Hotel Pricing Hypothetical RE: 4/17 DisUnplugged Podcast

[Tiffany Hafner]

Hey,

In today's DisUnplugged Podcast, the team discussed Universal building hotels (value hotels?) and when is going to be the point when Disney has to lower their hotel prices to compete with Universal, and/or are more people going to stay at Universal and travel to Disney. I believe it was Steve that brought up, how would that affect the crowd levels? Since more people would be able to afford (at least the hotel) coming to Disney again, would crowds become even worse?

Hypothetically-speaking, and, I don't know how much of a stretch this is, does anybody see the parks reaching capacity more often being a problem if crowds get worse? I've heard of Christmas, New Year's, maybe the 4th of July reaching capacity. If Disney lowered their prices, and more people were choosing to stay at Universal and coming to Disney themselves, what if the stress of having to worry about whether the parks reach capacity was added to your vacation and happened on a pretty regular basis?

Does anyone see that happening? Could Disney function like that? I don't know about the first question, but I don't think Disney could function. I surely would have a hard time going back if I knew that I needed to make efforts to be first in the door if I wanted a chance of getting in the parks.

What does everyone think about this, though? Hypothetical of course, and, as stated, I don't know how much of a stretch this is as I don't know how close Disney parks come to reaching capacity even during the busiest seasons. I just wanted to hear different opinions.

 

[rteetz]

It was the Disunplugged podcast not the Daily fix.

I don’t see Disney lowering prices until they see a drop. Their occupancy rates and attendance haven’t dropped so why should they lower prices. With everything coming in the next few years I don’t see a drop coming unless we get hit hard with a recession.

 

[MamaBelle4]

Hypothetically-speaking, and, I don't know how much of a stretch this is, does anybody see the parks reaching capacity more often being a problem if crowds get worse? I've heard of Christmas, New Year's, maybe the 4th of July reaching capacity. If Disney lowered their prices, and more people were choosing to stay at Universal and coming to Disney themselves, what if the stress of having to worry about whether the parks reach capacity was added to your vacation and happened on a pretty regular basis?

There are plenty of WAY cheaper and closer options than Universal Studios would be. Even if Disney lowers it's prices by 20%, there are plenty of cheaper options right off site.

I know it's been a couple years, but in October of 2014, I stayed in a very lovely 3 bedroom suite for 6 nights for $900. People who want to come down but don't want to pay Disney's inflated prices, certainly can do so now. I don't think a drop would increase capacity significantly.

 

[tlmadden73]

I don't see Disney dropping prices unless they see occupancy rates go down.
If anything, they will just keep the prices the same and up the perks or just offer more "discounts" to make people think they are getting a deal (aka the Kohls philosophy).

Disney will already be crowded whether hotel rates go down or not: I don't see occupancy going down simply because:
1) SWGE coming in 2019
2) Tron and the new Epcot rides coming in 2020 and beyond
3) MK 50th anniversary
4) People like being "in the bubble" (I know I do).
5) The perks of staying onsite are still desirable for a lot of people. (Especially 60 day Fast Passes).

Yes .. there are plenty of cheaper options within 15 minute drive or less from WDW, but some people just like staying at the hotel.
(I mean . .I am opting to stay at All Star Movies for my next trip .. not because it is cheap or luxurious . .but because I think the kids will find all the giant characters fun)

 

[Krandor]

I don't see Disney dropping prices unless they see occupancy rates go down.
If anything, they will just keep the prices the same and up the perks or just offer more "discounts" to make people think they are getting a deal (aka the Kohls philosophy).

Disney will already be crowded whether hotel rates go down or not: I don't see occupancy going down simply because:
1) SWGE coming in 2019
2) Tron and the new Epcot rides coming in 2020 and beyond
3) MK 50th anniversary
4) People like being "in the bubble" (I know I do).
5) The perks of staying onsite are still desirable for a lot of people. (Especially 60 day Fast Passes).

And also the new gondala coming. Better transporation from on-site hotels will only help. I mostly do rundisney events and for me race day transportation is worth staying on-site.

 

[jade1]

I think giving benefits to neighbor hotels, was their way of lowering prices.

 

[Killer Fish]

They will not lower rates unless the market dictates it.

As of February Orlando committed occupancy is up 2.1% for the rest of the year with a 5.5% rate increase (4th highest among top 25 North American cities).

As mentioned above only a recession is going to force change right now.

 

[danikoski]

I think giving benefits to neighbor hotels, was their way of lowering prices.

I believe you are right that this is Disney's answer to more "affordable" hotels. It may only be temporary, but I envision this will be a thing probably through to the 50th Anniversary. Especially with All Stars coming up for a major refurbishment like Pop. Until that is done, I see them continuing to extend benefits to select DS hotels. Also, it potentially helps increase traffic at DS, especially for the hotels that are by the walkway to DS. And with Universal's hotel announcement, it may become more of a permanent thing.

 

[tlmadden73]

I believe you are right that this is Disney's answer to more "affordable" hotels. It may only be temporary, but I envision this will be a thing probably through to the 50th Anniversary. Especially with All Stars coming up for a major refurbishment like Pop. Until that is done, I see them continuing to extend benefits to select DS hotels. Also, it potentially helps increase traffic at DS, especially for the hotels that are by the walkway to DS. And with Universal's hotel announcement, it may become more of a permanent thing.

I think it is more to draw people to Disney Springs over just trying to extend the affordable hotel footprint.

Disney Springs is just rather disconnected from the rest of the Disney Bubble .. unlike say CityWalk or Downtown Disney (in Disneyland) where you have to walk through it to get to the parks.

Even with the bus system, I am sure there are plenty of on-site guests that don't go over there to eat or shop. Even with bus transportation, it is not a short ride from the hotels (especially the Deluxe resorts).

 

[bartleby1]

My family has already reduced the number of trips we take to Disney due to the drastic increases over the last few years. We did annual trips years ago but it got to be too expensive as their prices kept going up and up. Many of those trips, we wanted to do Universal also, but their hotels were more than we were willing to pay so we stuck with doing only Disney. If Universal had value hotels, we most likely would have split our stay between the two. So, it wouldn't have stopped us from going to Disney, but Universal definitely would have taken some of our time and therefore money away from Disney. I'd suspect many would do the same. However, I don't think it would really make enough of a dent in disney visitors to make them lower their prices. There are plenty of people still willing to pay their higher rates....it just won't be me, LOL!