MW Would you pay Disney $449 extra for front-of-line access? Why VIP upgrades are becoming the new norm.
By Charles Passy
Companies want to extract every dollar they can from customers, say experts. But many consumers welcome the opportunity to feel like big shots.
With the news that Disney will be testing a new Lighting Lane Premier Pass program at its theme parks, consumers are facing a dilemma that's become all too common: Should they pay more for such VIP privileges or should they forego the perks and do things on the cheap?
Not that a regular single-day Disney $(DIS)$ theme-park admission is necessarily cheap, since it costs $100-plus, with prices varying depending on the park and the day. But the Lightning Lane Premier Pass, which provides front-of-the-line access to numerous rides, will add another $129 to $449 to the equation, again with prices varying based on the park and the day.
The program, which is launching on Oct. 23 at California's Disneyland Resort, and on Oct. 30 at Florida's Walt Disney World, will complement existing Lightning Lane offerings that are less expensive but are more limited in the rides that are included and can require advance booking for those attractions. The new offering is aimed at being far more comprehensive and simplifying the planning process for Disney guests, according to Disney officials.
Disney is hardly alone in providing such a deluxe theme-park option. Universal $(CMCSA)$ has its Universal Express pass, which allows front-of-the-line access for prices that range from $89.99 to $289.99 at its Florida parks, for example. But more to the point: The VIP-ification of the consumer experience, if such a term can be coined, is now more a fact of life than ever before across a wide spectrum of industries.
"No market is immune to the pull of high-roller status," said Rebecca Horan, a New Jersey-based marketing and brand strategist.
Want to get early boarding for a flight? Airlines will gladly make it happen for a fee - say, $15 to $99 on Southwest Airlines $(LUV)$ for its EarlyBird Check-In program. Want to upgrade your food delivery? The ordering platforms will accommodate that by offering a VIP-style membership - say, $9.99 per month for DoorDash's $(DASH)$ DashPass.
But there are more extreme options. Think VIP concert packages that include prime seats and such perks as gift items and even a possible meet-and-greet with the artist. Or suite accommodations on cruise ships that include private dining and a butler at your beck and call. In such cases, the cost can be as much as tens of thousands of dollars beyond the standard offering.
It's worth remembering that not so long ago - maybe a generation or two at the most - the standard offering was the only offering. In the case of Disney, there was just one way to visit a theme park: Pay for the everyday admission and stand in line for every ride.
Some Disney customers long for the simplicity of those times. Or, at the very least, they balk at the idea of spending more than the price of the park admission itself for the front-of-the-line Premier Pass access.
Alyssa Cohen is a Florida resident and Disney regular who says the latest offering is too much of an ask.
"I am truly disappointed for all of the families who want to experience the magic that we do, but who feel a Disney vacation is even more out of sight than before," she said.
Disney declined to comment for this story.
What has prompted all this VIP-ification across the consumer landscape?
Some consumer experts say it's a matter of companies getting smart and finding more ways to extract every last dollar from their customers. And it's a strategy that has become more critical as companies grapple with the inflation of recent years and a labor market that can command higher wages. Businesses need to profitable, but how?
The solution often works out as follows: Companies hold the line with value-focused customers by limiting how much they raise the price of their baseline offerings. But they simultaneously reap the financial rewards by playing up the VIP perks and selling them to customers willing to pay for the privilege, even if in some cases the perks are things that used to come at no additional cost.
It can add up to big money - or at least it has for Disney. According to a Wall Street Journal report based on leaked data, Walt Disney World took in $724 million in pretax revenue from 2021 to 2024 for its Genie+ program, a front-of-the-line option that's no longer sold.
Former Disney Chief Executive Bob Chapek spoke of the success of the Genie+ and Lighting Lane offerings in a February 2022 conference call discussing the prior quarter's earnings.
"While we anticipated these products would be popular, we have been blown away by the reception," Chapek said. "In the quarter, more than a third of domestic park guests purchased either Genie+, Lightning Lane or both. That number rose to more than 50% during the holiday period."
Some say the new Lightning Lane Premier Pass will find a market, even if it's a wealthier one. But experts note that many consumers who opt for VIP programs - at Disney or elsewhere - aren't necessarily all that rich. More often than not, they're middle-class folks who are willing to splurge a bit so they can feel like a big shot, at least for a little while.
In effect, it's not strictly the companies driving the VIP-ification trend. It's the consumer, too.
Take Toni May, a Florida resident who sails frequently with Celebrity Cruises $(RCL)$.
May said she usually opts for the cruise line's Premium Access pass that gives her such benefits as early access to the ship, priority departure from ports and a special welcome lunch. It runs $30.99 per day per passenger, according to Celebrity, but May considers it well worth the money for the ease and convenience it offers, to say nothing of that high-roller feeling it provides.
A case in point: May notes the program includes room service without the usual surcharge, so she takes full advantage of it.
"Every afternoon, we get a shrimp plate," she said.
-Charles Passy
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
October 19, 2024 12:08 ET (16:08 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments