spruce: ". Let's say there are 55,000 DVC member families. Each of these families has 4 members in their family. So, let's say we have 55,000 x 4 = 220,000 annual passes sold at $250 each to DVC member families. That's 55 million Dollars. This $250AP price reflects about a $75 discount on the non resident ap renewal rate. That discount cuts into our margin by 16.5 million, we should have collected 71.5 million.
Now let's say though that these families now spend 4 additional days in our parks each year spending $100 each day. That's 55,000 x $400 = $22,000,000. That 16.5 million discount is offset by a 22 million increase in park spending a net gain of$5.5 million dollars assuming our park expenses are covered by the discounted pass. ..."
Boss(me): First of all not everyone will buy every year, some DVC people bank and borrow and come every other year or go to VB or HH, or exchange, etc, that cuts your numbers...Second, we here at Disney pride ourselves on giving away as LITTLE AS POSSIBLE as we part the public from their money... APs are too valuable to give away 365 days for the price of 8 when we can give away MUCH LESS...Let's take that 10 day pass idea of mine and sell it for the same price as a 5 day pass(?$230)without the wter parks-- Now this pass is only good for 10 consecutive days after 1st use-but we advertise it at double the value- "10 days for the price of 5!" Of course we at Disney know that it is not double since those 5 Park Hopper days are good forever but we don't care, -we get the same money ($230) and it is for the person that doesn't intend to spend more than 5 days in the park unless you push/draw them in. They think "wow I was going to only go into the parks for 3 or 4 days and spend my food money etc at Disney only those days and the other days elsewhere, now I get 5 "free" days I will go in the parks more...Of course we say that we got them into the park when they weren't going to come anyway, we keep them on property away from the competion for most of those 10 days and they need a new ticket next time as opposed to using the remaining days on their hoppers...People will buy this even if they only stay 7 days (2 "free days!") Of course when they come back with my pass they need a new ticket! I (As Disney exec not me) would favor this approach over giving away the AP's...
If they want water park use they will go to the plus passes but some people don't want water parks or only want one day at a water park so they actually may spend one of those 10 days and BUY a separate water park admission for a day! Now we really are ahead as they give us more of their money and we have given away very little-which, after all is what is all about!
Paul
Now let's say though that these families now spend 4 additional days in our parks each year spending $100 each day. That's 55,000 x $400 = $22,000,000. That 16.5 million discount is offset by a 22 million increase in park spending a net gain of$5.5 million dollars assuming our park expenses are covered by the discounted pass. ..."
Boss(me): First of all not everyone will buy every year, some DVC people bank and borrow and come every other year or go to VB or HH, or exchange, etc, that cuts your numbers...Second, we here at Disney pride ourselves on giving away as LITTLE AS POSSIBLE as we part the public from their money... APs are too valuable to give away 365 days for the price of 8 when we can give away MUCH LESS...Let's take that 10 day pass idea of mine and sell it for the same price as a 5 day pass(?$230)without the wter parks-- Now this pass is only good for 10 consecutive days after 1st use-but we advertise it at double the value- "10 days for the price of 5!" Of course we at Disney know that it is not double since those 5 Park Hopper days are good forever but we don't care, -we get the same money ($230) and it is for the person that doesn't intend to spend more than 5 days in the park unless you push/draw them in. They think "wow I was going to only go into the parks for 3 or 4 days and spend my food money etc at Disney only those days and the other days elsewhere, now I get 5 "free" days I will go in the parks more...Of course we say that we got them into the park when they weren't going to come anyway, we keep them on property away from the competion for most of those 10 days and they need a new ticket next time as opposed to using the remaining days on their hoppers...People will buy this even if they only stay 7 days (2 "free days!") Of course when they come back with my pass they need a new ticket! I (As Disney exec not me) would favor this approach over giving away the AP's...
If they want water park use they will go to the plus passes but some people don't want water parks or only want one day at a water park so they actually may spend one of those 10 days and BUY a separate water park admission for a day! Now we really are ahead as they give us more of their money and we have given away very little-which, after all is what is all about!
Paul