Disney Responds to Rising Costs Criticism

As we discussed earlier this week in Walt Disney World is Worried About Its High Prices, concerns about Disney pricing out the middle class are no longer just a controversial topic among fans. Now alarms are also being sounded inside the company, as executives fear price increases are alienating fans and souring sentiment.

This was first reported by the Wall Street Journal, which spoke with current and past employees of the Walt Disney Company who were involved with discussions about pricing and corporate strategies for the theme parks. According to WSJ, “some inside Disney worry that the company has become addicted to price hikes and has reached the limits of what middle-class Americans can afford.”

People within the company who are familiar with pricing say that “internal discussions over whether Disney parks may be losing their grip on the hearts and wallets of families with young kids have become more frequent.” And then there’s this: “Starting in late 2023, the company’s own internal surveys of Walt Disney World and Disneyland guests found that the number of them planning return trips had ticked sharply down.”

That’s just the tip of the iceberg. The full piece delves into the average vacation costs and contains much more color commentary from inside the company about pricing. The WSJ article also strikes us as strikingly similar to a previous WSJ piece from November 2022 that was published shortly after the Chapek ouster.

In that, Bob Iger made it clear that he had been “alarmed” by price increases at Walt Disney World and Disneyland, and was concerned that Chapek was “killing the soul” of Disney. That article opened the floodgates for other pieces from the New York Times, CNBC, Hollywood Reporter, and other outlets I’m probably forgetting.

Even more notably, a little over a month later Walt Disney World made 3 big changes to restore value and improve flexibility, including the return of free overnight parking at the hotels. Mere months after that, the company announced 5 major improvements to make your visit easier. More recently, there was the switch from Genie+ to Lightning Lane Multi-Pass along with other queueing changes aimed at better balancing the interests of all guests. Otherwise, not a whole lot has happened to improve the guest experience in the last 365+ days.

Suffice to say, we’re expecting two things as fallout from the WSJ article. The first is similar reporting from the NYT, CNBC, THR, etc. Many of the journalists at those outlets are well-connected, and they’ve undoubtedly already reached out to their sources for fresh angles on this story.

The second is a response from Disney, much in the same vein as they responded in early 2023–with action. Well, the second thing happened before the first, at least on a superficial level. On its corporate website, the Walt Disney Company indirectly responded to concerns and criticism about costs with the following:

“To all who come to this happy place, welcome. Disneyland is your land,” Walt Disney said when he dedicated Disney’s first theme park in 1955. It’s been the company’s motto ever since, and the reason why Disney has remained the leader in family travel for seven decades and counting.

“The number-one thing we hear from the millions of guests who visit our parks each year is how much a Disney vacation means to them, and we intentionally offer a wide variety of ticket, hotel, and dining options to welcome as many families as possible, whatever their budget,” Josh D’Amaro, Chairman of Disney Experiences, said.

“We also know that, in inflationary times, it’s especially important to give families ways to save on their visits. We haven’t increased the lowest-priced ticket to Disneyland since 2019, and we recently introduced a kids’ ticket for as little as $50, just to name a couple of examples.”

Ever since opening day at Disneyland nearly 70 years ago, generations of families have been making memories with Disney that last a lifetime. And through the decades, Disney has always created new ways for guests to save on their vacations.

“We know our parks create life-long memories for families and we’ve worked hard to make a Disney vacation accessible to guests of all income levels,” Hugh Johnston, Chief Financial Officer, The Walt Disney Company, said. “With strong guest satisfaction scores and intent-to-visit ratings, our parks remain the most popular offering in the industry.”

The company went on to explain that it understands the “financial pressures that families face across every part of their spending, including how they travel” and that they listen to guests and “use that feedback to introduce new offers and promotional deals, which provide significant savings.”

Disney went on to list the many special offers currently available at both Walt Disney World and Disneyland, including the usual suspects, such as Florida and California resident discounts on tickets, free water park day at WDW, and various room discounts on both coasts. They also mentioned the popular Free Dining Plan Deal at Walt Disney World and the Kids’ Ticket Deal at Disneyland.

Of those, the only one that’s persuasive as being a good value for the average family is the $50 child’s tickets. That’s the only admission deal for the general public, and still presents the problem of how non-Californian adults are supposed to visit on a budget. It’s not like the kids can go unattended, which is precisely why Disney offers this deal–it’s a promotional hook to get families to visit and spend more on everyone else.

All of the other discounts for the general public require large financial outlays. No one is staying on-site at Disneyland to save money. Both Free Dining and the up to $200 off rooms promos lock guests into pricier packages, so that’s not a good example if you want to underscore bottom dollar prices to visit Disney.

Ironically, the best deal of all to feature would’ve been the room-only discounts at Walt Disney World, highlighting how inexpensive Value Resorts can be and what they offer versus comparable off-site accommodations. Disney could’ve boasted about how, after currently-available general public discounts offering up to 30%, you can “stay in the magic” for rates starting at only $125 per night this spring and summer (at All Star Sports).

That’s precisely what I discuss in my analysis of these discounts when encouraging those on a tight budget to consider the Value Resorts because their inclusive offerings can make them less costly in the long run. You’re going to be hard-pressed to do better than the rates Walt Disney World is offering at Value Resorts. For instance, ~$125 per night for the All Stars–with the new rooms, Early Entry, transportation, and free parking–is inexpensive enough that we don’t even recommend readers consider staying off-site to save money (peak season when rates explode is a different story).

If I were Disney, I probably also would’ve used that press release to tease the return of the 4-Day, 4-Park Magic Ticket at Walt Disney World. That’s an exceptional general public admission deal, and it’s almost assuredly returning within the next month or so. (Last year, it was announced on March 12 and valid for use from April 2 through September 22.)

Following that last point in the press release, Disney continues by explaining that offers like a child’s ticket for as low as $50 at Disneyland “can make that first trip to Disney possible for many young families. And the memories they make are one-of-a-kind.”

Disney went on to cite a recent survey of 3,531 U.S. adults by Morning Consult, commissioned by the Walt Disney Company, revealed that a strong majority of families with children under five:

• Said nothing compares to a Disney vacation…
• Said that a visit to a Disney park gives memories that last a lifetime and can’t be replaced…
• …And those that had visited Disneyland or Walt Disney World felt the vacation was worth the expense

The “commissioned by the Walt Disney Company” part is probably all you needed to read. Even so, we’re not particularly concerned with surveys–just as we weren’t in the previous article. Word questions the right way and you can use them to make whatever point you set out to “prove.” Disney is masterful at this, and many of its surveys are less fact-finding missions and more supporting a preordained conclusion.

My reaction to the press release is mostly confusion. I’m surprised that Disney opted to “refute” the article, even if indirectly. I’m even more surprised that they did so in such a superficial manner, not by making any meaningful changes but by pointing to things that already exist. I suspect they’re going to have to do that as well, at some point soon.

If the status quo were a compelling argument, Americans wouldn’t have concerns and criticism about costs and Disney pricing out the middle class. People would simply be taking advantage of the existing special offers, attendance and occupancy would be booming, there would be no concerns about guest goodwill or brand damage, etc.

The very existence of this press release is proof of the problem, not the other way around, and it will allay zero concerns about high costs and Disney. Since it’s on the corporate website, I can only assume the intended audience is Wall Street. Will concerned analysts and investors find this a persuasive rebuttal? I assume not. In general, Disney’s responses–both here and to WSJ–have felt a bit Bluthian.

This response reminds me a lot of the infamous “Nahtazu” campaign–if you have to make a concerted effort to explain why Animal Kingdom was not like a zoo…it was too much like a zoo. Here, if Disney needs to explain how the parks are accessible to guests of all income levels…they actually are not.

There’s a fancy phrase that I like, res ipsa loquitur, which means “the thing speaks for itself.” It’s normally used in other contexts, but I’ve taken to it when debating Disney. I like the saying because fans have a tendency to get too in the weeds with all things Disney; we can forget that the regular park going public doesn’t put as much thought or have as extensive knowledge as we do, ability to work the system, etc.

My favorite example is using it to argue that Dino-Rama sucks (because it does), despite fan claims to the contrary about backstory and other assorted nonsense. The thing, a rundown roadside carnival, speaks for itself. Or at least, it did before it met its demise. Which is why it met its demise. (Rest in pieces, Dino-Rama.)

Anyway, same applies here with Disney Parks’ pricing. I would take that a step further and argue against their specific example of young families. The whole reason Disneyland is offering that $50 kids ticket deal, or that Walt Disney World lowered the price of the Disney Dining Plans for children last year, or any number of other offers targeted at kids, is because fewer families with small children can afford to visit the parks.

This isn’t just me theorizing. One of the reasons Disney has been building more bars & lounges, adding adult-centric attractions & entertainment, and otherwise chasing the convention-goer and childless millennial demographics is because they’re making up an ever-increasing slice of the pie for Walt Disney World and Disneyland.

We first heard this explanation back in 2017 or 2018, and if I recall correctly, one of those years was the first time ever that guests without children surpassed those with. Although I haven’t heard much since, I highly doubt the trend has reversed itself. It makes sense, at least for the short-term. Twenty and thirty-something DINKs have more disposable income than their cohorts with children.

It should go without saying, but there are negative long-term consequences of this approach.

One of the key points we buried towards the end of the very lengthy ‘Disney is Worried About Its High Prices’ article is that “intent to recommend” metric is very important–on par with guest satisfaction and intent to revisit. We have heard from more and more fans who, even though they’re still going to Walt Disney World for emotional or sentimental reasons, have stopped recommending it to friends. This was reinforced in the reader comments to the high prices post, where several people said this describes them perfectly. Some admitted to hiding their trips from friends or being embarrassed about them.

It used to be the case that current Disney fans were excellent, unpaid brand ambassadors for the company–introducing Walt Disney World to others, making new fans in the process. What we’ve heard is that–due to higher prices, greater complexity of visiting, less value for money, and more–fewer readers of this site are recommending Disney Parks to others. This is really significant, and under-discussed. People trust the word of one person in their own social circles more than that of one-thousand social media influencers.

As a retired Childless Disney Millennial and current Disney Dad, I’d take this a step further and say there are a couple of unique ways this ‘intent to recommend’ angle applies to families.

The first is that, as a general matter, I would hazard a guess that childless adults are less of brand advocates for Disney in their real life social circles. When we were in that position, we weren’t proactively extolling the virtues of the Disney Parks to our normie friends. People knew us as Disney Adults, but it just didn’t come up. Separately, in our Disney friend circle, it came up constantly. But no one in that group needed a sales pitch in the first place. They were in just as deep as us.

Now that we have a daughter, we’re in parents groups and that sort of thing. We have a new social circle that is, unsurprisingly, families with children our daughter’s age. In these groups, Disney and other family-friendly activities come up constantly, with people soliciting advice and feedback from one another about things to do and products to purchase. (This constitutes a surprising amount of conversations!) I can only speak to our own anecdotal experiences, but I’d imagine that an enthusiastic recommendation of Disneyland or Walt Disney World in these groups would go much further than in a social circle without kids.

While I suppose that angle is arguable and anecdotal, there’s also the more obvious and undeniable one. Parents take their kids to Disney, those kids form emotional bonds, grow up visiting, and take their own kids to Disney. Rinse and repeat. This is ‘intent to recommend’ in its most organic and unadulterated form. Countless multi-generational ‘Disney Families’ exist due to this dynamic, including both of us–and probably many of you!

Pricing out families with small children is the surest way to break the cycle, resulting in future generations that have no emotional connection to Walt Disney World or Disneyland. There are hugely negative long-term ramifications to pricing out families, and it seems like there’s some degree of concern about this internally.

However, it’s not a problem that will play out in the short-term. So Wall Street, with its quarterly myopia, may not care. And given the average life cycle of corporate leadership, current Disney management may be long gone before those particular chickens come home to roost. Accordingly, there may not be much of an incentive for anyone to reverse this.

For what it’s worth, all of this is not to cast aspersions on Disney Adults or suggest the company should turn its back on them in favor of families. Absolutely not. DINKs are incredibly lucrative and U.S. demographics trends alone suggest they will be increasingly instrumental in the future. If anything, Disney should be doing even more to cater to these adults with disposable income. But at the same time, the company needs to figure out how to maintain accessibility for families, as they are Disney’s bread & butter, and will ensure generational nostalgia continues to drive future visits.

Bringing things full circle, all of this is also why it’s worse for Disney to lose fans on an emotional level than a financial one. Many people from both cohorts–the Childless Disney Millennials and the Disney Families–are there because we grew up hooked on Disney, forming that sentimentality and nostalgia as kids. If costs were all that mattered, the damage would be easy to undo. Disney could turn its big pricing dial down, or pull that giant discount lever and entice people to return in greater numbers. But when you lose fans emotionally, the likelihood of that damage being undone is far lower–and it can become generational.

Planning a Walt Disney World trip? Learn about hotels on our Walt Disney World Hotels Reviews page. For where to eat, read our Walt Disney World Restaurant Reviews. To save money on tickets or determine which type to buy, read our Tips for Saving Money on Walt Disney World Tickets post. Our What to Pack for Disney Trips post takes a unique look at clever items to take. For what to do and when to do it, our Walt Disney World Ride Guides will help. For comprehensive advice, the best place to start is our Walt Disney World Trip Planning Guide for everything you need to know!

YOUR THOUGHTS

What do you think of Disney’s (indirect) response to the criticism of price increases pricing out the middle class? What would you like to see done to improve the guest experience and satisfaction at Walt Disney World? Think that runaway price increases are the big concern, or is the value proposition an equally or more significant matter? Do you agree or disagree with our assessment? Any questions we can help you answer? Hearing your feedback–even when you disagree with us–is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!