Could Disney Gain Through Offering Thier Annual Pass Holders More?

Please welcome Michael Owen to The Disney Blog for this guest post. – ed

Throughout the current economic crisis theme park operators around the world have been coming up with varied marketing tools in order to keep the turnstiles turning and their hotel rooms full. Disney Parks & Resorts have been no different; Jay Rasulo commented at D23 that Disney’s recession-busting marketing strategy ‘Celebrate Today’ saw around 1 million people coming into the parks around the United States for free on their birthday.

Disney has recently announced their promotion for the New Year, ‘give a Day, Get a Day’. To put this simply if you do some volunteer work for a day Disney will offer you a free day ticket to one of their parks in either Florida or California. Of course this promotion will get a large number through the park gates, maybe more than the previous promotion. This is all well and good, but I’m not sure if Disney is really aiming their promotions at the right audience in order to best benefit their parks.

The most recent promotion and the one just announced are aimed mainly at those coming for one off trips, the same can be said for the free dining and buy four get three free on hotels and tickets. All of these offers are for people who are most likely coming on a vacation, or only for one day; meaning there is a limit to how much they will spend on-property over the duration of their visit. Admittedly, this does keep hotel rooms full and attendance high, but looking at it from a financial perspective I think heavily marketing towards those looking into, or currently in ownership, of an annual pass would prove much more successful.

So, why do I think annual pass holders are important? Simple, repeat business. An annual pass holder is going to want to make the most out of their investment, so they’ll be in the parks as often as they can be and whilst they are there they’ll most likely be spending money. Annual pass holders may not spend as much in a day at the park as a tourist would but the difference is a tourist may be in the parks 14-days a year whilst an annual pass holder could come 365 days a year, if they had the incentive to.

That’s the key point, an annual pass holder needs a reason to visit the parks more often, some sort of discount or offer which allows them to save money and/or have a more enjoyable time in the park. My suggestion for this would be a ‘Share the Magic’ promotion. My idea for this would be that anyone who buys an annual pass is allowed a select number of days a year in which they can bring a friend to the park for free. It’s similar to the ‘Celebrate Today’ and ‘Give a Day, Get a Day’ promotions apart from with this Disney are getting the profit from an annual pass.

By offering free days for friends Disney would see an increase in annual pass sales as people who wouldn’t normally see the annual pass as good value may have their mind changed by this offer. On top of that an increase in annual pass holders would see an increase in the money spent in park, as there’s more people there to spend it. As well as this the ‘friend’ who the annual pass holder brings on selected dates would be spending money in the park as well meaning Disney would be benefiting from offering such a promotion.

It also may be worth increasing the discounts that annual pass holders get whilst in the parks, it may mean they’re not paying as much for selected products but it may give them the incentive to buy something they wouldn’t at a higher price, again increasing the annual pass holders spending inside the parks. By being offered these discounts annual pass holders will feel that a day at the park is cheaper than before the promotions were introduced, meaning they’re more likely to visit more frequently.

Combine this with the current promotions, such as the recently reintroduced buy four get three free, and you’ll see both profits from both tourists and regular visitors increase, much better than just targeting one segment of the theme park visitor market, which is what Disney are doing now by primarily aiming at those visitors coming from long-distances domestically and those living outside of the United States.

Everyone enjoys being rewarded for their loyalty, maybe it’s time Disney took note of that too.

M. Owen

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10 Responses to Could Disney Gain Through Offering Thier Annual Pass Holders More?

  1. John says:

    I would like to add something to the discussion by suggesting that Disney offer a monthly payment plan for the Annual Pass. By offering this service it would open the possibility of owning an annual pass to more people. I believe it would be easier to budget a monthly payment than attempt to budget the entire cost of the annual pass.

    Just a thought!!

  2. Joe says:

    I’d love to know how many Annual Passholders Walt Disney World has, at least as a percentage of total visitors.

    Michael – are you a Florida Resident and a WDW Annual Passholder?

  3. J.C. says:

    I am a WDW Passholder. The benefits that are offered by the AP itself are nice, but the thing that tends to keep me away from Disney parks lately is two-fold: Firstly, I can never get into any on property restaurants to enjoy a meal (and supposedly a discount to entice me to eat there in the first place) because the out-of-towners have reserved (excuse me, in Disney parlance it’s “requested”) all of the tables at almost all dining establishments around the resort because they never know exactly where in “The World” they will be at any given day. So all available tables are requested. The restaurants, for some unknown reason, cannot release these tables. So my wife and I walk into, let’s say, Nine Dragons at Epcot, and there will be, without question, at least 3 or 4 open tables. But can we sit and eat? No.
    Secondly, the other problem I have faced lately is quality of food. For this I blame the Disney Dining Plan. Especially in the months of September and October where they entice out of towners with “free” dining. Since the travellers are not paying for this food, the quality of the food served everywhere has gone down tremendously. It’s for these reasons, and nothing else, that have had me turning to other Central Florida parks for enjoyment other than Disney. They can throw whatever discounts they want at me, it does no good if I can’t eat when and where I want, or when I do the food quality is terrible. Fix this problem, and the AP holders will come.

  4. Dean Marino says:

    My wife and I are Annual Passholders – and I have a different idea.

    No more room discount promotions or merchandise promotions, or free dining at the cheap restaurants… just give me a straight 15% off rack rate on rooms, in any season.

    What would I do? Come to WDW in seasons other than value or regular, and spend MORE in the Signature Restaurants … I may very well opt for higher end rooms in Delux Resorts.

    Disney? Every other business I work with understands the value of REPEAT BUSINESS. Don’t you think it’s time that you learned this?

  5. Better By Design says:

    While the “reward loyalty” idea is nice, and to some degree valid, it requires totally different views on the East & West coasts.

    For WDW, your suggestion of the guest passes has merit, in an area where annual passholders are relatively rare, and relatively expensive. The suggestions of modest (but real) discounts (and obviously good food) are great in terms of rewarding loyalty and increasing spending by these loyal WDW guests.

    On the West Cost, totally different story. Too many passholders, many of whom pop into a park for a short visit, and, I guarantee spend very little per visit, especially compared to the out of town guests. The “per day spending” number on tourists at DL has got to be crazy versus passholders.

    If anything, Disney should continue to up the annual pass prices, create additional tiers of passes (with discounts, special reservation phone lines for restaurants, exclusive walk up privileges, etc) to increase spending – of those guests willing to do it. The rest of the parks should be devoted to making the rare, once in a lifetime/childhood trip magical for those guests who are loyal to the Disney dream of saving (for years in some cases) to make magic happen for their children and families.

    • kevin says:

      yes east and west coast are different. disneyland has fast-food across the street. WDW….you have to drive 5 miles. not worth it and i think WDW guest would stay there longer due to the fact that they are in the middle of nowhere, so to speak.

  6. Joe says:

    Dean,

    The only group of guests that has negotiated a room discount in almost every season at WDW and Disneyland (except for Holiday season) is AAA – and only because they have 50 million members – and even then, only a certain percentage of rooms are allocated for that discount. That discount ranges from 10% to 20% and varies by resort level and season.

    I don’t see the number of Annual Passholders wielding that type of power.

  7. Phil Johnson says:

    I was just mentioning this same thing this morning to someone else. There’s been a lot of complaints about the D23 events for the same reason. I think the company is missing the fact that AP holders are their most devoted people and it would behoove them to create more.

    I love your idea about “bring a friend”. That would get me to buy an AP again, if I can bring my girlfriend for free once a year.

  8. Pingback: Phil Johnson of Roadside Attraction » Disney Stuff » Disney needs more perks for Annual Pass holders

  9. Linda says:

    I agree that Disney has lost sight of it’s most loyal fans and customers, the annual passholder. I have been a passholder for more than 20 years and when I first became a passholder the perks were so much better. It seemed that they gave much better room deals the passholders. Now, I can book a room as a guest without an annual pass for only $10 more dollars a night. If the room discounts were considerably more, I would come more often, which would mean spending more money in the parks and on food. Think about this, if the rooms were considerally less for passholders and they could go four times a year for 5 days each time, versus two times a year for 5 days each time and on average spend a $100 a day on food and other things, Disney would be getting twice as much money from that one passholder. Discounts can now be had by holders of the Disney VISA and memberships in other organizations such as AAA. Offer other things and special perks that you cannot get unless you are a passholder. I remember once they had a special passholder lounge for a short period of time in EPCOT’s The Land Pavilion. It was upstairs and you had to know the code for the elevator to access it and you had to show your pass before you could enter. Once in there you could have free cookies and drinks, watch TV or just take a nice break. They had very comfortable sofas and chairs and a play area for the kids. And it was quiet. This was a very welcome treat from the normal hustle and bustle in the parks. Mickey and others even came in to visit after he was through making his rounds in the Garden Grille. Now this couldn’t have cost a lot of money, but you certainly felt special. They already have these areas in the parks for their corporate sponsors to enjoy, so why not come up with an agreement with them and have it all the time for passholders. I think bigger discounts and more personalized incentives is what will help bring back passholders or even entice more to become a passholder. If you offered the “bring a friend” deal, you could also have a special price if that person decided at the end of the day that they wanted to become a passholder. Many people can be sold on the try before you buy incentive. And repeat business is what keeps businesses going, especially in these tough economic times. Just check with any restaurant or retail establishment and I think they will say the same thing.

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