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Have we gone past the supply/demand sweet spot?

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  • #21
    Re: Have we gone past the supply/demand sweet spot?

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    Last edited by jljtheraven; 06-14-2012, 10:50 AM.

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    • #22
      Re: Have we gone past the supply/demand sweet spot?

      Originally posted by jljtheraven View Post
      I know I probably seem grumpy, but we are middle class folks who have to save for nearly a year to take a vacation. I think Disney has reached its breaking point for our family in terms of cost. I was curious about others' opinions.
      I don't think you sound grumpy at all. You are just telling it like it is. It's good for Disney to hear comments like yours because it reminds them why they can't keep raising prices while at the same time lowering value (a real problem at WDW).

      Disneyland on the other hand has launched a blitz of value this summer:
      New Rides:
      Radiator Springs Racers
      Tow Maters Junkyard Jamboree
      Luigi's Flying Tires

      New Shows:
      Minnnie's Fly Girls
      Voices of Liberty
      News Boys

      New Dance party: Mad T Party

      New Restaurants:
      Flo's
      Cozy Cones
      Carnation Cafe
      (even the Paradise Garden restaurants should be considered new)
      Mary Poppins Bakery
      Starbucks on Buena Vista Street

      New Shops in Cars Land and Buena Vista Street.

      Plus lots of things have been revamped (Matterhorn, World of Color, Main Street Shops, etc)

      AND out in Downtown Disney, there are new shops, enlarged restaurants, and a new Earl of Sandwich coming.

      It's IMPRESSIVE to say the least. Disneyland raised prices up to 30% as a result of all this. They'll lose some passholders but probably make it up in spades on out of town visitors. But at least they can point at a MASSIVE list of enhancements to justify the cost.

      Disney World on the other hand has doubled the capacity of Dumbo, rebuilt a train station and swapped out some minor theme elements on a kiddy coaster. BUT they also closed a beloved dark ride to replace it with a princess meet and greet.

      Not very exciting (at least not yet, they have a new Fantasyland dark ride, new restaurant and another meet and greet still coming).

      Each family needs to weigh what a trip is worth to them. Right now, a Disneyland vacation is looking like a real value, especially when compared to WDW.
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      • #23
        Re: Have we gone past the supply/demand sweet spot?

        Going to Disney is expensive, but so are other destinations. I can't help saying that you got what you paid for. Every single line item was approved by you and others in your party. You got a level of service based on your income and expectations. If your budget was lower, your travel agent or you would have tried a lower figure to make it more affordable. Since you're booked, it is assumed you can afford it.

        As for if you got what you paid for, is it worse to stay at a cheaper place? I have done both and there's no real difference between a $100 and $200 a night place. You will have to study the differences. I stayed at a Best Western that offered 300 thread count sheets and very posh mattresses and it costs $130 a night. Pretty good for the money spent. The free continental breakfast was especially a cost saver and convenience.

        In many cases, the jump to $300 a night was more based on location than amenities. The jump to $400 and higher a night was based on the resort amenities and they are worth it if you can afford it.

        ---------- Post added 06-13-2012 at 02:05 PM ----------

        Originally posted by PSUMark View Post
        I'm sorry but this is kind of a ridiculous post. And I'm saying that as someone who is extremely fortunate enough to be able to visit WDW multiple times a year. Your point of comparison to prove that WDW isn't an expensive vacation is Hawaii??? Hawaii isn't exactly a cheap (or even moderate) vacation. (Not to mention, how are you able to calculate flight costs without knowing where this person is flying from?) There are tons of places someone could go for cheaper than WDW. Like a national park. Or a local amusement park. Or one of the cheaper islands in the Caribbean. Or just camping in the mountains or on a lake somewhere. Not every vacation destination has to be a resort.
        I've been the Hawaii many times in the past decade. It is not cheap, yet it isn't more expensive than Orlando. Actually, they are comparable in costs.

        Airfare: Hawaii more expensive.
        Rooms: Hawaii more expensive.
        Entertainment: Orlando more expensive.
        Food: Comparable.
        Rental Car: Comparable.

        Generally, Hawaii costs more to get there and for decent accomodations. If there is anything you should not hold back, it is the rooms. A nice room or suite improves the quality of your stay. I stayed in cheap hotels in Waikiki. I will never do that again. Stay in a resort in a high quality room near the beach. Hotels and airfare are a big expense.

        Orlando was expensive for park admission tickets and shows. It is quite bad in how they gouge you. You can't go anywhere in Orlando without paying to get in. Hawaii offers the beach (largely free). The luaus and boat excursions are expensive, but they usually include food and free snorkeling gear. Other nearby parks and museums are cheap. You can see free hula shows if you look for free local performances.

        Food is comparably priced. Its a matter if you want to pay for better food or go cheap. Many places to look for food in Hawaii. At WDW, they lock you in. Get a car if you want to avoid Disney prices.

        Transportation with rental car in Orlando is optional if you stay at Disney, but advisable if you want to visit other locations. Hawaii offers many bus tours if you don't want to drive. Then again, walk to the beach and get a Mai Tai.

        Overall, Hawaii and Orlando each have advantages, but I happen to think Hawaii is a much better place to visit to unwind. You can't beat the weather and the water. The whole island is the attraction. Orlando is a swamp.

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        • #24
          Re: Have we gone past the supply/demand sweet spot?

          Originally posted by Broadway Guru View Post
          Eventually, as Disney becomes more and more of a niche market, WDW will likely evolve into some sort of "boutique resort" which caters specifically to Disney lifestyle consumers.
          The ironic thing is, if that's Disney's goal, they're doing a really crappy job of it. Who is more pissed off about the way WDW has been "evolving" than the fans?

          Originally posted by StevenW View Post
          I've been the Hawaii many times in the past decade. It is not cheap, yet it isn't more expensive than Orlando. Actually, they are comparable in costs...
          I think you kind of missed my point. I wasn't debating the relative costs of WDW to Hawaii - I was saying that's a meaningless comparison in this discussion. Regardless how much WDW and Hawaii cost in comparison to each other, there are still many places one could go on vacation that are cheaper than WDW. That (the idea that there are lots of vacation destinations cheaper than WDW) is what was in dispute.
          I knew if this business was ever to get anywhere, if this business was ever to grow, it could never do it by having to answer to someone unsympathetic to its possibilities, by having to answer to someone with only one thought or interest, namely profits. For my idea of how to make profits has differed greatly from those who generally control businesses such as ours. I have blind faith in the policy that quality, tempered with good judgment and showmanship, will win against all odds.
          -Walt Disney

          sigpic

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          • #25
            Re: Have we gone past the supply/demand sweet spot?

            Originally posted by Broadway Guru View Post
            Eventually, as Disney becomes more and more of a niche market, WDW will likely evolve into some sort of "boutique resort" which caters specifically to Disney lifestyle consumers. Meanwhile, the general public will patronize the many other entertainment offerings in the area.
            Originally posted by PSUMark View Post
            The ironic thing is, if that's Disney's goal, they're doing a really crappy job of it. Who is more pissed off about the way WDW has been "evolving" than the fans?
            But those fans are the same ones who continue to open up their wallets every year because they "have to" go to WDW. It's the same debate that we have every time there's a major change to something. People complain about it for pages and pages, but in the end, they renew their passes anyway. That's the power of lifestyle branding.
            Disneyland Historic Preservation Society
            Charter Member

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            • #26
              Re: Have we gone past the supply/demand sweet spot?

              I thought about this post some more, and being an adult without kids, I'm amazed by how much these vacations are running parents these days. But times have changed and folks are doing things different these days, and this is really what I want to talk about.

              Airfare, back in the day, was expensive too, but I remember families driving to WDW as a kid. This saved them a lot of money, and even with gas costs as high as they are today, does it make sense for some families to drive instead of fly? You know, bring back the family road trip.

              Another thing, a lot of the folks I knew growing up rarely stayed on property. Of course, this was before all the value resorts started popping up. However, hotels have also evolved, and a lot of great stays still exist off property.

              Now that I'm closer to the west coast, I always drive to DL. It's a 6 hour drive, but it's worth it. I'll spend in the ballpark of $200-300 a night for hotel (usually the DL Hotel with the last night being off property) and stay for 4 nights. The other expenses are just the park hoppers and food. DL becomes really inexpensive. Likewise, it's cheaper for me to fly to Hawaii, namely Kauai, then to FL. But this is more about where I'm located.

              I guess we need to go back to doing things the old way. Bring back the road trip.

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              • #27
                Re: Have we gone past the supply/demand sweet spot?

                Where the hell did you choose to stay? I do Disney for 14 days with park hoppers/water parks and the deluxe package for less then 4k for 2 every year.

                Sure, I'd love it to be 2k, but frankly, when you break it down, it's a pretty good deal.
                1982 - Contemporary (1 week), 1987 - Visit (2 weeks, offsite), 1988 - Visit (1 week, offsite), 1989 - Visit (3 weeks, offsite), 1990 - Visit (5 weeks, offsite), 1991 - Visit (6 weeks, offsite), 1992 - Visit (6 weeks, offsite)
                1993 - Visit (6 weeks, offsite), 1994 - Visit (6 weeks, offsite), 1995 - Visit (6 weeks, offsite)
                __________________
                2010 - Carribean Beach (2 weeks), 2011 - Carribean Beach (2 weeks), 2012 - Pop Century (2 weeks...upcoming)

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                • #28
                  Re: Have we gone past the supply/demand sweet spot?

                  My family tried to go to Disney before each move (My dad is in the military). We would drive, stay at the military resort on property, Shades of Green, and bring a hot water heater and oatmeal. We'd also have granola bars and such for the parks. We'd eat our sit-down at lunch, when they have the same food but cheaper. After spending some time as a cast member, I almost forgot what the costs were for a full vacation. But if you do your homework and are willing to flexible, a Disney vacation is still possible.

                  I've been doing some research, and found out that if I am willing to spend over 24 hours on busses, I can get down to Orlando for about $50... it's all about what cuts are worth it
                  sigpic WDW Cast Member August 2009 - November 2011

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                  • #29
                    Re: Have we gone past the supply/demand sweet spot?

                    Originally posted by thedude76 View Post
                    I guess we need to go back to doing things the old way. Bring back the road trip.
                    Ya know what's funny for fun I looked up Amtrak for a fam of four from Chicago to Orlando and the total cost was $1,560.00

                    Granted your spending 34 hours on a train, but for those that don't want to drive or fly this is a great alternative...ahhh if only our Country's train system was better it would only take 20 hours total

                    I'm a big proponent of alternative forms of travel if you can't tell to drive to Orlando from O'Hare airport, it'd take less time than the train would(because you have to change trains in Washington, D.C.) in a 2010 Chevy Equinox(the only car I own that I'd take on that long a drive) it would cost 260.73!!!!!!!!

                    So figure in one night in a hotel and food for that one day and your saving about 3 grand over flying, and 1.5 grand over the train....ya unfortunately personal transit is still the way to go if your looking to do things on the cheap...

                    You can save money in little ways to add up for that trip if you want to, the question you have to ask yourself is do you feel like your getting good value for all of your sacrifice...

                    To me the answer currently is yes, until it's no I will find a way to make my trips possible, when it no longer holds that much value for me I'll stop going.....
                    The test of success is not what you do when you are on top. Success is how high you bounce when you hit bottom.
                    -George S. Patton

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                    • #30
                      Re: Have we gone past the supply/demand sweet spot?

                      9 days anywhere for a family isn't going to be cheap when you chose to stay in a premium location.

                      New Orleans for $111 a night? That's dirt cheap. My stay last week in SanJose (not a vacation).. $140/night.

                      My Stay in NYC last month (pleasure) $700/2 nights. Tickets to do Empire state for the family.. $180. Broadway.. would have been $100/head.

                      Having to 'save up all year for vacation' - isn't that what everyone does? When I was a kid... our Disney vacation cycle was basically every 4 years. Why? Because it's expensive to travel and do vacations.

                      I don't get why people pick a vacation.. and then complain when it doesn't fit in your budget. Why not start with a budget, and decide which vacations fit your budget.. and then worry about what's in or not.

                      Maybe 5 days in your budget instead of 9 days? Maybe not.. and you decide doing Myrtle Beach is better because you want a longer stay. Or you decide to goto FL and do things besides Disney.
                      Check out my blog - Coreplex: Rambling from inside the Grid


                      Am I evil? yes, I am
                      Am I evil? I am man, yes, I am

                      Originally posted by sleepyjeff
                      Disneyland was meant to be sipped not chug-a-lugged

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                      • #31
                        Re: Have we gone past the supply/demand sweet spot?

                        I rarely pay over $300 for airfare to either California to visit Disneyland, or Orlando to visit Disney World, and I travel from Chicago. The similarities end there. I can get a hotel cheaper in California. My food budget is less. Overall the Disneyland vacation is always cheaper for me to go to California, and besides I'd rather go west, more often than east.
                        BarbaraAnn

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                        • #32
                          Re: Have we gone past the supply/demand sweet spot?

                          In respone to the original title of this thread "Have we gone past the supply/demand sweet spot?" the obvious answer is: NO!

                          In may be out of a lot of people's budget, but that is not Disney's fault. Economics dictates that they should raise the prices until attendance drops off, and then back off only slightly. Should they charge $50 per day and have to turn people away everyday because of capacity issues, or charge $175 per day and have the parks at 90% capacity? The latter makes way more financial sense. I'm sure Disney has people who make these exact sorts of calculations. The fact that the parks are full is evidence that they are not priced too high.

                          Whether they are priced too high FOR YOUR CIRCUMSTANCES is an entirely different topic.
                          Last edited by Medd63; 06-14-2012, 10:59 AM.

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                          • #33
                            Re: Have we gone past the supply/demand sweet spot?

                            Originally posted by PSUMark View Post
                            I think you kind of missed my point. I wasn't debating the relative costs of WDW to Hawaii - I was saying that's a meaningless comparison in this discussion. Regardless how much WDW and Hawaii cost in comparison to each other, there are still many places one could go on vacation that are cheaper than WDW. That (the idea that there are lots of vacation destinations cheaper than WDW) is what was in dispute.
                            I don't think I missed your point. Even Hawaii would be a cheap place to visit if you tried. Every place is cheap if you tried, even WDW.

                            The fact that this person planned a trip for 4 at nearly $7,000 is plainly unnecessary. What can I say? Disney got them, trapped them.

                            Many people say don't use a rental car if you stay at WDW. Surely it is more convenient, but there is no free transportation. There's an inherent cost that is passed on to you if you stay on-site with no options.

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                            • #34
                              Re: Have we gone past the supply/demand sweet spot?

                              Originally posted by Medd63 View Post
                              In respone to the original title of this thread "Have we gone past the supply/demand sweet spot?" the obvious answer is: NO!

                              In may be out of a lot of people's budget, but that is not Disney's fault. Economics dictates that they should raise the prices until attendance drops off, and then back off only slightly. Should they charge $50 per day and have to turn people away everyday because of capacity issues, or charge $175 per day and have the parks at 90% capacity? The latter makes way more financial sense. I'm sure Disney has people who make these exact sorts of calculations. The fact that the parks are full is evidence that they are not priced too high.

                              Whether they are priced too high FOR YOUR CIRCUMSTANCES is an entirely different topic.
                              OR... Are the parks' respective capacities too low? Every park at WDW was never truly completed and/or has numerous attractions that closed without replacement. Maybe if the parks had higher capacity, they wouldn't need to price ration as aggressively (and could still make more money).
                              I knew if this business was ever to get anywhere, if this business was ever to grow, it could never do it by having to answer to someone unsympathetic to its possibilities, by having to answer to someone with only one thought or interest, namely profits. For my idea of how to make profits has differed greatly from those who generally control businesses such as ours. I have blind faith in the policy that quality, tempered with good judgment and showmanship, will win against all odds.
                              -Walt Disney

                              sigpic

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                              • #35
                                Re: Have we gone past the supply/demand sweet spot?

                                Originally posted by Medd63 View Post
                                In may be out of a lot of people's budget, but that is not Disney's fault. Economics dictates that they should raise the prices until attendance drops off, and then back off only slightly. Should they charge $50 per day and have to turn people away everyday because of capacity issues, or charge $175 per day and have the parks at 90% capacity? The latter makes way more financial sense. I'm sure Disney has people who make these exact sorts of calculations. The fact that the parks are full is evidence that they are not priced too high.
                                Originally posted by PSUMark View Post
                                OR... Are the parks' respective capacities too low? Every park at WDW was never truly completed and/or has numerous attractions that closed without replacement. Maybe if the parks had higher capacity, they wouldn't need to price ration as aggressively (and could still make more money).
                                This may catch me some flack here, but I believe your right PSUMark, because the earnings potential from a higher capacity is greater even with less charged at the gate, it's a numbers thing if it only costs me say 70 bucks to get into the park, then compared to now that's money I can easily make up on the cokes, tshirts, and other stuff that I can seel you....

                                If capacity is lower and I charge more as in Medd's case then true I have lower costs due to less staffing, less on upkeep, etc. but I also make LESS because there's fewer people in the park to buy all of the cokes, tshirts, etc. that have 100%+ profit margins...

                                Think about it this way, and this is why I said that cokes and other things of that nature have 100+ percent profit margins
                                Coke from the manufacturer or distributer with delivery and personal costs to sell it costs me let's say 1.00$ a bottle...I sell it to my customers at say 2.75$ that equals 175% profit that I just made off that coke...that may not sound like much but let's say I sell 1,000 cokes a day for six days and saturday I have a good day because it's so hot people buy alot of cokes and I sell 2,000 that day

                                That equals 140000 Dollars! just from this example...now if I have greater demand that means my price goes up on the coke or I increase my supply, to where I sell more cokes...

                                As you can see from the example(at least I hope you can haha) if I can cram more people into the same space safely then it gives me more profit from everything else increasing my overall profit margin exponentially!

                                moral of the story: Disney should ADD capacity and lower prices to increase profit not charge more...are you listening Disney???
                                The test of success is not what you do when you are on top. Success is how high you bounce when you hit bottom.
                                -George S. Patton

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                                • #36
                                  Re: Have we gone past the supply/demand sweet spot?

                                  That's a model that assumes you are under utilized and that adding more customers can be done so economically. DLR doesn't have that luxury - especially during peak demand.. which is why they are clamping down on people who have unlimited access to peak demand.

                                  A simple example... imagine you have no more parking spots. So how do you add more guests that require parking? To get more guests in, you first must expand your infrastructure. If that infrastructure costs $200 million to build... that's a lot of cokes you gotta sell before you even break even on the cost of adding that additional capacity.

                                  WDW is under utilized... but there is a balance between money left on table and opportunistic spending. How much do you need to lower prices to get that spike in demand? How much do you need to sell to make up that delta?

                                  Right now I think WDW's price increases are pushing the limit... but the beauty is they can always discount the prices and people go 'WOW.. 25% off??? Jump now!' and they can spike demand that way too.
                                  Check out my blog - Coreplex: Rambling from inside the Grid


                                  Am I evil? yes, I am
                                  Am I evil? I am man, yes, I am

                                  Originally posted by sleepyjeff
                                  Disneyland was meant to be sipped not chug-a-lugged

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                                  • #37
                                    Re: Have we gone past the supply/demand sweet spot?

                                    Originally posted by ORD84 View Post

                                    moral of the story: Disney should ADD capacity and lower prices to increase profit not charge more...are you listening Disney???

                                    I was getting ready to write a long winded reply but then I saw the smilie, I sure hope that's the sarcasm shinning through.

                                    And no we're not past the supply/demand sweet spot. In fact I think the property is currently maximizing its supply vs. demand vs. maximum capacity for the parks vs. guest satisfaction. People are still coming to the parks and they're still paying to do so. Disney needs to worry more about guest satisfaction and capacity of its current attraction lineup before it has to worry about demand dropping off soon. Secretly, the higher prices are designed to keep excess demand out of the parks and thereby keep guests satisfied with what they get out of a visit.

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