Tuesday, January 8, 2013

Just back from Disney World with an Economics lesson. You did not think I was riding the rollercoaster, did you? Has Disney raised its Theme Park prices TOO MUCH in the past two years since I last visitied? See my analysis here.

Below are the prices for admission to the Disney World Parks in Orlando, Florida.  Just got back from there for vacation!

A one day ticket today for a person 10 and older is $89.00 and under 10 is $83.00.

In 2010, I did a blog entry on elasticity of demand using a price increase they imposed at the time (go HERE for that entry).  At that time the price increased to $82 for 10+ and to $74 for under 10.
Photo+

For the 10+ ticket that is an 8.54% increase and a 12.16% increase for the under 10 ticket.

If we were to factor IN inflation (using the BLS calculator) that $82 dollar 10+ ticket in 2010 should be $86.57 in today's dollars. It is actually $89.00)

The under 10 ticket ( $74 in 2010) would be $78.13 in today's dollars. It is actually $83.00.

Quite amazing that the Disney was able to increase their ticket prices FASTER than the general rate of inflation DURING a prolonged economic downturn. That shows some significant pricing power within this market.

Hold your Fast Pass, there Goofy!!

Let's look at what is probably (I have no idea for sure, though) a more common ticket purchase---a 3 Day ticket. 

A 3 Day 10+ ticket cost $232.00 in 2010. In 2012 dollars that is $244.94.  The ticket price today is $242.  Increased slightly less than the rate of inflation.

A 3 Day under 10 ticket cost $214.00 in 2010. In 2012 dollars that is $225.95. The ticket price today is $226.00.  Increased slightly less than the rate of inflation as well.

So, this result shows Disney may not have the pricing power I initially thought they had.

I suppose I could do the math to figure out the rest of the days, but I am still tired from the trip.

Extra credit if you want to do it for me.  :)
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