Why not double the ticket prices and half the capacity?

May 13, 2020, 11:13 AM

It seems like this is a good time to revisit this idea and I'm curious about your thoughts.

The logic I wrangle with is the idea that WDW (and probably UO) are in a space in the industry as once in a lifetime destination vacations. Both have a common complaint about the crowds even before we had a pandemic suggesting distancing.

So if I've gotta pay a few grand to give my family the vacation of a lifetime, wouldn't I also choose to pay a couple grand more to guarantee a reduced crowd?

Replies (6)

Edited: May 13, 2020, 1:25 PM

That makes sense, but isn't really how I think it would work in the real world, particular with Disney. The thing is that guests were accepting of constantly increasing prices year over year without any noticeable reduction in crowds (in fact parks were getting even more crowded for those higher prices). I agree that a lot of people were willing to pay premiums to spend time in the parks and on experiences that offered a significant reduction of crowding (mostly because the parks were so crowded during regular admission hours). This is evidenced by the increase in quantity and prices of hard ticket events as well as dessert parties and meal/show combos to reduce stress and crowds around individuals paying those premiums. However, the increase in those events and the willingness of people to pay higher and higher prices for them also demonstrates that there might not be a ceiling (or at least not a defined one that a company could identify without some experimentation) on what parks could charge for exclusive access.

Also, there's the business side of the equation where accountants and management see the success of these hard ticket and limited admission events and want operations to squeeze every last drop of revenue out of them. Let's say for the sake of argument that Disney decides to double their regular admission price with the promise that guests will have crowds similar to those before/after hours hard ticket events. The parks then sell out virtually every day they're offered, and even using surge pricing doesn't impact sell outs. So in order to extract more revenue, operations starts selling more and more tickets each day to satisfy demand while also raising prices. Eventually, we're right back to where we are right now, just with the guests that much lighter in the pocketbook. It's happened to the MNSSHP and MVMCP over the past 5 or so years where the prices have slowly crept up, but Disney keeps letting more and more guests in, devaluing the exclusivity of the event. Guests complain about the reduction in value, but they keep coming. The same would happen if all admissions were like this, and the Drones will whine and complain, but still belly up to the bar no matter the cost to quench their thirst for the Disney experience.

In the end, neither the business side nor the customer side of the equation has the discipline to show restraint. Customers are unable to stop buying the product despite the increasing price and decreasing value, while the business side of the equation is incapable of always trying to maximize revenue. Until I see evidence from both sides that they can be restrained in their practices, there's no way I would support such a radical plan.

Edited: May 13, 2020, 1:50 PM

Parks price to what makes them the most money. That's all it comes down to. There's a reason Disneyland still sells annual passes on those monthly payment plan even though everyone agrees they make the place way too crowded, it's because they make a ton of $ off of them.

Also doubling prices and halving capacity doesn't mean they make the same amount of money.

May 13, 2020, 1:44 PM

Thanks for the response. It seems you are saying that even if the parks capped their total tickets/capacity for the day, their need to increase revenue would ultimately force them to sell more tickets/increase capacity?

May 13, 2020, 5:17 PM

It'll all depend on how big the demand is for Disney when they reopen. If they price the tickets so high that very few people show up, then they could lose money from labor costs.

Even before the pandemic, many families were living paycheck to paycheck. The only way they could afford a Disney trip was through long-term saving for a once-in-a-lifetime visit. Now that we have 30+ million unemployed and rising, visiting a theme park just isn't in the cards for a lot of folks who have to save money any way they can.

Edited: May 13, 2020, 10:02 PM

This only works if there would actually be enough people willing to pay double to fill the parks to half capacity. In reality, judging by recent attendance reports, it seems that Disney is at about the highest price point they can reach before demand drops off significantly. Add in the fact that the disposable income for many Disney visitors has likely vanished and the fact that the resort will be operating with limited offerings for some time, and I think you'd be lucky if 10% would still visit at double the rate. At this point, reaching 50% without a price increase is probably optimistic. Shanghai is barely managing to hit 20%, and I have a hard time picturing WDW doing much better until most people recover financially and international tourism opens back up.

May 15, 2020, 10:09 AM

One thing to also consider; theme parks also get revenue from hotel rooms, parking, food sales, merchandise sales, etc. Are you willing to also pay twice the price for all of the incidentals over and above the price of the admissions? Because that is the only way this would work for the theme parks and hotels. And what about the airlines, outside hotels, restaurants and other businesses that depend on the crowds at the parks?

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