Walt Disney Parks and Resorts: Supply and Demand Analysis

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Walt Disney Parks and Resorts: Supply and Demand Analysis

Table of Contents

Walt Disney Parks and Resorts Overview
The Analysis of Demand
The Analysis of Supply
Market Equilibrium and Recommendations
References

Walt Disney Parks and Resorts Overview

Walt Disney Parks and Resorts is one significant segment of the Walt Disney Company that aims at providing the best leisure opportunities for the family vacation. It was founded in 1971, and since that time became the symbol of the family-oriented entertainment. Currently, there are six major destinations of Walt Disney Parks and Resorts around the world. They are Disney Resort & Spa in Hawaii, Disneyland Resort and Walt Disney Imagineering in California, Walt Disney World Resort, Disney Cruise Line, Disney Vacation Club, and Adventures by Disney in Florida, Disneyland Paris in France, Hong Kong Disneyland, Shanghai Disney Resort, and Tokyo Disney Resort (Walt Disney Parks & Resorts, n.d.).

The Analysis of Demand

The level of demand at Walt Disney Parks & Resorts is predetermined by two non-price variables such as interest rates and prices charged for particular services. The target audience of Walt Disney Parks & Resorts is primarily children with their parents. The interests of consumers vary depending on the season of the year and holidays. Thus, the WDP&R faces the immense influx of clients during winter holidays, summer vacations, and spring breaks.

The demand for services offered by WDP&R is extremely high during these periods. As far as parks and resorts have limited capacity, Walt Disney Company experiences excessive demand during periods of vacations and holidays. The demand is controlled by the implementation of demand-based pricing. Thus, prices for services rise every year. Consequently, not all people can afford to buy expensive tickets. For instance, the ticket in one park costs $100 in comparison to almost $60 ten years ago (Martin, 2015). A seasonal interest rates increase the demanded quantity while demand-based pricing balances demand and supply.

The Analysis of Supply

Adverse weather conditions (natural disasters) and technology are two non-price variables that affect the supply of services at WDP&R. The functionality of WDP&R depends on the environmental factors drastically. Excessive rain, hurricanes, tsunamis, or flood can hinder the supply of services. For instance, in 2011, tsunami and earthquake in Tokyo influenced the operation of Tokyo Disney Resort. The supplied quantity decreased, and it resulted in the loss of revenue (Nielson, 2014).

The second variable is technology. Technological advancements enhance supply at WDP&R. For instance, a Magical Wristband facilitates all reservations and provides clients with all information about the particular service. MagicBand makes it possible to lock and open hotel door, quickly pass in some areas of the park, or reserve meal in advance (Kuang, 2015). Technological advancements increase quantity supplied because they improve the process of providing services.

Market Equilibrium and Recommendations

Walt Disney Parks & Resorts employs several strategies to achieve the balanced market equilibrium. Thus, when the demand is increased, the company controls it via variable pricing strategy. Technological advancements provide the better supply for the growing demand. In such a way, the companys market equilibrium is efficient. Managers should monitor such external conditions as future technological inventions. As far as technology is of great significance for the company, it is necessary to be aware of potential modifications to adapt the WDP&Rs strategy to it. Besides, it is advisable to monitor the way increased prices in high seasons affect the level of interests of potential consumers. Visitors may become dissatisfied because of high prices and, consequently, the demand can fall.