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Feb 142018
 

Anna and I on a Disney ride, back in 2011.

An annual event is Disney’s price increases for its amusement parks, and the howls of outrage they evoke, all the more so because their price rises, for the last five years, have been averaging three times the underlying rate of inflation.

Prices broke through the watershed $100/day cost back in 2015, and have continued skyrocketing since then, with one day tickets now costing up to $185 at Disneyland and $196 at Walt Disney World.

Tickets for children (narrowly defined as 3 – 9 yrs old) are imperceptibly less, $177 in Anaheim and $131 in Orlando.  Oh yes – add another $10 per person per day for an optional ‘Maxpass’, to get more convenient access to Fastpass tickets (less waiting in line) and free digital copies of pictures taken at the various attractions.

Of course, some of us can remember back to happier times when Disney was neither so crowded nor so expensive, and perhaps as part of our receding youth in general, it is hard to feel good about the changes that time hath wrought.  When Disneyland opened in 1955, admission was $1.00 for adults and 50c for children.

It is not entirely easy to track the soaring cost of a visit to a Disney theme park because prior to 1982, you purchased an admission ticket and then had to pay for rides separately, often in combo deals with a collection of ride tickets and an admission ticket bundled together.  And in the years since 1982, they have come up with many different types of tickets, with varying changes in pricing and inclusions per ticket each year.  Sometimes some ticket types go up much more than others, but – with apparently only one exception – every year has seen an increase in general ticket pricing.

In Disney’s defense, they will fairly point out that they are adding new rides and features all the time, so the increased cost of admission is being matched, to some degree, by more ‘value’ inside the parks.

That is both a true and untrue statement.  Yes, there is sort of more to do, but when you stop and actually look at it, how many new things have been opened in the last however many years you wish to track?  Sure, there are new attractions and updated attractions, but usually they are displacing older attractions that have been closed down and the space repurposed for the new attraction.

Additionally, who cares if there are lots more things to see and do if you can’t do half of everything that is already there in a day, due to waiting in ever longer lines.  The ‘more things to do’ directly flows through to a need to stay more days to see/do it all, and a further increase in our total visit costs.

Ticket Prices Compared to Inflation

Whether offset by any actual tangible increase in guest experience or not, Disney prices have pretty much always been rising at massively more than the rate of inflation.  Here’s an interesting chart that compares the inflation-adjusted cost of a one day Disneyworld ticket with the price per gallon of gas (sourced from this excellent article).

 

Disney park admission cost compared to the price of a gallon of gas.

 

Here’s a stunning chart that shows a five-year rolling average of how many times more than the rate of inflation Disney ticket prices have increased.  Currently, for the five years through 2017, Disney prices have increased at a rate three times greater than the rate of inflation (the brown line – see the related article which has plenty of other statistics and charts too).

 

How many times more than the rate of inflation Disney ticket prices increase each year.

 

It is also an interesting issue to wonder if Disney ticket prices should be increasing at, above, or below the rate of inflation.  With growing numbers of visitors each year, the fixed costs of park operation are being split between more and more visitors – it might seem fair to expect their ticket price rises to be no more than the rate of inflation and possibly even slightly less.

Park Visitor Counts

Both the two Disney parks in Anaheim and the collection of parks in Orlando sometimes reach maximum capacity (thought to be 80,000 people in the park at once for Disneyland, and 100,000 at The Magic Kingdom) and so have to introduce closures of various types to restrict the number of people still allowed to enter the park.

Imagine if you’ve flown to Orlando/Anaheim for a Disney themed vacation, only to find you can’t then enter the parks.  Ugh.

In addition to a few hours of a few days each year when the parks are now having to restrict admissions, the overall number of people visiting the parks continues to increase, even with the increasing costs of admission.  The result is a matching increase in misery in the park.  Longer lines for everything – not just the attractions and rides, but to get food or anything else as well, and more crowds of people, creating the equivalent of traffic jams and making it very difficult to find anywhere to sit when you feel like a break.

Here’s an interesting chart of average attraction wait times, comparing 2015 to 2017, in Anaheim (sourced from this article).

 

Change in average wait times between 2015 and 2017

 

Note that these are averages, including busy and slow days, first thing in the morning and late at night as well as peak times.  For most of us, and most of the time, the reality of the waits we’ll experience are probably appreciably longer – more like 60 – 90 minutes rather than the 40 – 60 minutes in the article.

Total Costs Per Visit

Let’s not forget that the price of your ‘all inclusive’ ticket is not the totality of the cost of a day at a Disney theme park.  Chances are you’ve already paid for parking ($22 for regular or $45 for preferred parking in Orlando, $20/$35 in Anaheim).

And then you walk in the gates, and immediately are barraged by opportunities to buy overpriced food, drink, photos, souvenirs, and just about anything/everything else.  Even timeshares.

The emphasis in that last paragraph really needs to be on the word ‘overpriced’.  Sure, it isn’t a total surprise or shock to learn that a bottle of water is two to ten times the price it costs at nearby convenience stores outside the park, and that a very ordinary hamburger is more expensive than a decent quality one at a nearby McDonald’s.  But it is still unfortunate.

The cost of food depends on whether you’ll just lightly snack your way around the park or if you want some ‘white tablecloth’ dining experiences.  It is hinted at by Disney’s dining packages, offered to people who stay in their hotels.  A one day package for one person, including a standard table-service meal, a quick-service meal (something like a burger and fries from a window at a fast-food place) and two snacks, plus a refillable drink mug, is $75.  You can downgrade to two quick-service meals ($53) or upgrade to any three meals you wish for $116.

But what about the official licensed Disney souvenirs?  Disney of course doesn’t need to pay itself a license fee, but everyone else does any time they create anything with a Disney image or character.  Plus, Disney buys direct from the doubtless Chinese manufacturers, other retailers have to go through middlemen (probably even Disney itself).  So, the nearby stores outside the park might be paying two or three times Disney’s cost per souvenir – but they sell them to you for much less than you’d pay buying direct from Disney, inside the theme park (sometimes the identical items for less than half-price).

This article suggests that in 2017 t-shirts sold for $30, and a monogrammed set of mouse ears was $20.  Clearly, there’s no limit to how much money you can lose in the souvenir and gift stores, and while there’s no compulsion to buy anything at all, you’ll be in a very small minority if you and your child(ren) make it out of the theme park without at least something purchased.

Disney is now aggressively promoting the sales of ‘collectible’ items – pins and suchlike; creating new designs, artificially making some scarce and therefore ‘valuable’, and so on, as yet another dimension to get your children pleading with you to spend more money on utter junk that they’ll probably never look at again once getting home.

This is one of the most impactful negatives of a Disney experience, at least to me as designated money-source for our visits there.  Everything you purchase embodies a nasty feeling of being ripped off, of being exploited as a captive audience complete with children One Must Not Disappoint.

There are some strategies to soften these extra costs.  Bring some bottles of water with you, and maybe some snacks as well.  Consider also refilling water bottles at the water fountains around the parks rather than buying new bottles.  Our sense is that Disney currently charges $3.00 – $4.00 for a bottle of water, something you can buy for 25c – $1.00 outside the park.

Another small way to escape this part of the ripoff is to buy your souvenirs on Amazon or eBay or anywhere else.  They’re still not cheap, but here’s a page of Disney t-shirts at prices as low as $12.39.  You can tell your children to make note of things they like – even take photos of them – and to save on the hassle of carrying your purchases (and probably flying back home with them) you’ll give them an allowance to spend on souvenirs once you get back home.

Depending on what you spend on food, drinks, souvenirs, photos, and other optional extras, it is very easy to spend another $100 per person per day.

Are the High Prices Disney’s Fault?

Well, yes, of course.  No-one is forcing Disney to raise their prices every year.  Or, perhaps, there is a reason why Disney’s price rises are designed to help us.

Put yourself in Disney’s shoes.  You’ve a product where demand is outstripping your ability to supply.  Even if your park is ‘only’ at 90% of capacity, the experience of everyone in the park is massively impacted with long lines and crushing crowds.  You’ve got no more land to develop (in the case of Anaheim).

It is basic economics that when any product or service is scarce and demand is plentiful, you raise prices to create a balance.  Indeed, it does seem there is a slowing in park visitor number rises, perhaps encouraged by the sizeable annual admission rises.

As long as Disney can fill its parks with costly admissions, why should it reduce the prices?  Shouldn’t it in fact raise prices higher so as to create a better balance between its ability to supply a quality guest experience and the demand from people wishing exactly that?

What Should Disney Do?

We have two suggestions.

First, not all guests are the same in Disney’s eyes when it comes to generating income.  Sure, if you’re an infrequent visitor on a one day pass, then you’re going to earn Disney the most money of any visitor type at all.  You’ve bought the most expensive ticket, and you’re more likely to fill up on Disney food, and to weigh yourself down with Disney souvenirs.

But did you know that in addition to the one/two/three/four/etc day passes, Disney also sells annual passes.  And, more than that, it also sells discounted annual passes to local residents.  If the infrequent visitor on a one day pass is Disney’s dream visitor, the regular visitor with an annual pass is Disney’s (self-created) nightmare.

These people, while potentially paying as much as $1000 or even more for their pass, will probably end up earning Disney very much less per hour of time they spend in the park, and per ride they take.

Depending on the type of pass they have, they might only need to visit three or four times to get their investment returned, and particularly for the very local pass holders, they might visit many dozens of times each year.  Imagine if you had a Disney park 30 minutes from your home (like millions of people do in Southern California) and an unlimited free entry pass.  It would be something you’d think nothing of doing for half a day during a weekend, or for an occasional evening out – going to see the lasers and fireworks.

These annual pass holders are least likely to spend more money on ‘stuff’.  If they’re only going for half a day, maybe they’ll not even spend anything on food or drink.  And because they know how the parks work, they know how to most efficiently get to and enjoy the best rides – they’re less likely to be walking in slack-jawed amazement up and down ‘Main Street’ but will be hot-footing it to the latest and greatest rides.

So they are more impactful, consume more of the available ride slots, and earn Disney the least money.

Our suggestion – restrict further the validity of annual passes, and increase their prices still further.

In the middle – not as profitable as single day visitors, but more profitable than annual passholders, are people with multiday passes allowing for generally 2 – 6 days of admission.  But they too represent less income with each successive day.  They’ll quickly learn to bring their own water and their own snacks.  They’re not going to buy the same souvenirs repeatedly, every day.  Not only do they represent less additional in-park income each day, but Disney charges less per day for each extra day on a pass.

Disney should reduce the discount on the extra days of multi-day passes.  Overall, Disney needs to get closer to matching the impact/cost of each admitted visitor to the return they get from that visitor.  Currently, they have things totally reversed – the most impactful visitors pay the least, and the least impactful visitors pay the most.

Now for the second thing Disney could do.  Start optionally charging per ride, rather than allowing for unlimited rides at no extra cost.  It is the rides that are the true and most significant resource constraint.  With modern computerized billing systems, charging for rides can be as quick and easy as the present Fastpass and Maxpass systems (both of which are very limited in terms of benefits) – you simply register a credit card when you arrive, and then you can any time go up to any ride and either wait in line for free, or scan your tickets, have a premium automatically charged to your card to skip the line, and go straight on to the ride.

This preserves the concept of unlimited free rides, but allows for people who are willing and even keen to pay a premium to avoid one hour waits for each ride to do so.  Wouldn’t you pay a few dollars to skip an hour of endless shuffling through a zig-zag queue of people?

If Disney reduces the discounts for multi-day and annual pass holders, it might then be able to juggle the pricing a bit in our favor for one and two days passes, and still net as much revenue itself, while having a slightly less full park and happier visitors.  And if it offers a queue-beating ride fee option, it might choose to again reduce the entry price per person, while getting more total revenue and giving a better experience to its guests.

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