Theme Parks leaving the middle class behind

[momof3kids-Yvonne 596]

http://www.washingtonpost.com/news/business/wp/2015/06/12/how-theme-parks-like-disney-world-left-the-middle-class-behind/

Business

How theme parks like Disney World left the middle class behind

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By Drew Harwell June 12

Some 1,000 persons turned out in Albuquerque, New Mexico to greet Mickey Mouse on Nov. 14, 1978, as he celebrated his 50th birthday with a whistle-stop train tour. (AP Photo/John Holmes)

When Walt Disney World opened in an Orlando swamp in 1971, with its penny arcade and marching-band parade down Main Street U.S.A., admission for an adult cost $3.50, about as much then as three gallons of milk.

Disney has raised the gate price for the Magic Kingdom 41 times since, nearly doubling it over the past decade. This year, a ticket inside the “most magical place on Earth” rocketed past $100 for the first time in history.

Ballooning costs have not slowed the mouse-eared masses flooding into the world’s busiest theme park. Disney’s main attraction hosted a record 19 million visitors last year, a number nearly as large as the population of New York state.

But rising prices have changed the character of Big Mouse’s family-friendly empire in unavoidably glitzy ways. A visitor to Disney’s central Florida fantasy-land can now dine on a $115 steak, enjoy a $53-per-plate dessert party and sleep in a bungalow overlooking the Seven Seas Lagoon starting at $2,100 a night.

For America’s middle-income vacationers, the Mickey Mouse club, long promoted as “made for you and me,” seems increasingly made for someone else. But far from easing back, the theme-park giant’s prices are expected to climb even more through a surge-pricing system that could value a summer’s day of rides and lines at $125.

“If Walt [Disney] were alive today, he would probably be uncomfortable with the prices they’re charging right now,” said Scott Smith, an assistant professor of hospitality at the University of South Carolina whose first job was as a cast member in Disney’s Haunted Mansion. “They’ve priced middle-class families out.”

Tourists crowd around Cinderella’s Castle to watch a performance at Walt Disney World’s Magic Kingdom in Lake Buena Vista, Fla., Thursday, Sept. 2, 2004. (AP Photo/Phelan M. Ebenhack)

As one of the biggest man-made attractions on the planet, Disney World has led the way for the theme-park industry to boost its prices, often on a yearly basis. Universal, Six Flags and other parks in Orlando, Southern California and elsewhere have followed in Mickey’s big footprints, worried they will otherwise look like bargain-barrel runners-up.

Disney and theme-park leaders have defended their rising prices as a logical response to record-setting attendance, with Disney spokeswoman Jacquee Wahler saying the company is “committed to ensuring all our guests have a magical experience.”

“We continually add new experiences, and many of our guests select multi-day tickets or annual passes, which provide great value and additional savings,” Wahler said. “A day at a Disney park is unlike any other in the world.”

But some see Disney’s magically ascending price tag as a reflection of the country’s economy, where stagnant wages and growing inequality have transformed even the way Americans take time off.

“When Walt created Disneyland, this was a middle-class country. But Disney now . . . as far as pricing out the middle class, they think: What middle class?” said Robert Niles, the editor of Theme Park Insider, an industry blog.

“Disney’s made a strategic decision that they’re not going to discount to hold onto people at the middle part of the economy,” he said. “They’re going to set their prices at the top 10 percent of family incomes and make their money where the money is.”

Prices rise, but business booms

American theme parks were built on deep roots in middle-class family entertainment, having expanded as outgrowths of low-cost getaways such as New York’s Coney Island, dubbed the “Nickel Empire” for its thrift.

When Walt Disney, the cartoon and business mogul, opened Disneyland in Southern California in the mid-’50s for $1 a ticket, many expected it would fail. Most amusement parks then were raucous affairs, with free admission.

“I could never convince the financiers that Disneyland was feasible,” Disney famously said, “because dreams offer too little collateral.”

Card Walker, right, president and chief operating officer for Walt Disney Inc., kicks off Disney World’s tenth birthday celebration by welcoming the William Windsor family in Orlando, Oct. 1, 1981. The Windsors were the first to see the Magic Kingdom, when it first opened ten years before. (AP Photo)

But over the years, as Disney’s movie and toy deals helped it explode into a $184 billion behemoth, its theme parks became one of Mickey’s most unstoppable moneymakers. Disney’s parks and resorts’ profits have nearly doubled over the past five years, to $2.6 billion in fiscal 2014.

Advertised for years as a once-in-a-lifetime experience, Disney’s parks have continually set new visitor records: During the winter holidays, its Orlando parks hosted 250,000 guests at a time, chief executive Bob Iger told analysts this year. Attendance rose 17 percent last year at Universal Studios Florida, America’s biggest non-Disney park, because of the success of its Harry Potter-themed mini-towns.

Disney park admissions revenue has grown about 10 percent every year for the past decade, to total more than $5 billion in 2014, financial filings show. (That’s not including park food, drinks or merchandise, which brought in another $5 billion.)

The parks have faced little resistance, even as prices have climbed. Tickets for the Magic Kingdom were increased 6 percent this year, to $105 plus tax, while entrance to other Orlando parks — Epcot, Animal Kingdom, Universal Studios — can’t be bought for less than $90.

Those costs have in recent years helped shunt tourists to smaller regional parks — but many of those have raised prices as well. Six Flags, which runs 800 rides across 18 North American parks, increased prices last spring and now charges $62 at its Maryland park. At American theme parks, per-person spending has climbed 33 percent since 2008, to about $56.23, data from the International Association of Amusement Parks and Attractions show.

Park watchers have worried that the rising costs are blocking out wishful visitors, especially because a third of the Americans visiting the country’s theme parks are younger than 18, data from industry researcher IBISWorld show. In a report this month, the Themed Entertainment Association, an industry group, called “the continued stagnation of -middle-class incomes” one of its biggest challenges.

But as long as places like the Magic Kingdom can pull in more than 80,000 visitors a day, experts said the industry is happy to profit off a richer clientele. In recent years, Orlando tourists’ average household income peaked at about $93,000, more than $20,000 higher than the average U.S. household wage, data from the tourism bureau Visit Orlando show.

The price hikes won’t slow until the park sees a dip in demand, experts say. If anything, Disney is experimenting with how to persuade parkgoers to pay even more. Disney surveys sent last month to guests suggested the giant was considering a tiered pricing structure that would clock peak-time “Gold” tickets, during summer and winter holidays, at $125. “Bronze”-level $105 tickets would allow entrance during less busy times, such as weekdays.

Wahler, the Disney spokeswoman, would not say whether the pricing would change, adding, “We regularly survey our guests on a variety of ideas.” But analysts said it could prove to be one of Disney’s biggest, boldest pricing hikes yet.

“They’ve been aggressively raising pricing because they’re looking at themselves as a premium price, a premium brand,” said Scott Sanders, vice president of pricing for Disney’s parks and resorts between 2004 and 2009.

“Every child feels like they’re entitled to a Disney vacation, and I think they’ve played off that, letting the emotions lay in until the family says to do it. They’re recognizing they can capture demand across the price curve. So why not take advantage of what people are willing to pay?”

Views of the private Cinderella luxury suite at the top of Cinderella’s Castle at Walt Disney World’s Magic Kingdom in Lake Buena Vista, Fla. are seen on Friday, Jan. 26,2006. A night’s stay at the castle was one of prizes given randomly to unsuspecting park guests recently as part of the launch of Disney’s “Year of a Million Dreams” campaign.” (AP Photo/Reinhold Matay)

Catering to ‘Wall Street dads’

Disney says it has made an effort to keep its gates open to all, offering -packages such as multi-day tickets and yearly passes to help balance out the costs. The “Magical Express,” a free shuttle from the airport into the sprawling park’s center, also shepherds tourists past the rental cars and rival attractions that would allow them to spend more time and money outside its gates.

The fun-per-hour value of the experience is still high, Disney executives say, because a tourist can spend all day there (as opposed to, say, a blockbuster movie). They add that higher gate prices have helped Disney invest in new, better attractions.

Disney World last year spent $425 million to expand Fantasyland, marked by the opening of a new Seven Dwarfs Mine Train roller coaster. Next spring at Epcot, Disney will retool its Norwegian-mythology flume ride, Maelstrom, into Frozen Ever After, where visitors will float past a skating Olaf and Elsa in an ice castle, singing “Let It Go” amid a sparkling, simulated snow.

But much of the recent innovation in the theme-park industry, experts said, has gone toward retooling it as a playground for the rich and their kids. The industry has increasingly “stratified its offerings,” said Sanders, Disney’s former pricing -executive, by offering more to attract visitors like “the ‘Wall Street dads,’ who have the obligation to bring the kids to Disney but want to do it as quickly as they can and are least sensitive to pricing of anyone.”

Parks now offer a variety of special upgrades aimed at the vacationing 1 percent, including after-hours parties, dine-with-princess events and guided tours such as SeaWorld Orlando’s “Private Elite VIP tour,” which bumps buyers to the fronts of lines and allows them to feed dolphins, sea lions and rays.

Disney’s two Bibbidi Bobbidi Boutiques sell a $195 pampering for little girls that includes a makeover, hair-styling, a costume and a princess sash.

The luxury has found its way back to the hotel room, as well. The Polynesian Village Resort — one of Disney World’s first themed hotels, where rents started at about $29 (or $171 in today’s dollars) — reopened this year with stilted Bora Bora Bungalows that can cost up to $3,400 a night.

In August, Orlando’s first five-star resort, a Four Seasons, opened on the Disney grounds, with a 1,000-pound chandelier imported from the Czech Republic and rooms starting at $449 a night.

With gilded offerings like that, Disney clearly has something going for it, and few expect the park will lose its luster with American vacationers anytime soon. If anything, the ascending prices could help solve another of Disney’s problems, by thinning its snaking lines and relentless crowds.

But that hasn’t stopped some Disney lovers from mourning a time when the magic of parks like Disneyland, the “happiest place on Earth,” was something nearly everyone could enjoy.

“As a business professor, it’s the right strategy,” said Smith, the University of South Carolina professor. “But as a kid who started there with his first job at 16, steeped in the tradition? It does make me sad that something that was set up by Walt, who wanted all families to be able to spend time together in a fun atmosphere and be able to afford it, is going by the wayside.”

[CCIntrigue...aka Gwen 547]

Much truth in that article. David and I have already been talking about fall 2016 being our last trip there for a good while.  Once our next APs have run out, and since we're on a fixed income, it's getting harder and harder every year to come up with the funds.  

[keith_h 420]

Much truth in that article. David and I have already been talking about fall 2016 being our last trip there for a good while.  Once our next APs have run out, and since we're on a fixed income, it's getting harder and harder every year to come up with the funds.  

 

Rene and I are in a similar situation. I'm retired, she's a public employee. We have finally decided no Disney parks this trip. We have also discussed that after this trip we will likely spend a few years visiting or revisiting regions with a historical bend. We are already planning a trip back up to the Boston/Lexington/Concord/Salem area for next year. Partially see the sites but to also replace the lost photos from our last trip 6 years ago that contained a lot of things from my childhood in Bedford. 

[Travisma 1,317]

It's bad enough with the Disney prices increasing all the time, but what really makes it hard is that the cost of living is skyrocketing as compared to wages/benefits.

[twiceblessed....nacole 433]

Much truth in that article. David and I have already been talking about fall 2016 being our last trip there for a good while.  Once our next APs have run out, and since we're on a fixed income, it's getting harder and harder every year to come up with the funds.  

 

We may be in that boat too.  I think we may try Hersey, PA in 2017.  Sad to think of not going to the Fort... but I've never been to several East Coast States so, could be fun to experience something new.  

[Daverene 14]

We're there also

[Beckers 1,136]

We may be in that boat too. I think we may try Hersey, PA in 2017. Sad to think of not going to the Fort... but I've never been to several East Coast States so, could be fun to experience something new.

Lots of fiends in that area so let us know if you do!

[BradyBzLyn...Mo 2,023]

Lots of fiends in that area so let us know if you do!

 

:wave1:

[Ok Grumpy AKA Cindy~~ 9]

Me too! I know in the last few years we have really cut back

[BouncingTiggers 98]

That's a great article. We are booked to be at the fort for halloween. It will be hard to pull it off with everything going up price.

[lightbikes 73]

"Ballooning costs have not slowed the mouse-eared masses flooding into the world’s busiest theme park. Disney’s main attraction hosted a record 19 million visitors last year, a number nearly as large as the population of New York state."

 

Wasn't it Barnum and Bailey who said there's one born every minutes?

 

 

“Every child feels like they’re entitled to a Disney vacation, and I think they’ve played off that, letting the emotions lay in until the family says to do it. They’re recognizing they can capture demand across the price curve. So why not take advantage of what people are willing to pay?”

 

And that's how they get everyone of us - our emotions.

 

"Parks now offer a variety of special upgrades aimed at the vacationing 1 percent, including after-hours parties, dine-with-princess events and guided tours such as SeaWorld Orlando’s “Private Elite VIP tour,” which bumps buyers to the fronts of lines and allows them to feed dolphins, sea lions and rays."

 

And when are they going to realize that it's the 99% who will come back, again and again, while the 1% will be looking for a newer, greater, more impressive experience?

 

"But that hasn’t stopped some Disney lovers from mourning a time when the magic of parks like Disneyland, the “happiest place on Earth,” was something nearly everyone could enjoy."

 

And that's us - Disney lovers in mourning.   

 

Love the Mouse, hate the Mouse

 

Great article, thank you for finding it 

[twiceblessed....nacole 433]

Lots of fiends in that area so let us know if you do!

 

Will do!  There's a couple things up that way (and on the way) that we would like to see.  If we end up heading that direction, I'll send a shout out for ideas.

 

Of course (since we just purchased our new TT) we are not in the market for anything... but the HUGE RV show up there looks like it would be a ton of fun to walk around :)

[parrothead7368 aka Norm 101]

Will do!  There's a couple things up that way (and on the way) that we would like to see.  If we end up heading that direction, I'll send a shout out for ideas.

 

Of course (since we just purchased our new TT) we are not in the market for anything... but the HUGE RV show up there looks like it would be a ton of fun to walk around :)

 

That RV show is one of the biggest in the country and definitely a two day event if you want to see everything. If you are looking for a new RV this is the place to see what everyone has to offer. We try and go every year just to look.

 

Best Regards,

Norm

[Dalspot ... Karen 21]

I'll second what Norm said - the Hershey RV show is great.  Lots and lots and lots of RV's to hop in and out of and they have a lot of vendors inside the stadium too.... tho why they let the likes of some vendors like Bath Fitters in is beyond me.  The show seems to get bigger every year.  If you think you'd like to camp there at the Hershey campground - reserve 19 months in advance!  They open reservations in February of the year for the following one.  So call in Feb of '16 for '17 reservations.  Sites are very pricey, but they do at least offer a free shuttle to the show.