WDW Ticket Price Hike: Changing the Guest Dynamic

The question was “Should we continue with our annual price increase or delay it?” It probably took about 1 nanosecond to decide.

I guess I don’t have to tell you what that decision was”¦you’ve seen the reports; read the internet; heard the podcasts”¦yes it will cost more this week to walk into a WDW theme park than it did last week“¦unless of course you have an Annual Pass.

Well, that decision led to another question in my mind.

Why?

Sure historically over the last few years we’ve seen price increases in August but this year is quite different from other years“¦.and I mean more than just the economy.

Let me point out a few things:

Airfare is up“¦the cost of flying to Orlando is much higher in August 2008 than it was in August 2007.

Do I have to remind you of the stroller rental increase?

If you have been paying attention you may have noticed that average price of dining at a Walt Disney World restaurant has risen since last summer.

Some character meals offered by restaurants like the Liberty Tree Tavern in the Magic Kingdom will soon disappear”¦hmmm does less characters mean a lesser fare to dine? What do you think?

Oh yes and recently Trails End has changed their lunchtime offerings to soup, salad, and sandwiches“¦no more additional hot food items. Has the price gone down along with the number of offerings? Take a guess.Surprise…it has AllEars colleague Jack Spence,who knows WDW restaurants better than anyone else, has rinformed me that the price HAS gone down from $12.99 to $11.99. Should it have gone down more? Let’s be thankful that it has gone down at all. Thanks for the info Jack.

Let’s not forget that for 2008 the Disney Dining Plan has been adjusted...and for some of you who have emailed me; you have found the sdjustment to be so subtle that you did not realize the change until your first meal.. Sure the price went down slightly but don’t forget”¦you no longer get the appetizer with the plan nor the gratuity. So if the price goes down $1 and you lose both the appetizer and gratuity then you are getting less for…uh a litle bit less…it’s tough to put a value on this but I’m sure we all agree that we are getting less value for our Dining Plan dollar.

Sticking with the topic of dining and subtlety, over the last year or so we’ve seen holiday “surcharges” added to the cost of at least a dozen of the most popular WDW restaurants such as Chef Mickey’s, Boma, and Liberty Tree Tavern. These surcharges are found during Thanksgiving, Christmas, Spring Break (Easter), and Memorial Day times of the year.

The reason for the surcharges? Well apparently if there is an increased demand for services during those times for food and beverage then a surcharge is in order. Huh? I’m thinking about the restaurants I frequent at home and you know…I cannot think of any one restaurant that does the same thing.

Are those CMs who work in those restaurants during those times being paid extra? I am not privy to that information but do realize that these seasonal surcharges are part of the cumulative effect of the overall cost of a WDW vacation….and as such contributes to the changing guest the dynamic during those times of the year.

We recently heard that the schedule for the nighttime spectaculars, i.e. fireworks will be changing; read that “less shows” yet the price of admission goes up. So this is a case of paying more for less.

I could go on and on but the whole point here is that guests are now finding they must reach down deeper to enjoy yet shallower returns.

At the onset it appears as though this hurts the guests. My feeling is that the Walt Disney World Resort may”¦and I emphasize may because this is strictly my opinion”¦.find that they may be shooting themselves in the foot.

I can hear everyone screaming “Mike, are you feeling okay?”

Hear me out.

Let’s all admit it. You know that the increased ticket prices may not impact your thoughts on visiting WDW, nor will the increased airfare. You will still visit. However how often; for how long; plus other decisions may be impacted by the cumulative effect of what has been happening since January.

Here are the adjustments I foresee some guests may take:

I think the number of trips the average person takes to WDW over the course of the next year will be reduced but perhaps the number of days will remain as is or be reduced slightly. For instance, if I normally take several trips a year to Orlando with each one being an average of 4 to 5 days that may change to maybe 2 to 3 trips a year with each one being 5-7 days. Why? Well to make the most of the trip; and to especially justify the cost of the airfare it may be wise to look at longer stays if possible.

The price increase will most likely motivate guests to stay longer on each visit because it will magnify the fact that the longer you stay the cheaper the cost per day”¦for admission. Again, airfare prices may play a part in this decision as well.

Of course staying more may mean that the resorts will enjoy filling those beds with heads but not necessarily. I expect that there will be other adjustments to offset the cost of the airfare and tickets. First and foremost some folks, rather than increase their WDW budget will keep it as is and perhaps “downsize” their trips by moving down in class from let’s say a Deluxe resort to a Moderate or from a Moderate to a Value”¦or may be even either dividing their stay to on and off the property or possibly stay off the property altogether.

Also, the Disney Dining Plan may take a hit because folks may find themselves eating less in a table-service restaurant and instead go for more quick-service meals. In fact perhaps the powers that be assumed this would happen; thus the recent announcement regarding the Quick-Service Dining Plan in which those participating will receive two (2) quick-service meals and two (2) snacks per day….hmmm sounds like a plan that may work best for Mousefest.

Although we hear all this official information about attendance being up, I’m not totally buying the fact that an increase in attendance equates to an increase in revenue.

I’ve been seeing some interesting signs. Earlier in the year I had to call and make adjustments to some Advanced Dining Reservations. I made a total of 15 changes and had no problem at all getting what I wanted”¦less than two months from my trip”¦and actually called for more changes this morning. Last year I could not have done this. What does this mean? Either less people visiting WDW or less people taking in the table-service restaurants.

I keep thinking that the combination of airfare, restaurant, and ticket increases will impact the “extras” that guests have gone for in the past and they won’t be dishing out Disney Dollars for come the near future.

Here are some examples:

It’s possible that an extra like Hoop Dee Doo, Cirque Du Solei, Disney Quest, and even water parks like Typhoon Lagoon and Blizzard Beach may take a hit. Some concessions may need to be addressed to keep the trip cost down. “Honey, let’s use the hotel pool instead of spending the time and money to go to Typhoon Lagoon.”

Tours such as the Steam Train Tour or any of the backstage tours may not get the bookings as they have in the past. For some vacationers they may see that as not worth the extra money.

But here is what came to mind first. Here is where I’m thinking that WDW may feel the pinch. Merchandise. Have you been to WDW this year? I’ve been visiting Walt Disney World since 1975. Don’t ask how many times. I’d say 99% of my trips have always found places like Magic Kingdom’s Emporium and EPCOT’s Mouse Gear packed with guests; ready to grab that special souvenir, toy, shirt, or whatever. A few months back I noticed that it was eerily sparse in these shops. The best way to measure this is to check out the shops an hour before the park closes”¦it was different”¦I saw idle cast members standing behind cash registers. To the average person the store may have appeared to have a healthy crowd but to the crusty old WDW veteran he or she may say, “Hmmm, not as many people in here as I’m used to seeing.” This is a big deal because of the markup on merchandise. A 10% drop in the daily merchandise revenue is big. Let’s face it; folks will say, “I don’t need that souvenir” or “I don’t need as many souvenirs.” What’s odd is that I continue to see t-shirts and other pieces of clothing continue to be priced in the stratosphere”¦not sure why but I’m looking forward to getting those $40 t-shirts for $10 next summer at the off property character shops.

This is just my opinion and I will be the first to admit that the prices won’t keep me away but will play a big influence as to how my entire Walt Disney World budget is divided. If more of my budget will go to getting there and getting into the park then something’s gotta give.

You and I don’t have to deny ourselves of visiting the land of Talking Mice and Ducks because of these price increases. Instead we have to become better informed consumers and make the adjustments we need to make in order to feed our Disney fixation.

Remember, sometimes demand can influence changes so as the behavior of guests dictates a need to change, perhaps those in decision making positions at Walt Disney World will be watching and will recognize what needs to be done to continue the revenue streams.

I say streams because there are several, as I have mentioned, that will feel the impact of the increase in airfare, admission, and other goods and services.

So Mickey, Minnie, Goofy, Donald, Chip & Dale if you’re reading this”¦don’t worry”¦I’ll still be coming down to visit”¦but I won’t be buying your shirts; doing that Backstage Magic Tour; eating much in your restaurants, or maybe even staying on the property as much”¦but I’ll still be coming.