Why do theme parks keep raising their ticket prices?
Published: June 4, 2012 at 10:55 AM
Recent news of price increases at Walt Disney World, Universal Orlando and the Disneyland Resort have elicited quite a bot of anger and anguish from readers, many of whom feel that they won't be able to afford the theme park vacations they've enjoyed in the past.
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.
Published: June 4, 2012 at 11:14 AM
If you based your vacation on the 1970s example, it would still apply to today especially if this is regarded as middle class. When I was a kid, we had vacations similar to your example. My mother was a single parent and she took us on vacations to Disneyland and Sea World in San Diego and we stayed at local motels and such. You can still do a cheap vacation.
Today, we regard some conveniences as standard such as the all-you-can-eat buffets, free continent breakfast, 300 threaded sheets, cell phones, SUVs/mini-Vans, and iPads or portable DVD players. We didn't have these things in the 1970s.
While Disney and Universal do cater to the high end, the innovations have benefitted the middle class. The choices are such that we can afford an occasional nice high-end meal and dress casually at the same time (no suits). The tradeoffs are better today. Although the prices have increased, I can afford it as long as I account for it. Unlike the past, it doesn't seem so desperate despite the on-going economic recession.
Published: June 4, 2012 at 11:34 AM
Great article. Part of the reason we moved to Orlando is how it reduced the cost of going to the parks.
Published: June 4, 2012 at 11:35 AM
The middle of this almost seemed to be a rallying cry for #OccupyMainStreetUSA.
Published: June 4, 2012 at 12:26 PM
Spot on. I'm planning our family's third trip to Orlando in 15 years, and wondering how in the world we did it before! Still planning to use the same percentage of our budget for vacation expenses, but this time we'll be on I-Drive instead of on-site.
Really enjoy the vintage photo too!
Published: June 4, 2012 at 5:53 PM
Great, timely article, Robert. Really appreciate the breakdown and focus on getting the biggest bang for your hard earned savings - even if that means skipping Disney/Universal completely!
The biggest change I have noticed is that it is no longer possible for me and mine to do BOTH Disney and Universal in a single trip. Universal used to be a less expensive add-on, but not any more. It is one or the other, which makes Universal even less viable since it would be very difficult to go to Orlando and NOT visit Disney!
For now, I am taking the time to experience the best of the regional parks with Silver Dollar City and Dollywood already in the books, Busch Gardens Williamsburg and a couple of other destinations (Holiday World, Kings Dominion, among other potentials) waiting in the wings. A family can visit a lot of great theme parks throughout the year on what it costs to visit Orlando for a week!
I would note that the cost of an extended Disney vacation is still a fairly competitive option since you take most of the ticket price hit in the first four days. Which, I guess, is what Disney really wants in the long run - come to WDW and stay put!
Published: June 4, 2012 at 3:21 PM
One of the best ways to save towards a Disney vacation is the new Disney Rewards Visa card. They give you double points for supermarket, restaurant, gas & Disney purchases. If you're a family that only goes to Disney once every three or four years, you can easily amass a large number of points, and then use those points to pay for Disney tickets, Disney hotels, Disney restaurants etc. Use the card for your routine food & gas purchases, pay it off each month, and it will cost you very little. There's a yearly fee for the double rewards card, but that can get paid quickly if you use it for supermarket purchases. As Robert says, make good business decisions to help alleviate the vacation cost.
Published: June 4, 2012 at 4:04 PM
Very well put Robert. I have been making the same argument for some time not, albeit not quite as eloquently as you just did. I wish I did not live in an area devoid of good regional parks. In Colorado we have Elich's and Lakeside. Now don't get me wrong I love Lakeside for the nostalgia and the price is certainly right. Elich's has only two decent rides and is mediocre throughout (I still miss the old Elich Gardens from my youth). I would love to live near Bush Gardens, Dollywood, Holidayland, Knots, Magic Mountain, Knoble's, Ceder Point etc. but I don't.
The good news is that companies like Cedar Fair are poised to take over the old Disney market place. With Matt Ouimet at the helm I have great expectations from Cedar Fair attractions.
Published: June 5, 2012 at 1:23 AM
Perfect article Robert - bang on the money.
My wife and I know that Disney is not a cheap vacation, but for us it never has been. When we come this November it will be our third visit at intervals of 4 years, and we will do every theme park in Orlando, including Busch Gardens and Legoland. It's expensive and we know that, but we plan carefully, work out where best to spend our money, and then just set out to enjoy ourselves...
Cheap? No. Great value? Absolutely.....
Published: June 5, 2012 at 1:55 AM
I wonder how to calculate WDW tickets today vs. the 1970s, when in the 1970s you had to PURCHASE ticket books as opposed to one gate price = unlimited attractions.
Published: June 5, 2012 at 2:36 AM
To the above anonymous poster: You named 7 amusement parks you don't live near. You misspelled four of them, and got one name wrong. That may be a record! ;)
Published: June 5, 2012 at 6:36 AM
I think that this assessment is true, although it seems that if you are willing to live like in the '80s while on vacation (no fancy food all of the time, no expensive character dining, braving the lines, etc) that you can do fine. When I went to WDW as a kid, I remember enjoying the waits for rides, the anticipation was awesome (especially at a ride like PoTC). For our next Disney vacation (probably a couple of years away), we'll seriously consider the Art of Animation resort, which is pricey per suite, but not if you bring grandparents along in the same room. While you can argue that Art of Animation is not a 'value'-priced hotel, I for one am very glad to see Disney throwing some creative muscle behind the lower-to-middle-tiered resorts. I was never interested in the 'value' resorts before (they seemed like cheap and cynical attempts to wrest middle-class dollars from off-property hotels), but with this one I think they hit the nail right on the head. I could see going and spending at least a day of the trip just hanging out at the hotel, as it is emmersive like the parks. So, I guess it seems like Disney is trying to do something here for the middle-class (not merely the upper-middle class) but maybe I'm looking at this too generously.
Published: June 5, 2012 at 9:08 AM
Great article Robert! I would like to respond to the person(s) saying they will continue to come here for vacation and stay on I-Drive instead of on property:
Do your research before you conclude that is the best way to go!
There are a few good properties on I-Drive, but most fall into the "meh" category AND one might just find that it is less expensive to stay on site at a "value" resort than stay on I-Drive. In addition to that there are perks that you will not get off-site and many of the perks translate into time and money saved.
For example, if you rent a mid-sized car for a week in Orlando you can look at spending between $200 and $250 PLUS gas PLUS parking of $12 per day. A conservative total figure is about $350. Stay on site and you save that amount by using free transportation and get extra hours at the parks as well! I completely understand you can get free transportation at most if not all the I-Drive hotels, but you are on their schedule and take it from a guy who's been there and done that.....you don't want to do that.
Similar perks await you at USF resorts. They may not be as price competitive as the value resort options at WDW, but you get some pretty tasty perks there as well (you just have to love the express pass feature of your room key!)
I live in Orlando and my wife and I lamented the increase in price we will be looking at when we renew our passes, however we feel it is an investment for us. As long as Disney keeps investing in more "Magic" at the parks via upgrades, referbs, and new attractions we will continue to purchase our passes
We have lived in Ohio and had passes to King's Island and I grew up in the Chicago area and had passes to Great America. Nice little parks that have character, but they aren't Disney!
Published: June 5, 2012 at 9:10 AM
Here's one way around the high prices:
A few months back I was in a local supermarket and bought a graduation present for a friend, a Disneyland pass for $99. It was "One park per day, two days." so not quite a park hopper but a pretty good value. Yesterday I was shopping in the same store and still saw plenty of those cards on the rack. Given the recent price increase, I'm surprise someone hasn't bought them all. I should really buy two or three of those right now, but this assumes these passes will still be honored for some time. They don't list any expiration and if anything warn that prices are subject to change.
Can anyone advise if they know if buying these is a good solution for these recent price raises or will buying these only afford me a surprise at the game like being turned away and/or being required to pay an upgrade? Has Disney said anything officially? Can anyone just take a reasonable stab at a guess?
Published: June 5, 2012 at 9:41 AM
By the way, note to Mr. Niles: Looking sharp in that tie, buddy! Great photo of you and Mrs. Niles.
Related: The dapper fellow with the ice cream bar may not be Robert [unless there's a "junior" in our midst] but I'll bet dollars to doughnuts that the pretty lady is, in fact, a Mrs. Niles. Correct me if I am wrong.
Also related: On this website, you generally don't have to request to be corrected if you are wrong about something.
Published: June 5, 2012 at 12:06 PM
I appreciate this article, but it does not address the cost of living and how that has skyrocketed in recent years. More expensive costs for me means more costly goods and services used in theme parks and other entertainment venues. Yes, I can lament the good old days, but that is not the fault of the theme parks. It is reflective of our government "at work." I am much more careful as to where I spend my money. I frequent the Disney parks less often, plan better, and use creativity to pull it off. As for the smaller parks around the country. I'm sorry, they just don't appeal to me. I am accustomed to theme parks that are better with the details and thus they will still have my loyalty. I bring sandwiches and water bottles if I have to, but I make it happen on our budget
Published: June 5, 2012 at 2:44 PM
Why limit it, TH? We are often corrected even on those rare occasions when we are
Published: June 5, 2012 at 3:51 PM
I'm pretty sure that these theme parks do not have to charge so much. Not only is it expensive in USA but here in Europe it's also expensive. So much so, i don't go unless i can obtain a discount offer. Disneyland Paris has become so expensive, so i always wait for discounts. And we all know that this park is a poor version of magic kingdom.
If theme parks carry on behaving like this, numbers will fall drastically so they should review their pricing procedures before it's too late.
Published: June 6, 2012 at 2:41 AM
James: No, you're not. I mean, yes you are. I mean, that is, hummina hummina hummina..I don't know what I mean. I'm so confused.
Published: June 5, 2012 at 10:56 PM
All I can say is, I have enough money that I could enjoy a Disney vacation whenever I wanted.
And I wouldn't bother going to Disney. It's way too expensive for the experience.
Which is why I have enough money to go to Disney.
Why can Disney keep raising their rates? "Wizards First Rule - People are stupid". You tell people they can't live without a Disney vacation. Better still, you tell them that their kids can't live without a Disney vacation, and if you won't give them a Disney vacation, you are a bad parent. You get multi-millionaires to say the line "I'm going to Disneyworld", when there isn't a chance that they would waste their time doing so.
It's all show. Disney knows what it's doing. It knows how to sell the hype, it knows how to market, how to get others to help them market, to encourage the right people to say the right things to sell others on a Disney vacation.
What's magic about Disney? That they can charge an amount far beyond what the experience is worth, and people will pay it, just to brag about how they did a "Disney vacation". They aren't selling the experience, they are selling the right to brag to others, to put on an air of haughtiness, of superiority.
But what do I know? I choose a $1 passable burger at McDonalds over a $30 theme park "high class meal".
Published: June 6, 2012 at 1:59 AM
Ah well ...
Published: June 6, 2012 at 4:01 AM
"What's magic about Disney?"
Must be magic enough to drag my wife and I over the Atlantic and invest about £4,000 (over $6,000) in a vacation there once every 4 years or so. If we didn't think it was magic, and good value, we wouldn't keep coming back....
It's not something we can afford to do every year, but we are prepared to budget for it every 4 years or so...
Published: June 6, 2012 at 4:15 AM
@ Charles: There is an abundance of "Magic" at WDW! If it weren't perceived as a good value by the majority of the tourists attending it would be spread like wildfire. It's just not the case.
That being said, I agree some experiences Disney offers seem to me to be better values than others and Disney makes it real hard for parents not to cough up the cash while vacationing to keep from seeming like a heel to their kids.
I bet many a budget has been blow to shreds once the family is on property with the "We aren't going to do this everyday so we might as well do it right" attitude.
I speak from experience regarding this! ;)
Published: June 6, 2012 at 7:27 AM
Great article. To get more bang for the buck we plan, plan, plan. The tickets are the only real expense that has grown greatly over the years. We book a nice house rental for under 1k. With a big group of people that is better than the motels of the past. Food choices are everywhere today. 10. buffets, fast food, walmart frozen meals, that you can throw in the oven in your house rental. Far cheaper and time saver in the park, than the over-priced Disney restaurants. Still travel by vehicles and the cars are more gas efficient, although gas prices do rise. But nothing compares to the excessive cost increase of Disney tickets. And for what to build a Beast restaurant, with even more exorbitant prices? Star Wars redux, nice but about 10 years too late. Holding out hope for Avatar. We have been increasing our visits to Universal/Sea World to every 2 years and slow down on Disney from annually to now every 4 years.
Published: June 6, 2012 at 2:15 PM
@ David Brown
Thanks so much to you and your family for spending your vacation time here in Orlando ... See Ya Real Soon!
Published: June 7, 2012 at 11:11 AM
I think it's supply and demand. If people are willing to keep paying the prices to go to the parks, the businesses will continue to up the prices until they see growth of attendance slow.
Personally, I think prices within the entire travel industry have gone up exponentially in the past 10-15 years, far greater than the rate of inflation. Look at the prices of airfares (not even considering all of the annoyances of today's air traveler), which are getting out of control even with the proliferation of so-called "low cost" airlines like Southwest, Airtran, Jet Blue, and the like. Hotels too have drawn their rates up. When is the last time you could find a reasonable hotel room for under $50 AYNWHERE? $50/night used to be the dividing line between value chains (Super 8, Red Roof Inn, Motel 6, and Comfort Inn) and mid-level/business chains (Courtyard, Fairfield, Holiday Inn, and Hampton Inn). Now that line has doubled to around $100/night.
I think the increase in ticket prices have been pretty steady with the prices of other travel-related expenses. Yes, it sucks that by the time I have grandchildren, it will probably cost $100 to walk through a Disney turnstyle (I'm still working on multi-day tickets that I purchased when rates were still around $50/day), but as long as people continue to pay, they will continue to go up.
As far as pricing out the middle class, I don't think that's the case. Middle class families have been cutting corners and finding savings to afford a Disney vacation for decades. Living in the DC Area all of my life, I know most of my friends and family would make the drive down I-95 to save money on airfare and rental cars to be able to make those trips to Disney. In fact, I still make that drive every year or two because it's easier and cheaper than taking the flight.
To provide some comparison, my wife, 2-year old, and myself will be taking a 10 day vacation to Orlando this fall, and we expect to pay somewhere around $2500, which includes staying 4 nights at Port Orleans. If we wanted to go to another popular tourist destination for the same length of time (LA, Grand Canyon, Texas, Chicago, etc.), we'd probably spend about the same amount of money when you figure in the cost of hotels, meals, and attractions.
It's just getting more and more expensive to travel, which is why so many Americans have been taking "staycations."
Published: June 7, 2012 at 11:51 AM
OH MY GOD! I just saw the kid in the stroller! Could that be a young Blogger-to be?!
Published: June 8, 2012 at 12:22 PM
Walt Disney is rolling over his grave. His vision of a place where "ALL" children can enjoy time away from the problems of the world is now up for rent to the highest bidder. Disney has become the "Beverly Hills of theme parks". Someone please do an "Occupy Disneyland" so someone in corporate can see that greed is corrupting Walt's image of the "Happiest Place on Earth". Disney has become the new symbol of Corporate Greed and you can quote me on that.
Published: June 8, 2012 at 2:19 PM
GREAT ARTICLE and spot on!
Published: June 9, 2012 at 9:27 AM
With the increase in prices of everything people want to get every cent of there money's worth. This has caused nasty, mean, pushy people that ruin the experience for others. We have FL passes and lately we have gone in the parks and left in a short time because we could not stand the obnoxious people.
Published: June 9, 2012 at 10:39 AM
Because they can. As long as people are willing to pay - they can - and will. Sums up the article in two sentences.
Published: June 10, 2012 at 8:27 AM
I think your explanation is correct. As long as the price point fails to affect the bottom line, theme park operators will continue to increase the price. However, what about the original reason Walt open his park in '55? A place where everyone of any age could enjoy the day. A place where families can enjoy time together. And, by the way, time where parents could insist that kids leave their cell phones, and video games at home. I understand that raising prices can keep out the "rift raft," but it also limits the source of income for the park, and creates a financial fence that further limits what those who cannot afford the park can do. Even as a cast member, I cannot really enjoy the park outside the wandering about thanks to the free admission (which is really paid in sweat 60-80 hours a week). In truth, I think park operators have fallen short of their primary purpose: to make the most money for their shareholders. Even if they had a day to celebrate Walt's dream by rolling back prices for the day, it would be better than excluding those with incomes under six figures.
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