Whenever the Walt Disney Company has raised ticket prices for its U.S. theme parks in recent years, the rationale has often been the same: crowd control.
Take for example when Walt Disney World moved to its new “date-based pricing” method for multiday tickets in 2018. The company said it would “allow us to better distribute attendance throughout the year.”
A similar explanation was given earlier this month when single-day tickets to California’s Disneyland went up by as much as 10 percent.
“We continue to provide our guests with a variety of ticket offerings to meet their needs, while helping us to spread visitation, better manage demand and deliver a great experience,” said Disneyland Resort spokesperson Liz Jaeger.
Demand for Disney parks has surged in recent years, with attendance at the Magic Kingdom climbing by nearly 20 percent and Animal Kingdom crowds up more than 31 percent between 2007 and 2017. In the same time frame, one-day tickets to Disney World parks increased by 50 percent.
In other words, the strategy behind the price hikes — crowd control — hasn’t worked, at least not yet.
According to Bill Zanetti, a founding member of the University of Central Florida’s Entertainment Management Advisory Board, Disney “doesn’t really know the maximum price that a guest will pay for a ticket to their theme parks.”
“The only way to even out that demand on a daily basis is to raise prices to find out what the magic number is per day where people stop coming,” Zanetti said. “Once you do that, you can create a scale between a highest possible price and a lowest possible price and then move even more into a variable pricing model to entice people to come on what would traditionally less crowded days.”
Overcrowding in Disney parks has an effect on the bottom line. Dissatisfied customers spend less on food and merchandise and park operators spend more to keep the parks staffed and guests happy. If attendance is relatively the same day to day, Disney can make operations more efficient.
Disney took its biggest step in this direction with the introduction of “date-based pricing” at Disney World in October 2018. Prices for multiday tickets can now vary based on the time of a guest’s visit.
As Disney was quick to point out to Orlando Rising, the change didn’t implement true “dynamic pricing” like hotels or airlines, where prices can fluctuate in real time based on demand. Such a radical change may never happen; the industry has only recently moved towards allowing some seasonal variation in prices, and as Martin Lewison, an assistant professor of business management at New York’s Farmingdale State College, wrote in a 2017 study on theme parks: “Characteristics of theme parks may prevent true dynamic pricing.”
Disney will still need help on spreading out attendance, especially with the much-anticipated opening of Star Wars: Galaxy’s Edge expected to draw huge crowds to Disneyland and Disney’s Hollywood Studios when the 14-acre area opens in both parks later this year.
“Any business person will tell you that it’s a best practice to charge the most you can for a product where you are filling your full capacity,” Zanetti said. “You want to even out supply and demand. This is a simple matter of economics.”
Photo credit: Disney