Membership Magic Beyond

[tjkraz]

But most discounts are designed to increase revenue for Disney in the big picture.
The “savings” don’t actually decrease Disney’s revenue, depending how it’s designed.
Most discounts are really disguised upsells.

Shifting a guest from a crowded weekend to a less crowded weekday actually helps Disney’s bottom line.

Discounts that encourage people to take more trips, or add days to their ticket, increase revenues and profits.

Imagine they offered for MMB, $25 off park hoppers. That would not cost Disney $25 per person — The guest would feel like they are saving $25 per person. But it would increase the number of people buying park hoppers— and if priced correctly, round increase revenues and profits.

Essentially, discounts that are really an opportunity for Disney to sell you more things.

Disney routinely does “special ticket” types along these lines. A significant perceived savings, based on a very specifically restricted ticket.

Three general comments:

1) Programs like this involve multiple entities, all of which have some decision making authority in the finished product. At a minimum, any park ticket promo involved lengthy discussions between DVC and the Parks & Resorts heads. What we see is the result of compromise between those groups. (Apparently the Disneyland execs saw things a little differently. Maybe former DVC head Ken Potrock had something to do with that. And maybe WDW will loosen the reigns over time if they see net positive results here.)

2) On many levels, I don’t disagree with what you’ve written above. But here’s the thing: If Disney believed that lower ticket prices, or more aggressive promotions, or actively moving guests from weekends to weekdays would lead to a net increase in profits, they wouldn’t save those philosophies for a paid DVC benefits program.

3) Disney knows their theme park business better than anyone. No their decision-making isn’t infallible. But when it comes to consumer spending data…they’re holding all the cards. And we have none. For that reason alone, I have a tough time buying into the idea that we know better than Disney.

I get that Disney is a for-profit corporation. My problem isn't that Disney was "stingy." It's that this is a poorly thought out product. There are a whole host of ways they could have designed this program (and ticket offers), that increase profits for Disney AND increase perceived value for guests.
A flat 20% discount on tickets over 4 days, for example. Or let MMB members purchase Disney Pirate Pass.
Offer MMB members to buy the Disney Dining Plan at 10% off. (that would definitely increase profits for Disney, it would lead to a lot more dining revenue from DVC members). Refillable soda mugs at 50% off for MMB members when staying on-site.
10% off the price of Premier Pass, subject to availability, for MMB members.

I’m really not sure how you can claim to know the impact on both revenues and profits as a result of some of these off the cuff suggestions. Let’s talk about the mugs specifically. The mug purchase is currently $22. Hypothetically, let’s say the mug costs $1 and the average guest drinks about $5 worth of filtered water, syrup and coffee beans over the course of a trip. Disney’s profit margin is roughly $16 for every mug sold.

With a 50% discount, they still have fixed costs of $6 for the mug and product, but they’re only keeping $5 of the $11 charged. They need to sell more than 3x as many mugs just to earn the same profit. And some of those guests would have occasionally bought a coffee or soda for $5 each, and now won’t because they got their $11 mug. More profit sacrificed.

Are those numbers accurate? I dunno. You don’t know. I don’t think they’re wildly off. But the point is discounts are eliminating pure profit from the equation, and that profit has to be made up in volume. Which is often easier said than done. Will Disney sell more DDP at $87 than they will at $97? Yeah, probably. But it also means they’re keeping $10 less for every buyer. It means people who would have spent $97 are now only spending $87. It means lower profit margins on people who would have paid full price for a smaller number of meals—more revenue for sure, but the profit impact is impossible to forecast.

At the end of the day, if changes like these were such a slam dunk win for Disney, EVERYBODY would be buying $11 mugs and $87 dining plans. The idea that we can just casually play Monday morning quarterback and say “oh, if Disney just did X, Y and Z they’d be much better off” simply doesn’t ring true to me.

 

[VGCgroupie]

TAKE MY MONEY!

Yep. Take my money now I will decide next year if it provided $99 of value to me.

 

[AstroBlasters]

Oooh…. something in the fine print about the DLand tickets:

• DLR Tickets do not have to be used on consecutive dates. The price paid for a wholly unused ticket can be applied to the purchase of a new ticket with an equal or higher price. To learn more about upgrades, click HERE.
• DLR Tickets may only be purchased by the Member enrolled in the Optional Benefit Program for themselves and up to seven (7) of their immediate family living in their household, for up to a total of eight (8) DLR Tickets per the 2025 Benefit Season.

Now, whenever I have purchased tickets through a broker/agent I have been able to upgrade that ticket through Disney and it seems to always be the delta between the full retail price and the full retail price of whatever Disney is charging.

For example, I upgraded a 5-day WDW ticket to a 6-day ticket when they moved our return flight from 8am to 8pm and it only cost an extra $20 per ticket. I purchased the tickets through getawaytoday.com before the more recent price increases and they cost difference between what I paid and direct from Disney for the extra day was greater than $20…

I wonder how this will be handled…. how much to book a discounted 3-day weekday only and upgrade to a 5-day with weekends….

 

[havoc315]

Three general comments:

1) Programs like this involve multiple entities, all of which have some decision making authority in the finished product. At a minimum, any park ticket promo involved lengthy discussions between DVC and the Parks & Resorts heads. What we see is the result of compromise between those groups. (Apparently the Disneyland execs saw things a little differently. Maybe former DVC head Ken Potrock had something to do with that. And maybe WDW will loosen the reigns over time if they see net positive results here.)

2) On many levels, I don’t disagree with what you’ve written above. But here’s the thing: If Disney believed that lower ticket prices, or more aggressive promotions, or actively moving guests from weekends to weekdays would lead to a net increase in profits, they wouldn’t save those philosophies for a paid DVC benefits program.

Exactly my point — they have special ticket promotions all the time, apart from DVC. Whether off-season, non-magic kingdom, etc.

One goal of modern business is to stratify pricing — instead of charging all customers the same price, you create opportunities for guests to pay more or less based on their cost tolerance. (Perfect example is airlines — charging more for certain coach seats than others).

So it was rather surprising — as Disney creates promotional ticket specials all the time, surprising they wouldn’t do a better one for the DVC market.

3) Disney knows their theme park business better than anyone. No their decision-making isn’t infallible. But when it comes to consumer spending data…they’re holding all the cards. And we have none. For that reason alone, I have a tough time buying into the idea that we know better than Disney.


I’m really not sure how you can claim to know the impact on both revenues and profits as a result of some of these off the cuff suggestions. Let’s talk about the mugs specifically. The mug purchase is currently $22. Hypothetically, let’s say the mug costs $1 and the average guest drinks about $5 worth of filtered water, syrup and coffee beans over the course of a trip. Disney’s profit margin is roughly $16 for every mug sold.

With a 50% discount, they still have fixed costs of $6 for the mug and product, but they’re only keeping $5 of the $11 charged. They need to sell more than 3x as many mugs just to earn the same profit. And some of those guests would have occasionally bought a coffee or soda for $5 each, and now won’t because they got their $11 mug. More profit sacrificed.

Or more likely — DVC guests are among the least likely to buy the mugs, or often buy an individual soda. They are the ones most likely to get groceries including soda delivered .

So if you increase mug adoption from 20% to 80%… even with the discount, you are doubling revenues with only a tiny increase in actual costs. (The mugs cost Disney less than a dollar each, the soda for a week costs Disney $1-2 per mug. It costs Disney under 10 cents per serving).

And since they bought the mug… most stopping buy QS… leading to more frequent QS purchases, increasing revenue and profit further.

Are those numbers accurate? I dunno. You don’t know. I don’t think they’re wildly off. But the point is discounts are eliminating pure profit from the equation, and that profit has to be made up in volume. Which is often easier said than done. Will Disney sell more DDP at $87 than they will at $97? Yeah, probably. But it also means they’re keeping $10 less for every buyer. It means people who would have spent $97 are now only spending $87. It means lower profit margins on people who would have paid full price for a smaller number of meals—more revenue for sure, but the profit impact is impossible to forecast.

It is quite possible to forecast, with a fair level of accuracy. It’s what my brother does for a living.

At the end of the day, if changes like these were such a slam dunk win for Disney, EVERYBODY would be buying $11 mugs and $87 dining plans.

No… You’re missing the whole point. DDP adoption is extremely low for DVC members. Even at $87, it wouldn’t go through the roof.

You don’t give the discount to the crowds that are more likely to pay $97… you offer it to those who aren’t buying the DDP at $97… which is DVC guests.

The idea that we can just casually play Monday morning quarterback and say “oh, if Disney just did X, Y and Z they’d be much better off” simply doesn’t ring true to me.

I gave examples. I’m not saying every example is exactly correct. Maybe the mug discount would work better at 40% than 50%. Etc etc.

What I know for a fact — because Disney does such promotions all the time — there are other promotions that would both increase profits for Disney AND increase perceived value for DVC guests. No, I don’t know the exact math on which promotions. But I know that such promotions are possible.

 

[TCRAIG]

You can buy and swap from existing 7month reservations. It's tricky, so not for the inexperienced.

The key is 7 months…that’s what I was saying…

 

[tjkraz]

It is quite possible to forecast, with a fair level of accuracy. It’s what my brother does for a living.

Yes, it is very easy to forecast. By the people with access to the proper data. (The people who are not green lighting these hypothetical promotions.)

What I know for a fact — because Disney does such promotions all the time — there are other promotions that would both increase profits for Disney AND increase perceived value for DVC guests. No, I don’t know the exact math on which promotions. But I know that such promotions are possible.

You’re pretty liberal with “all the time.”