Would You Like It as Much If It Was Cheaper?

So I’ve been thinking a lot about the fate of the parks and Disney in general since I last posted (sorry for the delay, but these thinking things can take awhile to come to enough of a conclusion worth typing about). . .

Our recent sea voyage and trip to Disney World certainly confirmed a couple of things that are in the blog-o-sphere..  attendance is still there and the cruise business is still packing people in (our cruise was clear full, somewhat to our surprise).  So the question for Disney isn’t ‘are we getting people’ but ‘are we getting people who have money to spend as usual’?  That of course is where the whole ‘average revenue per room’ that Disney tracks comes from in their quarterly and annual reports…  and I think we can all safely say that number has continued to decline, despite only modest declines in attendance.

Which got me to thinking about the complaints people make about a Disney vacation expense (along with the recent revelation from Six Flags that they might be in bankruptcy before the summer is out).  Here is my question to you:  would you like a trip to a Disney park if it was really that much cheaper? 

Stop that initial ‘Yes, of course!’ reaction that you just had and really think this through okay?  We’d all like our vacation to be ‘cheaper’, but what is the value of something that costs you only $1???  Usually not much.

So walk with me here just a second, because this discussion goes beyond just you and me and our immediate out of pocket expenses. 

If the average trip to Disney was say 50% of the current price for 5 nights and tickets, what would that do?  If the advertised price for that package in a value resort is $1500 for what Disney calls a typical family of 4 (mom, dad, teen and child), and it was suddenly only $750, what are the second order changes that would make on the environment?

Certainly you could make a case that attendance would go up, but would it go up twice as much to maintain the current margins?  Further, would you like it if they did double and the parks were always twice as busy as they are now?  The lines these days, even on a slow day, are still plenty long… imagine every day being like a busy holiday, and holiday’s being outrageous (as if they aren’t already).

Would the food service be better if it had to crank out 1.5 to 2 times the current throughput?  Even on modest days you can stand in line for 15-20 minutes at a counter service to get lunch.

And where would all those other people come from?  Is it that likely that people who can’t afford a $1500 vacation can suddenly afford a $750 one?  What kind of people would these be?  I’d hypothesize that they WOULD NOT be the kind of guests who would suddenly have more money to spend on trinkets and other purchases… no, my bet is that it would still be a stretch vacation for many of these new customers and the lower price would get them in the gate, but only the concessions would stand to make much money from the increased throughput.  Would you buy more stuff just because you suddenly could go with $750 more? 

Even more interesting is where would you put all of these people?  The Value resorts today are increasingly hard to get into, especially with the current discounts.  The Moderate price difference is still too much to generally make it an alternative for people on a budget, and the hotel’s in Downtown Disney are no cheaper (and in many cases more expensive after resort fees and other such nonsense…  we stayed at the Buena Vista Palace this last trip and a simple buffet breakfast for 2 adults was $50!!!  And you thought the Disney food courts were expensive????)

Beyond all of that, I doubt attendance would double so Disney would have no course but to cut services to maintain profitability.  We already complain about ‘declines by degrees’, but think of what it would be if the price and attendance were different? 

There is very carefully managed balance between anticipated attendance and costs and the perception of the value received for them.  I’m not so sure we’d all like it nearly as much if it went from being Walt Disney World to Mickey’s Discount Vacation World…