Logic behind Best Rate Program

[susy]

As a masters research student, the first very obvious thing that jumps out is that 80% thing. Of course you hav a high rate of complaints from people who are constantly there as opposed to day visitors.DUH!!!!!

 

[lillygator]

Thats Great dont take offense....Its statistics pure and simple.

CAr Insurance is cheaper for those with higher education......does that mean PHD never get in accidents.....No it means statistically they get in few than the norm. Its a numbers game. Nothing personal

I am not taking offense but can't you show me the stats to back your statement?

 

[n2mm]

For what it's worth, I got home last night to a message on my machine. It was from Disney regarding my emails to them about 2 recent issues. One was the best rate program. The CM said that this new program is very popular and successful, but wanted me to know that it is an ADDITIONAl perk for AP holders and will not replace the old way we booked AP rooms. The released of AP discounted rooms will still occur.

BTW: I also complained about the short notice of the children's dining age changing, but he didn't comment about it.

 

[lillygator]

wow - a real person called!! I am impressed!!

 

[DMRick]

I still see nothing that tells me Disney wants less AP holders coming.
QUOTE]


OH MY GOODNESS.............THEY ARE MESSING WITHTHE AP HOLDERS #1 PERK, WHY ??????????? BECAUSE THEY WANT LESS AP HOLDERS. THIS WHOLE PROGRAM IS TO "Thin out the Herd". THEY WOULD INCREASE BENEFITS IF THEY WANTED MORE AP HOLDERS>

Some people just dont get it. If Disney charged a 10 srcharge for indoor plumbing i swear some people would defend them!!!

Oh, I think you have the wrong person. I'm not defending them (I'm the one who said if they don't give me the perks I want, I'll stay off site and make less trips, and I had no problem reporting it right here, when my daughter's room was robbed while we were there.). But I can't say they are thinning out the herd. Not as long as they are still offering all the perks (they take some away and they offer others, like DDE..that was a real plus). They are giving to us a little different, and in a way that makes my last minute trips harder (assuming they will not be offering the "usual" perks via phone). But I don't know that yet, do I? I don't know that they won't still be offering some discounts, because I'm not at the time where they would ordinarily offer them. And why all caps? I don't have to be screamed at, just because I don't agree with the "thinning".

 

[CharlesTD]

DMR this is the type of thing I am guessing Disney is looking for those that have the AP for certain perks such as room discounts because if those that are looking for the discounts start to stay offsite then it opnes more rooms for rack rate paying customers and by my recolection this is worth more to them than an APer in a room. Yes AP holder often visit more often but not alwyas the case. I know for fact that before we became DVC memebers and my inlaws bewcame DVC members they would visit 3 times a year no AP no DVC rack rate and full pop for passes we ran into some people at OKW this past may that also paid rack rate for a 2 bedroom and come down to the same accomodation 4 or more times a year for 2 weeks at a time all paying rack rate. Disney is trying to free up more rooms to allow for the higher rate paying guests wether they come once or 10 times.

 

[cobbler]

I got a phone call yesterday too. From the Executive Vice President of something. I honestly am drawing a blank at what and what his name even was. He called regarding my email about the new program and I told him that now I understand it was in addition to the current things. He said yes that is true, its an addition not a replacement and glad I understood.

I was really taken aback at the phone call from someone so high up that I totally forgot to express a few of my other concerns (I.E rolling it out on a Friday afternoon with no trained staff to answer questions and also no email notification about this new program at all). He asked where I was learning my information, was it from the internet and where. I did tell him just the passholder website. He said good because something about only people he has talked to and how is the info getting out or something. I really couldn't follow what he was saying. Of course this too could be because I was kind of shocked I got a real phone call and from someone important as well.

He did say if I had any other concerns just to let them know.

Interesting phone call to say the least.

 

[planning06]

It's not just total money---that's only revenue. There are also costs. If two guests each spend the same amount of money, but one guest visits the parks twice as often (and stays in the hotels twice as many nights) then that guest represents less profit. Granted, the fixed costs of the theme parks dominate per-capita costs. This is true to a lesser extent at the resorts. But, each marginal guest does add *some* cost to the operation. So, if a guest that switches from an AP to day tickets spends, say 20% less in total in a year, but visits for 1/3 fewer days, that might represent more profit for the company.

That doesn't make sense. Economies of scale means that the more revenue coming in lowers the total percentage cost per guest per day. Overhead is so large that they need the revenue to cover it. Any loss of revenue will increase the percentage of fixed cost per person per day. Why do you think they offer such low room only rates when occupancy is low? If what you said is true then they would just be increasing their own costs by doing that. They aren't. They are covering fixed costs.

 

[DMRick]

DMR this is the type of thing I am guessing Disney is looking for those that have the AP for certain perks such as room discounts because if those that are looking for the discounts start to stay offsite then it opnes more rooms for rack rate paying customers and by my recolection this is worth more to them than an APer in a room.

You're kidding, right? If I stay on site, I'm eating on site, I'm spending on site, and my value is a lot more than a room discount (and we often bring others, who also spend). For your logic to be right, all rooms would have to be filled. And they aren't. If they were, you would see the other side of POP being built (that will really tell me when things are booming, since they need 80% of rooms filled in the values, before they continue that), as well as new resorts. Remember, we may call and not be able ot get an AP room, but it's seldom we aren't able to get a rack rate room (Christmas, Thanksgiving, Easter)..so they aren't filling up yet. Disney is doing better, but judging by the marketing, they aren't totally out of the woods yet. Full rooms is what hotels want, even if some are at discount (and by offering me an incentive to stay on site, my AP is worth more to them, than just free admittance. If I'm staying off site, I'm spending much less at Disney. Heck, when we stay off site, we are even less likely to do tours, and buy souvenirs, as well as the before mentioned eating). But in any case, I got my phone call this morning (about 5 minutes ago). This best rates is supposed to be in addition to the regular AP discounts. The gal who called me, said they hoped to save APer's time and phone calls, by making sure their valued guests got the best rate, without having to go to the trouble of continuing to monitor. So we'll see.

 

[deerh]

By DeanMrick:You're kidding, right? If I stay on site, I'm eating on site, I'm spending on site, and my value is a lot more than a room discount (and we often bring others, who also spend). For your logic to be right, all rooms would have to be filled. And they aren't. If they were, you would see the other side of POP being built (that will really tell me when things are booming, since they need 80% of rooms filled in the values, before they continue that), as well as new resorts. Remember, we may call and not be able ot get an AP room, but it's seldom we aren't able to get a rack rate room (Christmas, Thanksgiving, Easter)..so they aren't filling up yet. Disney is doing better, but judging by the marketing, they aren't totally out of the woods yet. Full rooms is what hotels want, even if some are at discount (and by offering me an incentive to stay on site, my AP is worth more to them, than just free admittance. If I'm staying off site, I'm spending much less at Disney. Heck, when we stay off site, we are even less likely to do tours, and buy souvenirs, as well as the before mentioned eating). But in any case, I got my phone call this morning (about 5 minutes ago). This best rates is supposed to be in addition to the regular AP discounts. The gal who called me, said they hoped to save APer's time and phone calls, by making sure their valued guests got the best rate, without having to go to the trouble of continuing to monitor. So we'll see.

GOOD POINT!!!

DeerH

 

[DisFlan]

2005 - Holiday Inn, Disney Village ($1.13 per night!!)

Zip-a-dee-dude-da - If we could get $1.13 at HI every night, we'd be there all winter! Man, what a deal. I sorta think Disney can't compete with that one.

DisFlan

 

[Sammie]

I got a phone call yesterday too. From the Executive Vice President of something. I honestly am drawing a blank at what and what his name even was. He called regarding my email about the new program and I told him that now I understand it was in addition to the current things. He said yes that is true, its an addition not a replacement and glad I understood.

I was really taken aback at the phone call from someone so high up that I totally forgot to express a few of my other concerns (I.E rolling it out on a Friday afternoon with no trained staff to answer questions and also no email notification about this new program at all). He asked where I was learning my information, was it from the internet and where. I did tell him just the passholder website. He said good because something about only people he has talked to and how is the info getting out or something. I really couldn't follow what he was saying. Of course this too could be because I was kind of shocked I got a real phone call and from someone important as well.

He did say if I had any other concerns just to let them know.

Interesting phone call to say the least.

Just curious when he asked where you were getting information why did you not mention the DIS??

Not that it matters, as you just let them know you get info here too.

 

[Brian Noble]

Economies of scale means that the more revenue coming in lowers the total percentage cost per guest per day.

But the costs aren't all fixed; there are marginal costs per guest---more guests in the park means more cash registers need to be staffed, more ride vehicles on-line (and CMs to operate them), more food locations open for longer hours, etc. etc. Add to that the diminishing returns of an AP guest: the more they visit, the less they contribute to the per-capita revenue each day. The same is true of the day guest, thanks to the new MYW structure, but the downside is limited---you can't get a single MYW ticket that lasts more than 10 days.

So, it is certainly possible that AP guests are not as profitable as day guests, even if they spend more total money---it all depends on how many visits that money is spread across.

In any event, (and as I said earlier) I don't believe WDW is as serious about cutting the AP population as is DLR. DLR has done this in the obvious way: sharp AP price increases that, on a percentage basis, are much higher than day-ticket increases. WDW has not, and has in fact added perks for APs, notably the ability to purchase the DDE card.

The changes to the AP resort booking process are, I think, only driven by the fact that the resorts are not as desperate for guests as they once were, so there is less of a need for last-minute discounts to put heads in beds.

 

[Zip-a-dee-dude-da]

Zip-a-dee-dude-da - If we could get $1.13 at HI every night, we'd be there all winter! Man, what a deal. I sorta think Disney can't compete with that one.

DisFlan

Actually we were swithched to the Sheraton Safari down the road (HI not done until oct.)......but still given the 1.13 paer night rate for a deluxe view room. Cant complain I got 7 nights at around 10 bucks after tax!!!!!!!!!!

See the thread on the orlando area hotels and attractions board for info on this amazing development

 

[Zip-a-dee-dude-da]

But the costs aren't all fixed; there are marginal costs per guest---more guests in the park means more cash registers need to be staffed, more ride vehicles on-line (and CMs to operate them), more food locations open for longer hours, etc. etc. Add to that the diminishing returns of an AP guest: the more they visit, the less they contribute to the per-capita revenue each day. The same is true of the day guest, thanks to the new MYW structure, but the downside is limited---you can't get a single MYW ticket that lasts more than 10 days.

Correct .......this is the same phenomon behind the World shocase opening late at epcot and future world closing early.......and why the Animal Kingdom closes at 5...........It costs more to operate than the money being brought in

 

[planning06]

But the costs aren't all fixed

Of course not, but by far the largest portion of costs are fixed costs.

there are marginal costs per guest---more guests in the park means more cash registers need to be staffed, more ride vehicles on-line (and CMs to operate them), more food locations open for longer hours, etc. etc.

Very marginal IMO. Yes, you need more ride vehicles on line and CMs to operate them but that is a drop in the bucket. The other things like cash registers and food locations open, well the more people in WDW, the more people are spending on souveniers and food which means more profit.

Add to that the diminishing returns of an AP guest: the more they visit, the less they contribute to the per-capita revenue each day. The same is true of the day guest, thanks to the new MYW structure, but the downside is limited---you can't get a single MYW ticket that lasts more than 10 days.

But it is very limited. If most of your AP guests never stayed onsite, shopped, or ate at WDW or DL then you would have a point. AP guests for the most part still do these things and do it more often because of the simple fact that they have an AP.

So, it is certainly possible that AP guests are not as profitable as day guests, even if they spend more total money---it all depends on how many visits that money is spread across.

Possible, yes of course. It is still my opinion that in total APers still bring in more total profit (yes profit) over a single year than if they did not have an AP. You can argue and say that a person paying rack rates who buys MYW tickets is more profitable but that is missing the point. If you get a person to buy an AP and that causes the profit you gain from that person to increase by 10% over the year then that is good business.

I think it is hard for any of us to say for sure the financial impact of the current AP population without knowing some insider information and doing some number crunching. From my perspective, it seems that overall, having a large AP population is a good thing for Disney.

 

[lillygator]

Zip - ??

 

[lillygator]

Thanks for the pm Zip - I am not a link hound...but when people post statements such as you did - I like to see the actual proof not based on what you have heard.....

and I am not disputing it I just want to see the "stats"....

 

[cobbler]

Just curious when he asked where you were getting information why did you not mention the DIS??

Not that it matters, as you just let them know you get info here too.

Honestly, I really don't know.

 

[airjoe]

The new "Passholder Best Rate " is in ADDITION TO the passholder rates as they were originally offered. If you don't like the new system just call the reservation center like you always did.

Think about this. Why would a business, any business, want to have less customers??? Even if Passholders spend less, and I'm not convinced that they do, they still spend money.

This new system addresses some of the objections of Passholders:

1. You don't have to tell your life story everytime you want to check availability.
2. You can check as often as you wish without having to worry about long hold times and large phone bills.
3. Sometime's when there is no availability for certain dates it is due in part to Passholders holding several reservations and then cancelling or modifying them right before the travel dates. This is unfair to other passholders. By having the non refundable deposit and the modification fee (only if the total price goes down) some of this will be eliminated.

People should not always look for negatives but concentrate on the positives.