Recently, there has been considerable handwringing about the cost of a Disney vacation. Along with an assortment of travel articles, the New York Post and even the New York Times got into the action. The economics of Disney World is fascinating, as is the role that Disney plays in American culture. A trip to Disney World (or Disneyland for those on the West Coast) is a rite of American childhood, a corporate pilgrimage unlike any other in the world. So why are people upset?
A lot of those claiming that Disney has “abandoned the middle class” are kidding themselves. Is a Disney vacation expensive? Of course. Prices have risen, with a one-day ticket to Disney World or Disneyland doubling over the last decade. Yet the sheer popularity of Disney shows these concerns are somewhat overblown. Tens of millions of people visit Disney every year. There are a lot of wealthy Americans, but not that many. Len Testa, the writer of “The Unofficial Guide” to both Disney World and Disneyland, claims Disney vacations are now “for the top 20 percent of American households — really, if I’m honest, maybe the top 10 percent or 5 percent.” That’s complete nonsense. If only the top 10 percent of American households could afford to visit Disney, these theme parks would not be able to sell out thousands of hotel rooms every night and regularly have multi-hour wait times for the best rides. Not even close.
This is ultimately an issue of supply and demand. When Disney World opened in 1971, the population of the United States was 2/3 of what it is today. The country was also much poorer. Most Americans had never flown on a plane. Vacations were mostly regional, if they occurred at all. Disney couldn’t charge that much for a ticket, which cost less than $30 after correcting for inflation. In the interim half-century, leisure travel in America exploded. Now it’s totally normal for a family of four to fly cross-country multiple times a year. I don’t think twice about flying home for Christmas every December, a luxury that used to be just for the rich. It’s a totally different era. All that prosperity means more competition. Crucially, not only has the population increased, but the types of Americans who want to go to Disney has widened. Disney used to be the province of families. Today, there are hordes of “Disney Adults” who regularly trek to Orlando to enjoy the parks. The increased prosperity plus the broadening appeal of Disney means more demand.
The supply side is a story of arrested growth. Initially, Disney World grew rapidly. Along with Magic Kingdom, tourists can now visit three additional theme parks and two water parks. There are hundreds of rides and dozens of other events every day for guests to see. Not to mention the characters. Yet that growth stalled in the 2000s. Disney World went from one park to four parks (and two water parks) in its first 30 years. Over the next 30, not a single new park has been built. To be fair, many new rides have opened over the course of the 21st century. Existing parks have expanded. Still, it’s telling that no new parks have been built. Whether this is an issue of logistics or regulation, I don’t know. Regardless, it’s interesting that a company that spent decades rapidly expanding totally changed its business plan.
We see this same supply stagnation elsewhere. Similar concerns abound about professional sports. In the year 2000 there were 31 NFL teams. Today, as football has cemented itself as the most successful and popular sports league in history and the population has continued to grow larger and more affluent… there are 32 teams. With a skyrocketing demand and a limited supply increase, the result will always be an increase in price. Especially because of capacity limitations, Disney doesn’t really have any option other to increase prices.
I think the best argument one can make about the worsening of Disney isn’t the price increases. It’s the creation of a tiered experience. Disney has had premium options for many years. Why wouldn’t they? I think the journalists are reaching when they talk about $3,000 a night suites and Michelin-starred meals at $600 a person as a bad thing. Let the rich spend the money on what they want. Let attractions charge them. The one exception to this, in my mind, is the creation of paid ride reservations. For decades, everyone had to wait in the same lines. People could stay in Disney properties to get early access, but everyone knew that a trip to Disney meant a lot of waiting. Today, the wealthy can cut hours-long lines and hop right on the best rides. For a fee, of course. This directly contradicts Walt Disney’s central ethos that everyone should be treated like a VIP. Separate lines couldn’t be more antithetical to his mantra. That said, if people are willing to pay money to cut the line, then Disney has every right to charge it.
Ironically, after reading the New York Times article, I think they prove themselves wrong. The article follows the Cressels, a middle-class family, as they try to afford a four-generation Disney vacation. Scarlett Cressel is a bus driver. Her adult daughter appears to be a single mom who works as a special-education assistant. This is a middle-class family if there ever was one. They have issues with long ride times and the weather. Ms. Cressel’s mobility scooter (not rented through Disney) has mechanical issues. The trip, however, is deemed a success. Ms. Cressel says she is already planning to return, but to spend even more money on a nicer hotel. People can complain all they want, but the Cressels prove Disney is still obtainable.
Ultimately, something that gets lost in a lot of discussions about Disney is that it is, in fact, a company. A company that has created core memories for hundreds of millions of people and is responsible for a significant amount of American culture, but a company nonetheless. If people are willing to fork over $200 for a ticket, then Disney should charge $200. No one has been wronged if they can’t afford a family trip to Disney, just like no one has been wronged if they can’t afford a Caribbean cruise or ski trip to Aspen. The goal of Disney is not to be accessible to everyone. It’s to provide a magical vacation that your family will always remember - for a price.