Did Disney Forecast the Demand Drop For Galaxy’s Edge?

August 22, 2019
Did Disney Forecast the Demand Drop For Galaxy’s Edge?

Disney, worried about park overcrowding and negative guest experiences with the opening this summer of the Star Wars Galaxy’s Edge attraction, managed instead to kill off demand.

Ticket prices were higher, annual pass holders faced blackout dates, guests required reservations to ride the new Star Wars ride, and hotel prices went up in front of anticipated demand.  These plans were so “successful” in warding off an onslaught of guests that park attendance dropped three percent over the summer.

In addition, some guests may be holding off till the second Star Wars ride opens at the Anaheim Disneyland in January, while fans of the Orlando park are awaiting their first one at the end of this August.

Despite lower attendance, higher ticket prices contributed to a 10% jump in average guest spending, while hotels saw their occupancy rates increase from 86% to 88%.

Video Spotlight: WHAT’S HAPPENING with Star Wars Galaxy’s Edge?!

This post is based on the Business Insider article, Disney Discouraged “Star Wars” Fans From Visiting Its New Galaxy’s Edge Area, and Domestic Park Visits and Profits Dropped, by Theron Mohamed, August 7, 2019; the Fox News article, Disney CEO partially blames Star Wars land for drop in Disneyland attendance: ‘Some people just stayed away’, by Michael Hollan, August 7, 2019; and the YouTube videoWHAT’S HAPPENING with Star Wars Galaxy’s Edge?!, by Mickey Views – All Things Disney News, July 13, 2019. Image source: Ingram Publishing/SuperStock.

Discussion Questions:

1. What challenges does Disneyland face regarding capacity planning?

Guidance: Service capacity planning poses challenges that are different from managing inventory for a tangible product.  While Disney certainly does have many tangible inventory items to forecast (i.e., food, souvenirs, and cast member costumes), managing the inventory of its hotel rooms and park tickets involves services that cannot be made ahead and stored.  If the number of park guests becomes too great, waiting times become excessive, and crowding throughout the park makes the experience less enjoyable.  Raising prices of hotel rooms and tickets is one way to try to influence demand, but figuring the best rates to yield the number of desired guests is still challenging.

To a certain extent, Disney can also increase service capacity by adding more vehicles to a ride, opening more lanes/lines, or increasing the number of cooks and order takers at its food venues.  Another possible unknown is the actions or reactions of competitors.  In this instance, at the same time that Disneyland ticket prices went up, Universal Studios decreased its prices, potentially drawing visitors away from Disney.

2. Why does the addition of new themed attractions make forecasting demand even more challenging than usual?

Guidance: It is hard for Disney to know ahead of time exactly how big of a draw a new attraction will be.  The company can look to past experience and historical demand for some indication of demand levels, but since each attraction may have its own particular target audiences and enthusiastic fans, it can be hard to forecast demand for a new area of the park like Star Wars.


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