Deep discounts keep Disney park attendance high
From the beginning of the worst global recession since the great depress, Disney has been using deep discounts to prop-up the Disney brand. Many analysts are wondering how long Disney can continue to use discounted promotions to maintain attendance.
With the slowed economy, Disney has few options available other than offer Disney Quick-Service Dining Plan promotions. During the first quarter, Disney offered the stay four nights and get 3 free at select Disney resorts.
But analysts believe that Disney will have to continue offering the free meal plan in order to keep their turnstiles spinning. In fact guests have been receiving e-mails that their current quick-service dining plan with 5 days at a select resort including park tickets will be extended through Dec 17th, 09.
Disney has been able to sustain attendance with it's unique promotions while other theme parks including Universal had double digit declines. Even with the demonstrated resilience, it cost Disney deep discounts that will be reported in it's third-quarter earnings for next week.
The problem with driving traffic through promotions is that, travelers are motivated to travel sooner leaving large holes in future demands. Future demands affect everyone in the market from investors to tourism advertisers making the third quarter report essential.
Profits from the earlier buy-four-get-three-free promotion actually increased business by 1% percent said Michael Morris from UBS Securities. But there are many risk factors in offering long-term promotions.
According to Disney, they have been mindful about the long-term effects of promotions while being thoughtful and deliberate. Consumers can come to expect certain promotions on a regular basis setting the precedent on consumer demands.
Disney is hoping to be less aggressive on pricing promotions in the future as the economy improves.
With the slowed economy, Disney has few options available other than offer Disney Quick-Service Dining Plan promotions. During the first quarter, Disney offered the stay four nights and get 3 free at select Disney resorts.
But analysts believe that Disney will have to continue offering the free meal plan in order to keep their turnstiles spinning. In fact guests have been receiving e-mails that their current quick-service dining plan with 5 days at a select resort including park tickets will be extended through Dec 17th, 09.
Disney has been able to sustain attendance with it's unique promotions while other theme parks including Universal had double digit declines. Even with the demonstrated resilience, it cost Disney deep discounts that will be reported in it's third-quarter earnings for next week.
The problem with driving traffic through promotions is that, travelers are motivated to travel sooner leaving large holes in future demands. Future demands affect everyone in the market from investors to tourism advertisers making the third quarter report essential.
Profits from the earlier buy-four-get-three-free promotion actually increased business by 1% percent said Michael Morris from UBS Securities. But there are many risk factors in offering long-term promotions.
According to Disney, they have been mindful about the long-term effects of promotions while being thoughtful and deliberate. Consumers can come to expect certain promotions on a regular basis setting the precedent on consumer demands.
Disney is hoping to be less aggressive on pricing promotions in the future as the economy improves.
posted by michael at
9:08 AM
