Parks weigh pricing plans
Disney, SeaWorld assessing response to changes in ticket costs
The laws of supply and demand have become more complicated at Orlando’s big theme parks as they make shifts in pricing strategies.
Walt Disney World has pursued an approach that will discourage some people from visiting during the most crowded times. SeaWorld Entertainment, which has been crushed by controversy and competition, wants to boost attendance with lower prices.
Despite their different situations, Disney and SeaWorld reported fewer people visited their Florida parks early this year, and both cited prices to analysts as a factor affecting attendance.
Universal Parks and Resorts said its first-quarter attendance overall was stable. Its Orlando parks have not made big changes in how they charge guests, and the company said it doesn’t discuss pricing issues.
The Walt Disney Co. says its approach will grow revenue but sometimes at the expense of attendance gains. SeaWorld said it underestimated how much its customers have come to demand discounts.
“SeaWorld has very price-sensitive customers, and Disney’s customers are less price-sensitive,” said Robert Niles, editor of ThemeParkInsider.com. “But Disney’s getting cut a little bit, too. There’s some people who say,
‘We’ve got to cut the entire Orlando vacation,’ not just cut some things out of the Orlando vacation.”
Disney has aggressively raised prices. In October, it revamped its annual-pass system to make it much more expensive for people to visit during Christmas and spring break. In February, Disney announced tiered one-day ticket prices. The Magic Kingdom costs up to $124 on the busiest days.
Fiscal second-quarter Disney World attendance declined, but revenue rose because per-guest spending did. Walt Disney Co. Chief Executive Officer Bob Iger told analysts moderating attendance can create a better visitor experience .
“The right pricing strategy can benefit both the company and the customer — that idea of ... managing demand so you don’t have these crazy crowds that can’t be served well,” said Matt Busch, a partner with consulting firm Revenue Analytics.
The approach may have worked a little too well recently. In mid-March, “blackout dates” were lifted for employees and on special Florida-resident tickets. Analysts say that could have been a way to boost attendance that wasn’t meeting projections.
Disney took the concept of higher prices and fewer crowds to an extreme with a new series of late-night admission events costing $149. Hours before the first event in April, some time-share club members received invitations to attend for free, DVCNews.com reported. Prices were slashed in half for annual-pass holders and DVC members for subsequent events. That suggests “they weren’t hitting their target numbers,” University of South Carolina assistant hospitality professor Scott Smith said.
Disney said it was pleased with response to “Disney After Hours,” for which it did no marketing.
Experts said some trial and error is to be expected, especially with demand pricing, when forecasting attendance.
Before opening its new Harry Potter land in April, Universal Studios Hollywood started charging online prices that vary by day. Sea-World recently stopped charging separate weekend and weekday prices for tickets bought online. Those tickets — now $79 — will vary by season, a spokeswoman said.
In the first quarter, Sea-World said it moved away from discounting too dramatically. Sea-World Orlando did not offer two passes for the price of one as it had in 2015, and attendance dropped. So recently, people buying Sea-World Orlando passes started getting free ones for Aquatica too. Sea-World is also selling advance-purchase singleday tickets for $69 until just before its Mako roller coaster opens in June.
Sea-World has lost visitors as it has fought off controversy about its killer whales and faced tough competition.
“As they’re digging out from all this other stuff they’re laboring under, they’re still trying to get a fix on the pricing,” International Theme Park Services president Dennis Speigel said.
Sea-World says one thing is clear: It can’t match Disney’s and Universal’s prices. It is pursuing customers such as Edie Hoover, a 70-year-old retired teacher who lives in Windermere. After visiting Disney for years, Hoover switched to Sea-World.
“Their passes are reasonable — $13 or $14 a month,” she said. “That’s what we can afford to do.”