The Disney organization recently raised prices at its US theme parks. Price raises at Disney theme parks seems like an annual, and sometimes semi-annual, occurrence, usually rationalized as needed to pay for improvements that will make the guest better. This one, however, was different. The pricing went from a single price structure to one that, like the airlines and hotels, costs more during busy seasons.
This multi-level pricing structure is very different when compared to what Walt Disney himself had put in place for Disneyland. Here is a quote from Walt, for example, where he shares his thoughts on making money off of his guests.
“We have to feed people that come here, but I don’t want to make any money on food.”
Source – The Man Behind the Magic: The Story of Walt Disney by Katherine and Richard Greene
The original pricing structure for Disneyland was for a general admission ticket for $1.00 ($8.85 in 2016 dollars). With coupons for rides costing extra. The intent was to let guests enjoy the park for minimal costs while allowing those who could afford it to spend more.
Additionally, long-standing practice, at least at Walt Disney World where this writer worked, had been to open everything at park opening and close it all at park closing. That practice has been slowly abandoned over the years to the point where you need a times guide to know when different attractions open and close.
This writer’s first day as a Listen to the Land boat ride narrator was November 27, 1985 and I was asked if I would work the following day, Thanksgiving. I proudly responded, “Yes. The guests coming into Epcot tomorrow have paid their $17.95 and they deserve the best show I can deliver.” In 2016 dollars, admission to Epcot in 1985 cost $40.32. The price now is $115.02 for peak days. That’s a $74.70 increase ABOVE inflation and almost double what a ticket cost in real dollars in 1985. What changed? Why do the Disney parks cost so much more now?
Some of the cost can be blamed on the Disney take over battles of the 1980s. The story is fading from current memories, but the truth is that the Disney Parks empire was almost taken over by corporate raiders. Walt Disney World was, at that time, worth more divided up and sold, than it was worth as an entity. The sale would have carved up Walt’s kingdom. In partnership with Roy E. Disney, Michael Eisner and Frank Wells were brought in to save the Company. The strategy involved many parts, but one critical component was to make the company too big to buy.
As Eisner and Wells searched for ways to expand, they quickly realized that Disney park prices had not kept up with inflation and with changing times and cost expectations. In one example, Frank and Jane Wells checking into one of the Walt Disney World hotels and decided that the Company was giving its value away. Prices soon started escalating. And continue that escalation to this day.
Additionally, there is an ongoing reverse price war. Where most pricing wars push prices down, the effect in Orlando is the opposite. Disney keeps its Orlando park prices slightly higher than Universal and Sea World. Every time one of the big three raises their prices, the other parks follow. Another reason is entertainment inflation. Disney has a pricing formula pegged to the cost professional sports games, concerts, Broadway theater showing, movies, dining out, etc. that indicates what a Disney Park ticket price should be.
Finally, there is greed. Walt wanted a place where the entire family could spend time together. Once in the parks, that is still true. The difficulty is in affording to take an entire family into the park. Is this price gouging? Perhaps. But what does the audience think? Attendance at Walt Disney World was the highest it has ever been in 2014 (the latest year estimates are available for), jumping from 51,500,000 in 2013 to 60,125,000. The sweet spot is charging what guests will pay and no more. In that, Disney is expert.