Disney and the Monopoly of Magic: Will Theme Park Prices Affect Image?

Walt Disney once said of Disneyland, “What this country really needs is an amusement park where families can take their children to” (O’Leary, 2008). With the creation of Disneyland, and Florida’s Walt Disney World Resort, Walt Disney lived up to this ideal. Six Disney theme parks hold the top six spots for U.S. theme park attendance and its top two parks (The Magic Kingdom in Orlando, Florida and Disneyland in Anaheim, California) attracted over  20 million and 17 million visitors last year (respectively) (Barnes, 2017).

It is no secret that Disney Theme Parks, both domestic and international, have cornered the market on magic, and keep visitors coming back again and again. Salesforce has even identified the main ingredients to Disney’s theme park success which most notably includes the “balance between accessibility and exclusivity” (Wesson, 2014). Meaning, aside from the baseline of experiences that come with a basic theme park ticket, Disney offers more “magical experiences” at a higher cost. Think of it as the more you pay, the more pixie dust comes your way (see Salesforce’s take below).

Where is the bad news in all of this? Attendance at all Disney theme parks was down at fourteen Disney theme parks in 2016 (Barnes, 2017). Disneyland Paris also saw a dramatic attendance dip of 14 percent (Barnes, 2017). According to the Orlando Sentinel, a week at Disney costs a family of four $5,000 on average and a ticket to the Magic Kingdom now costs $1o5 a day (a figure that has doubled within the past decade) (Barnes, 2017). Moreover, The Washington Post estimates that the average Disney-bound family makes over $93,000 a year (a figure way above most middle-class family incomes) (Harwell, 2015).

Naturally, theme park attendance fluctuates from year to year and is based on a number of factors. With Disney’s latest acquisitions of Marvel and Lucasfilm, it is unlikely that Disney will not see more visitors in the near future. However, with Disney park tickets at an all-time high, and with wealthy families experiencing most of the magic, it will be interesting to see if Disney is changing its overall marketing strategy when it comes to its theme parks. Does Disney really want to create an amusement enterprise where all families can “take their children to”? Or, is Disney eyeing families who can stay longer and spend more? One thing is for sure, Disney magic comes with a hefty price tag, and it will be interesting to see if Disney adapts its marketing strategies as ticket prices soar. Will Disney halt the rise of its theme park tickets to keep up with attendance? Is attendance no longer a factor in Disney’s model of success and profit? Or will attendance transcend ticket prices as Disney introduces new key players with Marvel and Lucasfilm? It certainly makes for one “wild ride.”

 

References

Barnes, B. (2017, May 31). Attendance drops at Disney parks worldwide as prices rise. Retrieved on June 25, 2017 from https://www.nytimes.com/2017/06/01/business/media/disney-theme-parks-universal-attendance.html

Harwell, D. (2015, June 12). How theme parks like Disney World left the middle class behind. Retrieved on June 25, 2017 from https://www.washingtonpost.com/news/business/wp/2015/06/12/how-theme-parks-like-disney-world-left-the-middle-class-behind/?utm_term=.3e680dd68fdd

Maxwell, S. (2015, Nov 07). OPINION: Yes, disney prices out many families. why? because it can. TCA Regional News Retrieved from http://libproxy.usc.edu/login?url=http://search.proquest.com.libproxy1.usc.edu/docview/1731600561?accountid=14749

O’Leary, C. (2008). Walt Disney’s Worlds. Retrieved June 25, 2017, from http://www.chrisoleary.com/projects/TheParadoxOfPain/Book/Profile_WaltDisney.html

Wesson, M. (2014, Sept 02). 5 pieces of marketing magic from Disneyland. Retrieved on June 25 2017 from https://www.marketingcloud.com/blog/5-pieces-of-marketing-magic-from-disneyland/

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4 Responses to Disney and the Monopoly of Magic: Will Theme Park Prices Affect Image?

  1. Antoinette` says:

    Hi Brett,
    I found your post to be very interesting mostly because I love Disneyland. Despite the constant increase in ticket prices, people still go to the parks (myself included). It’s one of those things where I expect an increase in price, but I still want to go and I believe that is the same for many people as well.

    I do think with the opening of Star Wars land, the park will actually see more visitors in the near future instead of the opposite because it is appealing to a wider crowd than before (same with the acquisition of Marvel) because they are gathering people who may not be Disney fans, but big Star Wars fans. One thing that Disney does well is that they are always finding ways to provide valuable and new experiences for their guests. Even though I have been going to Disneyland since I was a little girl, I still find new things to do whenever I am at parks, so the value is worth the money for me.

    I know one reason Disney changed their premium annual pass structure and increased the prices is to provide the opportunity for new visitors to visit the parks during the winter season instead of regular annual pass holders visiting. The two weeks of Christmas and New Year are definitely the busiest, and they often have to cap attendance. Since they have to cap attendance, they really want to focus on new visitors because they are more likely to spend more in the parks than returning visitors. The company makes a lot of money on merchandise, so new visitors are more likely to purchase merchandise. At the end of the day, it really is about making money, which I hate to say. However, I am curious to see what the future holds for Disney.

    Great post!

  2. Dena Lawless says:

    Disney is a for-profit company keeping prices near the inflection point of supply and demand. However, it is also the great divider of the “haves” and “have nots” and I find that to be sad for many children. Disneyland is the ultimate experience for many kids who are exposed to the brand through retail shopping and movies. Children know that other children go to Disneyland. I think Disney could do a better job of inviting all children to attend at least once.

  3. Mariam says:

    Hi Brett, you raise interesting questions about Disney’s future marketing strategies. Most theme parks are so expensive nowadays that many families cannot afford taking their children there. For example, Universal Studio’s theme park entrance ranges from $186 to $359 per person, which is still expensive for a middle class family of four. If Disney wants to keep its image, its mission, and what it truly stands for, the company needs to overview its brand positioning before it would damage its brand image.

    Best,
    Mariam

  4. Lia says:

    Hi Brett! You raise an interesting topic – one that is very near and dear as I understand both the guest and corporate positions. In addition to rising prices, amusement parks also have to figure out how to manage the extremely large crowds that continue to grow despite the ticket fees. Many in the entertainment industry do try to make their experiences available to as many families as possible but operational expenses, especially when safety is the top priority, are also increasing, among other costs. I agree it is a tricky balance for an organization like Disney – who has a valuable brand to preserve and sustain across a wide variety of businesses. Thanks for your post!