Prices and Value at Disney World in 2013
By Dave Shute
“…We’re certainly on the trajectory to get back to our…pre-downturn trajectory on pricing…As we open DCA…we’ve announced [strong] price increases there…I think you’ll see a similar thing in Florida as we open the new product.”
– Jay Rasulo, CFO, the Walt Disney Company, at the Nomura U.S. Media, Cable & Telecomm Summit, May 30 2012.
PRICES AND VALUE AT WALT DISNEY WORLD IN 2013
There’s been a lot of reaction, some of it sensible, to Disney World’s 2013 price increases, especially when coupled with the recent announcement that evening Extra Magic Hours would be cut back from 3 hours to 2 hours beginning in January 2013.
For first time visitors, these price increases don’t matter much. The high absolute cost of going to Disney World matters a lot to them; the fact that it is more expensive in 2013 than 2012 is interesting, but largely irrelevant.
But for returning visitors, price increases matter a lot, as they may affect willingness to buy some items—e.g. the Dining Plan—or force some of them to delay their next visit.
DISNEY WORLD 2013 DINING PLAN PRICE INCREASES
Prices for Disney’s Dining Plan for 2013 have gone up around 8% for those ten and older, and around 14% for those younger than ten.
And this is on top of multiple value reductions in recent years: steep price increases over the past few years, the shift of many meals from one to two credits, and reductions in what the dining plan pays for. (To be fair, refillable mugs have been added back in.)
When I started this site in 2008, it was a slam dunk that the dining plan would save a family following one of its itineraries (which include many table service meals) hundreds of dollars.
That’s not at all clear any more. The dining plan is now much closer to a convenience and a budgeting/pre-payment tool than it is a deal.
So what happens next? On the current pricing and value trajectory, it won’t be long before I stop recommending the Dining Plan.
But overall, increased Dining Plan prices may in total be good for Disney World guests.
For years now, people who do any research for their first Disney trips at all learn a couple of things:
- Dining is a fundamental part of the Disney World experience;
- Some of the best venues sell out way in advance; and,
- Even in the less-crowded periods, it can be hard to get a convenient and fun venue without some advance planning.
The dining plan has made these issues worse.
A family paying cash that can’t get a reservation takes no loss—it just has limits on its alternatives.
But a family with the dining plan that can’t get a table service meal has pre-paid for that credit, and can’t get it back.
So dining plan families in particular are highly motivated to book up high-demand venues well in advance, which makes the overall problem worse. An increasingly popular dining plan turns this into a downward spiral, filling restaurants months in advance and decreasing guest satisfaction.
Increasing the price of the dining plan price has some potential for cleaning up this downward spiral. The more people who find the dining plan unaffordable, the less systemic pressure there is for early reservations.
Now NextGen, and the importance within it of setting advanced reservations for rides, may blow all this up. NextGen will likely cause mass confusion, but because of it many more people will get the message that advanced planning will pay off, and that may create even more demand for advanced dining planning…
DISNEY WORLD 2013 TICKET PRICE INCREASES
Ticket price increases instituted in June 2012 vary by what ticket type and length you buy, but for this site’s typical 8 day, no hopper tickets, prices have gone up 8% for kids and 9% for adults.
It’s hard to see on the face of it that the increase ties to value.
The Fantasyland Expansion at the Magic Kingdom will be largely open by the end of 2012, but so far as I can see, it doesn’t add a huge amount of value to the park—nothing like what Everest did for Animal Kingdom, Soarin for Epcot, or, going back a bit, Tower of Terror did for the Studios.
And there’s no material adds at any other park to justify the price increase.
I’m thinking the ticket price increases are based on two Disney hypotheses and one Disney fear.
The first Disney hypothesis, I’m guessing, might be that the slow economic recovery continues to increase willingness to pay, and the increased willingness to pay–when coupled with Disney’s need to recoup its investments in the Magic Kingdom—yields not just a pricing opportunity, but also a pricing need. (See the Jay Rasulo quote at the top of this page.)
The second hypothesis, I’m guessing, is that NextGen will be rolling out soon and will vastly increase guest satisfaction (though this is of no help to people paying higher prices to be in the parks before it rolls out).
Wait times in the parks right now are a penalty paid most highly by those unwilling to plan—or to put it another way, guest satisfaction is rationed by willingness to research and read good web sites (ahem).
NextGen will do two things: it will greatly raise the awareness of the importance of planning, and, if successful, it will also greatly increase the payoff of planning.
Remember that the exact same rides could serve the exact same number of people while cutting average time spent waiting by more than half, simply by scheduling capacity like restaurant reservations rather than allocating it based on random arrivals.
Getting anything close to these results will be challenging to pull off—informationally, technically, and operationally–but if Disney World can come close to smoothly pulling it off, guest satisfaction may skyrocket, justifying the 2013 ticket price increase…and making me fear what the 2014 price increase might be!
And the Disney fear? Another recession, I’d guess. Driving prices up when it can gives it more headroom for discounts later if the bottom continues to fall out from the euro economies…
DISNEY WORLD 2013 HOTEL PRICE INCREASES AND EXTRA MAGIC HOUR CUTBACKS
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