Our Mickey Mouse Economy

Notes from Disney World on the contours of modern inequality

I love Disney World. My family goes every few years and we always have a great time. The parks are an operational marvel and provide kids a unique experience that’s fun for everyone… if you know what you’re doing. I always figured that someone who didn’t like Disney either had a heart of stone or, more likely, hadn’t done a good job planning.

But that has changed in recent years. For our most recent trip last month, we found that we needed to pay an additional charge of roughly $20 per person per day to use the “Lightning Lane Multi Pass” (LLMP), which allowed us to reserve hour-long windows for three rides each day during which we could skip the line. The rides are in two different tiers and only one of your three reservations can be for a ride in the more popular tier. But every time you use a reservation, you can then book another ride for later in the day, and those can always be the more popular ones. So, for instance, a smart strategy is to make one of your second-tier LLMP reservations something close to the entrance gate for the earliest time in the morning, activate it as soon as the park opens, don’t even both going on the ride, and then replace it with a booking of a second top-tier ride later in the day.

Got it? We’re just getting started.

You see, the most popular rides are not eligible for LLMP. So if you want to go to the front of the line for those, rather than wait an hour or more, you must pay roughly $20 per person for a “Lightning Lane Single Pass” (LLSP) for just that ride. On top of that, there are also rides for which you need to use the “Virtual Queue” (VQ). Good news, those are free. Bad news, you do need to be ready on your phone right at 7:00am on a given day to secure a slot during that day to go on that ride.

All this is intermediated through the My Disney Experience app, which you of course must be running on your smartphone, which you of course will be carrying with you and checking constantly throughout your day in the park. But you can also pay to subscribe to third-party services that have access to Disney’s back-end systems and can manage these bookings on your behalf, pinging the servers literally every second to ensure you grab the best reservations the moment they become available. Other subscription services will provide you with valuable information like “Slinky Dog Dash has a Lightning Lane Multi-Pass Drop at 1:47pm every day,” meaning that if you have one of your three LLMP reservation slots open and you refresh the page right at 1:47pm you’ll have a chance to get a spot at the very popular Toy Story roller coaster.

I can confirm that if you are willing and able to master this system, and if you are willing and able to pay the up-charges of $40 to $60 per person per day (on top of the $150 per person per day for the park tickets), you can in fact cruise through a park each day, hit all the highlights, and never wait more than 15 minutes in a line. At ride after ride, you will traipse down the reserved aisle for people who know what they’re doing, past the line four or five times longer for people who thought that when you go to amusement park you, well, walk around and get in line for the rides you want to go on.

But to be blunt, speaking as someone who benefits enormously from this system, this is a crappy system. On my first day of my first economics class in college, my professor wrote on the board, “economics is the study of the allocation of scarce resources.” And that’s what we’re talking about here. Each ride can only accommodate so many people so quickly, and Disney must decide who gets to ride. At one extreme, it could simply organize a market and auction off each seat on each roller coaster. Next ride leaving in 20 seconds, whoever bids the most can get on board. At the other, it could take a “central planning” approach that allocates access according to whatever principle it chooses. For instance, it could emphasize equal access and give each guest one ticket to each ride with an assigned time. It could optimize for the experience of certain types of guests—families with young children, say, get a shorter line because young children have a harder time waiting in line.

When the theme parks first opened, Disney used a system closer to the “equal access” model, allowing each guest to purchase a book of ride tickets, with each individual ticket classified A, B, C, D, or E for different types of rides. Everyone came to the park and got to do a bit of everything, though presumably one could pay for a whole bunch of ticket books and just use all the E tickets, if so inclined. (Obviously, the system is still contingent on limiting access to the park in the first place by setting a price on the park ticket that only some people will be able and willing to pay.)

By the 1980s, Disney had converted to a system where the upfront cost of the park ticket included open access to all rides in the park. This model essentially rationed ride access based on time. Whoever was willing to wait in line for a ride got to go on the ride. As line lengths got longer, people less excited about the ride would go do something else instead.

The Lightning-Lane-style system first appeared in 1999 as “Fast Pass,” with its three reservations of one-hour windows and so on. But, notably, the system was free to use for all park-goers. Thus, Disney was introducing a new dimension through which to allocate: complexity. Fast Pass was free to everyone in the park, but using it effectively required understanding it and planning your time accordingly. Once Disney could assume everyone in the park would have a smartphone, it was off to the races with multiple levels of Fast Pass, other scheduling features, and so on, followed thereafter by requirements to pay for the privilege of dealing with the complexity.

As a final kick in the teeth, Disney has just rolled out “Lightning Lane Premier Pass” (LLPP). During one of our days in the park, the app was trying to sell us on an upgrade to LLPP costing anywhere from $129 (for Animal Kingdom) to $359 (for Magic Kingdom) per person. LLPP gives you one skip-to-the-front pass for every ride in the park, usable at any time during the day. I was aghast, but I suppose there’s a certain logic. Indeed, in the Wall Street Journal’s excellent piece over the weekend about the rising cost of a Disney vacation, it reproduces a model by Touring Plans showing the likely cost for a family in each income quintile, and simply assumes that the top 20% of families would spring for LLPP, which immediately becomes the single most expensive part of the vacation.

As Touring Plans observes, “Disney prices its theme parks for the top 20% of American households by income.” But I would add, it also does so in a way almost perfectly emblematic of our deformed socioeconomic structure. Beyond how it prices the parks, it further designs access to them to best serve and satisfy professional-managerial class types. And then it adds a money-solves-your-problems option for the rich who can’t be bothered to figure things out for themselves, and probably wouldn’t actually be very good at it if they tried. And then there’s a much longer line that takes the fun out of the whole thing for everyone else.

It's worth contemplating how this sort of situation is accounted for, if at all, in the economic analyses produced by folks in said professional-managerial class showing that, in fact, the typical American has never had it so good. The existence of all these unaffordable add-ons, for instance, presumably counts for nothing. They’re add-ons, after all. If the 1980s Disney family didn’t need them, the 2020s Disney family doesn’t either. The worse experience in the park presumably counts for nothing; to the contrary, we are encouraged to notice the technological superiority of today’s rides. And the damned unfairness of it all definitely counts for nothing.

Obviously, as you’ve perhaps discerned if you’re still reading, this isn’t about Disney. I mean, it is in part about Disney. What Disney is doing is gross. It’s likely maximizing short-term profit at the expense of alienating an entire generation of potential fans who will not go back and then who will not someday bring their kids, but hey what does today’s management care about that. It should cut it out.

But Disney is just an illustration of a broader phenomenon that is afflicting our education and health care systems, travel, entertainment, financial planning, and so on. Those who enjoy and thrive on complexity are in charge of designing systems that they make absurdly complex, in ways that happen to benefit people just like them, and we declare the result “efficient” and desirable even as it degrades the experience of the typical family. And then we measure it all with tools themselves designed to equate this efficiency with success, and use the results to denigrate everyone who finds themselves unsatisfied.

A final, even broader point, which I plan to write more about later, but cannot help foreshadowing here: Let’s return to the silly hypothetical of auctioning off every seat on every rollercoaster to the highest bidder. It’s actually not silly; it is the basic premise of our market system and use of prices to ration. Generally speaking, in the United States, whoever is willing to pay the most for something, gets it. When we’re not happy with that approach, we typically use government to provide the good or service either universally or based on some measure of need.

To declare this system efficient, and the one that maximizes welfare, we have to make the rather remarkable assumption that whoever is willing to pay the most for something is in fact the person who values it most. The roller coaster example is helpful. Let’s say we can only run the roller coaster twice each day and we’ve got 20 seats on it: 40 parents mill about the entrance, eager to bid on a ride for their children. Of those 40, 20 are in the top income quintile, with roughly four times more disposable income than anyone else available to spend on their vacation. Unsurprisingly, it is the kids from those 20 families who get the first ride. They all have a great time and disembark, shouting, “Mommy, Daddy, I want to ride again!”

It is time to bid again. You can guess how it goes. But ask yourself, to whom would an efficient and welfare maximizing system—market or otherwise—allocate the second set of rides?

- Oren