Saw this posted, thought it was a good discussion? Thoughts?
[B]The Orlando Sentinel poses the question: How long can the steep discounts currently offered at Disney parks last? [/B]
The discounts are part of Disney’s prioritized plan to keep attendance strong during the global economic downturn. The main reason for this being that Walt Disney Co. executives believe the future of their business strongly depends on positive word of mouth from visitors who have recently visited one of the parks.
Some financial analysts, however, do not believe Disney can keep this up much longer, but may not have a choice in the matter. “Without an economic recovery in sight, we believe Disney cannot afford to let demand fall in the December quarter,” said stock analyst Richard Greenfield on his firm’s research blog.
There is another concern Disney is certainly aware of when it comes to the discounts. While low ticket and lodging prices are attracting plenty of visitors in the short-term, they may be persuading visitors who had planned trips far in the future to come early. This would leave a gaping whole in the future financial quarters and cannibalize long-term sales. The promotions could also turn happy-go-lucky visitors into jaded guests if the populous gets used to the kind of pricing we are seeing right now.
“We suspect Disney is fearful of maintaining a promo for too long, as it will be hard to remove the discounting in the future if consumers come to expect a certain promotion,” wrote Greenfield. [Orlando Sentinel]