Theme Park Price Index and the Disney Effect.

I saw this line graph on my Twitter feed from the FRED data bank. It shows the change in the price index for "Amusement and Theme Parks" admission ticket prices.

They started at the beginning of 2006 with an index of 100.  As of May, 1 2016 the index was just a touch over 180.  This means that theme park ticket prices overall have increased by 80% in that time span.

My first thought when I saw this was what is the impact of Disney on the price of tickets.  I found this website which tracks their price changes.

I inserted RED bars (month and year on top) that show all of the Disney price increases (they had no price decreases) in this time period.

At the beginning of 2006 a single one day ticket to a Disney park was priced at $63.00 (see link above). Today a single day ("regular" price) is $110.00.  That is a 75% increase!

Remember, theme park (Six Flags et al) tickets increased by 80% overall.  Disney accounts for a disproportionate amount of that change.

If Disney admission tickets had just kept up with inflation during that time (using the CPI), ticket prices should only be $75.05, a 19.1% increase.

Seems clear that Disney is a "Price Maker" as opposed to a "Price Taker" and they are a "Price Leader" as well. However, the latter is harder to discern without doing the math.

When Disney raised prices did other theme parks follow suit at the same time?  If you look at the times in-between Disney price increases (gotta look really close) there seems to be a bump up in the line indicating a lag (sometimes short, sometimes longer) when other theme parks followed with price increases.

I did find it interesting that Disney elected to increase prices in the dead middle of the Great Recession (noted on graph in gray area).

Pricing power, indeed!

Did Disney raise its admission prices just to keep up with inflation? (Also a link to historical prices to the "Happiest Place on Earth")

This is an extension of a Disney post on the recent price increase. Here is that one.

Below is a single day ticket for entry into Disney World from 2003 (for a list of historical admission prices to Disney, go HERE). Note is says entry into Epcot for $52.00 but that was the price to get into any of the parks.

For the first time Disney has priced Magic Kingdom at a different price than the other parks.  Magic Kingdom now costs $95 for a one day ticket. It costs $90 for a one day ticket to the other theme parks.

I have read in several places that Disney has increased the price of admission well beyond the rate of inflation for the year. True enough. But what about longer term?  Maybe they are just making up for lost ground with not being able to raise prices enough in the past?

According to this BLS inflation calculator, $52 in 2003 in today's dollars would be  $65.72. Yikes! The ticket price today  is well beyond the 10 year rate of inflation. $95 - $65.72 = $29.28 divided by $65.72 = 45%.

I think they are doing fine on the keeping up with inflation front.

Source: HERE

Disney has just (this week) increased the admission price to its theme parks. Here is the rest of the story not reported by the media (yet).

For Disney Fans this is important.  Admission prices to DisneyLand and DisneyWorld have just increased AND they have disaggregated a ONE-DAY ticket to Magic Kingdom from the rest of the parks.  Previously admission prices to ALL of the theme parks were the same.  If you buy a multi-day ticket it includes Magic Kingdom as one of the parks you can visit.

Below I pasted the new price list from the Disney website. The new prices are in BLACK and the previous prices are in RED (I inserted those).  I also put a circle around the Magic Kingdom ticket to highlight that it IS different from the rest of the parks now.

I also calculated the percentage change in price for Adult tickets (age 10 and over) and a child's ticket (3-9). You will see those numbers to the left.

Source: Disney Website

I have read (and just saw on the news) only about the 6.7%  change in price for the single ticket price for Magic Kingdom.  The price single ticket price for the other parks increased too, but only by $1.00 (+1.12%).  That is positive, right?

What I have NOT seen is an analysis of the how the Multi-Day ticket prices are impacted.  After all, who REALLY only goes to DisneyWorld for just one day!!

Look at those change in prices and percentage changes as you buy additional days.

I think Disney believes the 3 and 4 day purchaser of tickets are not going to significantly reduce their quantity demanded for days at the theme parks.  Demand for those tickets isrelatively Inelastic.

They are probably right. If you can afford to visit the parks for that many days then an 8%+ price increase is not going to discourage consumption by more than that percentage change in price.

FYI: Here is the photo of admission prices in January 2013 when I last visited Disney Orlando.  This is where I got the price data in RED above.

Does DisneyWorld fascinate you? Nice NYTIMES article on how they monitor lines and wait times...It is scary how efficient they are without you knowing it!

I am a recent convert to the greatness of DisneyWorld...As an Economics teacher, what particularly interests me is the "magic" and how it is created and maintained.  Whenever I go there, I "look at the trees instead of forest" and try to pinpoint all the nuances of how Disney Inc. tries to manipulate us into having the experience they want us to have.  Some would say that takes the fun out of it...Hey, I say it puts the fun INTO it!! 

If you are interested in the behind the scene machinations of how they monitor lines and get people moving without their explicit knowledge, then  it will be worth your time to read the whole article. The study of lines, or "queues", are the subject of much social science research. Businesses are always looking for ways to shorten customers wait times, make that time less of a burden on customers, and/or try to wring out additional sales and profit from that wait time....Good stuff!

NYTIMES: Disney Tackles Major Theme Park Problem: Lines

""Deep in the bowels of Walt Disney World, inside an underground bunker called the Disney Operational Command Center, technicians know that you are standing in line and that you are most likely annoyed about it. Their clandestine mission: to get you to the fun faster....And so it has spent the last year outfitting an underground, nerve center to address that most low-tech of problems, the wait. Located under Cinderella Castle, the new center uses video cameras, computer programs, digital park maps and other whiz-bang tools to spot gridlock before it forms and deploy countermeasures in real time. ""