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Disney should charge a lot of money for Fastpass+

This October when I visited Walt Disney World it became clear pretty quickly that the current Fastpass+ system is not working. Go back five years and on the old system you could fairly easily walk into a park with minimal planning and be able to ride some, although probably not all of your favourite attractions. With the current system at a busy time of year unless you plan 30+ days in advance your chances of riding anything are next to nothing.

Supporters of the new system will argue that this is the point; It is meant to enable those who have paid large sums of money for the holiday of a lifetime to get the best experience possible. I spend my professional life looking at capacity optimisation. While sitting outside Pirates of the Caribbean on a particularly hot and muggy day I was watching a Fastpass line stretch all the way across the plaza and started thinking where did this all go wrong and how could it be made better.

Lots of things have changed over the last few years that have made the situation worse (more on that later), but first let us consider what never changes:  the mathematics of Queue Theory. Bear with me here, I will avoid a high school maths lesson as far as possible but this is an important concept.

Queue Theory

The mathematics of Queue Theory is quite well established and applies to lots of things like call centres, package delivery and important for our case, theme parks. The first important question you have to ask yourself is what is the capacity of your provider, in our case the attraction. This is how many people can ride an hour.

Let’s take Big Thunder Mountain as an example. It has 5 trains and one departs every minute, each train has 15 rows and each row usually carries 2 but could be up to 3 people. For our purposes let’s assume it’s 2 per row always so that is 30 people per train (15 rows x 2 people). One train leaves every minute so that is 60 trains per hour (30 x 60 = 1800 people per hour).

It would be nice if every train always left totally full, but slow tourists, groups of 3 and other things reduce this total in real life. In reality we probably take 80% of this so ~1,500 people per hour. Getting this up to the maximum of 1800 is why Universal and others put Single Rider lines on almost every attraction. An hour is a very long time so let’s look at this as ~350 people per 15 minutes, or

No matter what we do there is no way we can serve more than the maximum capacity per hour. If more than 350 people show up in a 15 minute interval we will not be able to serve them all instantly, a queue will form. Once a queue has formed two things can happen, if people keep arriving at a rate faster than they can get on a ride the line will keep growing longer. If people arrive slower than the rate they can get on a ride then over time the line will get shorter. There are some pretty neat mathematical functions to calculate all this but that is too complex for this discussion.

Every person has a threshold they are prepared to wait for, some people won’t bother getting in line if the wait is more than 20 minutes, others will get in line even if it says 120 minutes. We can call this the propensity to demand. What this means is as the line gets longer the number of people who are prepared to join the line decreases and this reduces the rate people join the line and therefore the length of the line grows at a slower rate. At some point this usually reaches a point where the length of the line means that the rate of people joining equals the rate the attraction can serve and the wait time stabilises. In extreme cases lines can keep growing for ages before this happens and get wait times counted in the hours, looking at you Pandora!

The Impact of Fastpass+

Now let us consider Fastpass. When a ride has fastpass it’s carrying capacity is the same, it can still carry the same number of guests per hour. What we have done is reduced the rate of Standby guests it carries and replaced these with Fastpass guests. Disney would argue this is fine as lots of the Standby guests will now have fastpasses elsewhere and this will balance the system. Not always true! On a very busy day there will simply be no Fastpasses left for those guests and they will be forced to use the Standby line, if you have not planned ahead so much capacity is being used by the fastpass guests that the wait times will grow even longer.

Also consider that where each attraction has a hourly carrying capacity, each park also has a carrying capacity. In any given hour a certain number of rides can be made on all attractions combined. The argument for the introduction of Fastpass+ was that it would encourage guests to make more use of the underutilised attractions and balance the demand across the whole park. The reality is this is partially true but many guests now pick up fastpasses they never use simply to hit the 3 per day limit, just in case.

This is made worse by the fact that over the last few years attractions have closed and often not yet been replaced. Large numbers of refurbishments and construction reduce the overall carrying capacity of the park and assuming attendance hasn’t fallen (it definitely hasn’t) then demand for all other attractions go up and the lines get longer. A great example of this is Tower Of Terror which before Hollywood Studios became a construction site rarely had a line of more than 30 minutes and now frequently tops an hour.

Speaking of DHS it is also important to mention shows. These have a MASSIVE carrying capacity, something like the old ‘light, motors, action’ show had an effective carrying capacity of several thousand and due to the duration of the attraction locked that capacity up for an extended period (20 minute show vs a 3 or 4 minute thrill ride). Remove the shows and suddenly there are thousands of people available to get in other lines and drive up the wait times.

Guest Recovery

The final impact of Fastpass+ is Guest Recovery. Previously if your attraction was down at your fastpass time the only recourse you had was to come back to the same ride later in the day. In the new world you are notified (even if you are not at the attraction) and are able to use that pass for almost any other attraction in the park at any time of your choosing and if it is close to the end of the day even anywhere in all of the parks the next day. This does two things, guests who in the old world made other plans and decided not to use the fastpass never even knew it was down and had no further impact on capacity anywhere. In the new world these guests will be very happy with their new free pass and likely use it. Guests are now also encouraged to use their pass on another attraction which moves the pain of one attraction being down to all the other attractions and knocks of the carefully balanced calculations of fastpass capacity across the parks for hours.

Nobody can blame guests for using the free things they are given, they don’t realise that by helping themselves at no real cost they are actually hurting the group as a whole. This is another Economic concept known as the Tragedy of the Commons.

Elasticity of Demand

People buy less when something is expensive. This is probably a pretty obvious concept and is the driving force behind Disney’s introduction of seasonal ticket pricing. When you are already full to capacity the only thing you can do is sell the same thing for a more expensive price, some of the people you previously sold to might not buy it but if there is excess demand other people come in instead.

The trick is to find the maximum price that generates the level of demand you want for the supply you have available. Go too low and you fill your capacity and miss out on revenue, go too high and you don’t sell all your tickets and you miss out. Think of low-cost airlines and their crazy ticket prices designed to fill every plane to 100% for the maximum price.

When on many days there are no Fastpasses left by lunchtime I argue it is time to start introducing charging to balance the supply and demand to ensure that guests who don’t plan ahead can still get on attractions. Universal have been doing this for years with their ‘Express’ model, their price gets more expensive on busy days and is cheaper on quiet days to maximise utilisation.

In this model imagine every seat on a ride has a price, the basic price is the ticket you paid to get in the park, if it was a low cost airline and you booked late you would still get a seat but you’d pay more. This is what Express delivers, a premium to get your seat last minute.

Disney have actually done the opposite. They have made the benefits of an annual pass significantly better and made many of those who were borderline on whether to buy one decide it is a good idea. This means that even more people have an AP and come to the park effectively for a marginal cost per visit of 0. This reduces the average price per attraction seat and drives up demand even higher, plus they get all the Fastpasses they want.

Why Disney won’t do this and what is the answer

Disney absolutely won’t introduce charging for Fastpass and the reason is that attractions are not where Disney makes money. It is in the Merchandise and Food & Beverage Divisions. The trick is actually to get as many people as possible in the parks where they are a captive audience to be sold to.

The way Disney report performance for their Parks & Resorts division is average spend per guest, so the aim is to drive this up. Many would argue that providing a better experience in the park will encourage people to come back again and therefore over time they will spend more (this is a concept known as ‘Customer Lifetime Value’) but remember for many if not most guests Walt Disney World is a once in a lifetime vacation. Why bother focussing on repeat business when what you actually want is as much revenue as possible in a short period of time?

The truth is somewhere in between, Disney do not want to charge more upfront as that puts people off from booking (revenue from hotel bookings and ticket all adds up to revenue per guests after all) and coming down to Florida but they do need some way to reduce demand – perhaps an express-based premium top-up wouldn’t be so bad?

So what is the answer? Medium-term there should be ever more capacity coming online with already announced new attractions at MK, Epcot and Hollywood Studios which should help to re-balance demand and supply. This is even more true in Studios where reported capacities for the new Star Wars attractions are enormous and should be able to swallow the anticipated crowds with relative ease.

Seasonal ticket prices will likely become more acute over time with the premium paid for peak period being even higher which should again help to rebalance if they get it right (get it wrong and you will make off-peak so busy it will become the new peak). But in my mind a premium top-up for busy days when you just can’t get Fastpass is a win-win, guests will get a much better experience and it is all additional revenue for Disney with minimal cost.

What do you think? Would you pay for a Premium Fastpass? Have crowds at WDW got so busy that you would consider not even going? Leave a comment below.

 

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