A note concerning DVC admission discounts/benefits

[bicker]

Just to put another perspective in: We're visiting in November, January and May, and we're buying APs. No ands, ifs, or buts. A discount program wouldn't result in us buying more admission. I suspect that a great number of DVC members are in the same boat: while we'd all like to pay less, we're not really changing how much we're buying that much.

Ask yourself this: Would you pay 30% more on admission this coming year (if it was a better deal)? It isn't enough to say that you'll buy the same admission for a lower price (no ROI for Disney in that) nor is it even enough to say you'll pay 2% more to get 30% more, since that's a losing proposition for Disney as well, mainly because Disney would lose too much money due to folks who'd use such a plan to buy the same amount of days for less money. That's really the key -- whatever plan folks come up with need to result in an average of people spending more money on admission or it just doesn't make business sense.

 

[PKS44]

bicker wrote:
"while we'd all like to pay less, we're not really changing how much we're buying that much. "


"...That's really the key -- whatever plan folks come up with need to result in an average of people spending more money on admission or it just doesn't make business sense."

Actually it is a little more complicated than that- because if people spend the same amount of total money (admissions, food,drink, merchandise) but in one case 30% of it is on admissions and the other case 10% of it is admissions the profit margins are different. I would guess the profit on food and merchandise is (a lot) higher than the profits on admissions.

The key is increased profit-but it does not have to be admission generated...in grocery stores they're called loss leaders...they sell some items at low to zero to negative profits just to get you in the door to spend on other things.

Ultimately though I would guess that the reason there is not a significant discount right now is that DVCers are buying what they're selling at the current prices. When that changes, so will the prices.

Paul

 

[Andrew Bichard]

On the subject of late entry dining only passes - I would be a little bit disgruntled if all the epcot restaurants started filling up around illuminations time and I couldn't get the PS I wanted. I can see that a LOT of people would want to come in primarily to see illuminations, using dinner as an excuse.

Andrew

 

[jeanneg]

Hmmm....that's an excellent point. That, plus the fact that I've never seen the Epcot restaurants hurting for business leads me to believe there's not much incentive for Disney to make such a move. Too bad for us!

 

[rbuzzotta]

We just spent 13 days at WDW and only visited the parks for 2 days. A better park admission policy would benefit our family of 5 much better!!!!!! What exactly are the FL resident benefits like?

 

[vernon]

Brian , it's a fine point but the key IMHO is not just people paying more for admission, it's spending more IN TOTAL in the parks. There is a slight BUT important difference IMHO. Personally I think they would make more money on admissions as well ( however marginally) but the extra numbers of people in the park would undoubtably add to the profits of the restaurants, shops and drinks concessions. It does need someone at Disney to take a look at the big picture and in that , you may sadly be correct. If the head of addmissions policy doesn't see a CERTAIN gain for himself he may not be willing to help catering and sales. IMHO the number of DVC people buying APs will dwindle as time goes by UNLESS they see better value in them.

Paul I think you're wrong over addmission/restaurant profitability.To get another 1,000 people into a park costs $0 . All the staff, ticketting, machines,rides etc etc are already paid for. To make up 1,000 meals has a physical cost (i.e. the ingredients) JMHO

 

[bicker]

The key is "how much" and that's something that the managers have to keep a very close eye on. While off the cuff some might feel that "it would be enough" the data is the real authority on that.

 

[KLR-wlv]

This comment is relevant to how Disney is losing out on a captive audience. In California, Disneyland doesn't offer much for California residents. I think they can get in for the kids price, but no perks like Florida residents. Now, California adventure's attendance is less than stellar and people don't make Anaheim a destination like Orlando - so wouldn't you think Disney would be courting California residents a little more? It's the same with DVC. The more you go down there - the less you need to go to the parks - especially with admission increasing recently at about $5 per year. It makes no sense really. Make DVC'ers PAY for an after 4 Epcot pass - they are getting an additional amount of money for the passes - discounted as they are - that they wouldn't get from many of us at all - plus money at the restaurants that they may not have gotten at all since we have the ability to cook in our rooms. They are missing the boat IMO on a captive, repeat, loyal audience.

 

[PKS44]

Vernon wrote: "Paul I think you're wrong over addmission/restaurant profitability.To get another 1,000 people into a park costs $0 . All the staff, ticketting, machines,rides etc etc are already paid for. To make up 1,000 meals has a physical cost (i.e. the ingredients) JMHO"

Well for another 1000 people maybe there is little extra cost (more wear/tear, maybe need for more staff)- the point is profit margins..It costs alot of money to run the rides, clean and maintain the parks, etc...the overhead is tremendous -so if you compare what that costs to what they take in from admissions it must be a wash or maybe a loss as it is. IT can't be anything like the mark up they can make off of meals...THE really large margins in profits are made on those meals where the ingredients do have a cost but the prices they charge are marked up 100's of times over (popcorn/soda especially are HUGE profit margins-tshirts too!).

If you run a park for 50 million it takes a million people at $50/piece to break even. You may be able to get the same $50 million out of people and spend only $10 million to prepare food and merchandise. (the equation may even be more tilted for food/merchandise- like $500,000 worth of soda to get $50 million in sales! )

Paul

 

[vernon]

If a park costs say $50 mil a year, it still costs (basically) $50 mil a year whether it gets 900K visitors or 1.1 mill visitors the P or L is decided on how many visitors it attracts either side of that number.
While staff numbers may be cut back slightly to account for number fluctuation the biggest expenses ( land use, ride fees, maintanance, cleaning, transportation etc etc) will remain constant ( the staff may have to work 10% extra harder in their paid hours but they would just "pick up the slack"). A lot of those costs would be there if it attracted NO visitors at all. You can't "retro" guests if they don't come into the park in Jan, you still have to pay the bills. Once you hit "break even " on numbers in the park anything extra ( as long as it isn't blocking "fee paying" customers entry) is profit.

If you need a million people at $50 each to break even and you get a million, you break even.
If you attract an extra 100,000 (for example) by discounting a ticket to 60% ( which effects 100,000 of your "usual" guests) your up $1,000,000 on admissions PLUS what ever 100,000 people spend in your park.

 

[PKS44]

Vernon- I don't think we are disagreeing here. If you have the base attendance, then everything above that is gotten for very little extra investment, as you described. Of course more people do cause more wear and tear. I would cite the Baltimore Aquarium or the National Aquuarium in Baltimore as an example. Initially it attracted so many people they had to re carpet and repaint way before they had budgeted. Now with Disney parks the question is where to try to get the money-when does attendance reach the break even point for running the parks and how much does it "cost" to generate that kind of attendance (eg new rides/shows/parades,etc) My point is that the Return on Investment is greater by attracting more spending on food and merchandise than on increasing revenue from admissions...I believe the abundance of stores supports the idea that these are the best returns on investment for Disney (same reason casinos invest so much space in slot machines) Little money out/lots of money in=happy management...

Paul

 

[Muushka]

I have really enjoyed reading everyone's ideas about how Disney should reconsider their idea of a DVC discount for admission.

The theme that I saw in most of the posts was that DVCers were not just looking out for themselves, it was thinking of Disney also.
The 'symbiotic relationship', as it should be.

One idea I thought was good was the Disney Dining Discount like the Florida residents receive. Being as frugal as I am, and having cooking facilities available, this would encourage us to dine out more. Good for Disney, good for us.

I am not sure what the answer to the passes is. I know that I do not look forward to park hoppers because I hate 'commando' style touring. However, Disney has crossed the line (mine that is) with their price of Annual Passes, and their renewal policy.

What I would like to add is that I am afraid that Disney may some day realize what we were saying here on the boards, and for someone like me, it may be too late. We are creatures of habit. With Annual Passes, those habits took years to cultivate. To learn to slow down, and shorten park visits. With the high prices (of park hopper prices), that style of touring is not practical. What we will learn to do is to enjoy visiting parks outside of Disney (USF/IOA). We will learn to just enjoy the resorts and surrounding activities. This will become habit for us. By then, we may not have the desire to go into the parks at all. Who looses then?

 

[vernon]

Paul, we're in agreement, get more people in the doors spending money.

 

[DisneyCrazy]

Veron, while I agree that more people in the parks = more profits I do have to say that a corporation's biggest cost is it's employees. We discovered this a few year ago during an unfortunate budget exercise to cut $5M from our department's budget. I think (educated guess, but a guess non the less) that the margins on admission are slim compared to other items (food and merchandise). Cutting too much of the admission price MIGHT not be in the best interests of the company.

Look at the staffing level difference in the parks in say June vs December - most of the rides are only running at 50% (for instance only one side of the Pirates is running). And it's not just the ride, it the cleaning crew, waste removal, etc.

I think there's a fine line being danced by Disney - they have ALOT of people looking at this (as does any big corporation) and I'm sure they feel they are maximizing profits with their current policy (I can see the graphs as I type ).

 

[vernon]

IMHO Disney's biggest costs of late have been the pay off to Katzenberg (sp?) , the payoff to the WWoS courtcase and the losses incurred by the Internet and Telecoms/media sides of the organisation. Low level staff salaries at the parks would be miniscule compared to those little rascals LOL.

At minimum wage I don't think an extra 20 cleaners/fastfood outlet/ride attendants/ticketting staff damage the budget as much as three mid level executive. Mike Eisner's bonus is still a HR cost but it doesn't make a park run better, an increase in low level staff by 2% is not going to put the wage bill up by 2% but it would improve the parks JMHO In reality an extra 100,000 guests is 274 per day. How many EXTRA staff are needed to deal with that? 3 maybe 4 . Lets say 4 staff x 12 hours a day x 365 daysx $5 per hour. Extra staff costs somewhere in the region of $85,000. extra earnings ( as previously discussed) $1,000,000 minimum. Seems a reasonable return to me.

DC to cut $5,000,000 from your departments wage budget you either had A SHED load of people or not many on minimum wage and I don't mean to belittle the plight of those at the sharp end .

 

[DVCajun]

I took this to heart and just emailed member services. I figure it can't hurt, even if the "Powers that Be" don't read it. Besides, if we all start emailing about the same thing, I imagine it WILL get brought to the attention of whoever needs to know. We have their ear-- let's get heard!

 

[GraceDVC]

I also just emailed DVC with the following:

"As a lover of WDW and a member of the DVC, we wish to request that members be awarded with "Florida resident status," or given the opportunity to purchase "group rate" tickets as are often given to conventioneers, or be able to visit the parks with, possibly, "half day tickets." We have noticed that we now visit the parks less, thereby spending less money at WDW for our meals and gifts. Awarding all DVCers with special rate passes would bring to Disney an abundance of revenue from a large group of people who are consistent year-round visitors to WDW. Why are one-time conventioneers given such special deals? Thinking that DVC members don't need incentives to go into WDW is all wrong; we may love Disney but we also are a cost-conscious group -- that is why we purchased our DVC timeshares in the first place!

 

[trishy]

I would be sooooo happy if DVC had an earlier PS time prior to the general public. This wouldn't cost Disney a cent. Even if it were a day earlier - it would be nice to not have to fight such a huge phone crowd. Just a simple thought from a simple mind.