The cash register goes “cha-ching”, you just paid $3.50 for a can of Pepsi at your local Six Flags park. At the grocery store it is only a dollar however. Have you ever wondered why theme park prices are so much higher, than the average price? Some may go as far as saying that they’re overpriced. The places that these outrageous prices are located at are theme (or amusement) parks. They are pay to enter parks that feature fun rides like the swings, mild rides like the go karts, and of course the thrilling roller coasters. Although these parks are awesome, the prices at them are just ridiculous, and many times scamming guests. Theme parks over-price food as it is the only available food option at the park, raise ticket prices on busier days, and raising prices so high to the point that the middle class is struggling to afford them.
As stated previously food pricing is way too high. However, theme parks know this and are taking advantage of guests. The article “How Theme Parks and Movie Theaters 'Price Gouge' for Food”, Lance Cothern states, “They (theme parks) have the only option for concession stand items if you don’t want to break the rules. Most people accept it and pay the prices.” Theme parks are very well aware that their concession stands are the only places to eat or drink at the park, so pricing items high is a smart business strategy, even though it is not a nice way to treat guests. For instance, the fact that one slice of pizza at Disney world is $7, but a whole pizza at Papa John’s is $9 is just straight up absurd. The article also states:
"Research shows that they (theme parks) likely optimize their prices so that they can make the best profit possible. I’d venture they test out different prices in different locations and see how the product sells. A simple example would be at $1 they sell 100 sodas, at $2 they sell 90 sodas, at $3 dollars they sell 75 sodas, and at $4 dollars they sell 50 sodas. In this case they make $100 at the $1 price point, $180 at the $2 price point, $225 at the $3 dollar price point and $200 at the $4 dollar price point. In the example above the seller doesn’t sell quite as many sodas but they do end up in maximizing their revenue."
This quote does a great job explaining what pretty much goes down at a theme park marketing meetings. Us humans are so lazy so we either just accept the high pricing or do nothing. Rather than leaving the park to get your own food or drink.
Also, theme parks only give “reasonable” prices on empty days. Empty days are just days when the park is not crowded at all. The article, “Disney Quietly Raises Theme Park Admission Prices Again” by Brad Tuttle states, “When Disney introduced variabel pricing, all of the low price admission days are when kids are in school.” So on the other side of the coin, this means on weekends and non-school days, the prices go up. Theme parks are almost trolling guests, offering low price offers on days when almost nobody can go. Especially Disney and Universal parks, who have been in a ton of news lately for there high pricing shenanigans. Companies like Six Flags and Cedar Fair however, are not far behind. Another trick theme parks like to do is offer multi day passes for cheaper prices. The article also states,
“Interestingly, on the same day regular admissions prices increased, Disney added a $20 online discount for passes of three days or more. As the industry publication ThemeParkInsider.com noted, two-day pass prices at Walt Disney World in Florida actually decreased as well, from $202 to $199. What this tweaked price structuring shows is that Disney wants to encourage guests to linger around the parks longer. When they do so, after all, they’re far more likely to spend extra money on (Disney-owned) hotels, restaurants, and gift shops. In other words, if you “save” money by buying a multi-day theme park pass, you may not be saving at all—because, odds are, you’ll wind up spending more cash out of pocket overall.”
As stated previously, this is strictly another trap. If you stay at a park for more than day you will have to open the wallet even more for a place to sleep, food to eat, and gasoline to drive you from place to place. When looking at these “deals” or “offers” make sure to think about if will truely save money.
On the other side of the coin however, many argue that these theme parks with these unreasonable prices are not targeting the middle class, but rather the higher (or upper) class. The article, “How theme parks like Disney World left the middle class behind” by Drew Harwell states, “Disney’s made a strategic decision that they’re not going to discount to hold onto people at the middle part of the economy, they’re going to set their prices at the top 10 percent of family incomes and make their where the money is.” Part of this argument makes sense as these prices theme parks are now offering are reasonable for the wealthy or upper class. Also, parks would make much more money targeting this class anyhow. However some arguments can be made against this, a New York Times article states, “Attendance declined at 13 out of 14 Disney theme parks around the world, higher prices were a major factor.” If attendance has dropped after price increases, that that definitely shows that the middle class was a major part of Disney’s attendance. They left because they can’t afford Disney’s pricing.
At the end of the day, theme parks are very overpriced. They over price food and drink since it is the only option for food. Also theme parks raise prices on busier days, and finally the middle class is struggling to afford the new pricing. So be aware of how theme parks may be ripping money out of your pockets.
Great Feedback!! I appreciate it!!! I agree with all of your points, as enthusiasts we understand the buisness aspect of the high pricing. This article was more targeted at some that may find this across a Google search that does not have as much knowledge on this topic as enthusiasts.
It's not just theme parks. It's all entertainment venues that overcharge for food and beverage. Sports arenas are some of the worst offenders with food and beverage prices 3-4 times what they would cost outside. Airports are also guilty of marking up food and beverage for their "captive audience" as well as movie theaters and museums. This is not just a theme park issue, but it does appear that some theme parks are responding to some limited backlash at overpriced food by offering guests alternatives.
Many parks have started to offer food/beverage passes that charge a single cost up-front for unlimited (or some similar variant) food and beverage for an entire day or season. Similarly, parks have begun to offer food and beverage options that guests cannot necessarily find elsewhere and rotating menus that encourage guests to visit multiple times throughout the season, and allowing parks to charge a premium for these items.
I think it's pretty well known that eating out is an expensive proposition, and whenever you are a captive audience, you are going to pay additional markup for food and drink. Theme parks are not alone in this regard, and there are hundreds of websites and discussion forums that address this issue and how best for guests to handle it. This really doesn't bring anything new to the table or highlight a problem that a majority of people don't already know about.
Some parks offer "all day dining" and others "all season dining" which, if you are knowingly going to 'pig-out' or go on a regular basis, then they can be a great option. I know in SeaWorld there are far more quests walking around with the eat-all-day wristband than not. Whether or not they get their $36's worth is another thing, but SeaWorld is OK with that.
No admission price hike for SeaWorld this year (so far) but they've certainly added plenty of $$ onto the food prices !!
Agreed! Many venues are bad with pricing, and it is a shame. I just felt like writing about this topic,that has been going on for a while now.I appreciate the feedback!
The food prices can be mitigated. Just bring them inside the parks. Despite higher security restrictions, theme parks generally allow you to bring outside food into the parks if they are properly packaged (no leaking). I might stop by my local supermarket to buy a $5 sandwich, $3 bag of potato chips, and a $1 one liter bottle of soda. I easily save 50%. Your backpack gets lighter after you consume the food. I did this a lot when I had my Disneyland Annual Pass. Of course, I gave them my business when I had to buy the Fantasmic dining package. Otherwise, how can I see Fantasmic at a good spot that isn't available to everyone else? You win some, you lose some.
As for reasonable prices, they only seem that way. They are still very expensive. One must seek alternative entertainment. Many decades ago when I grew up, Disneyland was an once in a few years experience. It took much saving to make Disneyland a vacation every 4 or 5 years. We don't expect kids to sacrifice as much these days, but we should be more stingy.
It may not prove anything with theme parks, but a friend of mine was the manager of a 16 screen cinema. The first question I asked him was "what is with the cost of concessions!?!?" He started to laugh because he knew that would be the first thing out of my mouth....like everyone else's!
He explained that the reality is, it is the concessions that pay the bills. It pays the electric, water and sewer as well as employee wages. I argued that with big hit feature films, they should be rolling in money. That's when he explained that is a huge public misconception. Now, this was several years ago and I don't know what might have changed in the meantime, but he explained that the opening weekend of a film, the studio gets almost 100% of the ticket sales. The next week, they take about 93% and the theater gets 7% and so on. Each week as the popularity of a film drops, the theaters gets a larger percentage of the sales. But the core operations of the theater is produced in popcorn and Cokes.
Knowing that now, I still hate paying my life savings for a bucket of popcorn...but I care a little less.
@Sarah - I think the same thing can be said for sporting/concert venues and to a lesser extent theme parks. Most entertainment venues book acts/host sports teams, and typically receive only a small percentage of the ticket sales and an up-front booking fee. Unless the arena/stadium/venue is owned by a sports team (and even then tickets and concessions are typically taxed by the local government at obscene amounts), those places are typically only making money off concessions. Those marked-up costs are necessary for the venue to stay in business and to continue to stage events.
Clearly theme parks are making money off the admission every single person walking through the gate pays (whether it be a single day, multi-day, annual pass, or some other form). However, in the theme park industry, in particular, companies frequently tout their "per cap" data, which is a measurement of total revenue collected inside the park divided by the total number of guests. It's that number that lets parks know how much people are spending in the park. The per cap is used by managers to adjust admission prices to see if charging guests less to enter will encourage more in-park spending, or whether conversely higher admission prices decrease in-park spending. It also guides parks to set prices for concessions, souvenirs, upcharge attractions, games, etc... It's a very delicate balance that parks are always tweaking. The biggest difference between theme parks and movie theaters/concert and sports venues, is that theme parks have to constantly improve. Arenas and movie theaters are built, and typically go 10-20 years between updates/renovations. Theme parks are in a constant state of improvement and/or expansion, so additional revenue is needed to fund that.
Honestly, if you think about it, theme park food and beverage is not that outrageous compared to eating out at most urban restaurants. There's certainly a bit of a markup there ($13 for 4 chicken strips and some cold soggy fries is a bit obscene), but the markup (20-50% over similar restaurant costs) is not quite as bad as sports/concert venues or movie theaters where prices are 100-200% over restaurant costs, particularly for alcoholic beverages.
@Russel - That makes perfect sense. And I do believe that this has been the case for so long that it is simply ingrained in our culture. When planning a day at a park, we either plan to bring the "food" money or pack a cooler to return to the car. We know before we even buy our ticket that food prices are what they are. Sure it makes us question the need but we still suck it up and pay it.
@Sarah - I think it all goes back to accessibility. The initial post seemed to indicate that theme parks were trying to price out the middle class with high concession costs. In reality that couldn't be further from the truth. If theme parks priced admission to completely cover their bottom line costs (i.e. not relying on food/beverage and other revenue streams), the price to simply walk through the gates would be insane. By shifting some of the operational costs to secondary revenue streams (food/beverage, souvenirs, upcharges, games, etc...), theme parks can keep their admission prices relatively stable and reasonably affordable. Sports teams have been doing similar things by setting aside certain "value" sections to allow guests to get into events for low cost in the hopes that those people will ultimately spend some money at the concession stands, where venues rake in the profits.
"You gotta eat" is an absolute, but there's no one forcing guests to eat in-park food, especially at many parks that allow guests to bring in sealed items and/or have a picnic in the parking lot (some theme parks even have picnic areas in the parking lots where guests can eat). I would argue that the higher concession prices are actually a sign that parks are trying to cater as much as they can to the middle class, by keeping admission prices reasonable and making up for that revenue through other areas. The middle class is able to get in the gate, and then it's up to each individual to determine whether they can eat lunch in the park too.
Interesting thoughts, but if your main thesis is that theme parks are expensive, that is something that is widely known.
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Enticing people with discounted multi-day tickets in order to get them to spend more long term is nothing new or shocking. It's a business trying to make money. Additionally, I believe financials for Disney Theme Parks in the US are still VERY strong. So it would seem that declining attendance is not backfiring. One could also make the argument (many often do) that they are looking for less crowding in the parks and that is the reason for the constant price hikes. I have no problem with Disney targeting the upper class or any class for that matter. F&B is always outrageous when on vacation and it's hardly limited to the theme park industry. Go to any major tourist destination and you will likely pay more for that bottle of water than at your local Shell.