Joined: Feb 21, 2006 Posts: 4196 Location: Sanford, Fl
Posted: Wed Dec 09, 2009 8:56 am Post subject: WDW Discounts to be scalled back in 2010
Iger: Disney will dial back on park discounts in latter part of 2010
The top executive at the Walt Disney Co. said this morning that he expects his company’s theme parks will scale back discounting during the second half of 2010, though he acknowledged that “we don’t know when we will essentially be able to turn it off.”
Disney Chief Executive Officer Bob Iger noted that the promotions Disney’s parks are currently offering – including another buy-four-get-seven hotel-night offer at Walt Disney World – are slightly smaller than deals they offered earlier this year, when the global recession was at its worst.
“We’ll be able to continue to dial that back over the latter part of 2010,” Iger told financial analysts at the UBC Media and Telecommunications Conference in New York.
Since the beginning of this year, Disney has been using a series of deep discounts at its theme-park resorts – on hotel rooms, food, tickets and more – to keep attendance afloat amid an overall slump in travel and tourism. While the company has relied on promotions to prop up attendance during previous downturns, it has not before used them for such an extended period of time.
The strategy has kept Disney World and Disneyland in Anaheim, Calif., full, which Disney executives say helps ensure continued word-of-mouth marketing and leads to return trips. But it has eroded margins: Operating profit at Walt Disney Parks and Resorts sank 25 percent during the company’s 2009 fiscal year, which concluded Oct. 3.
Some analysts have expressed concern that the strategy may lead to a permanent expectation of discounts among Disney customers, which would make it difficult to return to full prices without harming attendance. Some also worry that the promotions have simply cannibalized future attendance by luring people who were planning to take trips later.
Iger, as he has before, dismissed both concerns. He said, for example, the promotions have attracted new customers who would not otherwise have visited a Disney park.
“We’re not concerned about weaning ourselves and the marketplace of the discounts,” Iger said.
Still, Iger declined to predict when Disney might be able to stop discounting entirely. Tourism-industry experts have been watching for indications that Disney is preparing to pull back its promotions as a likely sign of improvement in the broader travel market.
Iger said it is difficult to make long-term predictions right now because travelers are not planning trips far in advance. “Visibility well into the year is very limited,” he said.
“It’s just not a market that lends itself to long-term commitments or early buying,” Iger said.
I think it's funny how in the middle of 2010, there are still a great many deals happening and maybe somebody didn't hear Bob Eiger's message. I'm not complaining, just amused by it.
"Some analysts have expressed concern that the strategy may lead to a permanent expectation of discounts among Disney customers, which would make it difficult to return to full prices without harming attendance."
Working in retail since 1985, I agree with this 100%. People want to make their purchase at a discount. How often do you go shopping for a shirt or a pair of shoes and pay full price? The thought process is the same.... _________________ 1974 - 1983 WDW day trips*1992 WDW offsite*94 Contemporary*97 WDW offsite*97 Polynesian*98 PAC DL*99 DLH*00 Port Orleans & Coronado*01 WDW offsite*02 DLH*02 HHB*03 POR*03 HHB*04 Moved to Orlando*06 DVC Member*06 DLR*07 OKW*07 VWL* 08 GCH*09 BLT*09 AKV*10 OKW*10 SSR*10 DLP
Joined: Jun 28, 2006 Posts: 366 Location: Celebration, FL
Posted: Wed Jun 23, 2010 2:56 pm Post subject:
doombuggy wrote:
"Some analysts have expressed concern that the strategy may lead to a permanent expectation of discounts among Disney customers, which would make it difficult to return to full prices without harming attendance."
Working in retail since 1985, I agree with this 100%. People want to make their purchase at a discount. How often do you go shopping for a shirt or a pair of shoes and pay full price? The thought process is the same....
Good point. Working in hotels and timeshare, I am very much aware of the dangers of conditioning the market. These analysts need to be concerned and now have to do a gradual reduction of the discount. They've probably lost a sizeable amount of money on the table by offering discounts to consumers that would have otherwise paid full price.
Good point. Working in hotels and timeshare, I am very much aware of the dangers of conditioning the market. These analysts need to be concerned and now have to do a gradual reduction of the discount. They've probably lost a sizeable amount of money on the table by offering discounts to consumers that would have otherwise paid full price.
At least get rid of free dining to start, and those who purchase it have to pass a one hour class on how to use it. I always get stuck for 15 minutes due to complications of the darn DDP, and all I'm trying to do is pay cash for a beer!
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