TICKET SHOCK

Theme park companies are turning to dynamic ticket pricing, which charges parkgoers more when demand is high and thus spreads crowds out more evenly throughout the year, as they implement bigger, costlier and more immersive attractions.

Ticket Shock
Ticket Shock

Theme park companies are turning to dynamic ticket pricing, which charges parkgoers more when demand is high and thus spreads crowds out more evenly throughout the year, as they implement bigger, costlier and more immersive attractions.

BY JAMIE BIESIADA

The theme park industry is undergoing a period of unprecedented development, with the big players concentrated on cranking out experiences that are so fully immersive and interactive the average guest might forget they are in a park altogether. 

Many of those experiences carry price tags beyond basic admission, even as the cost of basic admission continues to rise. Now, thanks to the implementation of dynamic pricing, many parks are raising prices during the busiest times of the year. It helps even out crowds throughout the year and also essentially prices out some visitors during peak times, giving those who can afford the entrance a better, less-crowded experience.

At the same time, it raises the question of whether or not top-tier theme parks are pricing out that portion of the American middle class that helped the parks prosper for all these years.

Four years ago, Walt Disney World changed its prices and for the first time crossed the threshold into a one-day park ticket that hit three figures. It was a big deal and generated headline after headline. But it worked, and Universal Orlando Resort was quick to follow suit.

Since then, Disney has become a pioneer in dynamic ticket pricing, with the theme park industry largely beginning to follow in its footsteps.

The cheapest ticket for one-day entrance into one of the parks at the Walt Disney World Resort stands at $109 ($104 for children). That ticket price can go as high as $159 ($154 for children) from Christmas Day to New Year’s Eve and sit anywhere in between those ranges for the rest of the year (summer tickets this year frequently were priced at $125 for adults and $120 for children).

The immersive experiences being introduced in top-tier parks are funded at least in part through those higher prices throughout the year.

“You would have never seen these lands and attractions being built to the tune of hundreds and hundreds of millions of dollars if they didn’t know that they were going to bring that return,” said Edward Marks, founder and co-CEO of the Producers Group, an attractions producer and theme park consultancy. “That flex pricing is a big chunk of that return, a big value of that return, because it guarantees a bigger number on a Saturday.”

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Hogwarts Castle houses the Harry Potter and the Forbidden Journey dark ride at Universal Orlando’s Wizarding World of Harry Potter. (TW photo by Jamie Biesiada)

Hogwarts Castle houses the Harry Potter and the Forbidden Journey dark ride at Universal Orlando’s Wizarding World of Harry Potter. (TW photo by Jamie Biesiada)

Hogwarts Castle houses the Harry Potter and the Forbidden Journey dark ride at Universal Orlando’s Wizarding World of Harry Potter. (TW photo by Jamie Biesiada)

The shift to dynamic pricing

Pricing is a tricky subject for theme parks, which is perhaps why Disney’s move to single-day admissions of more than $100 drew so much attention.

“It’s always challenging with pricing because pricing is so sensitive,” Marks said. “It’s mental. It’s psychological. What the market can bear. What the true costs are. What the perception of the value is. All of those things are factors that have to go into it, and I imagine there was a fair amount of massive studies done at Disney to decide when they made their decision to cross the three-figure number for single-day admission. It was newsworthy.”

Pricing in theme parks started with strip tickets that had a fixed cost, according to Dennis Speigel, president and founder of International Theme Park Services, a theme park consultancy and management firm. Every attraction in an amusement park was tiered by popularity. For example, a roller coaster might have cost 10 tickets; bumper cars, seven; a carousel, five.

When Disneyland opened in 1955, it operated under a similar method. There was a base entry cost of $1 for adults, 50 cents for children (about $9.50 and $4.80 in today’s dollars). Tickets for individual attractions were purchased at booths near attraction entrances until a few months later, when Disney introduced coupon books containing tickets that divided the rides into categories by letters.

Tickets for Disneyland and Disney World have evolved. Top, a Disney World ticket book featuring attractions grouped by popularity and sophistication, with E-ticket attractions being the most sought after. (Photo by Lou Mongello) Above, a ticket book for Disneyland. (Photo by Disney)

Tickets for Disneyland and Disney World have evolved. Top, a Disney World ticket book featuring attractions grouped by popularity and sophistication, with E-ticket attractions being the most sought after. (Photo by Lou Mongello) Above, a ticket book for Disneyland. (Photo by Disney)

Tickets for Disneyland and Disney World have evolved. Top, a Disney World ticket book featuring attractions grouped by popularity and sophistication, with E-ticket attractions being the most sought after. (Photo by Lou Mongello) Above, a ticket book for Disneyland. (Photo by Disney)

A-ticket attractions were the least exciting. Over the years, the system would expand to A, B, C, D and E categories, with E-ticket attractions being the most exciting. (The term “e-ticket attraction” is often still used today to describe particularly exciting attractions, though the ticket books have long since gone extinct.)

In 1961, Six Flags introduced the then-revolutionary idea of charging one price to access every attraction in its parks, Speigel said.

“The other operating amusement parks that had been in business for years selling strip tickets, they began looking at that,” he said.

Some, like Coney Island in Cincinnati, took hybrid approaches, using strip tickets on the weekdays and a single price on the weekends, but all eventually migrated to a single price point for entry.

In 1982, Disney, too, phased out ticket books in favor of the Passport, a single price point ticket.

Left, a ticket book for Disneyland. Right, a four-day ticket for Disney World from 1984, after Disney had switched to single-price entry. Right, a five-day Disney World ticket from 1991. (TW photos by Jamie Biesiada)

Left, a ticket book for Disneyland. Right, a four-day ticket for Disney World from 1984, after Disney had switched to single-price entry. Right, a five-day Disney World ticket from 1991. (TW photos by Jamie Biesiada)

Left, a ticket book for Disneyland. Right, a four-day ticket for Disney World from 1984, after Disney had switched to single-price entry. Right, a five-day Disney World ticket from 1991. (TW photos by Jamie Biesiada)

Len Testa, president of TouringPlans.com, said, “I think people hated the ticket books. It felt like being nickel-and-dimed. I think that was the primary motivation for it.” 

Testa, whose company monitors crowds and lines at Disney parks and predicts their traffic levels, is also the co-author of “The Unofficial Guide to Walt Disney World” and “The Unofficial Guide to Disneyland.” 

In 2013, Testa said, Disney introduced pricing for the Magic Kingdom at about $5 more per day than other parks, then it introduced seasonal tiered pricing in 2016 (tickets were different prices for seasons dubbed value, regular and peak). In October 2018, date-based pricing began.

As was historically the case, other players big and small have been following Disney into the practice of dynamic pricing, Marks said.

Speigel said he believes Disney has done the best job of implementing dynamic pricing thus far and that it will be the way of the future.

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The rugged terrain of planet Batuu, the setting for Star Wars: Galaxy’s Edge, looms over the Millennium Falcon. (TW photo by Jamie Biesiada)

The rugged terrain of planet Batuu, the setting for Star Wars: Galaxy’s Edge, looms over the Millennium Falcon. (TW photo by Jamie Biesiada)

The rugged terrain of planet Batuu, the setting for Star Wars: Galaxy’s Edge, looms over the Millennium Falcon. (TW photo by Jamie Biesiada)

Is it working?

Disney said its pricing strategy today is aimed at staggering attendance for a better guest experience.

“We’re creating authentic, innovative experiences on a scale unlike any other place in the world,” a Disney spokeswoman said. “We’re focused on providing a range of experiences that appeal to all our guests, and our pricing is intended to allow us to spread attendance throughout the year so that all guests have a magical experience no matter when they visit, like only Disney can provide.”

According to comments made by Disney CEO Bob Iger on the company’s recent earnings calls, it appears to be working.

In May, when Disney reported a 3% increase in revenue, he said the tiered pricing model “is really paying off.” And in August, after the highly anticipated Star Wars: Galaxy’s Edge land had been open for a portion of the quarter at Disneyland in Anaheim, Calif., attendance was down 3% at domestic parks. CFO Christine McCarthy attributed that largely to a decrease in annual pass holders visiting the parks because of blocked-out dates designed to “maintain a high level of guest satisfaction.”

A marketplace in the ‘Star Wars’ universe. (TW photo by Jamie Biesiada)

A marketplace in the ‘Star Wars’ universe. (TW photo by Jamie Biesiada)

A marketplace in the ‘Star Wars’ universe. (TW photo by Jamie Biesiada)

While attendance was down, per capita spending was up 10% as a result of higher admissions and spending on merchandise, food and beverage, thus achieving the goal of dynamic pricing.

Although Iger said attendance was lower than Disney had hoped, Marks said he believes it was a win.

“I think behind closed doors, they’re giving a lot of ‘atta boys’ out right now, because it did what it needed to do, which was: it needed to thin out the crowd and still keep revenue where it was, and not make 50 trillion people show up to the park who are all just going to stare at Star Wars stuff and not do anything,” he said. “They made them spend to show up, and as a result, it’s a better experience for those who spend.”

That is the ultimate goal of dynamic pricing: Crowds are better spread out throughout the year, and the theme park will still make enough money at the busiest times. But the guest experience will be better, and guests will be more willing to stay in the park longer and spend more money.

Disney expert and author Lou Mongello, who is the host and producer of the WDW Radio podcast, called dynamic pricing a win-win, because on one side, it enables theme parks to backfill low-attendance days by lowering the relative price, better spreading out crowds. 

It’s a win for consumers, too, Mongello said, “because if they do have flexibility and if budget is something that has to be taken into consideration, they can have a better experience.” 

They might be drawn to visit when the parks are less expensive, meaning lower attendance on more expensive days, shorter lines and easier-to-get dining reservations.

“Guests have more time in the parks that they’re not waiting on line,” Mongello said. “Yes, they can go and spend more money, so they are able to do a sit-down meal because it’s easier to get reservations. They are able to spend more time and, yes, money in the stores, as well. It absolutely is a win-win for … Disney and the consumer, and I think everybody’s happier, too.”

‘It absolutely is a win-win for Disney and the consumer; everybody’s happier, too.’
Lou Mongello, WDW Radio

Testa said that seasonal pricing has led to a drop in consumer media headlines about the price of an admission ticket, because increases can be staged more incrementally.

Yet, while it has fallen off the radar in some media outlets, it’s still a valid question: Have ticket prices for the top-tier parks gotten too expensive?

Mongello has a family of four. As locals, they have annual passes. “Sticker shock” is the way he described renewal time.

“I know what it’s like,” he said. “That being said, I have still never felt like it was not a great value for my money. … Going to Disney World is not like going anywhere else in the world; it absolutely is worth it even as the prices go up.”

As a company, Testa said, Disney has to focus on its shareholders, employees and customers.

“All of them seem to be reasonably satisfied,” he said.

But Testa does have a concern. Citing data from the National Household Travel Survey, Testa said a Disney World trip right now costs more than what 80% of Americans spend on vacation in any given year. That means most American households likely can’t afford a Disney World vacation, meaning the U.S. loses out on what was previously the shared culture of Disney theme parks.

“If 80% of Americans can’t afford to go, we can’t make jokes about Space Mountain, because 80% of Americans won’t understand what that means,” he said. “That’s the sort of thing that I’m concerned about. If Disney isn’t part of common American culture, if it’s only part of the culture for the top 20% of American households by income, I’m not comfortable with that for a variety of reasons.”

Robert Niles, founder and editor of ThemeParkInsider .com, said he thinks Disney’s attendance softness around the Anaheim opening of Galaxy’s Edge was tied to “aggressive” price increases, followed by discounting in various markets to try to get numbers back on par.

‘Disney’s approach is becoming too expensive for some segments.’
Robert Niles, ThemeParkInsider.com

“I think they’ve got some information now that they didn’t have about where the ceiling in the market might be,” Niles said. “That doesn’t mean that they’ve become too expensive. Their approach is becoming too expensive for some segments of the marketplace, so they’re going to have to think about how they diversify price points if they want to be aggressive with increases in the future.”

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Everything at Galaxy’s Edge is meant to immerse guests in the ‘Star Wars’ universe. (TW photo by Jamie Biesiada)

Everything at Galaxy’s Edge is meant to immerse guests in the ‘Star Wars’ universe. (TW photo by Jamie Biesiada)

Everything at Galaxy’s Edge is meant to immerse guests in the ‘Star Wars’ universe. (TW photo by Jamie Biesiada)

Add-on experiences

Speigel and other experts predict that dynamic pricing isn’t going anywhere. In fact, Speigel said it will just become further and further ingrained in theme parks.

Take, for example, a park on a day where the admission cost is low. Those are price-conscious visitors. While the park might charge $6 for a hot dog on peak days, if it employs virtual menu screens, the price can easily be changed to $3 on value days. The margin on hot dogs goes down, but the park is still selling them.

Pricing will evolve in two ways going forward, Speigel predicted. First, it will get more expensive. Second, it will cater more to guest needs.

Theme parks are already offering the latter in some ways, like through optional paid experiences such as extra hours in the parks with fewer people.

“The current trend is to shorten regular park hours so that special, separate-ticket events can be held earlier or later or both than regular park hours — on the same day,” Testa said. “This allows Disney to sell the same park two or three times in the same day.”

He pointed to Disney’s Early Morning Magic as an example: One land opens early in the Magic Kingdom and Hollywood Studios. Guests are allowed free rein for around 75 minutes for a cost of $79 per adult and $69 per child plus park admission; the events also come with breakfast. There are after-closing events, as well, such as Halloween and Christmas parties, with more added each year.

According to Testa, this year the Magic Kingdom will host 154 special-ticket events. That equates to an average of almost three per week.

“For example, on Aug. 20 and 27 this year, the Magic Kingdom hosted separate morning and evening events [and] in between, a regular park day,” Testa said. “The park was sold three times on those days. The net effect of these extra events is to shorten the amount of time the park is open to regular guests.”

‘The net effect of extra events is shorter hours for regular guests.’
Len Testa, TouringPlans.com

Regular operating hours in 2015 averaged 14 hours and 15 minutes each day, Testa said. That’s down to 12 hours and 35 minutes per day this year.

“It’s become a steady downward trend since 2015,” he said. “In fact, the Magic Kingdom’s average park day is now shorter than it was at any time since 2006, even during the Great Recession.”

Disney isn’t alone with its specially priced events. Universal has offerings like its popular Halloween Horror Nights. In Florida, single-night tickets range from $68 to $92.

Disney and Universal also offer premium VIP tour experiences that can get visitors to the front of lines. 

None, perhaps, made the splash that Disney’s World of Dreams Tour did when it was unveiled in February. For $12,000  plus the price of park tickets, up to six guests will get two tour guides; backstage access and transportation; three meals at any of the park’s restaurants; and a tour of the Cinderella Castle Dream Suite in the Magic Kingdom.

“There’s always a portion of the marketplace, a very small portion, that will be able to take advantage of a program like that and pay the going price,” Speigel said.

Today’s VIP tours are likely just the beginning, Testa predicted. He said he believes the next generation of tours will be based on suggestions from customers of existing tours, with offerings increasingly more customizable — and with even higher price tags.

“In a truly dynamic world it would be ‘Name the crazy thing you want to do,’ and they put a price on it, and then you do it,” he said. “But I think the lawyers would have to be the intermediary in there.”

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Guests in line for the Flight of the Hippogriff coaster at Universal Orlando’s Wizarding World of Harry Potter can get a close look at Hagrid’s hut. (TW photo by Jamie Biesiada)

Guests in line for the Flight of the Hippogriff coaster at Universal Orlando’s Wizarding World of Harry Potter can get a close look at Hagrid’s hut. (TW photo by Jamie Biesiada)

Guests in line for the Flight of the Hippogriff coaster at Universal Orlando’s Wizarding World of Harry Potter can get a close look at Hagrid’s hut. (TW photo by Jamie Biesiada)

‘Westworld,’ anyone?

The cost of admission is inextricably tied to guest experiences, and increasingly, these are immersive experiences. HBO featured a fictional version of an immersive theme park in its hit show “Westworld,” in which people could visit a themed area populated by hyper-realistic robots. It cost tens of thousands of dollars per day. While an actual ‘Westworld’ isn’t on the table right now, theme parks are turning to more immersive experiences.

Marks said it started with Universal’s Wizarding World of Harry Potter, which kicked off truly immersive theme park lands. Disney followed to some degree with Avatar — The World of Pandora and in a bigger way with Star Wars: Galaxy’s Edge, which drops visitors onto a planet in the “Star Wars” universe populated by “residents” (the park’s cast members).

Those are likely just the beginning. Though Universal has been mum on the details of its future Orlando park, Epic Universe, it has promised that the park will be “the most immersive and innovative theme park we have ever created.”

Disney has been a little more open about Star Wars: Galactic Starcruiser, its planned theme hotel that will immerse guests onboard a “spaceship” named the Halcyon, which will have video screens for windows. The hotel will operate with a model similar to that of a cruise ship, and guests will stay for three-day adventures.

Speigel said the hotel design follows the trend of immersiveness: “Everything they’re doing now is taking the story and wrapping the guest into it as much as they possibly can.”

Disney has not yet released pricing for the hotel, arguably the first example of the next generation of immersive theme park experience, but many experts believe it will be at least $1,000 per person, per night.

When Disney was brainstorming ideas for what eventually became the Twilight Zone Tower of Terror attraction at Disney World’s Hollywood Studios park, early discussions included the idea of a themed hotel. Special cars would pick up guests at the airport, immersing them in the experience from the get-go. That idea never came to fruition, but Mongello said it might have served as some inspiration for the Halcyon. 

He also said he believes the hotel will appeal to people who want a sense of escapism on their vacation.

“Everything that exists in our reality goes away, and that’s part of what we’re paying for,” he said. “We want this idea of escapism and leaving our problems not at the gate but now at the starship terminal or whatever it is. That’s why people are not just willing but happy to pay for that, because that’s what this place and these experiences afford us.”

The Starcruiser fits into what Marks believes the future will hold: more immersion and bigger ticket prices.

‘There is no shortage of those who are willing to spend more.’
Dennis Speigel, International Theme Park Services

“There is no shortage of those who are willing to spend more for an elite or a less crowded experience,” he said. “We’re going to see the entire model shifting more toward the bigger spenders.”

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