Disney and the Discounts
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4 responses to “Disney and the Discounts”
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At first, I agree with your assessment, but I have a couple of other thoughts. Iger has indicated previously that people are booking short term. Maybe discounts through September 2011 is Disney’s way of getting people to commit to a vacation further out? Also, in the winter the discounts recently have been buy X, get y free. Are the current discounts as good? I’m thinking they are giving the illusion of big discounts that aren’t quite as big as previous years. Just my thoughts, I haven’t done any real “analysis” of the offers.
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Well, I’m not sure if I can agree with everything there. I don’t see how the Disney quality changes as much with them offering free dining or them giving discounts. Their income is what is going to further determine the quality of the parks if you ask me- that is if they use it for refurbishments. I know the guests who have the discounts aren’t going to be treated any differently from those who spend more because I’ve gone to Disney World as both without a change.
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I honestly agree. Discounts have long been something that is expected and not an added bonus. Disney has released the same discounts around the same time for the last few years almost to the date every year. This is not to say that I haven’t taken advantage of some of the discounts and enjoy the deals and rates but sometimes I wonder if such “deep discounts” do affect the quality of the product. I do believe that service and even the food will suffer on some levels, but I also wonder if disney recoups the “discount” by the fact that during non-discounted dates and times the prices are so high and continueto increase every year. I have been to wdw many times throughout the last ten years and although I would love to stay at one of wdw’s deluxe accomodations I can never justify the cost. I find $450/night at say wdw’s Grand Floridian a little bit overpriced. I live on the beach and we have some pretty awesome beachfront properties but even at the peak holiday of 4th of July they are not even close to that rate. This is where I believe the recouping of the discounts is done. I will continue to go to wdw no matter the discounts but I would hope that it will keep the Fl resident and AP type of discount.
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Something you might want to research here. I have a theory that if you went back to the early 1990’s and found the rack rates then, you might be surprised to see that the discounted rates of today are pretty close to the rates you actually had to pay back then when adjusted for inflation. I recall reading more than once that room and pass prices rose at a rate well above inflation for many years due to strong demand.
Now that demand no longer supports those “high” prices, is it not rational that prices return to those which the supply/demand reality will support? One way to make those prices temporary is discounting, and it has the added bonus of making people feel like they got a “bargain”. A Beach Club type room for $230/night is hardly a bargain in the rest of the US. It’s nice, but you can find a comparable room in a high demand location for less outside of WDW.
Make no mistake, the resorts and parks are still quite profitable even with the discounting. Perhaps though their days of being the cash cows that supported the otherwise mediocre disney performance some years are over.
Frankly the percentage of people who can actually “afford” a Disney deluxe resort at full price is not sufficient to keep them occupied. Only by taking on massive consumer debt and overspending was that possible in the past. Just as a “bubble” in home prices occured, so did a “bubble” in the prices of expensive vacation travel. With that credit tapped out, people can no longer charge a $5,000 vacation.
With no kids to raise and a household income of $160K, I would still never spend $350/night on a hotel room there. It’s just not a good value. But for $204 I booked a stay in December. That is the marketplace at work. They do not have to lower standards, but merely profit expectations during a downturn.
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