Is Your Vacation Worth 3 Times the Inflation Rate?

With gasoline prices running about a dollar less than the same time last year, American families are gearing up for road trips in numbers not seen for a decade. Per AAA, 60% of Americans plan on taking a trip more than 50 miles from their home this summer, which could lead to a record number of miles logged on the road.

This got me thinking. Where are they going?

The beach, the lake shore, the Grand Canyon, Yellowstone — the list of potential destinations goes on. But from my perch here in Tampa, one endpoint stands above the rest. Just over an hour away is the mecca of kid-friendly (and adult-horrifying) vacations… Orlando. More specifically, Disneyworld.

This is not to say that every parent hates Orlando or the Magic Kingdom. It’s just that the trip can be a huge hassle.

The roads get jammed. It can take over an hour to get a table at Chili’s. The swampy humidity more-or-less sucks the life out of you. And then there’s the inflation rate of entertainment.

To experience the thrill of standing in line for a ride at Disney on a hot, humid day now costs a minimum of $105 — per person. This latest price increase is the first time admission has reached the triple digits.

That means for a family of five it costs over half a grand just to step into the park! And that’s before you buy a bottle of water, a pair of mouse ears or anything else.

To be clear, the cost of a ticket at Disney has climbed much higher than the general rate of inflation. Since the park opened in 1971, the price increased in all but three years, and in some years it went up twice. Even though the park opened the same year that Nixon closed the gold window, when compared to inflation, prices at Disneyworld make the general loss of purchasing power look like a bargain.

A general admission ticket originally cost $3.50 — so the current price is 30 times greater than when the park opened. If ticket prices had simply moved up with inflation, the cost would have grown to $20.42 today, or one-fifth of the current $105.

Granted, back in ’71 a general admission ticket didn’t get you access to the rides. You had to buy separate ticket books for that. They changed that in 1982 when a $15 ticket got you full access.

So, if we consider that as our starting point, inflation would put the ticket cost at $36.76, or barely more than a third of today’s price.

As Disney aficionados will note, the park is not the same as it was in 1971, or 1982. But does that make it worth triple what it would have cost in years past? That’s a question each set of parents can ponder as they barrel down the road in their minivan.

Then again, they might not want to think about this too much.

According to the Bureau of Labor Statistics (BLS), median household income has barely kept up with inflation since the early 1980s, so a trip to Disney takes a much bigger chunk out of the typical family budget than in years past.

If nothing else, the soaring ticket costs for theme parks are at least one way to condition parents for another inflationary shock that awaits them down the road — the cost of college.

Whatever the reason for the price hikes, one thing is clear: Just because the BLS reports that inflation has remained quite low for many quarters, doesn’t mean that you aren’t experiencing higher costs. Inflation in some areas is spread across the whole population, which glosses over the fact that price hikes often hit certain groups harder — like those with children.

This combination — stagnant income and higher costs — goes a long way in explaining why young adults are having fewer children today, and may continue to do so in years to come. These demographic trends will have long-term effects on our economy.



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Rodney Johnson

Rodney’s investment focus tends to be geared towards trends that have great disruptive potential but are only beginning to catch on to main-stream adapters. Trends that are likely to experience tipping points in the next 5 years. His work with Harry Dent – studying how people spend their money as they go through predictable stages of life and how that spending drives our economy – helps he and his subscribers to invest successfully in any market.