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Kenversations™
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by Ken Pellman (archives)
October 29, 2003
Ken once again addresses Disney theme park pricing.

Kenversations™ - Don't Be Scared

I gave today's column a bit of a seasonal theme.

It Came From a Lab
I know I just wrote a column that appeared yesterday, but I wanted to address a hot item, something many people here DO seem to think is scary- the controversy over Disney’s pricing system at the U.S. theme parks, the annual passholder program, and frequent customer programs. In a previous edition of this column (click to read), I talked about a “pay for play? system for attractions at Disney theme parks, and that column generated a lot of public discussion and private feedback. One Imagineer told me he printed the column out and sent it to Marty Sklar, the top creative executive at Walt Disney Imagineering.

Michelle “Fabulous Disney Babe? Smith, a former LaughingPlace.com columnist, recently wrote a column exploring the concept on JimHillMedia.com.

The Return of the Pricing System Debate: Revenge of the Coupon Books
I'm well aware that lots of die-hard Disney park fans, the kind of people who can and do spend hours upon hours every week either at Disney parks or reading/talking about them online are wary of bringing in a "pay for play" system (PFP). But stick with me before you skip down to the discussion link or the feedback form.

Bottom-line-minded executives like to prove that an investment made will directly pay for itself fairly quickly and then earn lots of profit. The reality is, under the current “pay one price (POP) only? system, there is no direct, short-term financial incentive to keep many attractions fully operational or open at all, to “plus? attractions, to add attractions to existing parks instead of opening up new parks with a separate admission price.

Guess what? It costs less to operate the park if you run fewer ride vehicles, if you staff as thinly as possible, if you open attractions later in the day and close them earlier in the evening, if you close down some attractions, if you never open a new attraction without closing another (to avoid increasing the overall park operating costs), and if you build less complicated, less expensive attractions to begin with.

If you’re paying the same price to get into the park when three major attractions are closed for renovation as you are when they are open, what is the direct (financial) incentive for park management to keep those refurbishment downtimes short?

The Imagineer's Side: A Nightmare on Ball Road - Escape From Creeping Mediocrity
Imagine you are an Imagineer, and you go to whoever is the President of the Disneyland Resort that week and say “We have this great attraction designed. It has high capacity so it will move a lot of people through, and it is innovative and there’s nothing else quite like it out there.?

The President takes a look at the numbers. “This is going to cost $100 million??

Imagineer: “Yes. That’s not bad for an attraction of this level.?

President: “Our surveys and statistics show that adding this one attraction will not cause enough people to buy unlimited passports [POP tickets] who otherwise would not have bought passports over the next five years because of this one ride to make it worth the investment by paying for itself three times over. We can spend a fraction of that cost on a live show instead, if we want to give guests something new.?

Imagineer: “Yes, but the live show won’t have nearly the capacity that this new ride will have, or the excitement.?

President: “What does that matter? We’re still getting the same number of people through the gate, and that’s where the money is made.?

Imagineer: "Don't you care about making this a better park?"

President: "Of course I do, but I answer to the CEO, who answers to shareholders. Planning for long term growth is good, but I need to show higher profits NOW, or I'll be replaced with someone who will."

Instead of making large capital investments to generate additional income, it is easier to make cuts. Who will stop coming just because a particular show is cancelled, or a particular ride is closed, or the operating hours of an attraction are reduced? Maybe nobody. Certainly not enough people to make a difference at the Main Gate that can be proven to be the direct result of the reductions and closures.

Think about it. You might be angry if Disneyland Park closed the Enchanted Tiki Room and failed to replace it with anything. But would you stop coming to the park? Did you stop with the removal (without a new attraction opening in their place) of the Motorboat Cruise, the Mike Fink Keel Boats, the Skyway, the Submarine Voyage, or the Rocket Rods? Did you stop coming when capacity was reduced on Splash Mountain? Would you stop coming if Pirates of the Caribbean was permanently closed? Did you swear off coming to a Disney park because a proposed attraction was never built, or because plans for an attraction were scaled back? Plus, it is very hard for Disney to survey the people who DON’T come and ask them why, in particular, they didn’t come.

Speaking of surveys- when you sit at the parade route and they ask you why you are there, and you say “the parade?, they put that down as why you made your visit to the park. Or when they ask you why you came and you say “To ride Pirates of the Caribbean?, it gets listed simply as “attractions?.

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