“All Your Dollar Are Belong To Us”*
How Walt Disney World tries to corner the market on your money
The Destination Disney project, begun a few years ago, has slowly been finding ways to keep every one of your vacation dollars from escaping the grasp of Disney. Implemented in phases, the project is designed to use various methods to entice you to ignore every other hotel, restaurant, and theme park in Central Florida in favor of Disney.
Of course, many Disney visitors find it a major benefit, as they had no intention of doing otherwise. For these folks, Destination Disney has improved their vacations and added value to their Disney stays.
So what is it that Disney has been doing to get people to eschew Universal Studios, Sea World and the restaurants and hotels on International Drive and U.S. Route 192?
Through a combination of incentives for staying at Disney hotels, eating at Disney restaurants and spending more days and money at Disney parks, plus creating a way to make it much more difficult to leave once people arrive, Walt Disney World has started to hurt some of the industries that it once helped to flourish.
Introduced in early January 2005, the Magic Your Way program has provided a huge impetus for travelers to stay, play and dine at Disney rather than elsewhere in the area.
Magic Your Way park passes
While park passes had always carried cheaper per-day prices, the new Magic Your Way price schedule front loads more of the cost, and has an extremely low incremental cost as you get deeper into your stay. This, combined with breaking out options that had previously been included (such as park-hopping and the lack of an expiration date), increase the incremental cost of leaving Disney property dramatically.
Let’s take a quick look at how it works: A family of four (let’s say two adults, a teenager, and a 9-year-old) have come to Central Florida largely to visit Walt Disney World, but also with an interest in seeing Universal Studios and Islands of Adventure. They have seven days to visit the parks. [Note: All prices in this article will be pre-tax for ease of calculations. Sales tax in Central Florida is 6.5 percent.]
They first check the prices for tickets for six days at Walt Disney World, with one day to head up to Universal. The cost for six days at Disney parks is $795, or $975 if they want the ability to hop between parks on the same day. One day at Universal will cost them $257 without the ability to park-hop, $241 if they buy in advance. But they check the numbers and find that if they spend their additional day at Disney instead of trekking up to Universal, the additional cost will only be $8 for all four of them, whether they have park-hopping on their passes or not. That’s a savings of $233-$249 over going to Universal for one day. That’s pretty hefty. That’s more than a couple of days worth of theme-park food for four.
In fact, park passes for Disney have high incremental prices only for days 1-3. Adding a fourth day carries a price of $10 for adults, $8 for children. Adding day five now costs $4 for adults and $1 for children. Each day beyond that (up to day 10) costs $2 for all, except for days 9 and 10, which carry a $1 cost per child.
So the steep entry cost for Disney’s one-day pass has also had the effect of making it harder for Universal to lure people for one day due to the desire to match the price to avoid giving the appearance of being a lesser park.
Universal has been trying to come up with ways of battling that, though. They are currently running an online offer for a two-day, two-park pass for $85, marketing it as being less than the price of a Disney one-day ticket with park-hopper option. By selling the pass online only, it requires visitors to decide in advance that they’re going and commit their money up front, rather than deciding on the spot that “why spend so much to go up to Universal when I can just add one day to my pass here?”
With Disney, since the park-hopper option is a separate charge and is one cost regardless of how many days the pass is for, there’s no longer the question of upgrading a park-hopper pass carrying a larger charge. Instead, there’s an incentive to amortize that cost over a longer pass. Also, separating out the no-expiration option and increasing the cost dramatically as the number of pass days increase, they are effectively pricing it out of the range of most visitors, who would most likely prefer to purchase a couple of incremental days when they return at the low price rather than trying to preserve tickets with a lower purchase price for a later trip. That has the added inducement of “why go somewhere else and spend extra money when we’ve got days left on this pass that will only go to waste if we don’t use them?”
Magic Your Way hotel packages
But park passes aren’t the only lure that Disney holds, and that’s a good thing because they don’t just want you to visit their parks. To get you to stay at Disney hotels, they offer special benefits for those staying at their resorts.
Do you want to get some extra time in the theme parks? Well, if you’re staying at one of the Disney resorts, you can get extra time in the morning and/or evening at selected parks each day through the Extra Magic Hours benefit for resort guests. Want to charge your meals and souvenirs to your room? Have your merchandise packages delivered to your resort so that you don’t have to lug them around all day? Resort guests only.
Don’t want to drive your car to the lot, walk to the tram and ride it to the park? There are buses or other transportation to take you anywhere on property, and if you miss one there’ll be another within 20 minutes. Compare that to the lengthy times between shuttles from off-property resorts, where you may need to make several stops on Disney property before you get to your destination park. You do want to drive? Well, you don’t have to pay the $10 per day parking fee if you’re staying at a Disney resort.
But wait, there’s more!
If you stay at a Disney resort, you’re eligible to purchase the Disney Dining Plan, which allows you to get a table service meal, a counter service meal and a snack for just $37.99 for adults and $10.99 for children ages 3-9. (In 2007, the adult price will go up one dollar to $38.99 while the children’s price will stay the same.) With this plan, regardless of where you eat (unless you’re dining at one of the top-tier restaurants or dinner shows), you’ve already paid for your food beforehand and don’t have to figure out whether you’re over budget or not. And, since you can make dining reservations up to 180 days in advance, you’ll feel somewhat committed to eating at the Disney restaurants because you already have your reservation times set.
Disney’s Magical Express
But let’s look at the big tool to keep people from leaving Disney property once they arrive, Disney’s Magical Express. As an added benefit for those staying on Disney property, they’ll take you from the airport to your resort and back for free. Not only that, but they’ll even take your luggage for you so that you don’t have to schlep it yourself. Just use their special luggage tags, get them on the plane at your airport, and the next time you see them will be in your room a few hours after you land. It’s magic! It’s free! And now you don’t have that nasty expense of renting a car.
Of course, if you don’t rent a car, you’ve got no easy way to head out to another theme park. You can’t make a run to the grocery store for a few six-packs of soda, beer or other beverage instead of paying inflated Disney prices. You can’t run out to your favorite chain restaurant or local place for an inexpensive meal. No trips to the Character Warehouse for discounted Disney merchandise at prices a fraction of their cost in the parks. All your dollars stay nicely on Disney property.
And the local businesses that have thrived in the peripheral market surrounding Disney are all hurting. Car services are cutting staff or going out of business. Rental car companies are raising prices dramatically because so many fewer visitors are renting from them. Local restaurants are having a harder time staying afloat.
But this isn’t new
Of course, local businesses being cut off by Disney is nothing new. Starting way back in 1989, Disney has been picking off competitors by opening their own version of the off-property attraction to keep people from leaving. Much has been said about how the Disney-MGM Studios was developed when the idea for a movie pavilion at Epcot (at the time, still EPCOT Center) grew too big for one building. However, a great deal of the credit also goes to the fact that Universal had announced that they were going to build a studio theme park up the road in Orlando. The Disney-MGM Studios opened in May 1989, months ahead of Universal.
That year also saw more openings aimed at knocking off competitors. In June, Pleasure Island opened, taking business away from—and eventually leading to the demise of—the extremely popular nightspot at Church Street Station. That same day, Typhoon Lagoon opened, siphoning visitors from Wet ‘n’ Wild, the big water park up the road near Universal. When Typhoon Lagoon regularly reached capacity and overflow crowds were again heading up I-4, Blizzard Beach was opened.
Small attractions were also considered targets. Pirates Cove Adventure Golf, with several locations in the area, suddenly found competition in the Fantasia Gardens/Fantasia Fairways complex. And to handle overflow, the Winter Summerland courses were opened a few years later.
After rounding out the competition with local attractions (though the comparison of The Living Seas pavilion at Epcot against SeaWorld Orlando is a bit of a stretch), Disney went against the big draw an hour and a half to the west. Finding that guests were leaving the property to head to Busch Gardens in Tampa, the resort announced Disney’s Animal Kingdom, which opened in 1998.
One complaint that that has been heard from many is the seeming lack of knowledge of anything off of Disney property by any Disney cast member. Those used to concierge desks at hotels around the world are frequently surprised when they ask the concierges at high-end Disney properties about restaurants, attractions or events in the surrounding area and get the response that they don’t know about anything that’s not on Disney property.
Bottom line
But for many, that’s not a problem. In fact, many consider all of these gambits as enablers, helping them to get the best value out of their Disney vacation. In many cases, I’ll admit that I find them beneficial, as well. However, for those looking for variety, it has raised the incremental cost of going elsewhere substantially.
Back when Dick Nunis was running the Disney Parks & Resorts division, he noted that there was plenty of tourist money to go around, and that Disney should be a good partner to the local businesses, so there was no need to do a major build-out of hotels on the Disney property. Of course, that was in a different world, where Disney was not a major corporation beholden to the whims of Wall Street and institutional investors, and where every blip in the company’s performance was not scrutinized mercilessly by the financial press.
With four theme parks, two water parks, 22 hotels and more small attractions to fill, it’s a lot more important for Disney to use every tool at its disposal to keep you and your money on its 47 square miles of property, and even get more money after you leave (that’s why you can buy your park photos using PhotoPass for another month after you leave).
But in the long run, if you were planning on spending all of your time at Disney anyway, then it turns out to be to your benefit. It’ll only run against you if you were planning to take some of your business elsewhere. And that’s just how Disney likes it.
[*Title reference: If the title of this article confuses you, go to Wikipedia to see the five-year-old Internet pop culture reference.]
