The website does not spend much time commenting on news stories – perhaps it’s something I should do more often. But Disney’s new date-based tickets and pricing structure are probably worth considering.
Dave over at yourfirstvisit.net has a great overview of how the new booking system is expected to work, here. This post will focus largely on what I expect to be the fallout.
You can also watch this unlisted video that Disney put out that goes over how the ticket-purchasing process should work. We’ll forgive the typo on “Discover Island.”
The new pricing structure goes into effect on October 16th. Unfortunately, Disney announced the change, but didn’t publish the new prices. My assumption is that the current prices will be the bottom and they’ll go up from there. Disney might use words like “helpful” and “easy,” but the new system is designed to make the Walt Disney Company more money, so it doesn’t make a whole lot of sense to charge $10 less on half of the days and $10 more on half of the days to basically come out even.
Interestingly, Disney states that “Introducing date-based tickets and pricing will allow us to better distribute attendance throughout the year so that we can continue to improve and deliver a great experience.”
Yep, this is what an $891/night hotel room looks like.
It seems unlikely that incrementally raising prices on theme park tickets is going to make that happen. September has been heavily incentivized for years with free dining and other promotions, in addition to the fact that airfare and other travel expenses are also lower due to the reduced demand. If you wanted to stay six nights in the least expensive room at the Polynesian during spring break, it would cost $4,926. That exact same room in September costs $3,338. That’s a difference of $1,588. And that $3,338 rate in September also probably comes with the “free” Disney Dining Plan for the entire trip, which is worth more than $1,800 for four Disney adults. So the family that chooses to go in September is paying almost $3,500 less before any changes to the cost of the theme park ticket. Yet September remains far and away the least crowded time of the year at Walt Disney World.
While we don’t yet know the premium that Disney is going to charge for what it believes to be the busiest days of the year, the company currently charges $109 for a 1-day Magic Kingdom ticket during Value season and $129 for a 1-day Magic Kingdom ticket during Peak season. That’s a $20 premium on the days Disney expects to be naturally busier. If we assume that premium is going to go up to $30 per person per day during the busiest times, a family of four is looking at spending $720 more on four 6-day tickets to go along with their 6-night stay. That’s a considerable chunk of change, of course, but it’s also less than 15% of the cost of the 6-night stay at the Polynesian and less than half of the difference between the spring break and September pricing. Overall, we’re looking at Disney making this particular spring break trip about 5% more expensive, if that, by increasing the cost of the theme park tickets by $30 per day.
Of course, that $720 is going to be more significant for the family that’s driving and staying six nights off-site. You’ll still pay a premium during spring break just about anywhere that you choose to stay, but it’s probably less than Disney and higher airfare isn’t factored in to the equation. The increase on the price of park tickets during spring break, as a percentage of the total cost of the trip, is going to be much larger.
This is basically what all of Florida looks like in September.
The question then becomes…what do these two families do? Does the family that already has a $15,000 vacation planned during the second busiest time of the year move their trip to September because it’s now a $15,720 vacation? Can the family that was planning on spending $4,000, but now finds themselves looking at a $4,720 bill, change their dates? The answer to both scenarios is probably “no.” For the second family, the question may even become whether or not to go at all. Most people’s vacation dates are largely set in stone based on school schedules, work, and other obligations. Disney World is busy when it’s busy because that’s when people can and want to visit. September is an inconvenient time for many people to visit with the hottest, most humid weather that Florida experiences. Charging $20 less per day to visit in September isn’t going to make it any more convenient or any less humid. It also doesn’t make a hurricane any less likely.
One does wonder how intelligent it is for Disney to emphasize the cost of a WDW vacation even more given the fact that prices are higher than they’ve ever been before. Five years ago, you’d go on DisneyWorld.com and input your dates, choose the resort, select the number of days you’re planning on going, and potentially select a Dining Plan. Disney would give you one number for how much it was going to cost. The price of each component wasn’t exactly hidden – anyone can look up how much a 6-day ticket costs or how much a night at the Polynesian runs on a certain date, but the individual components and their prices were never the focus. Everybody knows a Walt Disney World vacation is expensive, but you’ve got the one big number to swallow at the end of the short checkout process and that’s that. Maybe you would play around with the dates a bit, but I don’t think anybody is going through a cumbersome system to price out the cost of all 52 weeks at the Grand Floridian and then choosing a week to visit based on where they can save some money.
I thought September was supposed to be a low crowd time. It was wall to wall crowds.
Now, prospective guests are going to be keying in on cost more than ever before – they’re going to know exactly how much each person in their party is paying for each day. And with the per-day cost of a ticket rising above $125, it doesn’t seem like it’s in Disney’s best interest for people to focus on that again and again as they click through the price calendar. Plus, you’ve now made it clearer than ever that some guests are going to be paying a serious premium to visit on the only dates that they’re currently able to visit. If my six day vacation during spring break costs $8,500, but I click through and see that it’s $2,000 less in September, then maybe I’m not booking that spring break trip. I think the problem Disney is going to run into is that the family that can no longer afford the $8,500 trip isn’t going to then book the $6,500 trip for the same reason they weren’t planning on going then anyway – they can’t make the dates work with their current obligations.
Typically, the value you receive for a good goes down as the price increases. A Big Mac that’s $2 is a better value than a Big Mac that’s $5. With so much more emphasis on the fluctuating cost to visit, I think the question of value becomes a much more substantial one. More or less, a 9am to 9pm day spent at Magic Kingdom is a 9am to 9pm day spent at Magic Kingdom. If it costs $105 one day and $135 the next, it stands to reason that the more expensive day would offer less value. On the other hand, the single package price of yesteryear makes it a little more difficult to quantify the value of any single component. You pay for the night at the resort as one single price, but you’re not paying a specific amount for the Magical Express ride from the airport and the baggage delivery, you’re not paying for WiFi or the bus ride to Animal Kingdom, you’re not paying for the monorail or housekeeping, and as recently as last year, you weren’t paying for parking. Now, guests do pay for overnight parking and I think that amount stands out much more clearly to guests than if Disney had simply raised the resort rates by a couple of dollars per night on everyone. Disney is also offering some guests $10 per night to go without housekeeping. When you open up the bundle and pour everything out, making the price of every individual component more clear, it’s a lot easier to look unfavorably at certain pieces.
All of these people paying the highest prices of the year are also experiencing the heaviest crowds. Next year, they’ll pay more.
One interesting thing we’re going to see is whether or not Disney is even aware of what times of year are currently crowded. Based on the data that we’ve seen in posts like this, there’s a very real trend of people shifting away from the summer and it will be interesting if Disney prices their tickets to make the summer appear more appealing. They already did that this year with the 1-day ticket pricing where there’s something like 40 fewer peak days from June-August this year than last. So they are apparently aware of that shift, but it will be interesting to see how much they’re willing to “discount” what was once the strongest 12-week period of the year at Walt Disney World.
While Disney will be pricing tickets “dynamically,” there will apparently be a set price for each date that won’t change throughout the year. If you’re on an airplane with 200 other people, there’s probably at least 50 different prices people pay as the cost fluctuates every day depending on demand. With Disney pricing specific days at a specific rate a year or more in advance, they may or may not get it right. They could drive crowds towards days that are going to be unexpectedly busy or away from days where few people would naturally visit. Remember that the average family books their Walt Disney World vacation less than four months in advance and a lot can change economically, here and abroad, over the course of a year.
Imagine one of these Ticket Vending Machines today displaying the 30,000 screens you’d have to click through to buy a ticket to Epcot on February 18th.
Overall, I question whether or not it’s in Disney’s best interest to focus so much on the cost of the individual components that make up a Walt Disney World vacation, particularly when they can be seen as only going up. With variable pricing on resorts – there’s more seasonal categories now than ever – and a new focus on the per-day cost of the tickets, I think you’re giving people more and more pause as they have more and more big numbers to consider. People find comfort in their own ignorance and I don’t think people really want to know what everything costs. The Disney Dining Plans rarely save people money, but guests go back to pre-paying for meals because they like the idea of paying in advance and not having to worry about the cost once they’re on vacation. People don’t want to focus on cost and when they’re now forced to more than ever before, you’re just giving people another reason to consider an alternative, less complicated option. Disney is assuming that people are going to do whatever it takes to make a Walt Disney World vacation work without giving much consideration about the work they need to do to provide value to the guest.
One thing is probably for sure – higher prices mean bigger profits. It will be interesting to see how much crowds shift due to the new pricing structure, but we probably won’t have much of a handle on that until the middle of next year.