Evan Hicks
Mrs. Straub
A1 Economics
4/28/15
Walt Disney World Vacation: A $99 Admission Ticket?
It’s almost that time of year again. The weather will get hot, parents will surprise their kids with their dream vacation, and the sales at the famous theme park in Orlando, Florida will skyrocket. And with increasing attendance, Disney holds the power to increase the price per ticket as well, and never will hesitate to do so.
The price of Disney’s one-day admission ticket price recently rose to a whopping $99 a person. That’s a 200% percent increase in the past decade. A small amount of this could be attributed to inflation, but nowhere near enough to justify a double in price. There has been an increase in demand for tickets, but instead of using this as an opportunity to decrease their prices as a result, they decided to increase and boost sales even more.
Some economists are even claiming that Walt Disney World’s financial status mimics that of the U.S. economy. This video from Bloomberg.com illustrates this phenomenon:
With more and more families now traveling to the park, combined with an increase in ticket prices, it becomes clear that more and more people have the money to choose luxuries in addition to their necessities and pay for such a large vacation. This shows that the economy is doing relatively well.
As of right now, attendance continues to increase. Regardless of an increase in ticket price, consumers still continue to pay for a day of fun and a picture with the mouse himself. This makes Walt Disney World tickets relatively inelastic products. At $99, tickets are also strategically placed almost at $100, yet still in the double digits as it creates a minor illusion for consumers. Some may react quite differently to a triple digit price than a double digit. With an increase in demand, park-goers often find that there is a shortage of the service: Long lines at rides. There simply isn’t enough in the Disney parks to keep everyone constantly occupied with that massive a number of guests, so many often have to wait several hours before riding a ride. Regardless of the fact that it is an incredibly iconic theme park, if prices were to increase by significant amounts, it is quite possible that attendance could begin to drop.
Another factor that could influence Disney Park attendance is the fact that it is not far location-wise from Universal Studios, a strong competitor theme park. The two are in monopolistic competition with one another, as they both serve the same general purpose as a theme park and must compete for business. Universal Studios currently sells the lower ticket price between the two competitors at $92 a day. There are also numerous other vacation options that families have as substitutes and choose to take advantage of that are significantly lower in cost. However, whether it be that consumers feel that they get more bang for their buck at Disney or that they have a strong emotional attachment to Disney from childhood, the magical southern-Florida theme park still continues to rake in the largest crowds and likely will continue to in the generations to come.
Works Cited
"The Disney World Indicator of U.S. Consumer Health." Bloomberg.com. Bloomberg, 6 Jan. 2015. Web. 26 Apr. 2015. <http://www.bloomberg.com/news/videos/2015-01-06/has-walt-disney-world-become-an-economic-indicator>.
Bachman, Justin. "Disney's Magic Kingdom Nears $100 Tickets, and the Crowds Keep Coming." Bloomberg.com. Bloomberg, 25 Feb. 2014. Web. 26 Apr. 2015. <http://www.bloomberg.com/bw/articles/2014-02-25/disneys-magic-kingdom-nears-100-tickets-and-the-crowds-keep-coming>.
Lewitinn, Lawrence. "Why Rising Prices at Disney World Could Be Good for You." Yahoo Finance. Yahoo, 25 Feb. 2014. Web. 26 Apr. 2015. <http://finance.yahoo.com/blogs/talking-numbers/why-rising-prices-at-disney-world-could-be-good-for-you-201736025.html>.
Disney is a company that is able to get revenue from multiple industries. Disney promotes their movies and T.V. shows to children and during trailers or commercials also promote their toys and famous Disney Theme Park. This is similar to Apple where if someone buys an ipad for home they may also buy an iphone for on the go. This strategy of promotion in addition to the fact that they price their products ending with a 9 to make the allusion of items being cheaper, shows that they are doing an excellent job in marketing. When a company is able to take advantage of the right marketing strategy, they can often raise their prices and still keep their stream of customers.
ReplyDeleteI think it's safe to say that Disney has a monopoly on Disney products. They can charge however much they want for Disney toys, apparel, etc. because no other company is exactly the same as Disney. There is a certain child-like, anything-is-possible feeling to Disney World that attracts even middle age people and young adults. It's not just the products or the rides that people want when the come to Disney World, they are there for an unforgettable, magical experience, and Disney World does a great job of advertising this.
ReplyDeleteDisney is a thriving company, and has been for many decades. Many children dream of having breakfast in Cinderella’s castle with the princesses or seeing giraffes and zebras roaming around right outside of the balcony of an Animal Kingdom hotel room. Disney not only attracts children, but young adults to the elderly as well. With Disney’s monopoly, as demand for tickets increase, the company can charge even more since there are few to no competitors who can offer the same magical and unforgettable experience. For me, one trip to Disneyworld and one to Disneyland was enough, however, I know some people who go every year without getting tired of it.
ReplyDeleteI know the cost of the price to even just enter Disney World is highly close to insane. This is just for the price of entering not including all the rides, food, or even shopping. Disney is constantly making profits from Disney World. For example we went to Disney World and it began to rain. Everyone ran to the closest store and were grabbing rain ponchos left and right including my family. The cost of one poncho $7. The total for my family alone $28 dollars now this is not even everyone in the shop. There was about 50 families which Disney would rack up a bunch of money from.
ReplyDeleteYou did well to incorporate terms from class into your post, and used them effectively in your analysis. I believe that the inelastic tendency of the park tickets is in part due to the name associated with it. Through American society, Disney land had become the "dream" vacation for all Americans. So it is understandable as to how they are able to double their ticket prices and still continue to have increased attendance at their parks.
ReplyDeleteThis was a very interesting article. The prices at Disney Word have clearly increased. People around the world travel to Orlando, Florida just to experience the magical place. I would be interested to know more about the economy of Orlando itself, is it good? You would think with Disney World that would really be boosting the Orlando economy. Tickets are now almost 100 dollars, what will they be in another year?
ReplyDeleteThe video you linked was good, I decided to watch the video before I read the post and I had a lot of background information from watching it. You also did a good job using economic vocabulary. I think that the prices of Disney is way to expensive for most to afford. You said that the prices have increased by 200% over the past few years. The graph you posted has been increasing rapidly and I think soon it will be to expensive for people to afford. I can see where you come from when you say: "There has been an increase in demand for tickets, but instead of using this as an opportunity to decrease their prices as a result, they decided to increase and boost sales even more." So I think that they will continue to make more sales.
ReplyDelete$100 for a parking pass for just a day, that's insane. The happiest place on earth, more like the sound of my wallet crying. The price of parking has almost doubled in the last 10 years. What will be the price in 10 or 20 years from now? A Disney trip is already very expensive, from just the tickets themselves. There are plenty of parks that have close to the same experience with almost half the cost. This is what you get when a company can advertise so well, so they can charge more for their product.
ReplyDeleteI love Disney World. I think the increase in price does show that the economy is strong and has rebounded since 2008. It will be interesting to see if the prices continue to increase that the rate it is. For a fair amount of people a day at Disney is inelastic while others might feel it is elastic. The attendance vs cost would be an interesting graph to really help see the possible or not possible relationship between the two.
ReplyDeleteDisney probably has realized that their sales are inelastic due to the fact that parents want to make their children happy and if that means paying for $100 per person, they will pay the cost. Perhaps universal studios has a chance to attack disney's economic stand point. If Universal were to lower their ticket price significantly, then perhaps they will receive more consumers. But I don't believe that universal studios and disney are in a monopolistic competition and are skewing the prices because there are multiple theme parks around the area that could succeed if disney and universal were to raise their ticket prices.
ReplyDeleteEven though there is competition in close proximity, Disney is probably still a monopoly. Competition holds prices in check a little bit, but consumer tastes are clearly in favor of Disney. Anything Disney produces seems to be relatively inelastic. The brand name of Disney is similar to a Cadillac or Apple logo, making it the more desired option based off name.
ReplyDeleteDisney Parks try to limit shortages in service with the fastpass system. This system can be used by everyone, but is especially kind to those that plan ahead, as you sign up for different times to go through a shorter line. However, you are limited to the number of fastpasses you can have at one time, and there is a limited number of passes based on time of day. Disney offers an even better way to bypass shortages in service where you can virtually fastpass any line every time. Of course Disney makes it expensive, costing nearly double normal admission. I think that Disney is capable of attracting so many people to their park because of its unmatched atmosphere. Also I feel that Disney is known as a popular vacation spot that is thought to be as something that must be experienced at least once in a lifetime. These factors lead to Disney's success.
ReplyDeleteThis is a good topic to bring up because now things are getting higher in price. Determining ticket prices is a great topic to talk about in economics because the prices do fluctuate time to time. I thought the graph that you had about the ticket prices over time was good. It was good to see that to see how much a ticket had cost back in the day. Then to see the comparison from 1971 to 2014 is shocking to see that a ticket to get into an amusement park costs $100. Just a few years ago I had went here and it seemed as the ticket was $75. Also I feel as this is a popular tourist attraction, with that being said if they raise the prices in a ticket there revenue will continue to go up because no matter what they are still going to make money. Overall, I thought that this was a good topic to discuss.
ReplyDeleteI think we would be best off starting up a new Disney world with our own rides and characters. This would eliminate the monopoly and we would be directly competing against Mr. Walt Disney. We could have a special of cheap fresh American grown fruits that would give us an advantage that would drive their customers to ours.
ReplyDeleteIf Disney world and Orlando were forced by the government to lower prices and allow competitors there would be many problems. The over standard for theme parks would drop and the quality of both Orlando's and Disney's theme parks would drop. Many of the people employed there would get laid off. This is one of those rare forms of monopolies that can't be fixed the most that can happen is the government can put a ticket price max.
ReplyDeleteThose ticket prices are ridiculous, on a busy day you would be lucky to get on 5 rides. And averaging that out, this means that each ride costs almost 20$. That shows how much money they really make, with giving the consumer not much in return. Also like you said it shows that people still have the money to do this luxury activities while paying for the necessities as well. Tickets seem to be an inelastic good.
ReplyDelete;The Disney tickets so much expensive. In the busy day like summer we won't be able to get much on ride because people are so much they are waiting like a hours. She explains very well about ticket. Another factor that that Disney park attendance is the fact that it not far from Universal studio two park are monopolistic cooperation. The universal studios have different kind of tickets price the average ticket price between the two competitors at $ 92. People don't care about money sometime because they want to fun and also they want to look all places in short time.
ReplyDeleteExcellent read, I just passed this onto a colleague who was doing a little research on this topic. And he actually bought me lunch because I found it for him. So I should thank you for the free lunch I got.
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