Friday, August 22, 2014
YOLO COUNTY NEWS
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Are we there yet? Economics 101 lesson might lessen the pain

TanyaPereznewW

By
From page A9 | June 12, 2013 |

Last week I read something in the Los Angeles Times that caused me to have a minor tizzy.

According to Daniel Miller’s story on June 2, “Walt Disney Co. raised entry prices to its theme parks in California and Florida.”

Specifically, “A single-day ticket to either Disneyland Park or Disney California Adventure Park in Anaheim for visitors 10 or older now costs $92, up from $87 — a jump of nearly 6 percent.” The one-day Park Hopper Ticket (allowing entrance to both Disneyland and California Adventure) is now $137. And prices have been increased steadily, with a 28 percent increase since 2010.

I think the sentence from the article that really enraged me was this: “Recent price boosts have helped Disney’s bottom line. Its parks and resorts posted operating income of $383 million for its fiscal second quarter — a gain of 73% from a year earlier.” What the? Is Disneyland just about greed and shareholders’ fattening portfolios?

As I was lamenting to my husband, the economist, he logically pointed out, “Yeah, but Disneyland is packed with people every day of the year, so it’s not hurting them to raise their prices.”

Yes, but it’s hurting me! I don’t want normal people to miss out on the fun of Disneyland, a place that was 20 minutes from my house when I was a child; a place that cost my parents $6 for 11 attractions in 1975 (http://ocresort.ocregister.com). People shouldn’t need an annual income of $100,000 to be able to spend a couple of days at the Happiest Place on Earth.

After my husband explained some simple economics principles, I felt a little bit better. Maybe you’ll feel better too, assuming this bothers you at all.

A common problem for most families when planning a trip to Disneyland is choosing a time that won’t involve crushing crowds. Obviously most families with school-aged children have to plan their visits to coincide with school breaks; i.e., when the most people will be there. What can Disneyland do about controlling the crowds? It has to ration to control demand.

I don’t know if you’ve ever braved the crowds of Disneyland during one of its peak attendance times, but my family and I went a few spring breaks ago and it was unbelievable. Our kids were practically in tears begging us to not have to go back the second day of our planned trip; we went to the beach instead.

That’s not the experience Disneyland wants people to have or the kind of magical memories that bring visitors back.

So for Disneyland to ration its resources, there are only a few options: It can allow only a set number of people in, on a first-come, first-served basis; it can implement a lottery system; or it can increase prices to keep crowds manageable.

If ticket prices dropped to, say $25, and the first 40,000 guests were admitted, 40,000 people would start lining up the night before the park opened. The area surrounding Disneyland would be a tent city, populated primarily with unemployed or poor people. Because who has time to wait in line overnight to get into Disneyland? Either people without jobs, or poor people who were hired by rich people to wait in line for them. This doesn’t really solve the problem.

If Disneyland employed a lottery system to control the crowds, would-be visitors could apply for a window of time to hopefully get chosen to buy tickets. This system is what the NCAA does to ration Final Four tickets. If you are lucky enough to get picked, you then get to pay a fortune for basketball tickets. Maybe this is preferable to ever-increasing ticket prices, with Disneyland selling 40,000 tickets every day of the year for (an arbitrarily chosen amount of) $60 each.

What they have decided to do is increase ticket prices, which is an effective — if distasteful — way to ration demand. The idea of a family of four spending $840 for two days’ admission  to Disneyland — to say nothing of transportation, food, hotel … cha-ching! — is insanity. But families keep doing it.

Ski resorts also have been controlling crowds with this method of rationing. Ticket prices have steadily climbed for years, and it’s not uncommon to pay $100 per lift ticket per day to ski in the Lake Tahoe area. I miss the days of $20 lift tickets, but the crowds would be overwhelming at that price. Longer lines and less skiing is the trade-off.

I realize this is a pretty cruddy trade-off, but I hope it will make you feel a wee bit better as you fill out the paperwork for your second mortgage to fund your trip to Disneyland.

— Tanya Perez is an associate editor at The Enterprise. Her column publishes every other week on Wednesdays or Thursdays. Reach her at tperez@davisenterprise.net. Follow her on Twitter at @enterprisetanya

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