Disney Tests Pricing Power at Theme Parks
wsj.com
wsj.com
I have a colleague who uses 100% of her vacation days (25 days/year) to travel to Disneyland/World. When she goes for 2 weeks, she is in the park every one of those days. There's apparently one night a year where the park is open 24 hours and she'll fly down from Calgary to Anaheim just for that day. She talks about all the other people she knows that are just like her. There are thousands of families that spend all their vacation time in the park and therefore, I'm sure there are plenty of people willing to pay $300 for early access so they can brag that they were one of the lucky ones.
ADDED: You could say pretty much the same thing about many cruises, Club Med, etc. Many people like to get out of their day to day routine while still enjoying a pretty predictable and controlled environment.
There are people who are obsessive like any other hobby. There are people who seem to be trying to relive their childhood or one they never had, over paper over some damage.
But for me, it was sort of a relaxation thing. Working a high-stress tech job, there was an implicit understanding amonghts my friends and I. You leave your troubles outside the park, and have fun.
For example when you go to the Forbidden Journey attraction in the Wizarding World of Harry Potter at Universal Studios, there's a long line to wait in like you would expect of any attraction. However it isn't a roped queue that you stand in, it's a walk through Hogwarts School of Witchcraft and Wizardry. You stroll through the greenhouse filled with mandrake root and other plants that are alive before moving into a great hall where Dumbledore walks out onto a balcony and greets you then you pass into narrow hallways where the paintings on the wall are having a conversation but will stop to acknowledge your presence and sometimes insult you. You are actually so distracted with the environment that you forget you just waited an hour in a line, if felt like you were just on a casual stroll.
Contrast this with visiting the Colosseum in Rome where you show up and half the structure is covered in girders and tarps because they're performing some restoration. You get in a line that's not much more than a cattle corral packed in with hundreds of other people waiting to buy your tickets. You wait an hour nudging forward a couple steps every few minutes. The place is covered in grime and dirt. When you get inside you have to move around the thousands of of there people crammed in trying to take selfies or filming everything. Everything is behind chicken wire or metal barriers.
Venice in particular is a great example of a place that has basically become a Disney-lite type of experience. Sure the city buildings are ancient and the canals and alleyways make for a truly unique location that's fascinating from a historical point of view. But it's smelly, hot, hard to get to, utterly packed with visitors; the lines are long, the attractions aren't always what they are cracked up to be, they nickel and dime you for better access and shorter lines, you have to carefully choose restaurants and food vendors, the "shopping" is barely different than what you find at an upscale mall in any large city in the world, there are pickpockets and scammers, the rides cost extra and aren't always working, the gift shops are overpriced and often terrible quality. All in all, Venice may be more real, and if you're a history nut you can probably see some interesting settings from old stories, but if you are wanting to have fun on your vacation and experience something pleasant that you can't normally do, Disneyworld is cheaper, easier to get to, less crowded, and a lot more fun.
I also prefer visiting different places in the world, but I totally understand people have different hobbies and like different things. It's not difficult really.
If a 1% price increase causes any more than 1% fewer people in the park, then it's a net loss.
Not to mention that many people go and don't really ride the "big rides" that much or ever.
Consider it this way: If all rides and all facilities have lines waiting for entrance, they are all at maximum productive capacity. The only way to expand revenue is to get more people in the door, or build more revenue-generating attractions (only the attractions that charge per use matter here).
Not 100% accurate, b/c I'm sure that not each and every little hot dog stand or tchotchke booth has a queue, but a good model.
Like I said, if they were to reduce the number of people in the park by say 50%, that means that everyone would have to pay double in admission to maintain the same income. A 3-day park ticket is already almost $400. Do you really think enough people would be willing to pay $800 for a 3-day ticket to offset the number that wouldn't be willing to pay that? And would that extra cost of admission reduce the amount those people spend on souvenirs, food, events/shows, etc...? And would a 50% reduction in guests really make it "feel" any less crowded? (the distribution of people in the park is far from "normal")
I'm going to side with Disney on this one. I assume the big mouse has done extensive studying in this area, and they are probably pretty close to matching what the market will handle.
Not to mention that they are trying other methods to reduce crowds and wait times. They now allow you to schedule your rides during 1-hour time slots to avoid waiting for up to 3 rides a day (our last trip we didn't wait more than 15 minutes for any ride because my wife was able to schedule them for the whole trip). And there are options for some customers to get a cast member to go with them all day and basically skip all lines for a few $1000 if you want.
We are rapidly remaking America as a place where all segments of culture and entertainment operate for the rich and merely wealthy.
"What’s great about this country is that America started the tradition where the richest consumers buy essentially the same things as the poorest. You can be watching TV and see Coca-Cola, and you know that the President drinks Coke, Liz Taylor drinks Coke, and just think, you can drink Coke, too. A Coke is a Coke and no amount of money can get you a better Coke than the one the bum on the corner is drinking. All the Cokes are the same and all the Cokes are good. Liz Taylor knows it, the President knows it, the bum knows it, and you know it."
It's sad to see that something as quintessentially American as Disney is going the opposite way.
America commoditised entertainment through technology. The radio and the gramophone allowed a farmer in rural Maine to listen to the Metropolitan Opera in their own home. Movie theaters brought the greatest actors in America to every small town. The egalitarian nature of popular culture stands as one of the greatest defences of consumer capitalism. A reversal of that trend points to a fundamental and worrying change in society.
Arguably, there's more VIP-style pricing discrimination than there used to be for in-person entertainment. It's probably easier with online booking. But good concert seats or opera tickets were never particularly cheap.
I would say 'premium' entertainment cannot be displaced by time and space.
The experience will not be as polished or "magical" as Disneyland, but it still has many attractions and entertainment options.
Drive another hour and you can take your family to Six Flags Magic Mountain, or if you prefer to Universal Studios Hollywood. The experience at these parks will be even less polished than Knott's, but your kids will still probably have a great time.
The beauty of the free market is that even though not everyone can easily afford a premium experience, other companies are more than happy to compete for your entertainment dollars.
Let's say America is remade in the image you have in mind with "all segments of culture and entertainment operating for everyone". Great in theory. Now you have 100,000 people trying to get into a park that holds 5,000.
What's your solution?
http://znews24.com/disney-tests-pricing-power-at-theme-parks...
> Disney parks executives are engaged on adopting a dynamic pricing mannequin