y ago
Another option is to build more parks. Spread out the people more.
- dougmwne 5y ago
  That’s quite curious, as that was my first thought as well. Disneyland sits on 100 acres. That’s about the same a small golf course. Why aren’t there parks outside of every major city?
  - EMM_386 5y ago
    > Why aren’t there parks outside of every major city? Brand dilution. You can have your local Six Flags but that isn't Disney.
    - NullPrefix 5y ago
      There's already Disneyland and Disneyworld and also Disneywhatever in France.
      - EMM_386 5y ago

Someone 5y ago

> I bet they could double or triple prices and still only take a minor hit to overall attendance. Maybe slowly, but if they did that overnight, I guess visitors would want to see shorter queues. I also expect that, for Disney, queues are the cheapest part of the park, so shorter queue means costs per visitor-hour would go up. I also guess that non-ticket revenues per visitor-hour would go down (can’t buy an ice-cream while sitting in an attraction; customers that grow tired from standing in line will spend more time sitting at eating stands) ⇒ It wouldn’t surprise me if they’re already trying to get as much as possible out of die-hard fans by maximizing the time they spend in queues. That’s also better for their image, as visitors will (partially) blame other visitors for waiting times, not Disney.