So I heard this second hand, from someone who works within Disney's finance unit. Take with a grain of salt, but it is fairly credible.
It is public knowledge that Disney wants to wean the public off discounts.
Their finance team has apparently been running models of various scenarios but all scenarios involve a dramatic scaling back of discounts.
Within the assumptions they are working with, are that Disney value resorts are already a better value than off-site hotels, even at rack rate, when Disney-provided transportation is factored in.
Supposedly, there has been intense scrutiny of free dining discounts, especially at value hotels -- For a family of 4, who is paying around $95 for a room, why give a $140 "discount" in the form of free dining. Disney executives are supposedly confident that when those prospective guests look at off-site comparisons, they will find that staying onsite at Disney is still econimically attractive.
While Disney knows that their deluxe resorts are priced far above the competition, they are concerned about undercutting themselves--- giving discounts to people who are willing to pay full price. They also see questions about the valuation of American currency, and are finding international guests more attractive for the deluxe resorts. Their models are suggesting that they will only have a small drop off in occupancy without American public discounts, which they can fill up with targeted discounting (PINs, international discounts, military discounts).
They are also looking closely at the "psychology" of the pricing. For example, in the past, they made the 4th+ days of their tickets ultra cheap, to change the psychology of the Disney traveler -- to expect a week long Disney experience, instead of a 2 day experience. They believe they were successful, so they are now raising the ticket prices on those 4+ days.
Similarly, they are worried they may have gone too far in creating expectations of discounts with the public. And they really want to be able to charge full price when they open the Fantasy Land expansion. So, they are considering whether it is worthwhile to go through a bit of short-term pain, to wean the public off discounts. Accept lower occupancy temporarily, with the hope that the public will start booking again, after they realize discounts aren't coming.
Finally, *if* they do offer discounts.... they are examining newly packaged discounts that will not actually cut significantly into revenue, and will continue to change buying habits. The "memory package" was a partial roll-out of this philosophy -- Encouraging people to buy the Photo Books, in the hopes that they will like them and continue to buy them in the future. They have also examined discounts that require purchase of Park Hoppers, Water Park tickets.
Anyway, take all this with a grain of salt.
It is public knowledge that Disney wants to wean the public off discounts.
Their finance team has apparently been running models of various scenarios but all scenarios involve a dramatic scaling back of discounts.
Within the assumptions they are working with, are that Disney value resorts are already a better value than off-site hotels, even at rack rate, when Disney-provided transportation is factored in.
Supposedly, there has been intense scrutiny of free dining discounts, especially at value hotels -- For a family of 4, who is paying around $95 for a room, why give a $140 "discount" in the form of free dining. Disney executives are supposedly confident that when those prospective guests look at off-site comparisons, they will find that staying onsite at Disney is still econimically attractive.
While Disney knows that their deluxe resorts are priced far above the competition, they are concerned about undercutting themselves--- giving discounts to people who are willing to pay full price. They also see questions about the valuation of American currency, and are finding international guests more attractive for the deluxe resorts. Their models are suggesting that they will only have a small drop off in occupancy without American public discounts, which they can fill up with targeted discounting (PINs, international discounts, military discounts).
They are also looking closely at the "psychology" of the pricing. For example, in the past, they made the 4th+ days of their tickets ultra cheap, to change the psychology of the Disney traveler -- to expect a week long Disney experience, instead of a 2 day experience. They believe they were successful, so they are now raising the ticket prices on those 4+ days.
Similarly, they are worried they may have gone too far in creating expectations of discounts with the public. And they really want to be able to charge full price when they open the Fantasy Land expansion. So, they are considering whether it is worthwhile to go through a bit of short-term pain, to wean the public off discounts. Accept lower occupancy temporarily, with the hope that the public will start booking again, after they realize discounts aren't coming.
Finally, *if* they do offer discounts.... they are examining newly packaged discounts that will not actually cut significantly into revenue, and will continue to change buying habits. The "memory package" was a partial roll-out of this philosophy -- Encouraging people to buy the Photo Books, in the hopes that they will like them and continue to buy them in the future. They have also examined discounts that require purchase of Park Hoppers, Water Park tickets.
Anyway, take all this with a grain of salt.
