story by Kim Souza
ksouza@thecitywire.com
A Disney World theme park vacation may be every kid’s dream, but with the escalating costs of a one-day ticket such a fairy tale trip could be out of reach for many middle-class families.
Walt Disney World raised its daily ticket price to $99 in February, the second price hike in less than a year. The ticket costs have doubled in the past decade. Meanwhile, the median family income has declined 8% since 2007 to $51,017 in 2012, the latest available data by the U.S. Census Bureau. The median income in 2012 was at the same level it was in 1995, a setback of 17 years.
The theme park prices continue to rise annually, but Fiona O’Donnell, a leisure analyst with Mintel, said this year the price hike came earlier than expected. She doesn’t think the $4 increase will keep vacationers away.
Disney spokeswoman Kim Prunty, recently told CNBC that ticket pricing reflects the “high quality experiences” offered and the company’s ongoing investments in their park facilities.
“We offer a variety of ticket options that provide a great value and find that most guests select multi-day tickets that offer additional savings," she said.
Disney did not immediately respond to The City Wire’s request for comment made on Tuesday (March 25).
A three-day ticket costs $274 which is $91.34 per day for park patrons aged 10 and up. Children ages 3 to 9 would pay $255 for the same ticket, a daily average of $85, according to the Disney’s website.
A family of four that includes two small children would plunk down $1,058 for three-day passes, and that doesn’t include parking, food or lodging. A one day trip to the Magic Kingdom would cost $384 for the same family. Analysts said if pricing put the parks out of reach for traditional clients, they will likely go far less often, perhaps once in a lifetime.
CONSUMER REACTION
Consumer sentiment has been mixed on the rate increase, according to several people interviewed by The City Wire. Carlos Collier, an avionics technician at the Tulsa International Airport, said “$500 for a family of five sounds a bit ridiculous to me.”
Mitch Clendening, a television news director in Houston, said the $99 ticket price is steep. But he added that he has taken his family to Disney several times via complementary passes made available to the media. Peggy Treiber of Fayetteville said she thought the price was a bit much until she got to Orlando.
“Now I would consider it too high if you went during spring break or on a holiday and ended up spending most of your time in line, other than that, not really.”
A February report from IBIS World notes that the amusement park industry has focused on growing in-the-park spending as a way to compensate for lighter crowds in recent years. The higher ticket prices also help to keep annual revenue constant as it may take some families several years to save up for their Disney vacation.
REVENUE REBOUND
The amusement park industry derives the majority of its revenue from ticket sales. In 2014, admissions and ticket upgrades are expected to account for 55% of industry revenue, according to the IBIS report.
This segment has held a steady share of revenue in the five years prior to 2014, and it is expected to continue providing the majority of industry revenue in the five years to 2019, noted Andy Brennen, analyst and report author at IBIS World.
Walt Disney’s theme park segment revenue is on the rebound after a bumpy ride from 2008 to 2010. Segment revenue dipped 7.3% in 2008 to $5.12 billion. The following year revenue was flat. Ticket costs rose from $69 to $76 for a one-day pass during the same years.
Disney park revenue rebounded 9.6% in 2010 and 2011 to $5.66 billion and $6.2 billion, respectively. Last fiscal year revenue topped $6.5 billion, up 5.4% annually, according to corporate filings.
INDUSTRY MARKET SHARE
The amusement park industry is a $15.4 billion market this year, and profits are forecast at $1.6 billion up 4% since 2009, according the IBIS report. The Walt Disney Company has a 44.5% share of that market, well ahead of Universal Parks at 15%, Sea World at 10.6% and Six Flags at 7.9%.
The industry is increasingly dependent on U.S. residents and that is especially true again this year with continued global economic slowing. IBIS estimates about 80% of the industry’s total visits this year will be from domestic patrons.
The largest demographic of domestic visitors are children and teens — 25.6% of the market. The parents or these kids ages 35 to 54 represent about 21.6% of the visitors. Senior citizens represent about 19.2%.