Airline-Style Dynamic Pricing at Disney World & Disneyland?

Walt Disney World and Disneyland management is working on adopting a dynamic pricing model similar to airlines, in which prices fluctuate depending on when tickets are purchased. This is what’s being reported in a fascinating new Wall Street Journal article. In this post, we’ll discuss that article a bit, and offer thoughts on dynamic pricing at Walt Disney World and Disneyland.

Per this WSJ article, internal projections at Disney demonstrate that even following 5 years of price increases at roughly double the rate of inflation, Walt Disney World and Disneyland could still charge significantly higher prices without driving away too many guests. Interestingly, the key consideration in management’s decision-making is not whether guests would pay higher prices, but how further spikes would be perceived. “The company, however, is wary of appearing to gouge customers, according to theme-park executives and analysts, and going against founder Walt Disney’s vision of affordable family entertainment.”

That article goes on to discuss the current tiered ticket price increase, and discusses up-charge events and how those are being introduced as parallel revenue streams. It also shares some of the fan outrage over recent price hikes. All familiar territory for anyone who has read the comments section of this blog or any online forum. From our perspective, the interesting aspect of the WSJ article is the dynamic pricing model, so that’s primarily what we’ll discuss here…

To be blunt, I question whether Disney is in a position to introduce dynamic pricing a la the airlines. Not whether Disney has the desire to raise prices, because I think we all know the answer to that. Rather, if Disney has the technical sophistication to implement a system that’s truly dynamic. This might seem ridiculous; conventional ‘wisdom’ is that Disney is tracking and monitoring everything we do, and has access to incredibly thorough analytics thanks to MagicBands, My Disney Experience, and other technology that’s part of MyMagic+.

In a FastCompany article from 3 years ago that described Bob Iger’s initial approval of the MyMagic+ system that would overhaul the digital infrastructure of Walt Disney World, there was a passage describing numerous components of the program, including the potential challenges and upsides. The line that probably sticks out from that today is Iger’s blunt and stern statement to Tom Staggs after the MyMagic+ pitch to Disney’s Board of Directors: “This better work…this better work.”

Given Staggs’ fate with Disney following the completed rollout of MyMagic+, we arguably already have our answer as to whether it worked. Looking deeper into the article, there are all sorts of unrealized promises about what MyMagic+ could deliver. “By monitoring where crowds were forming, the company could better optimize flow. Say the sensors noted that one section of Magic Kingdom was becoming overwhelmed with guests: Operators could immediately respond with a character parade around the corner, to disperse traffic and ease strain on cast members.”

I don’t dispute for a second that Walt Disney World has access to extensive guest analytics. Hypothetically, those analytics could be used to ascertain the optimal price point to charge each of us if Disney properly leveraged that data. I dispute to what extent they actually use, and are even equipped to use, that data.

We have heard multiple reports from people with knowledge of different departments that Walt Disney World’s backend systems are largely a patchwork of antiquated methods (calling them “systems” might even be generous) that aren’t able to utilize any analytics from MyMagic+.

The point of this is not to criticize Walt Disney World for how it has harnessed MyMagic+. The resort complex is large, employs so many people, serves so many guests, and has so many moving parts that it’s no surprise that rollout and implementation is still a work in progress.

Moreover, I’m not sure Disney better utilizing this data would necessarily be a win-win for both Disney and guests. There would definitely be some upsides for us, but I fear better crowd management and resource allocation would negatively impact how many attractions savvy guests (like readers of this blog) could experience each day.

But we digress. Circling back to the main point of this, we don’t think Walt Disney World is currently in a position to implement truly dynamic pricing like that utilized by the big players in the airline and hotel industries. (In fact, airlines are looking to introduce even more sophisticated dynamic pricing based upon IP address and your personal flight history.) By this, we mean dynamic pricing in the sense that it’s tied to inventory levels and employs inter-temporal price discrimination.

We think a “dumb” version of dynamic pricing could be introduced, or rather, expanded upon. For hotels, this is partially achieved via seasonal rate charts. It’s also accomplished in a round-about way via discount offers like Free Dining and percentage-savings that are offered closer to travel dates. (Raising prices as dates draw nearer is another matter.)

Disney could expand upon its tiered pricing model (they’ve already announced tiered prices will be coming to multi-day tickets later this year) to achieve more inter-temporal price discrimination. In terms of tickets, a good example of such a strategy already in use would be pricing for Mickey’s Not So Scary Halloween Party (or the Christmas Party). Not only are early-season, weekday tickets cheaper, but there’s a day-of surcharge.

Price-points for that event are no doubt made with assumptions about demand in mind, but hard ticket event prices are set in stone months in advance based on (at best) information from the previous year and an “optimistic” outlook on how aggressive pricing can be for the following year.

The problem we’ve seen with this is that those assumptions are often wildly inaccurate. We’ve attended three consecutive early-season Halloween Parties with sparser attendance than the parties we attended during the Great Recession. These recent parties have occurred at times when attendance was generally up at Walt Disney World, but we have heard reports of discounts on the events being extended to Cast Members due to a lack of demand from guests. (In fairness, attendance for the Christmas Parties is much more consistent–and higher.)

The Pixar Pier Premiere cited in the Wall Street Journal article is potentially another good example of Disney’s pricing ‘methodology’ not working…or at least being imprecise. Since the Pixar Pier Premiere Preview was announced a couple of months ago, there have been follow-up articles promoting in on the Disney Parks Blog. Anecdotally, I’ve seen countless promoted posts across social media (Twitter, Facebook, and Instagram).

While Disney Parks Blog moderates its comments, those social media accounts don’t/can’t moderate replies, and the reception to this event has been poor, and that’s an understatement. Of course, how the vocal minority reacts to events is not indicative of ticket sales, but that there have been blog posts and promoted posts across social media certainly does.

We’ve been discussing the extended paid previews Disney is likely to offer for Star Wars: Galaxy’s Edge for a while, so we won’t totally retread that ground here. It is a near-certainty that Galaxy’s Edge will have paid previews, and we’d assume the price points will be higher than the Pixar Pier event.

We’ve noted that all things Star Wars are a license to print money, and between that and the presumptive high quality of the land, we don’t think Disney will have any difficulty selling out these events on either coast. They could do months of the previews a la the Christmas or Halloween Parties at $400/ticket and may not even have trouble selling out any of them in California.

However, there’s a big difference between Star Wars: Galaxy’s Edge and Pixar Pier. Not just in fan following, but in quality. No, I haven’t stepped foot into either, but I think we can draw some reasonable deductions based on budgets and details that have been released and come to a reasonable conclusion that Galaxy’s Edge will be at least “slightly” better than Pixar Pier. Just slightly. And yet, there’s a $300/person preview for Pixar Pier.

From my perspective, the pricing of the Pixar Pier preview doesn’t so much demonstrate Disney being savvy with up-charges, but Disney being wildly inconsistent with up-charge events. We’ve seen this “throw it at the wall and see what sticks” approach with up-charges for the past few years. Some have been successful and some have failed spectacularly. Quality and pricing certainly matter, and Disney has not demonstrated that it has a good handle on either.

All of this is a very long-winded way of saying that while we agree with some of the premises in the Wall Street Journal article, and don’t doubt for a second that there’s an internal desire to introduce airline-style dynamic pricing, we question some of the near-term conclusions. We also don’t doubt that Disney wants to introduce more up-charge events–it’s really a question of their aptitude for these events. As for dynamic pricing, at some point down the road it’s an inevitability. Whether Disney’s current technology infrastructure will allow for a sophisticated dynamic pricing model prior to the debut of Star Wars: Galaxy’s Edge remains to be seen.

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 about the prospect of dynamic pricing at Walt Disney World and Disneyland? When it comes to price increases, do you just assume that “Disney will find a way”? Do you agree or disagree with our take? Any questions? Hearing your feedback is interesting to us (even when you disagree!), so please share your thoughts below in the comments!

31 Responses to “Airline-Style Dynamic Pricing at Disney World & Disneyland?”
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