Blog
Disney's price increases: Yoda or Goofy?
August 15, 2011 by Dale Furtwengler — President, Furtwengler & Associates, P.C.
In a June 20, 2011 Orlando Sentinal article, "Disney pricing strategy: Seeking more profits out of long-term visitors," Jason Garcia cites hefty price increases for longer-term passes at Walt Disney World. Is this brilliant strategy or sheer folly?
Here are a few findings that Mr. Garcia cites:
- Disney's four-, five- and seven-day passes are its most popular.
- Single-day tickets account for only a small percentage of total ticket sales.
- Single-day ticket prices are approaching $100.
As Jason Garcia astutely observes, by focusing its price increases on longer-term tickets, Disney is able to increase revenues while slowing the rate of increase on single-day ticket prices. Why does this make sense, or does it? Let's see.
What is it that you're really buying with the longer-term tickets?
- Flexibility
- A more leisurely pace
- Greater variety
- A more enjoyable experience
Flexibility
Multi-day passes allow more flexibility in your scheduling. Typically you're traveling some distance to get to Walt Disney World so you've planned an extended stay to make the travel worthwhile. You also want to see some of the other attractions in the Orlando area. Multi-day passes allow you more flexibility in accomplishing all of these goals.
Greater variety
The flexibility outlined above allows you to enjoy greater variety on a day-to-day basis. Instead of having to focus all of your energy and attention on getting the most of your Walt Disney World visit and making it feel more like a marathon than a vacation, you can blend in other activities that offer a broader array of experiences for you and your family.
Leisurely pace
Already exhausted from your travel, you don't have to rush headlong into the rigors of a theme park visit. You don't have to cram everything into a day. You have time, each day, to go back to your room to read, take a nap and keep the little tykes on something approximating their routine while remaining confident that you'll have time to see everything you want to see.
Enjoyable experience
When you combine the flexibility, additional variety and more leisurely pace, you can't help but have a more enjoyable experience. That's the value of the multi-day passes.
What does that do for Disney? It allows them to generate:
- More repeat business.
- Higher average ticket prices.
- Higher margins.
Repeat business
Customers who have an enjoyable experience are more likely to return time and again. Higher prices do not deter buyers who had a pleasurable experience. Instead they say "It was worth it!"
Higher average ticket prices
With each day that's added Disney enjoys higher revenues per customer. Revenues grow without having to increase the size of the customer base.
Higher margins
The customers who value the flexibility, variety and leisurely pace the multi-day tickets afford aren't likely to spend every waking hour at Walt Disney World. They're not trying to cram everything into a compressed timeframe. They're going to meander in and out and, in all likelihood, won't visit every day that their ticket affords. The result?
Revenues per customer hour spent at Walt Disney World go up dramatically, yielding higher margins on multi-day tickets. Staff scheduling can also be normalized for the season allowing more effective allocation of labor resources. Don't you love strategies that produce multiple benefits?
I don't know about you, but this looks like a Yoda type strategy to me. Kudos to Disney.
