Is Loyalty is a Luxury You Just Can't Afford?
If you need an illustration of just how much some people love the Disney theme parks, look no further than the online reaction to Disney's latest price increases. Many fans lashed out at Disney over the higher prices for visits to the Walt Disney World and Disneyland parks, topping $100 a day for the first time. Yes, Disney continues to offer substantially lower per-day prices for multi-day tickets, but the overall trend remains higher and higher prices every year. And that's making fans angry and frustrated.
Which shows how much they care.
The worst reaction a company can elicit is silence. The opposite of love, the saying goes, is not anger. It's apathy. People are angry about Disney's continued price increase because they love going to the Disney theme parks and have expended considerable effort over the years to adjust their family budgets to make that happen.
With each price increase, however, Disney "moves the goalposts," and forces families whose incomes are not rising at the same rate as Disney theme park tickets to go back and find yet another place to cut to make their next Disney visit possible. Of course that's frustrating to people! No one likes to do the to work to figure out how to accomplish something, only to have someone else make a change that undoes all that work. That's a large part of the frustration behind Walt Disney World's MyMagic+ system, which forced many long-time fans to change their tried-and-true itineraries for visiting the parks. Throw another price increase on top of that, and no wonder that people are getting upset.
So what can Disney fans do?
One of the basic principles in consumer economics is the idea of substitution. The textbook cliche says that when beef gets too expensive, families start buying chicken for their dinner, instead. In theme parks, fans who feel that they can no longer afford a visit to the Walt Disney World Resort might instead substitute a visit to Universal, SeaWorld, Busch Gardens, or some other park. Will that happen? Sure — plenty of Disney fans have visited those parks and maybe some more will join them in the near future. But many Disney fans won't be booking trips to other companies' theme parks. They'll just keep on complaining about the Disney price increases even while booking their next trip to Walt Disney World.
Loyalty. Disney has invested millions (billions?) of dollars in cultivating brand loyalty among its fans. With advertising and promotional campaigns that urge fans to show their "Disney Side," to feel the "magic," and to "wish upon a star," Disney seeks to create emotional connections between its fans and the company's parks that will lead those fans to believe that the Disney Parks provide a unique, personal experience for which there is no substitute. These fans will not — indeed, cannot — substitute visits to Universal, SeaWorld or Busch Gardens because they do not see those destinations as acceptable alternatives to a Disney vacation.
Of course, chicken isn't beef, either. But so long as people are willing to eat chicken for dinner, it remains a potential substitute for beef. That's why industry groups representing ranchers will pay for an advertising campaign to convince shoppers that they really want beef for dinner — not some cheaper alternative. And that's what Disney does with its theme parks. It looks to build customers' brand loyalty to the point where they will not consider a substitute.
If companies can pull this off, they'll reap millions (or more) in additional revenue as their customers lose their sensitivity to price increases. Companies can extract more and more and more money from their loyal customers, as those customers refuse to consider substituting other companies' lower-priced products.
This is why airlines offer frequent flyer miles and hotels, grocery stores, and other businesses offer similar loyalty programs. They want the lure of "free" trips, meals, and other rewards to keep you coming back to them, rather than having you shop around to find potentially lower prices elsewhere. Smart consumers go ahead and claim the credit they've earned by buying stuff from these businesses, but if you pass up a lower price elsewhere to chase a loyalty program reward... well, that reward is no longer "free," is it? You've paid a higher price than you needed to to get it.
At least with things such as frequent flyer programs, you might get a free (or very cheap) flight somewhere at some point. With Disney, you're not getting free stays or days, you're simply getting the intangible benefit of a visit to a place with which you're forged an emotional connection. While many fans treasure that, it's an amazing deal from Disney's perspective. It can keep raising prices, and its loyal, loving fans will keep buying. Even if they get angry for a while after a price increase, ultimately, those fans will keep finding ways to cut elsewhere, borrow the money, or give up other vacation days to ensure that the vacation they do take is spent with Disney.
Disney loses only when it raises prices to the point where fans can't cut elsewhere anymore, they've maxed out their credit cards and home equity loans, and they simply can't afford to visit Disney anymore. Even then, Disney can continue to raise prices so long as it can find new, wealthier fans to replace they ones it's priced away. (See, companies can substitute, too!) And with Disney marketing itself to the "one percenters" of Europe, central and South America, and Asia, it is finding enough wealthy tourists from outside the United States to continuing growing attendance at the Walt Disney Word and Disneyland Resorts for many years to come.
So here is your choice, if you are a Disney fan: You can either continue to look for ways to afford that Disney vacation, or you can substitute. Now, the worst thing a consumer can do is to spend money on something he or she doesn't really want. That's the epitome of waste. But there are other great vacation destinations out there. Many families with elementary-aged children actually prefer the Legoland theme parks to the more broadly-targeted Disney parks. If you love Epcot's World Showcase, you might try a visit to Williamsburg, Virginia, not just to enjoy the European-themed Busch Gardens park there, but also the historically-themed Colonial Williamsburg and Jamestown Settlement parks nearby. Do some research, read about other parks, and try something different. You might find another destination you love, and, at the very least, you might save enough money to be able to afford better your next Disney trip, which you might appreciate more after having been away.
I love Walt Disney World. I visit when I can afford it, and will continue to visit in the future. But I also visit other destinations and shop for the best deals whenever I'm thinking about a vacation.
Look, big companies rarely offer loyalty to their customers by cutting their profits and executive pay to offer better prices and quality, so why should customers reflexively offer their valuable loyalty to big companies? To a big company, you're just business, regardless of what its publicity campaigns try to make you believe. Treat companies as they treat you. Don't hesitate to shop around.
No, you shouldn't spend money on something you don't really want. But you shouldn't allow your emotions to lure you into spending money you cannot afford to spend, either.
If you get to the point where a price increase — for anything, whether it's a Disney theme park vacation or something else — is making you mad, that is the point where you ought to ask yourself "is my loyalty to this company a luxury I can no longer afford?"
You Might Also Like:
It's not just the price going up, but also the value going down. It's really apparent if you compare Disney of today to Disney of 10 years ago.
Nicely done, Mr. Niles. And I agree 100%. Used to be we'd go to Orlando (Disney/Universal/SeaWorld) about every two years. Sadly, we haven't been back since 2010. Our last Disney trip in 2010 cost about $3000 for ten days on site at a moderate hotel. Now it's about $4000. We keep pushing back our next visit every year because I just can't stomach the cost. And Universal is no bargain either. In a way, I am spiteful of Harry Potter, because back prior to 2010 my family of five could go to Universal for four days at a cost of about $1350 and stay at the Royal Pacific. A complete steal. Now that same trip runs at least $1000 more. Calculate the cost of food at either Disney or Universal for another $150 a day and it adds up quick. Nothing is cheap in the Orlando theme park circuit these days. Nothing.
I started going to Universal Orlando because going to Disney was not the same anymore but the cost was higher for less value to the customer. Universal reminds me of WDW durning its glory years when they only had Epcot and MK with three hotels before it got watered down and sprawled out of control.
I have a pass for Busch Gardens /SeaWorld, all the parks in their network . The value is unbeatable. Disney is showing it's Disney Side...which isn't for its patrons just them.We are a Disney loving family and it's becoming not worth it.
This is one of the most depressing theme park-related pieces I think I've ever read... and yet I can't really argue with any of it. In ten years (if not sooner), Disney will likely have priced itself almost entirely out of most middle class families' budget range, and I genuinely feel bad for kids growing up who might not get to visit Disney parks because their parents can't afford the massive expenditure. Universal is at least building things in Orlando at a rapid-fire pace, so they can kinda/sorta justify their increases; Disney World, however, has been more or less stagnant in the new attractions department (apart from the ridiculous, multi-year odyssey that was the phased opening of New Fantasyland) since 2008, rendering their price increases totally at odds with any idea of increased value to go along with them.
Staying offsite at DisneyWorld is okay if you don't mind not getting your first choice for restaurant reservations or Fastpass+ times, but at Universal Orlando it simply is not an option. Getting Express passes for staying at one of their big three hotels is the only way to go. I wouldn't even consider another option unless my visit was during the time of year when wait times are negligible (which still sometimes happens at USO). But now that my oldest is taking college courses as a homeschool junior, the days of my off season visits are pretty much over.
I don't mind staying offsite. The perks you get are not worth the mind boggling price difference in my mind. How much time are you really going to spend in this hotel room? Not sure where we stayed in DL last time but at WDW 3 couples split a condo at the Mike Ditka resort and it was seriously cheap.
For 21 years, beginning with the very 1st "Fright Nights" my son and I (And various others we took along the way) attended Universal's Halloween Horror Nights. We looked forward to it every year and it was one trip we still enjoyed together as mom and son long after he moved out. But in the last couple of years, the price of their tickets (And Express Pass, because you can't atten any longer without that) became so expensive we had to stop going. It was such a disaapointment to lose that chance to spend a fun time with my grown son. I have every ticket from every year we went and now ti's become a fond memory and nothing else. It's sad when these places that families should be able to enjoy price themselves so high taht only the upper middleclass and higher can afford them. No one thinks about the children. In the end it will eventually cost disney in sales and promotions. After their debacle of the "Villians Night" last year I doubt I will attend any more of there specail ticket events anymore.
The problem is that Disney is raising prices beyond what their customers can afford. By raising prices beyond what some of your longtime customers can pay, you are telling them they do not matter anymore. Theme parks are not a right, but they are a tradition. Most people's income has not doubled over the past twelve years, so why has Disney's prices? People put up with it because there isn't a substitute for Disney. But even with record attendance, there are people who aren't returning because they can't afford it anymore. Disney needs to think about those people when they decide raising prices.
As long as there are enough Disney Fans who will put up with any costs the Disney Corporation throws at them, then prices will continue to go up as high as the Richter Scale. If someday only millionaires can afford to go to the Disney Theme Parks and the company can still make obscene profits, they will not care one bit if the average American (i.e.the disappearing middle class) can no longer afford the visit. As long as the customer continues to let the Disney Corporation rape their pocketbook-----they will.
Reading the first ten or so comments here, it looks like most of you didn't truly appreciate at least half of Robert's point. And anyone who has been around on the internet for the last 15 years or so knows Disney gets hit with complaints they are way too expensive and pricing everyone out...and the parks get more and more crowded, attendance goes up and up.
One thing I will NEVER understand about WDW lately is their inability to build new attractions at anything but a glacial pace. And I'm not buying the "Disney kool aid drinker"'s argument I've heard lately of "Oh, they just care so much about the details and safety, so they need to take it slower". Nonsense. I have NEVER seen more detail in a theme park than the Harry Potter experiences at Universal. And they went up in record time. So it can be done- but Disney has the brand loyalty that the author of this article is writing about. And even though everyone complains on social media about the price increases- most still pay them and come anyway. Disney KNOWS this. So what incentive do they have to improve things any faster? Why should they keep prices low if people will pay more? I don't like the dismissive attitude they have either, but the whole "think of the children" perspective is naive- Disney is a BUSINESS. A very successful one. They care about the $. People are secondary. It's reality.
Disney isn't beyond affordable. We just don't want to pay it. The higher prices hurts more with a family yet we find ways to pay for them to go. There are substitutes, but it seems like we slam Disney for slow walking new attractions while other theme parks embark at a faster pace. Not necessarily true. It only seems that way. At Southern California, the other theme parks are even further behind Disney's pace. Universal Hollywood is getting Harry Potter finally well after it appeared in Japan and California Adventure got Carsland.
Disney corporate management has been coasting for thirty years on the goodwill that Walt created.
Our loyalty lies with Universal since my wife decided to divert from those Disney vacations all those years ago. This being said, we are skipping the annual vacation to Orlando this Summer. It's not about the money, we just want to see something new and Kong / Skull Island will be finished by then.
Also, many here are buying multi-day passes. I don't know the percentage of visitors on multi-days or APs but I suspect it's high. The 1-day ticketed guest is probably not a huge percentage of their gate.
I think Disney has been very smart and catered to international audiences to help keep attendance high. I haven't seen the numbers, but my guess is that domestic visitors have dropped at Disney over the past 10 years. There was definitely a very large contingent of South American visitors during our recent trip in late January.
Let's get real, people. The parks are booming and thus overcrowded. They exist in physical space, not cyberspace, and can only accomodate so many people before it becomes unpleasant and uncomfortable for everyone. The only way to keep the crowding from getting worse is to increase prices. Honestly, I'd be willing to pay even more if it meant parks not mobbed by tens of thousands of my closest friends.
Attendance is great, but that's because Disney has done a great job getting wealthy people from Europe and elsewhere.. While it will never happen anytime soon, Disney needs to consider a third US resort. It's not just the price of Disney that's high, it's the cost of getting there. The US has much more people than it did in 1971. A third resort needs to happen someday. Having two resorts on the southern side of each coas of the country was a good choice climate wise, but it wasn't a very good geographic wise. If Disney were closer to more people's backyard, Disney's prices wouldn't matter as much if they didn't also don't have to spend so much to get there. I don't expect it to happen soon, but unless Disney wants to start turning people away they will have to open another park eventually.
There are ways around the high cost of Orlando..
Very well stated article. We gave up on Disney a few years ago and opt for a FEW other parks instead. There is too much to do in So Cal already, anyway.
I stayed silent because I knew it was coming...and Universal followed suit.
^Give Silver Dollar City or Dollywood a try, Anthony. They are not quite Disney or Universal, but with annual passes at ~$75, I think you will be pleased with the themed entertainment those parks provide.
The latest popular internet myth: "only the rich or upper middle class can still afford to go to Disney."
Disney wants the price high to force people to buy into their point based Disney Vacation Club time share system where they can change the value of the points when ever they want and lock people into Disney vacations for 50 years where the guest actually pays a monthly fee to keep up the hotel for them. That's showing your Disney side
Most people in North American society live over their means. It's not just a question of going on vacations they can't afford; it's their entire lifestyle. Advertising tells them they should have a certain way of life, and easy credit makes it possible -- although unwise.
Comment from above: "Disney is serving its investors well to price the product in a way that optimizes total revenue ($ per person x number of people). It would be irresponsible to be otherwise. It isn't a social program."
It's simple. Disney AP is triple the Universal pass I have. Disney makes few changes at their parks and it takes years when they do. Once every 5 years is enough. And now that I'm older, the Magic Kingdom hassles just aren't worth it anymore. We go the Universal 5 - 6 times a year, at least, and spend a bundle. Just my point of view.
Disney theme parks have been cutting back on live entertainment for years. And their franchise is still supported. Indeed, Disney parks continue to be well populated. Why not charge more when the lemmings are getting less I overheard one Disney exec say. Unlike Walt's time when the Disney brothers were glad to hear that kids were urinating in Disney's parking lot, today disney spends millions on ads, promos and PR. They don't have to give anything away. They're as fascinated with this trend as those reading and discussing this story. They keep cutting back food value, merchandise value and entertainment value and still the crowds swell because there is little or no competition. As more and more competition come about changes will take place.
"Nobody goes there anymore, it's too crowded."
I'm all for keeping out undesirables. One coaster park was almost ruined when gang members started hanging out there, scaring everyone else out. That's why they now have metal detectors and a sheriff's station right in the park.
Sylvain, raising prices isn't about keeping out "undesirables". The people you're complaining about typically buy annual passes and are blocked from visiting at peak travel times. Raising prices means that good middle class people are increasingly being priced out of taking their kids to Disney.
I agree that they need to increase capacity, and that means more star attractions. If space is an issue, they can replace certain unpopular rides. Let's hope record profits will also give them an "excuse" to build some new lands and E Tickets.
This article has been archived and is no longer accepting comments.