TALKING POINT
Alice Davis, managing editor, Attractions Management THE $100 BARRIER
Disney has pushed its headline ticket price up to $105 in a bold move that got the industry talking. What does this mean for pricing in the sector?
W
alt Disney World’s Magic Kingdom crossed the $100-mark for its headline one-day ticket price in February this year, when the
cost of a one-day one-park ticket was increased from $99 to $105. Universal Orlando Resort followed suit, raising its one-park adult ticket to $102. This was a bold move by Disney, not because of the price rise – ticket prices are increased every year – but because it crossed the $100 threshold. In return, guests are getting more for their money. In the past fi ve years, Disney has invested more than $8bn into improving its US parks and opening new attractions. So far, however, price hikes haven’t
deterred visitors. The jump to $105 represents a 6 per cent price increase, and in 2013-2014 the ticket increased from $90 to $99 – a 9 per cent hike. Despite this, there’s been strong attendance at Disney’s US parks and resorts, with Walt Disney World Resorts posting a 7 per cent increase in revenue year-on-year.
At Disney and Universal, a $100-plus price tag is partly symbolic, as many guests won’t pay the headline price, due to the plethora of special tickets and marketing offers available, but for regional parks, changes in pricing require more caution in implementation to avoid upsetting regular customers.
Walt Disney World in Orlando isn’t a typical park – it has data analysts working on every decision it makes and a strong tourist market to draw on, so there’s a limit to how transferable lessons can be. So what’s the industry’s reaction and what should you look at when pricing your tickets? We asked the experts.
Lesley Morisetti Morisetti Associates
Optimising admission prices is fundamental to the successful operating performance of visitor attractions. Setting the price too high can depress attendance; setting it too low can reduce profi t. Hence attractions place great importance on price strategy, taking many factors into account in setting annual price changes, including: ■ Mission – is your objective to optimise volume or value? Some non-profi ts are required to do the former, most commer- cial attractions do the latter. ■ Changes to the visitor offer – is anything being added which supports an above infl ation price increase?
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■ Your visitors’ views – how price sensitive is your current and potential customer base? ■ Your discounting strategy – the lead price needs to have suffi cient headway to allow discounts to be applied for web sales, concession tickets and promotions, as well as account for annual pass holders.
■ VIP access – will some of your audience pay premium prices for added value options? ■ Competitor pricing, including perceived price per hour – based on current prices and any information on competitors’ future plans ■ The economy – projections for infl ation and currency exchange rates (for attractions with international markets) So crucial is setting the right price that attractions are increasingly turning to con- sumer research to test the price sensitivity of their key audiences, fi nding the optimum point between being so cheap it raises concerns over quality and so expensive they’re not perceived value for money. Once prices are set, it’s
crucial to monitor visitor response. Downward trends in customer satisfaction ratings for value for money and enjoyment can provide an early indicator of dissatisfaction, allowing you to adjust prices before they sub- stantially impact attendance. There’s been much debate about Disney and Universal breaking the $100 barrier. For any attraction, deciding when to cross one of those landmark price points is tough. Undoubtedly it’s easier to do this in a year when you’re providing a substantial addition to the experience, enabling you to cross the barrier confi dent that you’ll continue to provide excellent value for money.
lesley.morisetti@
morisettiassociates.com AM 2 2015 ©CYBERTREK 2015
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