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A Disney World vacation is no cheap matter. We’re reminded of that every year when ticket prices are regularly bumped up. It’s usually paired with a bunch of news articles about Disney becoming an increasingly expensive experience. However it wasn’t always that way. So why is Disney so expensive?

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Back when Disney World opened in 1971, an adult eleven ride ticket book cost $5.75 and a room at The Contemporary cost up to $44 a night. Even adjusted for inflation, that would come out to around $34.50 for the tickets and $264 for the hotel. In reality, a one-day Magic Kingdom ticket costs $132 with tax, and a night at The Contemporary, facing the theme park, can run around $675 a night.

So what happened? When did Disney World get so expensive? Well the quick and short answer is that CEO Michael Eisner and CFO Gary Wilson happened. The long answer is that, circumstances at the time really made the decision simple and it’s kind of hard to vilify them for what was otherwise a sound business move.

You see, Disney as a company was in a bit of a rough spot when Eisner took over as CEO. With the death of Walt Disney in the later half of the 1960s, the 1970s were somewhat of a lost era for the company. Sure today we can look back at projects like Robin Hood and The Rescuers and see them as classics, but the truth is the company wasn’t growing financially during this time.

A company once known for constant innovation at the hand of Walt Disney quickly became one that relied on its old tricks due to a “What would Walt do?” mentality. This lack of evolution and change was partially beneficial for fans, as it was an era in which admission prices at the parks didn’t rise too steeply. Annual increases ranged from fifty cents to a dollar or so.

Unfortunately corporate raiders on Wall Street didn’t care about what Walt thought twenty years prior, and so the stagnation of the company into the early 1980s made Disney a prime target for a hostile takeover. Thanks to the efforts of Walt’s nephew, Roy E Disney, the raiders were ultimately warded off. If you want to know more about how, I have a great book suggestion at the end of this video. Long story short however, it meant a change of leadership at Disney, and that meant bringing in Michael Eisner and Frank Wells.

In order to keep away any future wall street raiders Disney needed to start improving their bottom-line, and fast. Eisner brought in a new Chief Financial Officer from Marriott named Gary Wilson, and without any hesitation ticket prices started to go up.

Just to give you an idea of the rate and amount of the increases, consider this. During the two years prior to Michael Eisner joining the company, Disney World ticket prices rose twice for a total of three dollars, from $15 for a one-day ticket to $18. In the two years following his arrival tickets rose in price five times, jumping eight dollars to $26. That would just be the beginning.

The surprising part for Disney was that even with the frequent price hikes, attendance wasn’t dropping, proving Eisner right. There was more value in the admission to Disney parks than Disney was realizing. By 1987 the company’s operating income jumped from just under three-hundred million dollars to nearly eight-hundred million dollars. The turnaround kept raiders at bay.

Prices continued to rise in the 1990s and early 2000s. Even into Bob Iger’s tenor as CEO over the last ten years, tickets would see annual hikes that leave us at the prices we have today. Now some might argue that Disney is very different from the state it was in thirty years ago, and so they should stop raising prices. However even though Disney improved drastically, they weren’t always totally in the clear. For instance, as late as 2004, Disney was the target of another takeover bid, this time by Comcast.

For better or for worse, the growth-focused mindset of Wall Street and the constant looming threat of being purchased, willingly or otherwise, by a bigger fish means companies like Disney are forced to try and grow every single year. This means more revenue, and this means higher prices to get there.

So ultimately Disney World is so expensive because historically the price hikes were crucial to elevating the company as a whole and closing a near 15 year gap of stagnation. It protected the company from outside buyers by making the company more valuable. But beyond that the answer is because, when all is said and done after each price hike, people are still willing to pay for it.

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Livia

The author Livia

Crossfitter, Blogger, World's Pickiest Vegetarian, Ninja in Training, Vampire Slayer. Blue is my favourite color. It's also the only color.

19 Comments

  1. Disney is not expensive when they provide 5 star customer service and world class entertainment.  you are paying more for your crappy phone service.

  2. Let's not forget that Disney world is also the size of a small city that's always growing. It takes a fortune to keep a city going.

  3. Supply and demand. I think it would be great if they'd have some days cost an absorbent amount more, say $300. For those days you'd need reservations and they'd have to sell half the tickets so people who had the money could experience it with smaller crowds. They'd still be making more money on these days for several reasons. 1. Less Cast members would be needed because smaller crowds. 2. triple the price but only cut attendance in half. 3. Them rich folks is gonna buy more souvenirs then us poor folks complaining about the price . On the other day's keep the prices around $100. They sort of do this with the extra magic hours.

  4. Stop going there. Prices will drop quickly. Problem solved. Keep eating the crap and that's exactly what you'll do. Eat crap forever.

  5. Most of all Disney World visitors are not native residents of Florida most Floridians can’t even afford to visit Disney World it’s mostly out of stators or foreigners

  6. 1. You get what you pay for, its WORTH it!
    2. Keeps the riff raff out. Even the other guests in the park are great people.

  7. Unfortunately, although we have enjoyed Disney on so many occasions in the past, it has now become too expensive and we shall not be going again, when there are so many other attractions in Florida (and I don't mean theme parks). The greed for profit has spoiled much of what was good- take the fireworks on the lake as an example. It is very difficult now to view unless paying extra for priority locations, with more of the view hidden by buildings.

  8. When our family went to Disneyland in April the total package which included air hotel park tickets and a princess breakfast was just over 4400 Canadian that was for 5 people 2 adults and 3 kids this does not take into account the 2k we took with us for extra stuff. It cost us 2700 to get 2k US dam exchange rate at the time lol. When we look at going to Disney world it would cost us over 7k. Now I do realize that obviously going to Florida is a longer trip then say California. Either way very expensive. But that being said I also look at it as a once in a lifetime opportunity. Great video btw.

  9. Prices are ridiculous at Disney parks and official hotels. I understand there's going to be or may already be a Four Seasons Hotel at WDW. They really seem to be catering to wealthy people. Most of the hotels at WDW are in the luxury class. They don't have many moderate hotels and the "value" hotels are more like a nicer Motel 6. The bus system has lots of things that need to be fixed. You can wait a long time for buses and the fill up quickly. There is a push and shove mentality to get on the buses. Sometimes people have to wait for another bus because people pushed to get in front of them. There's no civility trying to get on the buses. At Disneyland you have to walk to get into the parks. I was surprised to see how expensive the Disneyland Hotel had become. They have 2 others. One is excessively expensive and I don't know much about the other hotel. There are a lot of other things like charging a separate price for special celebrations and kicking everyone else out of the parks. We went on a nice vacation to Disneyland and one to WDW, but that was when the price of things wasn't as ridiculous as they are now. I'm not even going to discuss how much the food and drinks cost at the parks. As long as people are willing to pay ridiculous prices, they will continue to raise them. Pretty soon only wealthy people will be able to afford the parks. Maybe that's what Disney is pushing for.

  10. Honestly based on the experience that Disney has recently been showing vs the amount of money they’re earning now…really doesn’t make sense. Frozen has become the best selling franchise and they’ve already bought 2 companies. They’ll have to lower the price soon. Other parks like Universal Studios have made a ton of coupon and price slashed and they’re attendance is pretty good. Sometime in the future, Disney is going to have to drop the prince on EVERYTHING. It’s not just the parks. I went to the Disney store outside of Disney world and I actually saw a pack of 2 medium sized cookies for $5….I doubt they’re worth the money too. Not even a pencil was below $4. That’s WAY too expensive.

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