TALKING POINT Figure 1: Evolution of prices at Walt Disney World from 2000–2015
110 100 90 80 70 60 50 40 30 20 10 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Ticket price ($)
Yearly price increase ($) Source:
mynews13.com,
AllEars.net
The entry price has increased by approximately 130 per cent since 2000, which is an average annual increase of 5.6 per cent. If prices had been linked to inflation, today’s ticket would be $63
Nigel Bland Deloitte
The price to enter a Walt Disney World theme park has increased almost every year since 1971, when entry cost only $3.50. Now the single- day adult price has surpassed $100, does it still represent good value for the customer? First, let’s ask if price increases have been fair. The entry price has increased by approximately 130 per cent since 2000, which is an average annual increase of 5.6 per cent. If prices had been linked to inflation, today’s ticket would be
$63. In real terms, it’s one and a half times more expensive to visit the Magic Kingdom in 2015 than it was in 2000. In the past nine years prices have increased by 66 per
Figure 2: Price comparison between Disney and its competitors $60–$75
Major Destination Parks
n Six Flags n Cedar Point n Alton Towers n Legoland UK n Busch Gardens n Williamsburg
Source: Theme park websites 32
attractionsmanagement.com $85–$95 Florida non-studio parks
n Legoland US n Busch Gardens Florida
n Disney US n Universal
$95–$105 “The big two”
cent, not dissimilar to the 60 per cent increase at the UK’s leading park, Alton Towers. However, when you compare them to some other destination leisure products they appear disproportionate. For example, the average cost of an NFL ticket has “only” risen 35 per cent since 2006 (to $82.50). Comparing headline prices can be misleading, as joint ticketing and discounting have evolved considerably over the period. In Florida particularly, many guests buy packages of tickets with implicit discounts, assuming they have the energy to maximise value for money. In addition, there’s the impact
of new product. Disney points out its recent price rises are supported by new experiences on offer at its parks such as the Festival of Fantasy Parade. So, how does it compare
today? Disney leads the world theme park market in terms of pricing, based on the brand and the quality and depth of investment it makes both in park infrastructure and also in live on-site entertainment. Universal Studios has raised the price of a one-day ticket to $102, only $3 less than
Disney and hardly likely to be a differentiator to consumers. Theme park pricing, as shown in the table [Figure 2], is quite consistent with other parks in Florida at a 10 to 20 per cent discount to the “big two” and major regional parks at about 30 per cent discount. At face value that doesn’t seem like an unsustainable price differential against the other theme parks. Indeed there are many experiences that are more expensive – Discovery Cove, for example. In conclusion, the real test is if customers keep coming and I believe they will. Disney prices have been rising ahead of inflation for many years, and yet Walt Disney reported domestic park attendance rose 7 per cent in the three months ending 27 December 2014 – a company record. Walt Disney World Resorts also reported a 7 per cent increase in revenue year-on- year. This seems to indicate that despite the increasing cost, customers still value the experience and are willing to pay the premium. l
nbland@deloitte.co.uk AM 2 2015 ©CYBERTREK 2015
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