Why do theme parks keep raising their ticket prices?
Published: June 4, 2012 at 10:55 AM
That passion speaks well for the quality of experience that these theme parks provide, actually. The parks have created something that many fans don't want to lose. But these price increases send another message, too - that the nation's top theme parks aren't necessarily middle class destinations any longer.
When I was a kid, wealthy families wouldn't have been caught dead slumming it on vacation at a place like Walt Disney World. Disney was strictly a middle-class destination, the choice of families that could never afford a week at Hilton Head or some other rich person's golf-and-beach resort. The upper-middle-class families who came to Disney might stay on-property, in one of the few hundred rooms available at the Contemporary and Polynesian Resorts. But for the rest of us, thousands of rooms in low-cost motels on 192 awaited. With two-day passports less than $20 in the 1970s, a family of four could spend a couple days at the Magic Kingdom - including counter-service food - for under $100. Pair that with a drive over to the free beaches on either coast, and Florida offered an affordable vacation get-away to millions of middle-class families.
But over the past 30 years, the American economy changed. Real wages (in other words, hourly wages adjusted for inflation) haven't budged since the early 1970s, despite massive gains in worker productivity. Real wages went up a bit in the late 1990s, but Americans gave those gains back in the 2000s. The American middle class has shrunk, and the gap between wealthy and working class Americans has grown to the widest level since just before the Great Depression.
The people running Disney and Universal aren't stupid. They've reacted by gradually shifting their business to go where the money is. Walt Disney World has transitioned from a middle-class destination to one for upper-middle class and wealthy vacationers. When the dollar weakens, the Orlando parks market aggressively to tourists from outside the United States. Each of the top 10 most attended parks in the United States have added ticket options and resort amenities designed to appeal to wealthy visitors, adding price points that the crowds who came to the parks in the 1970s would never have supported.
Today, if you have the money, you can choose from thousands of hotel rooms in four-star hotels on Disney and Universal property. You can spend hundreds of dollars (per person!) to have tea with a princess. You can dine in award-winning cuisine in world-class, table-service restaurants. And, for the price of staying in the correct, on-property, hotels, you can even have exclusive ride time on selected attractions, or skip the lines entirely. Appropriately, parks are adding and improving attractions in return for all this extra income, too. Today, park visitors can enjoy wonders such as The Wizarding World of Harry Potter, and soon will have an expanded Fantasyland in Orlando and a new Cars Land in Anaheim.
Now, middle class families still can - and do! - afford Orlando theme park vacations. It's just that, today, staying off-site on 192, visiting the parks during "normal" operating hours, waiting in lines, and eating only counter-service meals gives a family of vacationers the low end of what the Orlando theme parks have to offer, instead of the typical experience enjoyed by the vast majority of visitors.
Even as the parks raise their "rack rates" for admission and hotel rooms, they continue to offer discounts that sharp consumers can exploit. But to get the most value from an Orlando theme park vacation, families can't just pile in the car and hit the road for Central Florida, as they once could do. Today, middle class families that want more than a bare-bones Disney or Universal theme park vacation are going online, doing research, and getting engaged with fan communities. They're not just tracking discount opportunities, they're learning tips and lessons on how to navigate the increasingly complex offerings at the parks, to get the most value for what they're paying.
While that's great for site such as Theme Park Insider :^) - that's tough for time-pressed middle-class parents who are working harder than ever for the same wages their parents earned in the 1970s.
So what happens to middle-class theme park fans who can't afford Orlando any longer? Many of them have been discovering high-quality, but more affordable, regional parks closer to home. One of my goals on Theme Park Insider is to bring to your attention world-class offerings at these regional parks, such as themed lands of Busch Gardens Williamsburg, the Broadway-quality entertainment at Dollywood, and the free amenities and top-notch wooden roller coasters at Holiday World.
Why do theme parks raise their ticket prices? Because they can. Demand drives ticket prices in the theme park business. So long as people keep buying tickets and booking theme park vacations, parks will continue to raise prices as they seek the "optimum market price" - the price point just before they start losing so much business that it reduced their overall income. With wealthy Americans earning more than ever, the nation's high-end theme parks have decided to go after that market. And so far, they're getting it.
Want to know why Disney and Universal are raising their prices? There you go. The smart thing for you to do - as a consumer and a theme park fan - is to set your emotion aside and to make a smart, well-informed decision about where you'll spend your vacation dollars. (And that's true no matter what your income level.) Research discount opportunities in Orlando. Learn how to get the most from your vacation dollars at the parks. Improve your money management skills. And look into world-class alternatives at competing regional parks.
Enjoy yourself while on vacation, but treat your vacation planning like it's business. Get informed. Look at the alternatives. And find the option that delivers you the maximum enjoyment without breaking your family's budget. For theme parks, ticket prices are a calculated business decision. Your decision whether or not to pay those prices should be just as well calculated.