To The Locker for Captain Jack Sparrow!

[Zazu]

But they still go and raise prices for admission and everything else. Figure that one out.

Not hard; if fewer guests are expected, you charge each of them more.

Yeah, if I have to mortgage my house to have a Disney vacation, that's ridiculous.

The average guest spends five years paying for his family's Disney vacation. Some save up, some use credit. It's a non-trivial investment no matter how you fund it.

[hobie16]

Not hard; if fewer guests are expected, you charge each of them more.

But if you're trying to attract more customers shouldn't the prices be reduced?

We see the same argument in Hawaii. The hotels refuse to drop their prices to attract customers because they claim they won't be able to raise them later and they wonder why the occupancy level has dropped to 61%.

[Zazu]

But if you're trying to attract more customers shouldn't the prices be reduced?

We see the same argument in Hawaii. The hotels refuse to drop their prices to attract customers because they claim they won't be able to raise them later and they wonder why the occupancy level has dropped to 61%.

I think these are two different situations. Let me offer an explanation and we'll see if I can convince myself.

In the case of Disney park tickets, they are really a small fraction of a family's vacation cost. Lodging, food, often transportation can all cost more. Also, not many folks actually make a budget and find out what things cost, other than airfare and hotels. Folks presume that all else is "reasonable". Yeah, not bright, but I'm talking about how the average guest thinks -- remember, by definition, he's dumber than half the guests in the park.

As a result, Disney can raise ticket prices without having a significant impact on how many families visit or for how long. Sure, there is some price elasticity, but I suspect we're a long way from the breakeven point on ticket pricing. Apparently, so does Disney.

Hotel pricing is another matter. At the same time Disney is raising ticket prices, they are offering substantial discounts on hotel prices. Why? Because there are thousands of empty hotel rooms surrounding WDW, and those folks are desperate enough to nearly give them away!

Besides, most local hoteliers have adopted Harris Rosen's mantra, "You can't make any money off an empty hotel room." They discount as far as they have to in order to keep their occupancy rates up. What profit they lose in the hotel they make up for in the restaurant and gift shop. Some local hotels treat the rooms as a break-even operation and pull *all* of their profits from ancillary activities.

And as hotel prices are one of the few things that guests *do* investigate when they plan a trip to Disney, they are a much greater influence than ticket prices.

Mickey doesn't care which of his pockets you put the money in, son long as his pants jingle at the end of each day.

[hobie16]

I think these are two different situations. Let me offer an explanation and we'll see if I can convince myself.

In the case of Disney park tickets, they are really a small fraction of a family's vacation cost. Lodging, food, often transportation can all cost more. Also, not many folks actually make a budget and find out what things cost, other than airfare and hotels. Folks presume that all else is "reasonable". Yeah, not bright, but I'm talking about how the average guest thinks -- remember, by definition, he's dumber than half the guests in the park.

As a result, Disney can raise ticket prices without having a significant impact on how many families visit or for how long. Sure, there is some price elasticity, but I suspect we're a long way from the breakeven point on ticket pricing. Apparently, so does Disney.

Hotel pricing is another matter. At the same time Disney is raising ticket prices, they are offering substantial discounts on hotel prices. Why? Because there are thousands of empty hotel rooms surrounding WDW, and those folks are desperate enough to nearly give them away!

Besides, most local hoteliers have adopted Harris Rosen's mantra, "You can't make any money off an empty hotel room." They discount as far as they have to in order to keep their occupancy rates up. What profit they lose in the hotel they make up for in the restaurant and gift shop. Some local hotels treat the rooms as a break-even operation and pull *all* of their profits from ancillary activities.

And as hotel prices are one of the few things that guests *do* investigate when they plan a trip to Disney, they are a much greater influence than ticket prices.

Mickey doesn't care which of his pockets you put the money in, son long as his pants jingle at the end of each day.

Gotcha.

Apparently Rosen's mantra hasn't reached our shores. Many hotels are now courting residents with kamahina discounts but their public stance is not to drop prices and then have to fight to raise them when the economy picks up.

[Zazu]

Apparently Rosen's mantra hasn't reached our shores. Many hotels are now courting residents with kamahina discounts but their public stance is not to drop prices and then have to fight to raise them when the economy picks up.

Well, that makes sense .... just so long as you know you'll *survive* until the economy picks up. :twisted:

[hobie16]

Just saw this on the news. Maui's latest occupancy rate is 43%. The room rates average $246.

Somebody is in denial.

[Ho-say]

Mickey doesn't care which of his pockets you put the money in, son long as his pants jingle at the end of each day.

This ranks as one of my favorite quotes to date - definitely needs to be put on a t-shirt. :D:

[hobie16]

Mickey doesn't care which of his pockets you put the money in, son long as his pants jingle at the end of each day.

I worked for a small company that was taken over by a large, deep pockets company. We all thought this was a good thing as they would invest money in us so we could come up with even better products.

It became painfully clear that we were wrong. In the first meeting with them, they basically said, "We have deep pockets. Fill them up."

[breathless]

Mickey doesn't care which of his pockets you put the money in, son long as his pants jingle at the end of each day.

This seems so true when you think about how much stuff the Disney name is on... But I think if the company was still fallowing all of Walts ideas, it wouldn't seem to be only about the money. My mom asked me how I can be such a supporter how Disney "is" after hearing something from one of her "obnoxious" (to me) friends, my response was If Walt could, he would be rolling in his grave soo much it would cause an earthquake with the way the company has been run the last 20 or so years.