Thursday, June 06, 2013

The High Cost of Disney Living

Thinking back to my last post about the cost of admission to a Disney theme park and the decision by Disney to spend more than $1 billion on a marketing system to track guests (rather than on, you know, attractions and improvements), I started wondering exactly how much the cost of Disney has increased relative to other items in our expensive world.

I discovered that the median American salary in 2012 was $50,413, and back in 1982 -- the year that's most important to readers of EPCOT Central -- it was $18,641, for an increase in 30 years of 175%.

The cost of a gallon of gas in 1982 was 91¢.  Last year, it was $3.63, for an increase of 299%.  Not looking pretty for Average Joe American, is it?

The car you put that gas in cost, on average, $7,983 in 1982.  In 2012, it had risen 279% to $30,303.  Ulp!

The average price of a new house was $79,900 in 1982, and by 2008 -- the height of the real-estate bubble -- it had ballooned 281% to $301,000, though by last year had declined considerably to $152,000, which would still be a 90% increase versus 1982.

If those prices were out of your league, you could have just gone to a movie: In 1982, the average movie ticket would set you back $2.92.  By 2012, the average ticket price had risen 175% to $8.02.

The cost of a Disney vacation?

Hm.  Well, this is where things get interesting.

In 1982, a "World Vacation" offered by the Magic Kingdom Club offered five nights' accommodations in the Contemporary Resort Tower, six days' admission and unlimited use of all Magic Kingdom attractions and all Walt Disney World recreational activities and facilities (golfing, swimming, water skiing, etc.)  EPCOT Center wasn't open when these prices were established, but according to the Summer 1982 issue of Disney News I have, the prices were valid through Dec. 31, 1982.

It also included breakfast lunch and dinner at any Walt Disney World restaurant or dinner show.  Yes, that's right -- any restaurant you wanted, any dinner show you preferred to see.  There weren't tiers of restaurants and classes of service, and you didn't have to save up meal coupons from one meal to use at another.  Just, simply, whatever you wanted wherever you wanted.  (Except room service and, interestingly, "fast-food locations" -- what?  Disney wanted to push its high rollers toward its better restaurants?)

The cost: $568 per person, or $1,136 for two people.

There's no equivalent option today, but for unrestricted breakfast, lunch and dinner each day (which does place limits on dinner shows), you'd have to upgrade to the pricey Magic Your Way Premium Package.  Factoring in five nights at the Contemporary Resort with a Tower room (Bay Lake view) and a six-day park-hopper ticket, the total price: $5,111.84.

That's an increase of 350%, rising far faster than the other categories.

A simple one-day ticket to the Magic Kingdom?  That has risen by 616% since 1982 -- from $13.25 (as the general public price) to $95 as of this week.

As Disney executives might say: Good thing we're all so rich.

Monday, June 03, 2013

Money, Money, Money

Let's talk about money for a minute.

Three decades ago, Disney built EPCOT Center for $1 billion, and the cost of a one-day pass to EPCOT Center or The Magic Kingdom was $15, a 13% increase over ticket prices just one year earlier.  The cost of admission for a family of four (adult tickets) to visit a Walt Disney World theme park was $60 a day.  With a 1982 median household income of $18,642, four adult admissions represented about 22% of weekly gross pay.

Thirty-one years later, Disney is spending $1 billion on Walt Disney World again, but this time, that billon dollars isn't buying an entire theme park, it's buying a technology-driven marketing tool to roll out at its Florida parks.  The cost of admission for a family of four (adult one-day tickets) to visit a Walt Disney World theme park is $380.  With a 2012 median household income of $50,054, four adult admissions represent about 39.5% of weekly gross pay.

The question that most grates at me is whether the ticket price increase announced just today is one that makes a lot of sense, especially in light of what it "buys" the average guest.

A walk around EPCOT is pretty revealing.  The seldom-used Future World stage area is falling apart.  The Wonders of Life pavilion is just an empty shell of a building.  The upstairs area of the Imagination pavilion is shuttered.  There hasn't been a new country pavilion added to World Showcase in twenty-five years (Norway opened on June 3, 1988 -- happy quarter century!).

EPCOT, the subject of this blog, has certainly seen many better days.  Disney has long argued that EPCOT is reliant on sponsorships, and without sponsors it can't significantly upgrade or add attractions.  But ... it has more than $1 billion to implement a guest-tracking program?

MyMagic+ is a program designed, Disney's own Jay Rasulo freely admits, to keep guests from going to other theme parks.  "We get a bigger share of their wallet," he told media and analysts on a recent conference call.  "Spend more money" is the primary goal of the program, he says.

MyMagic+ gives some people the heebie jeebies, and I'm not sure I'm not among them.  I haven't experienced it yet, but it's a valid question whether I'm comfortable going on vacation knowing every move I make is being tracked.  Some people have said they'll feel more comfortable knowing their kids are easier to find, and that may well be a solid argument.  But certainly there must be better ways to satisfy that concern than to unapologetically turn every single guest into a marketing data point?

Of course, there are ways to opt out of MyMagic+, and I'm just not the sort of person who cares a whole lot about whether Mickey Mouse knows my name when I meet him.  (Hey, if he really wants to know, he can ask, just the way everyone else does.)  Will shaving another 15 minutes off my attraction wait time really justify letting a company know everything they could possibly know about me, including where I am and where I'm going?

The bigger issue to me, though, is that Disney has become so blatantly marketing-driven.  Like the rest of The Walt Disney Company, today's Disney is not about creating entertainment, it's about managing what it's got.  And nothing points that out more than MyMagic+.

Instead of investing $1 billion to make its theme parks better than they've ever been, they've poured a billion dollars into getting more money out of guests.  You already know the weak spots of EPCOT, which could be fixed for a lot less than $1 billion -- but what about Tomorrowland at The Magic Kingdom?  What about the lack of focus and vision at Disney's Hollywood Studios?  (I imagine the visual rights to the Chinese Theater, allegedly the reason the Sorcerer's Hat was built in the first place, would be only a fraction of that $1 billion.)

Equally important: If Disney can spend $1 billion and still make billions and billions of dollars in profit, why does it need to pass the cost on to the consumer?  In essence, the extra money you pay to Disney for admission goes to funding a program designed to get you to spend even more money.

There's little doubt in my mind it will work.  Most guests will see MyMagic+ as a great opportunity to create an even better Disney experience, where "better" means devoid of spontaneity and carefully designed to keep you from venturing to Universal Studios or Sea World.  It's a heck of a lot better for Disney, that's for sure.

But when the average guest is spending more than one-third of his or her weekly income just to get in to the park, this new development is a perplexing one for a longtime EPCOT fan.  It's the kind of impressive technology that EPCOT used to showcase as part of our future ... implemented not for the common good, but for the increased profits of a single company.