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  1. #1

    • Darkbeer
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    Disney passes putting squeeze on rival parks - Orlando Sentinel, 8/10/06

    http://www.orlandosentinel.com/news/...l=orl-news-col


    I remember when Mickey Mouse took out Church Street Station with brutal efficiency by building Pleasure Island. In a few years, downtown's bustling tourist spot was deserted.

    I hope Universal Orlando and SeaWorld paid attention. They're next.

    The tourism industry is undergoing a tectonic shift, and the Mouse is positioning himself to deal with it.

    Tourism has gone from an economic thrill ride to "mature industry."

    There will be no new parks. There will be no huge annual increases in the number of visitors.

    To keep those turnstiles turning faster, or even to keep pace with past attendance figures, the theme parks must capture a greater share of the market. That means they must cannibalize one another's crowds.

    This is exactly what Disney had in mind when it came out with a new pricing structure in January 2005 called "Magic Your Way."

    Naturally, it involved a price hike for daily admissions. But then came this carrot. Prices would plunge the longer you stayed at the parks.

    For example, a basic three-day pass costs $192. For only $10 more, you get admission for a fourth day. For only $4 more, you get a fifth. From there, it is only $2 more for each additional day up to 10 days.

    Disney has four parks. The average out-of-state visitor stays about six days. One might assume this average visitor would spend a day at each Disney park, then maybe head to Universal and/or SeaWorld.

    Now plug in Magic Your Way.

    Let's say your family of four is visiting Disney for six days. You've been to each park and now are considering options for days five and six. With Disney's pricing, you could get the whole family into the Disney parks -- there's still plenty left to see -- on both days for a total of only $24.

    But if you took the family to Universal Orlando and/or SeaWorld for those two days, the tickets could cost you about $500.

    Has this had an impact?

    Last year, attendance at SeaWorld was stagnant, while attendance at Universal Orlando plunged 8.5 percent.

    But attendance at Disney parks was up between 5 percent and 6.5 percent.

    I think this success was behind Disney's recent price hike, the second this year. The Mouse smells blood.

    Not only does this help make up for lost revenue from the discounted days, it also makes the longer stays an even better deal.

    The major theme parks have a tradition of matching one another's price increases. Nobody wants to look like a discount attraction.

    But Disney has put SeaWorld and Universal in a box. If they do raise prices, they simply make Magic Your Way a better alternative to their parks.

    Universal and SeaWorld also have multiday-pass discounts, but they are not multiday destinations.

    In the long run, the only way they may be able to compete is to hold down prices on their one-day admissions. The Disney squeeze is on, as both are offering various discounts. SeaWorld now is offering adult tickets at child prices on its Internet site.

    When you cut a company's revenue growth, you cut its ability to invest in the product. This could give Disney what it has long wanted for its competitors, and what Universal and SeaWorld have long tried to avoid -- second-tier status.
    Check out my Theme Park Photos at http://darkbeer.smugmug.com

  2. #2

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    Re: Disney passes putting squeeze on rival parks - Orlando Sentinel, 8/10/06

    Is pricing is reflected in hotel rates? one wonders...
    Check out my other blog:

  3. #3

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    Re: Disney passes putting squeeze on rival parks - Orlando Sentinel, 8/10/06

    Wow. Wish I could go out to Orlando...

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    Re: Disney passes putting squeeze on rival parks - Orlando Sentinel, 8/10/06

    the reason more people came to disney was the new attractions and universal and sea world hadn't added anything new. most of the people coming to orlando these days are repeat people so they don't want to do the same thing every year.

  5. #5

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    Re: Disney passes putting squeeze on rival parks - Orlando Sentinel, 8/10/06

    I agree with Cmash, the other parks are suffering due to a lack of major additions or improvements. IOA hasn't recieved a major new attraction (or even a minor one for that matter) in years, and the attendance (as well as public opinion) reflects that. It was once considered the top theme park in the world by many fans who are now getting bored with the lack of updates. Not saying the Disney strategy has absolutely nothing to do with what is going on elsewhere, just that there are bigger reasons. When deciding where you wish to spend your vacation you look at all of the factors. Price is one for sure, but what does each destination have to offer is just as important. I think it's pretty straight forward that many people would choose a few extra days at Disney for such a small price versus yet another ride on the same attractions over at the other parks. If Universal can offer something new and exciting, people will pay to come back there again.




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    Re: Disney passes putting squeeze on rival parks - Orlando Sentinel, 8/10/06

    Quote Originally Posted by Xharryb
    I agree with Cmash, the other parks are suffering due to a lack of major additions or improvements. IOA hasn't recieved a major new attraction (or even a minor one for that matter) in years, and the attendance (as well as public opinion) reflects that. It was once considered the top theme park in the world by many fans who are now getting bored with the lack of updates. Not saying the Disney strategy has absolutely nothing to do with what is going on elsewhere, just that there are bigger reasons. When deciding where you wish to spend your vacation you look at all of the factors. Price is one for sure, but what does each destination have to offer is just as important. I think it's pretty straight forward that many people would choose a few extra days at Disney for such a small price versus yet another ride on the same attractions over at the other parks. If Universal can offer something new and exciting, people will pay to come back there again.
    The article, though, is saying that the Disney strategy is putting the squeeze on the other parks so that they cannot invest in new attractions.

    That's the danger if you try to be a parasite to Disney's business; Disney can cut you off.

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    Re: Disney passes putting squeeze on rival parks - Orlando Sentinel, 8/10/06

    i think universal is heading in a new direction. I read that they are planning to lobby the legislature in order to get some of the production laws changed so they can do more production at the studios. that would offset the lag in attendance at the studios. also there is a shortage of production spaces in north america right now. with so many cable channels now doing their own original series, hollywood and canada can't keep up. too bad disney is turning their soundstages into ridescause they could make more money renting them out than having kids shoot at things in them.

  8. #8

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    Re: Disney passes putting squeeze on rival parks - Orlando Sentinel, 8/10/06

    Quote Originally Posted by PragmaticIdealist
    The article, though, is saying that the Disney strategy is putting the squeeze on the other parks so that they cannot invest in new attractions.
    Yeah it is, but the article fails to mention that Universal is 50% owned by General Electric and Sea World is owned by Anheuser-Bush. Disney is a mom-and-pop organization compared to GE. These folks have deep pockets. If they wanted to support their theme park divisions with new rides and shows, they could. Lately, GE has chosen not to because Wall Street doesn't look at theme parks as a good investment the way they used to. Disney considers theme parks central to their business. GE makes hardware...big time hardware. Theme parks aren't where they want to put their money. If Uni and Sea World become second class parks, they have only their parent companies to blame.

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    Re: Disney passes putting squeeze on rival parks - Orlando Sentinel, 8/10/06

    universal is almost totally owned by nbc so I think GE holds a bigger steak than 50%. also universal is also raising it's rates to equal disney. anheuser-busch entertainment is a wholy owned division of anheuser-busch that is responsible for all sea world parks and its busch gardens properties. currently that is six parks they own and run.

  10. #10

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    Re: Disney passes putting squeeze on rival parks - Orlando Sentinel, 8/10/06

    Lets not forget a lot of it is planning, when Walt mad his now famous land grab in central florida he was looking to the future expansion of the parks and did not want to the experience to be diminished by cheap hotels and other non Disney properties right up against the gates of the park like he was in california. The scope, theming, ability to bring in new characters and movie elements to the existing parks as well as major improvements while retaining classic elements have all been key to the disney sucess.

    I think the Disney rides, especially the classic ones like the haunted mansion, Pirates, and others are much better themed (or rather imagineered) than in any other park I have visited in Orlando or elsewhere.

    Also lets not forget Disney now has multi generational support with parents and grandparents who remember the parks as a child returning with their kids. The other parks lack that element due to their "new kid on the block" status.

    You add up everything disney has to offer in terms of themed resorts, emersive parks, and just sheer scope and size than the others. New attractions help, but Disney has a huge fan base that just keeps coming back year after year and probably will continue to do so. Even if GE and others pour tons of money into the other parks they lack the real estate, fan base, characters and the Imaginers to beat Disney long term.
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