Tuesday, June 29, 2010

The Economics of Annual Passports


A common theme on Disneyland message boards is that annual passholders are causing strange things to happen at the parks. True, they behave differently than day trippers and vacationers, and this can have adverse effects on the resort.

Passholders are more likely to drive alone to the park, overloading parking lots (which Disney did not adequately plan for). The parks are not necessarily more crowded, but the crowds are distributed differently. Today, Friday nights feel more crowded than Saturdays. Premieres and openings see massive crowds, sending Team Disney Anaheim running for ze hills. The day before summer blockout days begin are especially uncomfortable. Some long-time fans have pretty much thrown out all conventional wisdom about which days are best to visit.

I've noticed that annual passholders don't hit rides like other guests do, sometimes preferring to hang out, clogging walkways, tables and other areas. I remember Friday nights in 2007 in which the park was packed. It was difficult to move in most lands, yet Indiana Jones would have a 15 minute wait. Space Mountain would post a 30 minute wait. Very strange behavior, indeed.

Of course, there's nothing inherently wrong with an annual passholder program. I had one for a couple of years and you probably the same. Season passes are standard features at amusement parks across the country. While most people are content to visit once or twice a year, a theme park operator also has a subset of their customer base that enjoys visiting more often than the average person. They pay a lump sum for nearly unfettered access so that the marginal cost of subsequent visits is relatively low. This is all fine and well, of course, but can there be too much of a good thing?

Consider the ways in which an inexpensive annual passholder program can create perverse incentives to visit the park. Once you get past that initial lump sum cost, the marginal cost of visiting the park is relatively low. The price of your admission (and parking if you added it on) is a sunk cost, one that you don't consider anymore. The marginal cost of visiting the park now consists of transportation costs and time. This has a tendency to cause annual passholders to overuse the park because they don't consider the full cost of their visit anymore. 

Driving works in a similar way. For the typical car owner, it costs about 50 cents per mile to operate their vehicle. Most of this cost consists of the initial capital outlay for the vehicle and depreciation. The capital outlay is a sunk cost and depreciation isn't on the average driver's radar. 

When the car owner does decide to drive, they primarily consider the cost of fuel, which is significantly cheaper than 50 cents per mile, leading to overuse. Even the cost of fuel is in the background as you don't have to insert quarters into your dashboard to begin driving. This in turn leads to overburdened roads and highways, more air pollution and more accidents.

The concept is the same, an initial lump sum cost, followed by a relatively low marginal cost to actually use the product or service, causes overuse in some cases. This is all very much simplified, of course, but t
he key is finding an appropriate price point so that TDA doesn't find itself dealing with so many power users that the resort's infrastructure is overtaxed. Society is also interested in maximizing utility. Who gains a greater benefit from a visit to Disneyland, a child on his or her first visit or an annual passholder's hundredth visit this year?

While we'll probably never see the A-B-C-D-E ticket books return, Disney may want to set that initial lump sum cost a little higher in order to limit the amount of super users.
Or perhaps they could build transportation systems, parking lots, attractions and shows that could actually handle all these people.

In any case, for as long as Disney continues to offer cheap passes, let the good times roll. Just don't complain that it takes a half an hour to board a tram.

Sunday, June 13, 2010

Why Be Afraid of Originals?

After a sudden turn of events, I was able to see World of Color in person (from the blue section, which means a giant speaker pole is in the middle of the action at all times) so that I would be able to complain about it with all two of my readers with full impunity.

My opinion of the show did not really change much after a live viewing. I like World of Color, but it's telling that if I told you about my favorite parts I would only be able to point out the cool effects that stuck out, such as this sequence that suggested diving under the sea or another one in which the water collapses on itself and leaves a figment of color hanging in the air, which is beautifully choreographed. I can't really say that I was jonesing another dose of classic Disney film sequences on mist screens though. Fantasmic! has that covered and over-reliance on the technique can make you want to pull your hair out.

I found the extended mist screen film clips mostly distracting because at its core World of Color is essentially a character hunt. It's an opportunity to point and then demonstrate your ability to remember what you've seen at home on DVD. The basic premise goes like this.
1. Pick a bunch of random Disney movies.
2. Mash them all up.
3. ?
4. Profit.
World of Color takes this concept and runs for ze hills. People are already reciting along with the show, despite the fact that the thing has only been playing to the masses for two days. We expect this on the Haunted Mansion, but a brand new show? A group next to me was even reciting the whole exchange between Buzz and Woody about whether or not Buzz could fly, which is straight out of the first Toy Story movie. We all know this material and we've seen it a million times. I'm sure it took a little longer for some guests to realize that memorizing and reciting, "Is this haunted room actually stretching?" would delight fellow parkgoers, because Lord knows the Waltons from Nebraska spent good money to hear Ashley from Anaheim play the role formally belonging to Paul Frees.

There's nothing inherently wrong with character-driven or movie-based attractions and shows. People clearly go to Disney theme parks to see their favorite characters and movies come to life. Believe it or not, I like to do that as well. Indiana Jones and Star Tours are two film-based synergistic attractions that are among my favorites.

What we tend to forget is that people also go to Disney theme parks for the originals. Sure, Walt Disney may have named his castle to promote an upcoming film, thus inventing synergy and making hypocrites out of all Disneyland purists, but the major focus in those years was on original concepts and ideas. The Haunted Mansion, Pirates of the Caribbean, It's a Small World and others all took Disneyland to amazing heights. Imagineers carried on the tradition long after Disney's death, walking a fine line between original and character-driven attractions. At some point an emphasis was placed on more of the latter and less on the former.

Why is there a fear of originals among the powers that be at Disney, especially at the park that started it all? Are they afraid that original attractions won't attract enough visitors to make such an investment worthwhile? Are original attractions too risky? Do character-driven attractions represent fail-safe investments so that even if the underlying attraction is poor, people will still enjoy seeing their favorite characters?

Expedition Everest, a rare specimen, proves that originals remain in demand, even if the Yeti doesn't work. Though California Adventure was lambasted for its poor theme and lackluster atmosphere, its standout attraction was in fact an original, though flawed, attraction called Soarin' Over California. Perhaps the initial failure of DCA led to the mistaken belief that originals are not what guests want to wait in line two hours for.

Whatever is actually going on here, I hope that originals make a strong comeback. They came back in a big way at Tokyo DisneySea, which represents a good balance between characters and originals. Closer to home, Tomorrowland, with its numerous areas in dire need of attention, presents a perfect opportunity to make right those mistakes made over a decade ago. So, too, does the mythical Anaheim third gate, currently a small piece of land that could someday make a big impact.

Photo credit:  
Lion king in mickey-shaped bubbles - dreamagicjp