Analysis Of Pricing Strategy In Walt Disney World Amusement Park
Amusement park or Theme Park is a park that offers different forms of attractions for instance rides and games and other fun filled forms of entertainment. The parks usually provide attraction for different age groups. They have high and low seasons; they sometimes fill to capacity during holiday seasons. They are stationed on one place and are made for long lasting operations. Amusement parks or theme parks are a big attraction sites as well as a big source of income for the organization or institutions that own the parks. Walt Disney World in the United States of America is one of the most visited amusement parks in the country. It has come up with a new admissions pricing strategy. They have set low prices during low end seasons and their prices increases all the way to 15% high attendance days. They have flexible date-based tickets for their parks. They have made it easier and more appealing to purchase tickets online by saving some cash when one purchases several days ticket. Walt Disney World variable-priced ticket system helps to manage high demand since others prefers to visit during off-peak seasons when prices are low. The new admission pricing strategy is based on the popularity of that day or season. It is a system that aims in helping the organization to capitalize on profit during the high peak and off peak season. The prices are higher during high peak and they decreases during low peak seasons or days. Ticket prices decrease as you purchase more days.
The strategy encourages the guests to visit on less congested seasons of the year. The strategy is used in many various organizations for instance in booking a flight tickets, in hotel industries. Variable pricing has not been common for theme parks. Most of the theme parks have been using fast-pass tickets. Variable pricing system has always been common in hotel industries, airlines and car hire companies. Walt Disney has pioneered the variable pricing concept for their theme parks. The Disney version of the variable pricing is based on dates of the calendar. The prices are determined by “peak,” “moderate” or “low peak. ” Guests can request tickets for days with the lowest pricing for various lengths of stay. These prices have got not only the guests but everyone talking about it. Definitely some are uncomfortable with these varying prices since their schedule is fixed in such a way that the only time they have is only during peak seasons. These guests will have to cough more money for the peak seasons. However, the guests and the organizations get a win situation because the guests get to choose a date of their choice and the organization get to control overcrowding. Switching from the traditional methods of pricing to the variable pricing system helps in maximizing revenue through, encouraging a lot of guests to attend during off peak days and fewer guests during peak days to avoid congestion.
The system reduces congestions which also reduces on waiting time. When people don’t spend time in line waiting they will spend it in the park having the best experience of their lifetime without much pressure from the guests waiting outside. In addition, the park operators plan on how to distribute their staffs and operations in a better way. Smaller crowds bring about peoples happiness every time they visit as compared to overcrowded times. Walt Disney Company said during an earning call that attendance at World Resort in Florida had a gradual reduction of visitors in the beginning of the year and increased revenues due to the high pricing. Moderate attendance in the park brings about a better experience of the park. Some of the advantages of variable pricing are; effectively controlling crowds thus creating a better guest experience by reducing the amount of guests which end up giving them more space for them to enjoy their visit. This also helps the organization to plan and put everything in place and order to avoid confusion. Profit margin increase for the organization due to a well spread out pricing dates that are determined by high peak days, moderate days and value days. The attendance is well spread out due to the pricing. The guests are also happy because they get to buy tickets that they can afford and at their own convenience. The guests feel that they are getting value for their money for the services and goods that they have paid for. Due to reduced overcrowding and controlled guests levels, the guest gets enough and better experiences in the park. The organization also is able to cater for the guests by offering good quality experience thus promoting the trust and happiness of the guests. The variable pricing helps an uninformed guest know when to expect the parks to be extremely crowded, high season like summer and Christmas. The system helps to show months with low attendance so that those with flexible schedule to take advantage of.
The system also help the organization to plan early prior to their due dates, Variable pricing also has its disadvantages for instance some of the guests are not okay with these varying prices since their work schedule is fixed and may be they can’t afford the high cost prices during the peak seasons. The only time they are available is when the prices are exaggerated hence they are forced to dig deeper into their pockets to meet their prices. The organization gets reduced profits during discounted sales drop because its not paid1the full amount that is normally charged. when the prices shoots back up the organization may lose the new clients who cannot afford the high price. For a permanent discounted price for special groups for example; low student rate will result to a continuous lower profit. Guests prefer small crowds and shorter lines. It is hence expensive to bring family to an amusement park. This is because many travel for longer distances just to visit those parks only to find large crowds such that one has to wait for others to finish their adventure in some sections. This becomes more tiresome and stressful hence they withdraw. Variable pricing is a good system to both the organization and the guests in that it helps the organization to plan prior and earns more profit for the organization due to the well spread out date based pricing. The guests are able to afford tickets during the low prices on low peak days. The guests are also able to plan in advance for the best days that favor them.
References
- Maglaras, C. , Meissner,J (. 2006) Dynamic Pricing Strategy for Multiple –Products Revenue Management Problems.
- Martin, H (2016) Disneyland Demand Pricing Andrew, G
- (2008) Pricing Strategies for Small Businesses Self Counsel Press
