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View Full Version : Monday MouseWatch : These days, there's 'way too many rooms at WDW's inn


orbital62
04-02-2007, 08:51 PM
From Jim Hill Media - interesting read.

Jim Hill takes a look at one of Disney World's most serious problems. Which is that this Central Florida resort now has 5000 more hotel rooms than it can actually fill on a regular basis

Still having trouble wrapping your head around the idea that the Walt Disney Company just awarded Four Seasons Hotels & Resorts the rights to build a luxury hotel & 18-hole golf course on WDW property? Well, think about how the folks who actually run the resorts side of things of Walt Disney World must have felt. Given that they weren't actually clued into this deal until just 48 hours prior to the official announcement.

Mind you, this would never have happened back in the late 1980s / early 1990s. Back when virtually every hotel that Mickey owned in Central Florida maintained a 90 % or higher occupancy rate. But now that the Mouse has an inventory of over 21,000 on-property rooms (Never mind about those 2487 Disney Vacation Club units that are currently available for occupancy at WDW. Or those 784 campsites & 409 cabins that you can rent at Fort Wilderness Campground) ... Disney really has to hustle these days in order to put heads in all those beds. Especially during the off-season.

http://jimhillmedia.com/blogs/jim_hill/archive/2007/04/02/monday-mousewatch.aspx

ExPirateShopGirl
04-02-2007, 09:20 PM
Very interesting read... and confirms what I have long believed about certain promotions like free dining and 40% off. Despite what I have seen a few people post, WDW occupancy is NOT at an all-time high. It may be at its highest since 9-11, but there's a reason the rest of Pop remains unfinished.

Thanks for the link.

:)

minnie61650
04-02-2007, 10:53 PM
Yes, it is interesting.

When we stayed at the All Star Music Suites last September DH and I were in the in the pool and DH was counting the # of Suites he could see from the pool then he said to me-- "This resort resort must have too many vacancies if they are converting all of these rooms into Suites. How many are they building here anyway?"

(Mind you DH owns some commerical and apartment buildings and is a builder so he does pay attention to occupancy as well as,heating, cooling,etc. & construction of buildings.)

Duh! I had told him there were going to be 192 Suites at All Star Music many times but of course he never listens to my Disney triva and info.:rotfl: :rotfl2:

eliza61
04-03-2007, 05:27 AM
From Jim Hill Media - interesting read.

Jim Hill takes a look at one of Disney World's most serious problems. Which is that this Central Florida resort now has 5000 more hotel rooms than it can actually fill on a regular basis

Still having trouble wrapping your head around the idea that the Walt Disney Company just awarded Four Seasons Hotels & Resorts the rights to build a luxury hotel & 18-hole golf course on WDW property? Well, think about how the folks who actually run the resorts side of things of Walt Disney World must have felt. Given that they weren't actually clued into this deal until just 48 hours prior to the official announcement.

Mind you, this would never have happened back in the late 1980s / early 1990s. Back when virtually every hotel that Mickey owned in Central Florida maintained a 90 % or higher occupancy rate. But now that the Mouse has an inventory of over 21,000 on-property rooms (Never mind about those 2487 Disney Vacation Club units that are currently available for occupancy at WDW. Or those 784 campsites & 409 cabins that you can rent at Fort Wilderness Campground) ... Disney really has to hustle these days in order to put heads in all those beds. Especially during the off-season.

http://jimhillmedia.com/blogs/jim_hill/archive/2007/04/02/monday-mousewatch.aspx

Very interesting.
I think the off season has always been a hustle to fill. (which may be why its called the off season. :lmao: ) Those parks sure do get packed though. Hey maybe if there is too much inventory, the prices will come down? Maybe? Hopefully?

rie'smom
04-03-2007, 07:39 AM
Very interesting.
I think the off season has always been a hustle to fill. (which may be why its called the off season. :lmao: ) Those parks sure do get packed though. Hey maybe if there is too much inventory, the prices will come down? Maybe? Hopefully?

It's nice to dream:rotfl:.

raidermatt
04-03-2007, 11:12 AM
Lower prices = lower margins, and we just can't have that can we?


As others have said, Disney doesn't offer free food out of the goodness of their hearts. On-property food is one of those "that's how they getcha" things, so if they are literally giving it away to get people in the hotels, even at rack rates, you KNOW they are having trouble in that respect.

Unfinished hotels and conversions to DVC... the writing has been on the wall for some time. What's probably of most concern is that all of this stuff has been happening when tourism is booming. That doesn't bode well for the next downturn. As Mr. Hill notes, DLR can always put their plans on hold, but WDW already has the excess inventory.

I'm also going to point out that the folks on the Dis podcast have been mentioning WDW's obvious problems in getting its rooms filled for awhile now.


All of this is one of the reasons why so many people have questioned the Western Beltway and Four Seasons projects. Disney can't fill its own rooms and now its letting more third parties in the door? Something has to give.

DisOrBust
04-03-2007, 11:20 AM
It explains also why they are slaughtering the AKL on the alter of the DVC. I wonder if they considered what it will do to their repeat AKL business. I know I'm not the only one who won't return after the DVC is built.

*Robin*
04-03-2007, 11:41 AM
It explains also why they are slaughtering the AKL on the alter of the DVC. I wonder if they considered what it will do to their repeat AKL business. I know I'm not the only one who won't return after the DVC is built.

Can you explain why this is a problem? (Because I really don't know what happens when something becomes a DVC, other than it's available to DVC members)

Thanks!!

YoHo
04-03-2007, 11:41 AM
So AV's been talking about this for over a year, I've been talking about it. The podcast has been talking about it.

Where are the people around to discredit Jim Hill?


In the words of our old friend Landbaron:

VINDICATION

eliza61
04-03-2007, 03:08 PM
It explains also why they are slaughtering the AKL on the alter of the DVC. I wonder if they considered what it will do to their repeat AKL business. I know I'm not the only one who won't return after the DVC is built.

Why?

pilferk
04-04-2007, 12:14 PM
So AV's been talking about this for over a year, I've been talking about it. The podcast has been talking about it.

Where are the people around to discredit Jim Hill?


In the words of our old friend Landbaron:

VINDICATION

They're (meaning me) are posting on Jim's website.

Jim's playing a bit fast and loose with some of his facts, he's not making any real world comparisons on occupancy rates, and he's basically shoving square pegs into round holes, IMHO to simply support a conclusion he'd come to when he decided to write the article.

There's an awful lot of "evidence" that Jim is relying on that simply has little to do, if anything with a mandate for reducing inventory on property.

KS Jeff
04-04-2007, 01:09 PM
From Jim Hill Media
This is the point at which I usually stop reading a post.

raidermatt
04-04-2007, 01:26 PM
This is the point at which I usually stop reading a post.

Fair enough. His rumors are all over the place.

But in this case, he's hardly the first to come to the conclusion that WDW is having trouble dealing with the excess room inventory.

Lewisc
04-04-2007, 01:35 PM
During the holiday season, every single hotel room on property is occupied. But maintaining that 21,000-plus unit inventory during the other 50 weeks of the year actually eats away at WDW's earnings

Almost every single hotel room is booked during spring break, Independence Day, Memorial Day weekend, Columbus Day weekend etc. A lot more than just 2 weeks a year.

There may be enough fully booked weeks, at rack rate, to justify having to discount rooms during the slower months. Disney is doing a good job, DME and MYW Dining, of giving guests new reasons to stay on site.

The All-Star Suites cost more than 2 rooms and are blacked out of many of the discount codes. It doesn't sound like a bad deal from Disney's side.

I guess Disney may have overbuilt but Disney already owns the land. Filling POP at rack rate 20% of the year and discounting rooms the rest of the year is probably profitable. Not very expensive construction.

Jim talks about Shades of Green like it's something new.

The Four Seasons Resort isn't popular with a lot of posters on DIS but Hilton is putting a Waldorf in the Bonnet Creek development. It makes sense to accomodate those guests look for a real 4-5* hotel. Disney isn't really set up to have a hotel that discourages non-guests from looking around.

G8r4evr
04-28-2007, 12:04 PM
Very interesting read. However, if they are really struggling to fill the rooms, why dont they just come down on the prices (even slightly)? I have yet to find a room at any of the deluxes for under $300 a night (exacept AKL on occasion is around $250).

When we stayed at CBR in 8/06, I remember the parking lot looked like a ghost town (but I blew that off, assuming most people used the Magical Express), but the pools were empty and I can honestly say that in our 3 night stay...we only saw 3 0r 4 other guests the entire time. Granted, we didnt venture into the food court. LOL

Another Voice
04-28-2007, 12:52 PM
However, if they are really struggling to fill the rooms, why dont they just come down on the prices (even slightly)?
Because every room that they open also requires costs - housekeeping and maintenance services, baggage handling, guest services staff, utilities, laundry, etc.

Sometimes you can make more money by closing lots of rooms (and saving those costs) and selling the open rooms for higher amounts. Disney has some very nice math that let's them know how many rooms to open to maximize the profit. That's why you can get the situation where hotels are "sold out" yet there's few people around. Disney has been running this way since mid-2000 when it's attendance started to fall.

Of course there is a trade off - you may have a few people paying top dollar to stay in a hotel, but there are now fewer people going to the theme parks. Occupancy is a constant struggle between the profitability of the hotels and the profitability of WDW overall. The whole free food giveaway was a novel attempt to solve two problems at once - get lots of people to pay top dollar for the hotel. It didn't really work (people still think Disney is way too expensive) and caused massive problems all over property (too many people eating high cost food - notice how short all the restaurant menus have gotten and how similar they all are now).

Disney's known it way overbuilt hotel rooms for a while know. That's why Pop was never completed and why they're rushing to expand the convention facilities at Coronado Springs and why both the Animal Kingdom Lodge and Contemporary Resorts are going condo. Disney also knows its "Deluxe - Moderate - Value" strategy has really backfired in terms of who's staying on property (another reason why WDW is sprouting my chessy time shares than the Jersey shore). Short of a major economic downturn, occupancy is WDW's biggest problem for this decade.

TiggerFreak
04-29-2007, 06:51 AM
Since WDW does not release the data, can we assume that all these numbers being thrown around are pure conjecture?
Sometimes I think that the execs at WDW are rolling their eyes and chuckling when they see the fan sites whipping themselves into a frenzy over some isuue. And thats assuming the excs even care enough to read them.
Maybe when they need a good laugh!

Another Voice
04-29-2007, 10:31 AM
One doesn't need inside numbers to see what's going on, you only have to look at the rotten hulk of the Pop Century to know something is going on.

The Animal Kingdom Lodge - the one so spiffy that regular guests weren't going to be allowed on site - is now the lowest priced "deluxes" and is having a huge chunk of its rooms turned into condos. Free Food giveaways to fill up rooms, discounts every where you turn. Comments by people at "booked full" resorts that there are actually few people staying there.

The only thing WDW management is laughing at are the fans still living in the "Disney is perfect" mental state.

raidermatt
04-30-2007, 12:27 PM
From Disney's 10k filings, occupancy for the East Coast resorts:
86% of 8,834,000 available room nights for fiscal 2006.
83% of 8,777,000 nights in 2005.
77% of 8,540,000 nights in 2004.

A positive trend. Both occupancy and available nights on the rise, so apparently Disney's efforts are bearing fruit. In fact, per room spending is rising as well:

$198 per room in '04
$199 per room in '05
$211 per room in '06

That spending covers room rate as well as food/merchandise at the hotel. Again a positive trend. It does make for some interesting points when you think about the dining plan and all that money some guests claim to be saving. But I digress...


So, 86% of available nights, with Pop Century 1/2 finished, and parts of the Contemporary and AKL being taken out of the inventory. Doesn't seem too bad, but it does indicate they are still having a tough time filling rooms during slower periods, and one also has to wonder about the wisdom of finishing Pop, as well as building 4000-5000 3rd party budget rooms in the Western Beltway development.


Also, from Disney's 10q for its fiscal Q1 in '07 (Sept through Dec 2006):

85% of 2,143,000 available room nights in '07 (really '06, but its Disney's fiscal '07).
83% of 2,198,000 available room nights in '06.

So, at first glance, occupancy was up, from 83% to 85%. But in this case, available room nights dropped, and when you do the calculations, you find that there were actually slightly fewer occupied nights. Only a .15% decrease (that's "point" 15%), so essentially it was flat. Perhaps the dining plan efforts have leveled off.


I'd say at the very least, Disney seems to have reached its saturation point on room construction, and that's with Pop as is, and the Western Beltway and Four Seasons rooms not yet built.


All that said, though, I think Disney could fill rooms far more easily by focusing on improving the entertainment offerings around the resort. Free dining and creative ticket pricing are neat little moves to try to shift demand around and pick up slow periods. But fully developing AK, MGM and World Showcase, among other things, could boost overall hotel demand for years to come.

DancingBear
04-30-2007, 12:34 PM
From Disney's 10k filings, occupancy for the East Coast resorts:
86% of 8,834,000 available room nights for fiscal 2006.
83% of 8,777,000 nights in 2005.
77% of 8,540,000 nights in 2004.

A positive trend. Both occupancy and available nights on the rise, so apparently Disney's efforts are bearing fruit. In fact, per room spending is rising as well:

$198 per room in '04
$199 per room in '05
$211 per room in '06
And yet operating income from the parks division is down. I wish they provided that info for the East Coast Resorts separately.

pilferk
04-30-2007, 12:54 PM
Doesn't seem too bad, but it does indicate they are still having a tough time filling rooms during slower periods, and one also has to wonder about the wisdom of finishing Pop, as well as building 4000-5000 3rd party budget rooms in the Western Beltway development.


Couple things:

1) Remember, Disney is not building the Western Beltway nor are they building the 4S resort.

2) If you're thinking those two resorts will pull from Disney's Fill rate, I humbly disagree....or humbly disagree that the effect will be noticeable, really, when it comes to the DIS bottom line. Both developments cater to people NOT likely to currently stay on Disney property...those looking for superbudget rooms and those looking for ultra-high end resort offerings. WDW has 0 superbudget rooms, and it could be argued has few, if any, offerings to compete with a 4S type resort experience. So, ultimately, with zero cash outlay, Disney stands to attract even more people into it's parks. In addition, if it flops, and the new developments can't fill rooms...Disney still collects a good bit of $$ from both developments and incurs none of the financial hardship of opertating empty resorts. It's win/win for them.

3) I agree on Pop. It doesn't look like it would be much use to build them out as planned. That being said, so far the demand for the AS Music Family suites is far outpacing supply. We'll see if that trend continues once the new building is converted (and, I assume, buildings to follow at AS Sports and Movies). Demands for parties of 5 and larger seems to be on the upswing (held up by census findings that many families are growing to closer to that size, rather than the traditional 4).


Also, from Disney's 10q for its fiscal Q1 in '07 (Sept through Dec 2006):

85% of 2,143,000 available room nights in '07 (really '06, but its Disney's fiscal '07).
83% of 2,198,000 available room nights in '06.

So, at first glance, occupancy was up, from 83% to 85%. But in this case, available room nights dropped, and when you do the calculations, you find that there were actually slightly fewer occupied nights. Only a .15% decrease (that's "point" 15%), so essentially it was flat. Perhaps the dining plan efforts have leveled off.


You're also viewing those numbers from inside a bubble, comparing them only to WDW occupancy rates for previous years. It's a fair metric for profitability, but should also be viewed in the context of the Orlando area as a whole. Very few (if any) other hotels achieve the occupancy rates that those on property achieve. Disney's "plan" seems to work: Sell more rooms during the times tourists are more active, at a higher price, vastly offsetting any "losses" you incur during slower periods of time.


I'd say at the very least, Disney seems to have reached its saturation point on room construction, and that's with Pop as is, and the Western Beltway and Four Seasons rooms not yet built.


All that said, though, I think Disney could fill rooms far more easily by focusing on improving the entertainment offerings around the resort. Free dining and creative ticket pricing are neat little moves to try to shift demand around and pick up slow periods. But fully developing AK, MGM and World Showcase, among other things, could boost overall hotel demand for years to come.

Possibly. But at what cost? And what's the ROI for improving those entertainment offerings? Because, while you may be right that expanding the existing gates, or creating a 5th super-blockbuster gate, might draw more people for years, you know the final consideration is the bottom line and if doing those things will draw ENOUGH people, more than they can draw using more conventional and less costly methods, to pay for the project. Given the attendance numbers which came out not too long ago, and the % change, year to year, I'm not sure they think it would. I'm not saying it's a bad idea...just that I'm not sure that the Dis Business people think it's a good idea.

pilferk
04-30-2007, 01:09 PM
And yet operating income from the parks division is down. I wish they provided that info for the East Coast Resorts separately.

2nd quarter? I haven't seen those numbers yet. The last quarterly filing I saw was Feb 7, 07. Is there a new one out? I didn't expect it for a week or two, at least.

I know they were up in the 1st Q (ending Dec 30, 06) by about 4% in revenue and 8%, in operating income. Again, no way to break that out as East Coast vs West Coast.

From their SEC filings:

Revenues:
Parks and Resorts Q1 2006: 2,489 Q1 2005: 2,402 % Change: 4 %

Segment operating income:
Parks and Resorts Q1 2006: 405 Q1 2005: 375 % Change: 8 %

Combine that with a 1Q East Coast 3% attendance increase, and a 7% per capita guest spending increase.

Just for those interested, here's a link to those filings.
http://biz.yahoo.com/e/070207/dis10-q.html

Another Voice
04-30-2007, 01:36 PM
Again, no way to break that out as East Coast vs West Coast.
And I beleive they also report results from EuroDisney and Hong Kong in those numbers as well. Figures from Toyko Disneyland are reported in revenue and earnings, but I haven't heard if they're also included in the attendance figures (Disney gets a per head cut of the money as well).

Disney has ways of making the numbers say a lot of different things.

DancingBear
04-30-2007, 04:55 PM
Couple things:

1) Remember, Disney is not building the Western Beltway nor are they building the 4S resort.

2) If you're thinking those two resorts will pull from Disney's Fill rate, I humbly disagree....or humbly disagree that the effect will be noticeable, really, when it comes to the DIS bottom line. Both developments cater to people NOT likely to currently stay on Disney property...those looking for superbudget rooms and those looking for ultra-high end resort offerings.I'd disagree that a Comfort Inn-type hotel within the Western Beltway shopping area is a "superbudget" hotel that doesn't compete with the Value Resorts. Nothing in the descriptions or drawings appear that we're talking Super 8 here.

DancingBear
04-30-2007, 04:58 PM
2nd quarter? I haven't seen those numbers yet. The last quarterly filing I saw was Feb 7, 07. Is there a new one out? I didn't expect it for a week or two, at least.

I know they were up in the 1st Q (ending Dec 30, 06) by about 4% in revenue and 8%, in operating income. Again, no way to break that out as East Coast vs West Coast.I don't have time to recreate right now, but I previously posted the comparative figures from a much longer time span, I believe maybe 2000 (the last pre-911 figures) and was shocked to see that while revenues had shot way up Operating Income was actually down.

MasterShake
04-30-2007, 06:02 PM
Of course there is a trade off - you may have a few people paying top dollar to stay in a hotel, but there are now fewer people going to the theme parks.

Once again you are stating that fewer people are in the parks, when the only data we have suggests that Disney World is experiencing record high attendance. Operating income is slightly lower then 2000, but attendance is most likely up.

raidermatt
04-30-2007, 06:21 PM
These were they:
Here's some interesting figures (sources are the 2000 and 2006 10-Ks):

2000 Parks and Resorts Revenue: $6.8 billion
2006 Parks and Resorts Revenue: $9.9 billion

2000 Parks and Resorts Operating Income: $1.62 billion
2006 Parks and Resorts Operating Income: $1.53 billion.


Different timeframe of course, and obviously encompasses more than just hotel numbers.

If you're thinking those two resorts will pull from Disney's Fill rate, I humbly disagree....or humbly disagree that the effect will be noticeable, really, when it comes to the DIS bottom line. Both developments cater to people NOT likely to currently stay on Disney property...
I'm more likely to buy this on the Four Seasons side. Clearly they offer a product that is easily differentiated from Disney's top product. Though, its that same differentiation that does make me question the whole thing. If those potential Four Seasons guests are WDW fans, then they probably are staying on-site already. GF concierge, Poly concierge, etc. If they aren't WDW fans, are they going to now become WDW fans just because Four Seasons is there?

Maybe.

But on the other end, we're really trying to split some already thin slices. I still see these new rooms as being decent quality budget rooms. Comfort Inn, Best Western, etc, located just outside the Disney gate, but on Disney property in a Disney-owned developement. How much cheaper than the Values can these rooms be? I'm sure they will pull some guests from other off-site areas, but they are certain to pull some from Disney's on-site rooms as well.

I will agree that we don't know for sure how much. I just think its more significant than you think.

Demands for parties of 5 and larger seems to be on the upswing (held up by census findings that many families are growing to closer to that size, rather than the traditional 4).

Average family and household size actually continued to drop in the 2000 Census, but perhaps there is more recent data. Regardless, I do agree the demand for the larger rooms is there, its just that it was probably there all along. I suspect its just a value/convenience thing that just wasn't an option in the past. It's only been recently that it became clear the demand for more standard rooms just isn't there, and hence Disney's efforts to try other things.

It makes sense to accomodate those guests look for a real 4-5* hotel. Disney isn't really set up to have a hotel that discourages non-guests from looking around.
Guests looking around is not what has kept the GF from becoming a 5 star hotel. Further, it's not going to be easy for the Four Seasons to keep the lowlifes out either, if that's their goal.

I suspect though, that 4S will be far more concerned with their own offerings than with keeping other resort guests outside their gates.

pilferk
05-01-2007, 06:18 AM
I'd disagree that a Comfort Inn-type hotel within the Western Beltway shopping area is a "superbudget" hotel that doesn't compete with the Value Resorts. Nothing in the descriptions or drawings appear that we're talking Super 8 here.

Except, well, they don't. Most "comfort inn"-type hotels in the Orlando area offer some pretty cut rate room rates, well below the nightly rate of the AS or Pop hotels. You can see that from simple searches of the travel sites. In addition, they don't offer any of the benefits of the "on site" properties. There is a pretty good differentiation line between the two types of accomodations.....

pilferk
05-01-2007, 06:19 AM
I don't have time to recreate right now, but I previously posted the comparative figures from a much longer time span, I believe maybe 2000 (the last pre-911 figures) and was shocked to see that while revenues had shot way up Operating Income was actually down.

So you're saying down compared to pre-2000? That's just not a valid comparison. So much has happened in both the economy and the tourism industry, you're comparing apples to oranges. Better to compare year to year, and to the industry as a whole. Again, Disney doesn't operate inside a bubble...

pilferk
05-01-2007, 07:05 AM
These were they:

Different timeframe of course, and obviously encompasses more than just hotel numbers.


Yeah, everything pre-9/11, pre-recession, etc is just too tough to compare to for anything related to the tourism industry. Any financial analyst will tell you that trying to make a comparison to those times is almost worthless. It's just doesn't present an apt picture.


I'm more likely to buy this on the Four Seasons side. Clearly they offer a product that is easily differentiated from Disney's top product. Though, its that same differentiation that does make me question the whole thing. If those potential Four Seasons guests are WDW fans, then they probably are staying on-site already. GF concierge, Poly concierge, etc. If they aren't WDW fans, are they going to now become WDW fans just because Four Seasons is there?

Maybe.


You have to really take a good look at that market. The ultra-high end, 4S target market, isn't likely to "slum it" at the GF or the Contemp. They're very....and I'm trying to be as diplomatic in this description as possible..."discerning". It's as much a mind set as it is a real differentiation in service quality or room offerings. Again, you MAY see some offload of the high end accomodations at the GF or Contemp, but I doubt it will be very severe. Those staying "on property" are likely to still be willing to do so, since they obviously have in the past. And the "per night" difference in price for similar accomodations is, if other 4S resorts are any example, astronomically different.

In addition, you have to also look at the fact that this is 4S ONLY Orlando offering. That, in and of itself, will be the attraction for many guests. The WDW theme parks are, possibly, a nice "afterthought" addition....WDW is just banking on the fact it's enough of an "addition" to compel a good number of the 4 Seasons guests to visit the park(s).


But on the other end, we're really trying to split some already thin slices. I still see these new rooms as being decent quality budget rooms. Comfort Inn, Best Western, etc, located just outside the Disney gate, but on Disney property in a Disney-owned developement. How much cheaper than the Values can these rooms be? I'm sure they will pull some guests from other off-site areas, but they are certain to pull some from Disney's on-site rooms as well.


How much cheaper? Well, even $20 a night off of AS and Pop's $99 per night is a significant % savings. And for many families (witness those who stay offsite in JUST these types of accomodations) that's a pretty big deal.

Will they pull some guests from the AS and POP? Probably. But first off it doesn't look like they'll even OFFER enough rooms to really make a dent in the 8k+ rooms Disney offers in the budget category. Second, we know it won't pull ALL the guests looking at the WDW budget offerings, simply because they won't offer the same "guest perks" that onsite WDW rooms offer, and those "perks" are good selling points to many families. So then it comes down to: Will the relatively small cannibalization result in a loss of revenue/operating income/profit over that of the revenue/operating income/profit that WDW generates from the chains that DO build in the development. I'd think, given Disney's abundance of bean counters, that that equation has been gone over in more depth than any discussion we could have here, and given they went forward with the project...I have to assume the results were in Disney's favor.


I will agree that we don't know for sure how much. I just think its more significant than you think.


And I think, if it were as significant as YOU think that Disney would not likely have "done the deal". There's so many factors involved in this that fall in Disney's favor, it's hard to see a situation where occupancy rates really fall to the point of effecting their bottom line.


Average family and household size actually continued to drop in the 2000 Census, but perhaps there is more recent data. Regardless, I do agree the demand for the larger rooms is there, its just that it was probably there all along. I suspect its just a value/convenience thing that just wasn't an option in the past. It's only been recently that it became clear the demand for more standard rooms just isn't there, and hence Disney's efforts to try other things.


There was a 2004 government study and another 2005 household study that show that average family size has blipped up for the first time in about 10 - 15 years. It's still not on the level of the 50's, or even the early 80's, but it came up. The study showed a jump from about 2.5 children in the average family up to around 2.6-ish. Not a drastic increase, but the studies both noted that MOST of that increase came from a statistical increase in families with 3 children (not 4,5, or 6). I'm assuming Disney has seen some "outcry" from families looking for that type of room...and assume their market research is largely why they've begun offering more rooms of that type. Heck, even the newest DVC (AKV) is now setting up to allow 5 in a 1 BR (in all other resorts, the stated limit has been 4).

As for demand for standard rooms "not being there"...we can see that's not the case by the occupancy numbers. Even looking at the fact there were less rooms, that doesn't show there was a decrease in demand. Demand (if you assume the bookings represent that) was pretty much flat. And Disney didn't build out any more rooms this year than they did last year.

Now, if you want to say the "rooms for 5" are a way to try to increase occupancy rate and harness more revenue...sure. But I think the "demand" that needs to be taken into account is an unsatisfied one in the market, not a lack of one for their "standard offerings". That seems to be Disney's latest "bent" when you look at all their most recent decisions: Build/target new markets to expand their existing one. I think MANY of the decisions you're seeing lead more directly to THAT conclusion than to anything regarding them "worrying" about their occupancy rate, or having "overbuilt". That being said, I don't think WDW is likely to build any MORE rooms, on property, for awhile. I think they've struck the perfect balance, at this point, between being able to meet demand in the busy seasons, and still making profit during the slower seasons.

DancingBear
05-01-2007, 11:39 AM
So you're saying down compared to pre-2000? That's just not a valid comparison. So much has happened in both the economy and the tourism industry, you're comparing apples to oranges. Better to compare year to year, and to the industry as a whole. Again, Disney doesn't operate inside a bubble...I'm not talking about attendance figures declining post 9-11, I'm talking about Revenues up almost 46%, but Operating Income down. I don't know of anything in the economy or the tourism industry as a whole that explains that.

DancingBear
05-01-2007, 11:49 AM
Except, well, they don't. Most "comfort inn"-type hotels in the Orlando area offer some pretty cut rate room rates, well below the nightly rate of the AS or Pop hotels. You can see that from simple searches of the travel sites. In addition, they don't offer any of the benefits of the "on site" properties. There is a pretty good differentiation line between the two types of accomodations.....On one hand, you have a Disney All-Star Resort with very averagely appointed exterior-entrance rooms, with nice landscaping, a decent pool, no dining other than a very average food court, and a Disney bus to take you on the long ride to the parks.

On the other hand, you have a Comfort Inn interior hallway hotel with basically the same room appointments, an average pool, set in the midst of a shopping center with lots of dining options in walking distance, and an on-property drive to the parks. And the Comfort Inn is much cheaper.

You don't think a lot of folks would consider the Comfort Inn a pretty good alternative?

pilferk
05-01-2007, 11:53 AM
I'm not talking about attendance figures declining post 9-11, I'm talking about Revenues up almost 46%, but Operating Income down. I don't know of anything in the economy or the tourism industry as a whole that explains that.

Allow me to offer up some examples of things that could lead to decreased operating income (which are obviously due to an increase in operating expenses, since revenues are up.) when comparing 2000 to 2007:

Increased security costs
Increased energy costs
Increased fuel costs
Increased insurance costs
Increased food costs
Increased transportation costs
Increased materials (ie parts, manufacturing, and raw materials) costs

Just to name a few, and all related to 9/11 (some directly, some indirectly), the economy, and the tourism industry in general, especially in that geographic area (ie: the "Katrina" effect and the changes since 9/11). There's loads more of them....but the point is the tourism industry in general has had to absorb some drastic increases since 2000. Again, financial analysts are saying much the same thing, so don't take my word for it....

In addition, you have things that have come on-line since '00 (like, um....DCA) which have not been as successful as Disney hoped, are still eating up expense dollars, but aren't related to WDW at all.

Combine those two factors, and looking at what we DO know about WDW (mostly + trends in attendance, per capita spending, and flat occupancy rates), and I'm not sure that the conclusions you're coming to are supported by the data we have, or can very easily assume.

pilferk
05-01-2007, 12:04 PM
On one hand, you have a Disney All-Star Resort with very averagely appointed exterior-entrance rooms, with nice landscaping, a decent pool, no dining other than a very average food court, and a Disney bus to take you on the long ride to the parks.

On the other hand, you have a Comfort Inn interior hallway hotel with basically the same room appointments, an average pool, set in the midst of a shopping center with lots of dining options in walking distance, and an on-property drive to the parks. And the Comfort Inn is much cheaper.

You don't think a lot of folks would consider the Comfort Inn a pretty good alternative?

Some? Yes.

A lot. No. Because if they did, there's a whole slew of similar offerings not much further away in other directions.

You still lose some of the on propery "perks" that the WDW budget accomodations have. And you minimize the advanatage they have.

The WDW budget resorts have more than ONE "average" pool..."average" being debateable when compared to offerings by those you're using for comparision. Most of the "types" of resorts you're comparing to, and looking at the size of the development itself I'd be hardpressed to see this change, DO only have 1 "average" (ie: largely unthemed) pool. You have access to better, more direct transport from your resort to the parks on WDW property. Now, the other hotels may offer shuttles (or charge you for shuttle service, which is what many of the super-budget places do), but from other "off property" resort offerings, we can assume they won't be like Disney transport. On WDW property, you get a max of 10 days extra to book ADR's (180 + 10), something becoming increasingly valuable as the WDW TS places fill more quickly with the dining plan. You also get "Extra magic hours", something MANY families feel is worth the extra expense to stay on WDW property for, alone. You also have DME, something that can potentially save a family of 4 about $100 (assuming paying for shuttle service) or more (if they feel they need to rent a car). AND you get to participate in the dining plan..again, something many families feel is worth paying more to stay on Disney property to get, even when it's NOT free.

Now, given all that, can YOU say that a LOT of families would choose to save the $20 a night and bolt from Disney property? Those are compelling reasons NOT to choose the super-budget rooms...but some families will (and do...because some families stay off-site), because ultimately that savings may be the difference between being able to go, and not being able to go.

And, in the end, ignoring all that, looking at the size of the Western Beltway development, there simply isn't enough SPACE to create any large scale cannibalization for the approx 8K worth of Disney budget rooms, and still fit all the rest of the things Disney has said will be there.

So, at the end of the day, yes...some will likely bolt...but I don't think (and obviously the Disney bean counters feel the same way) that the small number of guests who DO bolt will actually cost WDW money. In fact, I'd bet dollars to donuts Disney figures they'll actually make MORE money, after losing those guests. Of course, it remains to be seen if they're right, but I tend to think they probably are.

raidermatt
05-01-2007, 05:09 PM
You have to really take a good look at that market. The ultra-high end, 4S target market, isn't likely to "slum it" at the GF or the Contemp. They're very....and I'm trying to be as diplomatic in this description as possible..."discerning".

But they'll slum it in the parks with moderate, value, off-site and day guests in tank tops, 95 degree heat and 95% humidity?

Ok. I trust Four Seasons judgement more than I do Disney's on this, so somehow it must make sense.


How much cheaper? Well, even $20 a night off of AS and Pop's $99 per night is a significant % savings. And for many families (witness those who stay offsite in JUST these types of accomodations) that's a pretty big deal.

Will they pull some guests from the AS and POP? Probably. But first off it doesn't look like they'll even OFFER enough rooms to really make a dent in the 8k+ rooms Disney offers in the budget category. Second, we know it won't pull ALL the guests looking at the WDW budget offerings, simply because they won't offer the same "guest perks" that onsite WDW rooms offer, and those "perks" are good selling points to many families.

So off-site guests currently staying in cut rate rooms will move up to rooms costing just $20 less than on-site, without any guest perks? With no perks, it's more than a $20 value difference, but then we're getting down to the same rates being paid off-site now for quality budget rooms. There's not a lot of room to slice here. It has to take from both ends.

And we are talking about 4000-5000 rooms. That sounds like plenty enough to make a dent in Disney's 8000 value rooms.


I'd think, given Disney's abundance of bean counters, that that equation has been gone over in more depth than any discussion we could have here, and given they went forward with the project...I have to assume the results were in Disney's favor.

Of course they were. But as any non-bean counter knows, the numbers at the end are only as good as the numbers at the beginning. Since Disney bean counters apprarently believed Pop Century would be filled by now, and the GF would be the 5-star resort it was envisioned to be, I'm going to need a little more than "trust in the bean counters".

As for demand for standard rooms "not being there"...we can see that's not the case by the occupancy numbers. Even looking at the fact there were less rooms, that doesn't show there was a decrease in demand. Demand (if you assume the bookings represent that) was pretty much flat. And Disney didn't build out any more rooms this year than they did last year.

The context of the demand "not being there" comment was with regard to Disney making changes, like not finishing Pop. The demand has not been, and apparently is still not, there for Disney to finish the value resort it started. Or at least that's the opinion of Disney's bean counters.

pilferk
05-02-2007, 06:47 AM
But they'll slum it in the parks with moderate, value, off-site and day guests in tank tops, 95 degree heat and 95% humidity?

Ok. I trust Four Seasons judgement more than I do Disney's on this, so somehow it must make sense.


Again, Disney makes money strictly on 4S using their property, and ANY increase in park attendance, even if it's a relatively small % of those USING the 4S resort, is an affluent demo with lots of disposable income...which means more per capita spending. And again, it's risk vs reward. Disney is taking practically no risk and investing little to no capital on the project. Not to mention, if you look at some of Disney's recent marketing, it's obvious they're trying to tap into this demo so the 4S resort goes along with that plan.


So off-site guests currently staying in cut rate rooms will move up to rooms costing just $20 less than on-site, without any guest perks? With no perks, it's more than a $20 value difference, but then we're getting down to the same rates being paid off-site now for quality budget rooms. There's not a lot of room to slice here. It has to take from both ends.


You misunderstand. What I'm saying is EVEN a $20 rate cut is a significant % savings. Other hotels in the Best Western/Comfort Inn categories in the Orlando area (for example, Comfort Inn Lake Buena Vista for $60 a night, Best Westerns in the area are between $60 and $65 per night) offer rates more like $40 cheaper. On the value front, I agree...that's precisely why the WDW budget rooms won't lose a significant portion of their guests, IMHO. But there is a category of guest who's not looking for value...they're looking for cheap. Again, witness the fact that offsite properties, with cut rate rooms, fill up. THOSE are the types of rooms these resorts are going to have to compete with, precisely because they have "value" equal to those rooms + (in some cases) the benefit of a better location.


And we are talking about 4000-5000 rooms. That sounds like plenty enough to make a dent in Disney's 8000 value rooms.


You're assuming all those units would be filled by WDW guests. I don't think that's remotely a valid assumption. Again, 4000 superbudget rooms, with less value, simply isn't enough to put much of a dent in the higher value 8000 budget rooms. However, assuming similar pricing to other "Comfort Inn/Best Westerns" in the area, and the better location, they ARE likely to draw people away from those hotels....because people staying in them, already, have proven they're more concerned with final price than with increased value.



Of course they were. But as any non-bean counter knows, the numbers at the end are only as good as the numbers at the beginning. Since Disney bean counters apprarently believed Pop Century would be filled by now, and the GF would be the 5-star resort it was envisioned to be, I'm going to need a little more than "trust in the bean counters".


Sure, but are you really going to assume, having no data at all, that the bean counters numbers are "bad"? If so, we'll just have to agree to disagree on that one. I think Disney conducts as much, if not more, market research than just about any company, and certainly any entertainment, media, or "tourism-base" company, on the planet.

On the Pop front, surely you can't be serious? You expect the bean counters to be able to predict 9/11 and the resulting demolishing of the tourism industry? I don't think that's a fair assessment on any level.

On the GF front...again, I'm not sure that's a fair accusation, either. While the GF may have been envisioned as a 5 * resort when it was built, it wasn't built as what TODAY is considered a 5* resort....like the 4Seasons or the Ritz-Carlton resorts. It's facilities, now, peg it squarely at 4*...maybe 4.5*, and short of demoing it and rebuilding there's not really any way to get around it. In addition, Disney has one thing it simply can't overcome with the clientele that visits that sort of resort: Name. The 4 Seasons and Ritz-Carlton brands, alone, are selling points to that market...something that is very hard for "non-luxury-resort exclusive" brands to break into.


The context of the demand "not being there" comment was with regard to Disney making changes, like not finishing Pop. The demand has not been, and apparently is still not, there for Disney to finish the value resort it started. Or at least that's the opinion of Disney's bean counters.

Again, you're comparing demand pre-9/11, and decisions made then, with current demand. That's just not a fair comparison, nor is it an apt one. It's also not a fair picture of "demand not being there" as a reasoning for any decisions that are made.

Another Voice
05-02-2007, 10:14 AM
Sure, but are you really going to assume, having no data at all, that the bean counters numbers are "bad"?
The Disney Institute
DisneyQuest
Disney's California Adventure
Anmial Kingdom
Disney Studios Paris
Hong Kong Disneyland

Gee wiz - what have Disney's bean counters got right in the last decade? Each one of those parks massively underperformed estimates. Both Paris and Hong Kong were forced to refinance debt they were so bad...and we can't even begin to list the diaster that happened in Anaheim. For all their "market research" they do Disney seems utterly incapable of putting ANY of it into practice.

You expect the bean counters to be able to predict 9/11 and the resulting demolishing of the tourism industry?
Except that Disney has recoved faster and stronger from other shocks that were far pu[worse[/i] than 9/11 to the travel industry. How about the oil crisis that hit just after WDW opened - gas prices soared at a time when 90% of WDW visitors drove on their vacations? How about gasoline rationing - it wasn't a silly matter about being afraid to drive, you couldn't even buy gas to get to work? How about the recession in the 1980's when interest rates were 20% and unemployment was three times today's rates?

You keep whinning about 9/11 as if no other era saw problems of it's own. Everytime has produced troubles for the tourism industry - and everyone other than Disney seems to be doing great these days. Have you seen the building boom and the hotel rates in Vegas? They're not crying make excuses, they're growing their businesses.

pilferk
05-02-2007, 11:50 AM
The Disney Institute
DisneyQuest
Disney's California Adventure
Anmial Kingdom
Disney Studios Paris
Hong Kong Disneyland

Gee wiz - what have Disney's bean counters got right in the last decade? Each one of those parks massively underperformed estimates. Both Paris and Hong Kong were forced to refinance debt they were so bad...and we can't even begin to list the diaster that happened in Anaheim. For all their "market research" they do Disney seems utterly incapable of putting ANY of it into practice.


There have been far more successes than failures. Disney Cruise Line, the Oriental Land partnership, ESPN, DL's 50th, DVC, etc, etc. Pointing out a few mis-steps isn't particually compelling when viewing the sum as a whole.

By and large, they get it right...even MORE frequently when looking at WDW alone. I'm not willing to bet against them on this one because, quite frankly, there isn't enough evidence to think otherwise. Other than a general "doom and gloom" perspective, that is.

But what makes YOUR perception that they "got it wrong" any more well founded? That's why I said, when addressing raidermatt, "We'll have to agree to disagree on this one"...because until there's some hindsight data available, it's more a matter of opinion than anything else.


Except that Disney has recoved faster and stronger from other shocks that were far pu[worse[/i] than 9/11 to the travel industry. How about the oil crisis that hit just after WDW opened - gas prices soared at a time when 90% of WDW visitors drove on their vacations? How about gasoline rationing - it wasn't a silly matter about being afraid to drive, you couldn't even buy gas to get to work? How about the recession in the 1980's when interest rates were 20% and unemployment was three times today's rates?

You keep whinning about 9/11 as if no other era saw problems of it's own. Everytime has produced troubles for the tourism industry - and everyone other than Disney seems to be doing great these days. Have you seen the building boom and the hotel rates in Vegas? They're not crying make excuses, they're growing their businesses.

You're talking about things that happened 20 to 30 years ago. I don't bring them up, or bring up Disney's "recovery time" (which, FYI, wasn't particularly quick in relation to other similar industries) because they have no bearing on today's business climate. I'm also not sure they were "worse", either in total effect or in the sense that their duration, and effects, were relatively short-lived. Even so, the events you mentioned were actually resolved prior to Disney's recovery from them. Notice there is still a fear of terrorism, and effects from that fear, etc, that is having a lasting effect on the industry. Sure, they're dwindling but you have no further to look than political polls to see Homeland Security (or problems with it) are still primarily on the mind of the American people. So are gas prices. So are the increased energy costs. So are lots of things that discourage travel amongst the middle class family demo. None of those concerns, to date, have actually been resolved.

I'm hardly whining. I'm simply pointing out an event that pretty much every reputable financial analyst takes into account, and says so, when doing comparisons. You simply can't ignore it. Or rather, you can't ignore it and expect to come out with a fair comparison.

Vegas is not Orlando. Vegas is not a family vacation destination, largely. It's got an entirely different demographic appeal and attempting to compare it to WDW isn't fair, nor apt. As for "growing their business"...that's exactly what Disney is doing with the WB and 4S deals...just not in the traditional ways YOU want/expect them to. They're not "crying" or "making excuses". They're taking tactics to tap into untapped, or undertapped, markets. It's pretty smart business, IMHO.

And as for the assertion that "everyone other than Disney seems to be doing great", I'd like to see you back that up with numbers. Because the major hotel chains in tourist destinations, major resorts, even the cruise lines, have not, to my knowledge, posted numbers equaling those prior to 9/11. They've recovered, to be sure, and are doing OK, but not to the extent that they were prior to 9/11. Vegas, maybe....business travel, maybe...but I think "everyone else" is a stretch. Look at the state of the airlines, for example.

Another Voice
05-02-2007, 12:32 PM
There have been far more successes than failures. Disney Cruise Line, the Oriental Land partnership, ESPN, DL's 50th, DVC, etc, etc. Pointing out a few mis-steps isn't particually compelling when viewing the sum as a whole.
You can't be serious. Disney did do anything to make ESPN - they bought them. And you're comparing two crusie ships agains against $3 BILLION invested in subperforming theme parks and calling Disney ahead? And while Disneyland's 50th Birthday was a single year success, across the plaza California Adventure is now in its sixth year of failure.

You are simply ignoring plain facts with silly "agree to disagree" comments. Your points are verging on the laughable now.

...because they have no bearing on today's business climate.
You're partiall correct - the sutuations in the past were much worse for Disney than 9/11 was. Having 90% of your client base unable to buy gas just to get to was far worse than having to wait in two hour security lines.

ANd WDW isn't like Vegas - it's much harder to get people to Vegas. It's a lot easier to put off your second honeymoon or to justify a thousand dollar gambling spreee than it is to tell your five year old she can't see Mickey Mouse. And other "family desitnations" from Hawai'i to the national parks have been booming for a long time while WDW contines to lag.

Your entire line of "whoe is Disney, for they are such great victim" is silly and piontless. The reason you have business managers is not to decry the sad fate that history has thrust upon them - but to keep the business running and to improve the business. All I hear is nothing but weak excuses for why Disney can't make the basics.

Maybe we need to get Disney on Oprah's show and have a good cry.

raidermatt
05-02-2007, 12:51 PM
Again, Disney makes money strictly on 4S using their property, and ANY increase in park attendance, even if it's a relatively small % of those USING the 4S resort, is an affluent demo with lots of disposable income...which means more per capita spending. And again, it's risk vs reward. Disney is taking practically no risk and investing little to no capital on the project. Not to mention, if you look at some of Disney's recent marketing, it's obvious they're trying to tap into this demo so the 4S resort goes along with that plan.


That's the bean counter view, sure. Why risk anything when you can get somebody else to sign a lease and give you a guaranteed cut.

Problem is, that does not take opportunity cost into the equation. Your view of risk reward never would have built DL or WDW in the first place.

Yes, I'm well aware of Disney's recent marketing efforts, and I'm also well aware that its a market they have unsuccessfully chased before.

You misunderstand. What I'm saying is EVEN a $20 rate cut is a significant % savings.
No, I don't. There is not a significant enough difference in the price points to prevent significant overlap.

You're assuming all those units would be filled by WDW guests. I don't think that's remotely a valid assumption.
That's so far off from reality I'm not sure how to respond to it. WDW is the major draw in the area. Most vacationers in the Orlando area hotels make WDW at least a significant portion of their trip. And now you suggest it's not even remotely valid to say that the majority of units in a development right outside WDW's gates on Disney-owned property will be occupied by WDW guests?

Again, 4000 superbudget rooms, with less value, simply isn't enough to put much of a dent in the higher value 8000 budget rooms.
And again, this is where your argument suffers a significant breakdown. They aren't 4000-5000 "superbudget" rooms. If these are superbudget, what will you call the quality budget establishments without the location benefit? How about the less than quality establishments? The new rooms are going to be priced higher than these other categories, yet lower than Disney's "value" rooms and there isn't enough space in there to create a unique market.

Sure, but are you really going to assume, having no data at all, that the bean counters numbers are "bad"? If so, we'll just have to agree to disagree on that one. I think Disney conducts as much, if not more, market research than just about any company, and certainly any entertainment, media, or "tourism-base" company, on the planet.

I don't assume anything, which is where the heart of our difference on this subject lies.

On the Pop front, surely you can't be serious? You expect the bean counters to be able to predict 9/11 and the resulting demolishing of the tourism industry? I don't think that's a fair assessment on any level.

I never said they needed to predict 9/11. However, most other tourist destinations had fully recovered by 2005, and even WDW set new attendance records in 2006. Yet the 2nd half of Pop isn't even being worked on. Clearly there were significant miscalculations.

9/11 could explain a timing delay of a year or 3, but it doesn't explain why Pop2 still sits as it is.

On the GF front...again, I'm not sure that's a fair accusation, either. While the GF may have been envisioned as a 5 * resort when it was built, it wasn't built as what TODAY is considered a 5* resort....like the 4Seasons or the Ritz-Carlton resorts.
That's a weak excuse. The GF never reached 5 stars in any time period, while other operators acheived it then and now. Its not like the only resorts to get 5-stars are those built in the last 5 years.

It's facilities, now, peg it squarely at 4*...maybe 4.5*...
Its actually a 4 with AAA and a 3 with Mobil.

In addition, Disney has one thing it simply can't overcome with the clientele that visits that sort of resort: Name.
Another ridiculous argument. Disney simply chooses not to try anymore, and instead take the "less risky", and therefore less rewarding way out. And again, the whole point to the GF tangent is that Disney's "bean counters" thought they could do it. Did you disagree with them then, or did you simply assume they were right?

Again, you're comparing demand pre-9/11, and decisions made then, with current demand. That's just not a fair comparison, nor is it an apt one. It's also not a fair picture of "demand not being there" as a reasoning for any decisions that are made.
No, you are ignoring the fact that 9/11 no longer impacts demand, and hasn't for several years. It was a valid argument in 2003, not now.

There have been far more successes than failures. Disney Cruise Line, the Oriental Land partnership, ESPN, DL's 50th, DVC, etc, etc. Pointing out a few mis-steps isn't particually compelling when viewing the sum as a whole.

By and large, they get it right. I'm not willing to bet against them on this one because, quite frankly, there isn't enough evidence to think otherwise. Other than a general "doom and gloom" perspective, that is.


So many success that the stock languished for over 10 years, and even the recent uptick doesn't come close to making up for that.

And for successes, you include DL's 50th? A nice short term marketing promotion yes, but its a drop in the bucket compared to the opportunity lost with something like DCA or DSP.

You're main evidence continues to be that you trust them. If that works for you, fine, but it doesn't go very far in discussions.

Notice there is still a fear of terrorism, and effects from that fear, etc, that is having a lasting effect on the industry. Sure, they're dwindling but you have no further to look than political polls to see Homeland Security (or problems with it) are still primarily on the mind of the American people. So are gas prices. So are the increased energy costs. So are lots of things that discourage travel amongst the middle class family demo. None of those concerns, to date, have actually been resolved.


They are resolved enough for tourism to make a full recovery, and in many cases for it to have made that recovery several years ago. People may think about all those things, but they are back to taking their vacations and have been for several years.

DancingBear
05-02-2007, 01:29 PM
Allow me to offer up some examples of things that could lead to decreased operating income (which are obviously due to an increase in operating expenses, since revenues are up.) when comparing 2000 to 2007:

Increased security costs
Increased energy costs
Increased fuel costs
Increased insurance costs
Increased food costs
Increased transportation costs
Increased materials (ie parts, manufacturing, and raw materials) costs

Just to name a few, and all related to 9/11 (some directly, some indirectly), the economy, and the tourism industry in general, especially in that geographic area (ie: the "Katrina" effect and the changes since 9/11). There's loads more of them....but the point is the tourism industry in general has had to absorb some drastic increases since 2000. Again, financial analysts are saying much the same thing, so don't take my word for it....Okay. Please find me anything from a financial analyst that explain the 46% increase in revenues vs. loss in operating income. There may be a perfectly good explanation for this in terms of the Parks division as a whole, but I can't buy that it's because all of those increased revenues and more were eaten up by 9/11-related cost increases.

pilferk
05-02-2007, 02:01 PM
You can't be serious. Disney did do anything to make ESPN - they bought them. And you're comparing two crusie ships agains against $3 BILLION invested in subperforming theme parks and calling Disney ahead? And while Disneyland's 50th Birthday was a single year success, across the plaza California Adventure is now in its sixth year of failure.

You are simply ignoring plain facts with silly "agree to disagree" comments. Your points are verging on the laughable now.


On the contrary, it is you ignoring facts....and displaying a stunning lack of knowledge about the company as a whole. I simply offered up a quick list of obvious suggestions. There are plenty more. If they were nearly as unsuccesful as you're intimating, they'd be showing it on the stock side. They're not. FYI, BUYING ESPN was a business decision. Ignoring the gains they've made simply because they don't support your argument pretty much discredits any input you have into this discussion.


You're partiall correct - the sutuations in the past were much worse for Disney than 9/11 was. Having 90% of your client base unable to buy gas just to get to was far worse than having to wait in two hour security lines.



You have numbers to back up the fact the effect was as extreme or as long lasting? No, of course you don't. You're simply arguing from a baseless position you're trying to defend.


ANd WDW isn't like Vegas - it's much harder to get people to Vegas. It's a lot easier to put off your second honeymoon or to justify a thousand dollar gambling spreee than it is to tell your five year old she can't see Mickey Mouse. And other "family desitnations" from Hawai'i to the national parks have been booming for a long time while WDW contines to lag.


Again, numbers? Because the numbers I've seen have shown similar "recovery", on a business basis, to what WDW has seen. In other words, you're arguing without supporting evidence....supply some please.



Your entire line of "whoe is Disney, for they are such great victim" is silly and piontless. The reason you have business managers is not to decry the sad fate that history has thrust upon them - but to keep the business running and to improve the business. All I hear is nothing but weak excuses for why Disney can't make the basics.

Maybe we need to get Disney on Oprah's show and have a good cry.

I didn't ever say they were a victim. I pointed out you can't compare pre-9/11 numbers to current numbers. It's not an "excuse", it's a simple truth. And It's a valid point. If you disagree, you may want to take it up with the financial analysts and business community who cite the same thing.

And Disney IS making the basics, and they ARE improving the business. Look at thier year to year numbers. Just not in way those who don't KNOW the business might like.

raidermatt
05-02-2007, 02:28 PM
I didn't ever say they were a victim. I pointed out you can't compare pre-9/11 numbers to current numbers.

That's actually true. Tourism is stronger today than pre 9/11, so you're right, there's no comparison.

pilferk
05-02-2007, 02:32 PM
That's the bean counter view, sure. Why risk anything when you can get somebody else to sign a lease and give you a guaranteed cut.

Problem is, that does not take opportunity cost into the equation. Your view of risk reward never would have built DL or WDW in the first place.
[quote]

On the contrary, that view is to maximize current assets, while minimizing risk. To maximize the assets you have to build them. It doesn't preclude opportunity costs, it says to make those expenditures when they make the most sense, rather than wasting capital on a more risky venture.

[quote]
Yes, I'm well aware of Disney's recent marketing efforts, and I'm also well aware that its a market they have unsuccessfully chased before.


True, which doesn't mean they won't be successful this time, given the new offerings.


No, I don't. There is not a significant enough difference in the price points to prevent significant overlap.


In your opinion. However, the rate of occupancy, off site,with similar price differences, would lead one to believe that opinion is not correct.


That's so far off from reality I'm not sure how to respond to it. WDW is the major draw in the area. Most vacationers in the Orlando area hotels make WDW at least a significant portion of their trip. And now you suggest it's not even remotely valid to say that the majority of units in a development right outside WDW's gates on Disney-owned property will be occupied by WDW guests?


No, I meant by WDW RESORT guests. I should have been more clear. In other words, you're assuming that 4k to 5k rooms will be completely siphoned from AS or POP resorts.


And again, this is where your argument suffers a significant breakdown. They aren't 4000-5000 "superbudget" rooms. If these are superbudget, what will you call the quality budget establishments without the location benefit? How about the less than quality establishments? The new rooms are going to be priced higher than these other categories, yet lower than Disney's "value" rooms and there isn't enough space in there to create a unique market.


In your opinion. As for terminology, you can choose whatever you want to term them...they are rooms between Disney's budget offering at $99 per night and the $35 per night offerings like super 8. Saying the market is too thin to slice ignores the fact that there is almost as much $ wise, and more % wise, between the Disney value hotels and the moderates. And given the flourishing of comfort inn and best westerns in precisely that price range, obviously there IS a market for them. There is now that self same option a bit closer than some.


I don't assume anything, which is where the heart of our difference on this subject lies.


So you have evidence to support your position,then? By all means, if you have access to numbers and data not shown here, please present it. I suspect, however, you don't. So you're forming your opinion completely on supposition.....


I never said they needed to predict 9/11. However, most other tourist destinations had fully recovered by 2005, and even WDW set new attendance records in 2006. Yet the 2nd half of Pop isn't even being worked on. Clearly there were significant miscalculations.


No, it was an appropriate calculation at the time. Assuming similar growth trends that they'd seen throughout the late 90's, 2006 attendance numbers would have been seen in 2002 or 2003. Again, the "collapse" and recovery process significantly affected growth trending....after the project was well under way.

And again, I've not seen any evidence that recovery has trully been "complete"...as in all numbers have returned to the pre-9/11 numbers. If you have some, please...I'd love to see it. I've seen evidence of some numbers come back up, but not all of them.


9/11 could explain a timing delay of a year or 3, but it doesn't explain why Pop2 still sits as it is.


Not entirely, but for the most part, it does. Whether you want to acknowledge it or not is another story. Add in other factors that are limiting destination travel....and look at their overall numbers....and it's pretty clear that things have changed significantly since 2000 - 2001.


That's a weak excuse. The GF never reached 5 stars in any time period, while other operators acheived it then and now. Its not like the only resorts to get 5-stars are those built in the last 5 years.


No, but significant changes have been made in older resorts, to keep them at the 5* level, which, logistically,would be difficult if not impossible to achieve at the GF. Again, it may have been concieved as a 5* resort, but it wasn't built as one. I said precisely that.


Its actually a 4 with AAA and a 3 with Mobil.


And it's higher with other ratings guides....so I think calling it a 4, to PERHAPS 4 1/2, is apt.


Another ridiculous argument. Disney simply chooses not to try anymore, and instead take the "less risky", and therefore less rewarding way out. And again, the whole point to the GF tangent is that Disney's "bean counters" thought they could do it. Did you disagree with them then, or did you simply assume they were right?


In your opinion. You THINK it would be more rewarding to try to cater to that clientele. You point out that disney tried with the GF. They were not successful. So better to risk more capital, and risk not getting what you're after, over partnering with a proven commodity? Yeah, that makes good business sense....Again, you're displaying a lack of knowledge about the market they're trying to cater to.


No, you are ignoring the fact that 9/11 no longer impacts demand, and hasn't for several years. It was a valid argument in 2003, not now.


All the way back to the original point: You can't compare numbers from 2000 to numbers now, because too much has changed, INCLUDING 9/11 which had/has some direct impact, STILL (or rather, the resulting concerns from it). You don't like the argument, which doesn't make it invalid. It had such a dramatic impact, it's still being felt. Not as direclty as it once was, but financial analysts still cite it. If you have a problem with that, take it up with Wall Street.


So many success that the stock languished for over 10 years, and even the recent uptick doesn't come close to making up for that.


The stock has done fine. Analysts still cite Disney quite well. The sky is not falling. I'm curious (and serious): Do you OWN Disney stock?


And for successes, you include DL's 50th? A nice short term marketing promotion yes, but its a drop in the bucket compared to the opportunity lost with something like DCA or DSP.


It was just a simple list of examples, no more eggregious than listing AK as a "failure".


You're main evidence continues to be that you trust them. If that works for you, fine, but it doesn't go very far in discussions.


It goes just as far as using "I don't trust them" as reasoning.....



They are resolved enough for tourism to make a full recovery, and in many cases for it to have made that recovery several years ago. People may think about all those things, but they are back to taking their vacations and have been for several years.


Again, numbers to prove tourism has made a full recovery? Airlines don't think so. Many hotel chains don't think so. Many cruise lines don't think so. At least not to the "bottom line" numbers. Unless you have prove to the contrary?

pilferk
05-02-2007, 02:34 PM
That's actually true. Tourism is stronger today than pre 9/11, so you're right, there's no comparison.

Evidence?

And include projected growth from 2000 to present USING 2000's numbers and compare them to current numbers.

Thanks.

Another Voice
05-02-2007, 02:43 PM
On the contrary, it is you ignoring facts....
Really?

I listed Disney projects from the last decade, all created and executed by Disney, each project over several hundred million dollars each, each a significant, high profile “strategic” move for the company, done from the height floors of the Team Disney Building. And all you offer is:

Cruise Line (half the cost of DCA, taking over an already successful business model – a success I’ll grant you. But its profits don’t even cover the capital needs for DCA)

The Oriental Land Partnership – a quarter century old business arrangement that Michael Eisner and Bob Iger spent two decade demeaning every chance they had. It wasn’t until they conned the Chinese Communists into throwing money into Hong Kong that suddenly “Oriental” was a good idea. But thanks for acknowledging that Ron Miller was a better CEO than Bob Iger is.

ESPN – again, it had nothing to do with Disney. Yes, you praise the business decision to purchase it, so how about your comments on the business decisions of ESPN Mobile? GO.com? Airliner leases for United and Delta (gone in bankruptcy), The Disney Stores? Seven Billion for Pixar? Sorry, Disney gets no kudos from throwing around its big check book. And we haven’t even gotten to the real reason ESPN happened – that brilliant success of ABC.

Disneyland’s 50th – Wow a one year wonder. Too bad in FIVE YEARS they haven’t gotten anyone to buy a ticket to California Adventure right across the plaza. And think, it’s only 48 more years until Disney can count up another success in 2055!!!!!

DVC – Timeshare condos? Granted, Disney is a genius for conning stupid people and I’ll have to say it seems to have been successful. And it was great that Disney can pass off other flops on to DVC (Disney Institute, Animal Kingdom Lodge, and Boardwalk). But how about those wonder units in Hilton Head and Vero Beach. And those planned DVC units in New York, California, Paris, London, Wyoming??? DVC has fallen massively short of its original intents. The best thing you can say about DVC is that it hasn’t lost as much money as other Disney projects.

Etc., etc. I suppose this is Latin for “I don’t have anything else to say”.


Again – any rational person stacking up one list against the other knows exactly what’s been going on. It’s only those stuck in the foliage that seem to be unclear.

But what makes YOUR perception that they "got it wrong" any more well founded?
Because my stock has been stuck within the same price range for 20 years now. Remember the days of the spilts and prices in the $70s and $80s? I do, and apparently Wall Street tends to agree with me that Disney isn’t worth today what it used to be. Even recently despite the Dow (of which Disney is a component) setting RECORD LEVELS – Disney still can’t raise above the “Ding-Dong Eisner Dead!!!” bump.

[qupte] I pointed out you can't compare pre-9/11 numbers to current numbers. [/quote]
Really – people are afraid or couldn’t travel in other crises. Yet Disney found a way to make them come to Disney World. But these days people have more money than ever, airlines are carrying record numbers of passengers, other destinations are setting records – and Disney is a poor victim of circumstance.

Please come up with another crybaby excuse.

Google recent toursist trends in Vegas. Hell, check out how many hotels they’re building. Check out the number of tourists going to Hawai’i – it’s all right there on the internets. Check out the numbers for thenational parks. Hell, there was a recent article here on DIS that said Florida’s tourism in up 11%, far above Disney’s. The evidence is there for any tear-free eye to see. It’s only Disney that’s sitting on the curb weeping over its fate. Everyone else is making their business work.

Just not in way those who don't KNOW the business might like.
Ya wanna compare credentials?

pilferk
05-02-2007, 02:44 PM
Okay. Please find me anything from a financial analyst that explain the 46% increase in revenues vs. loss in operating income. There may be a perfectly good explanation for this in terms of the Parks division as a whole, but I can't buy that it's because all of those increased revenues and more were eaten up by 9/11-related cost increases.

I've never seen anyone mention it.

Could that be because they don't view it as an "issue"?

pilferk
05-02-2007, 02:57 PM
Really?

I listed Disney projects from the last decade, all created and executed by Disney, each project over several hundred million dollars each, each a significant, high profile “strategic” move for the company, done from the height floors of the Team Disney Building. And all you offer is:

Cruise Line (half the cost of DCA, taking over an already successful business model – a success I’ll grant you. But its profits don’t even cover the capital needs for DCA)

The Oriental Land Partnership – a quarter century old business arrangement that Michael Eisner and Bob Iger spent two decade demeaning every chance they had. It wasn’t until they conned the Chinese Communists into throwing money into Hong Kong that suddenly “Oriental” was a good idea. But thanks for acknowledging that Ron Miller was a better CEO than Bob Iger is.

ESPN – again, it had nothing to do with Disney. Yes, you praise the business decision to purchase it, so how about your comments on the business decisions of ESPN Mobile? GO.com? Airliner leases for United and Delta (gone in bankruptcy), The Disney Stores? Seven Billion for Pixar? Sorry, Disney gets no kudos from throwing around its big check book. And we haven’t even gotten to the real reason ESPN happened – that brilliant success of ABC.

Disneyland’s 50th – Wow a one year wonder. Too bad in FIVE YEARS they haven’t gotten anyone to buy a ticket to California Adventure right across the plaza. And think, it’s only 48 more years until Disney can count up another success in 2055!!!!!

DVC – Timeshare condos? Granted, Disney is a genius for conning stupid people and I’ll have to say it seems to have been successful. And it was great that Disney can pass off other flops on to DVC (Disney Institute, Animal Kingdom Lodge, and Boardwalk). But how about those wonder units in Hilton Head and Vero Beach. And those planned DVC units in New York, California, Paris, London, Wyoming??? DVC has fallen massively short of its original intents. The best thing you can say about DVC is that it hasn’t lost as much money as other Disney projects.

Etc., etc. I suppose this is Latin for “I don’t have anything else to say”.


Short of your "opinions" on them, all the above were financially successful. Again, their successes currently outweigh their failures, no matter how much you'd like to rail to the contrary.

They comprised a simple list of successes...they weren't meant as anything more or anything less. But surely you can't possibly think that they're the ONLY ones? Thus, etc etc doesn't, contrary to your snide remarks, mean anything other than what it means at face value....that there are others I'm not listing because the list is too long to be productive.

Again – any rational person stacking up one list against the other knows exactly what’s been going on. It’s only those stuck in the foliage that seem to be unclear.


Of course...only those who agree with your opinion are rational. Of course, there's mountains of evidence that MANY people disagree with it.


Because my stock has been stuck within the same price range for 20 years now. Remember the days of the spilts and prices in the $70s and $80s? I do, and apparently Wall Street tends to agree with me that Disney isn’t worth today what it used to be. Even recently despite the Dow (of which Disney is a component) setting RECORD LEVELS – Disney still can’t raise above the “Ding-Dong Eisner Dead!!!” bump.


Sure, I remember how the stock splits diluted value until we're at the price point we are now. But blaming the stock price entirely on WDW isn't apt, since it's largely what has helped float other divisions. Thanks to the Pirates craze, the studio is doing much better....if they can float some more hits, and capitalize on some content, you'll see the price rise.



Really – people are afraid or couldn’t travel in other crises. Yet Disney found a way to make them come to Disney World. But these days people have more money than ever, airlines are carrying record numbers of passengers, other destinations are setting records – and Disney is a poor victim of circumstance.


Again, you misunderstand. 9-11 halted growth for a significant period of time. Using numbers pre 9-11, and comparing them to now, isn't apt. If you don't like it, take it up with Wall street...they largely say the same thing. I'll take their word as slightly more credible than an anonymous poster on the dis boards.



Please come up with another crybaby excuse.



Name calling is SO pertinent to the discussion, eh? Again, it's not an excuse, it's the way things are. You don't like them.


Google recent toursist trends in Vegas. Hell, check out how many hotels they’re building. Check out the number of tourists going to Hawai’i – it’s all right there on the internets. Check out the numbers for thenational parks. Hell, there was a recent article here on DIS that said Florida’s tourism in up 11%, far above Disney’s. The evidence is there for any tear-free eye to see. It’s only Disney that’s sitting on the curb weeping over its fate. Everyone else is making their business work.


Attendance is up at WDW, too. "Recovery" isn't all about simple attendance #'s.

And Disney IS making their business work. Just not the way you'd like them to. Try to get a seat on the board and change direction.....


Ya wanna compare credentials?

Why? Do you feel you need them to bolster your weak points?

DancingBear
05-02-2007, 03:02 PM
pilferk, I've totally lost track of your argument, but a few points:

--It's fair to say that the effect of 9/11 have to be taken into consideration, but it's ridiculous to say you can't look at any pre-9/11 numbers.

--I thought we were talking about the performance of the Parks and Resorts Division. That's why ESPN doesn't fit the discussion.

--I don't understand your discussion of opportunity costs. Sure you're minimizing capital outlay and sharing risk, but inherently you're also sharing the potential upside. Matt's point goes to the question, asked repeatedly lately, of just what does Disney think it does well enough to do on its own?

--Nobody's saying all 4,000 or 5,000 new rooms will displace an equal number of on-property rooms. Are you saying that all 4-5,000 rooms will only displace other off-property rooms? Do you think the on-property non-Disney hotels over by Downtown Disney compete with Disney's resorts? We're not talking about an Econolodge out on 192 which might have a Perkins next door, we're talking about hotel property integrated into a decent restaurant/retail environment which, while on the edge of the property, is closer to certain attractions like AK and Blizzard Beach than any other off-property places. Do you think when Disney goes out to attract hotels to open here they're gonna say "being here is the same as being out on 192"? Heck, no, they're gonna be pushing for a premium to bring those guys onto their "right at the gate" property.

DancingBear
05-02-2007, 03:05 PM
Evidence?If you're going to keep demanding numbers, it would be nice to provide some of your own.

pilferk
05-02-2007, 03:06 PM
If you're going to keep demanding numbers, it would be nice to provide some of your own.

I'm not the one who made the initial assertions.....they made 'em, their job to prove 'em.

pilferk
05-02-2007, 03:15 PM
pilferk, I've totally lost track of your argument, but a few points:

--It's fair to say that the effect of 9/11 have to be taken into consideration, but it's ridiculous to say you can't look at any pre-9/11 numbers.


Tell that to the financial analysts and wall street. The arrest of growth in the numbers in the years after 9/11 paint an unrealistic picture in the comparisons, as do other resulting factors.


--I thought we were talking about the performance of the Parks and Resorts Division. That's why ESPN doesn't fit the discussion.


More specifically, we were talking about WDW. But it seemingly go derailed into a discussion on the business unit as a whole.


--I don't understand your discussion of opportunity costs. Sure you're minimizing capital outlay and sharing risk, but inherently you're also sharing the potential upside. Matt's point goes to the question, asked repeatedly lately, of just what does Disney think it does well enough to do on its own?


And sheilding yourself from any potential downside. And ensuring you see profit in either scenario.

He's playing armchair CEO without any data to back it up and questioning those that do. That's the point. I'm not privy to Disney's reasoning, but, in the end, what does it matter?


--Nobody's saying all 4,000 or 5,000 new rooms will displace an equal number of on-property rooms. Are you saying that all 4-5,000 rooms will only displace other off-property rooms? Do you think the on-property non-Disney hotels over by Downtown Disney compete with Disney's resorts?


No, I'm saying that, looking at the types of hotels, while there will be some cannibalization of the existing WDW budget rooms, it's far MORE likely, since the WDW budget consumers have already chosen to stay on site, that the WB hotels will cannibalize the surrounding similar hotels MORE. AND they'll likely generate enough revenue for Disney to MORE than offset any cannibalization on property. In essense, if we've thought of this, I'm sure others have too...and taken it into account when making the deal.


We're not talking about an Econolodge out on 192 which might have a Perkins next door, we're talking about hotel property integrated into a decent restaurant/retail environment which, while on the edge of the property, is closer to certain attractions like AK and Blizzard Beach than any other off-property places.


But without the perks of staying at the AS resorts.


Do you think when Disney goes out to attract hotels to open here they're gonna say "being here is the same as being out on 192"? Heck, no, they're gonna be pushing for a premium to bring those guys onto their "right at the gate" property.

Right, but those hotels are going to have to compete with surrounding offsite properties on price,since they don't have the value that WDW budget hotels do. Disney will push location.....sure. But anyone agreeing to come in will, I'm sure, have to make it work within the constraints of profit.

YoHo
05-02-2007, 03:23 PM
The allstars themselves were built to attract offsite guests on property and yet the ended up primarily cannabilizing the moderates. Yet another failure by the Disney sharp pencil guys.

All Aboard
05-02-2007, 03:24 PM
their successes currently outweigh their failuresI would call that an "assertion" and it was certainly made by you. Care to back it up with any evidence?

DancingBear
05-02-2007, 03:39 PM
Short of your "opinions" on them, all the above were financially successful.The "opinions" weren't just about A-V's personal like or dislike of those projects, but about how they aren't meaningful because they're old (OLC--if pre-2001 doesn't count, how can this quarter-century old relationship?), relatively insignificant (Cruise Line), not something created by Disney (ESPN), and/or, although successful, still underperforming expectations (DVC).

Sure, I remember how the stock splits diluted value until we're at the price point we are now.Huh? Stock splits dilute value?

But blaming the stock price entirely on WDW isn't apt, since it's largely what has helped float other divisions.This is getting confusing. What time period are you talking about here? Surely not in the post-9/11 declining operating income period, right?

Again, you misunderstand. 9-11 halted growth for a significant period of time. Using numbers pre 9-11, and comparing them to now, isn't apt. If you don't like it, take it up with Wall street...they largely say the same thing. I'll take their word as slightly more credible than an anonymous poster on the dis boards.Please link some "Wall Street" analysis that says you just throw out the pre-9/11 numbers and don't look at them at all? You saying analysts aren't looking at how quickly tourism and travel driven businesses are recovering from 9/11?

Why? Do you feel you need them to bolster your weak points?It was you who challenged qualifications.

DancingBear
05-02-2007, 03:42 PM
I'm not the one who made the initial assertions.....they made 'em, their job to prove 'em.Bull. You've made assertions of your own, then complained that others' assertions don't come with numbers/evidence. If numbers/evidence is required for arguments to be valid, you have to produce as well.

Another Voice
05-02-2007, 04:06 PM
I'm not the one who made the initial assertions.....they made 'em, their job to prove 'em.
Let's just cut to the end here so we can just close this thread.

You can't provide numbers. You don't have any. You don't have any agruement, all you can do is stick your tongue out at others and drop silly little high school debating tactics.

The only question left is if palm trees get paid by the word.

WDW has problems. Serious problems. They are the result of bad management decisions and those poor practices continue through today. Many, many people have already seen a lot of what they liked about WDW disappear - what was once the "vacation kingdom of the world" is now perceived by millions and millions as a tacky tourist rip-off filled with long lines, bad food and weird people trading pins.

Some of us miss the Real Disney, the things that WDW used to be and what it used to represent. We wish Disney would get back to the hard work and make the place "magical" again - instead of just hiring PR firms to bully people. There is nothing in the laws of nature that says Disney will always be better or good or wonderful. It takes the rentless work of lots of talented people to make things.

But it takes only the greed of a few to ruin a century of effort.

DancingBear
05-02-2007, 04:10 PM
Tell that to the financial analysts and wall street. The arrest of growth in the numbers in the years after 9/11 paint an unrealistic picture in the comparisons, as do other resulting factors.Again, it's certainly sensible to take the effects of 9/11 into consideration. It's absurd to act as if no pre-9/11 figures matter. Also again, certainly the financial analysts are looking at the rate of recovery.

In any event, the revenue/operating income figures I posted earlier weren't about the rate of (or "arrest of") growth. In fact, they are allowing for a substantial recovery period.

More specifically, we were talking about WDW. But it seemingly go derailed into a discussion on the business unit as a whole.Because the operating income figures are not broken down into the East Coast Resorts, among other things. But you brought ESPN into the discussion--not in the business unit.

And sheilding yourself from any potential downside. And ensuring you see profit in either scenario.Right. But with opportunity cost.

No, I'm saying that, looking at the types of hotels, while there will be some cannibalization of the existing WDW budget rooms, it's far MORE likely, since the WDW budget consumers have already chosen to stay on site...Whoa! What makes you think that guests arriving in 2010 have already chosen to stay on site? The folks staying at the All-Stars NOW have made that choice, but they don't have the Western Development alternative to chose from, do they? The choices will be altered when the Western Development takes place--you seem to take for granted that this choice won't look any different to the potential guest than the 192 options--I think these may be much more attractive options (and as developer Disney will be working to make it so).

....that the WB hotels will cannibalize the surrounding similar hotels MORE.Perhaps, but even if 25% cannibalize from Disney, that would be significant.

AND they'll likely generate enough revenue for Disney to MORE than offset any cannibalization on property. In essense, if we've thought of this, I'm sure others have too...and taken it into account when making the deal.Of course I know Disney has run the numbers and is happy with their projections. But it's reasonable to question what the nature of the revenue objective is for the number-crunchers. Are they just looking at relatively short-term results by developing this property and selling it off, as with Celebration, or for the long-term revenue stream. Recent history suggests the former.

But without the perks of staying at the AS resorts...Right, but those hotels are going to have to compete with surrounding offsite properties on price,since they don't have the value that WDW budget hotels do.Well, that depends upon the package of benefits that Disney puts together. The dining stuff and ME and such all are recent developments. And of course they all have a cost. Disney created those benefits because they compete with other properties--they aren't inherent to being on-property.

DancingBear
05-02-2007, 04:44 PM
deleted duplicate post

pilferk
05-02-2007, 05:26 PM
I would call that an "assertion" and it was certainly made by you. Care to back it up with any evidence?

I did. You didn't like the examples, but they're still apt.

Not to mention looking at their SEC filings shows good growth, which has to mean some projects are successful.

YoHo
05-02-2007, 05:28 PM
No, it doesn't

raidermatt
05-02-2007, 05:28 PM
I'm not the one who made the initial assertions.....they made 'em, their job to prove 'em.

Google it. Hawaii has broke records, NYC, the state of Florida, LV. International tourism topped pre 9/11 levels last year and is projected to continue to rise. Some of this stuff has been posted on this very board in the past.

YoHo
05-02-2007, 05:37 PM
Hawaii
http://www.hawaii.gov/dbedt/main/news_releases/2007/news-release-0701

Ireland has record tourism in 2006.
http://goireland.about.com/b/a/000085.htm

World Tourism organization
http://www.unwto.org/newsroom/Releases/2007/january/recordyear.htm


And for the record, I really hate having to use google for people.

pilferk
05-02-2007, 05:39 PM
Hawaii
http://www.hawaii.gov/dbedt/main/news_releases/2007/news-release-0701

Ireland has record tourism in 2006.
http://goireland.about.com/b/a/000085.htm

World Tourism organization
http://www.unwto.org/newsroom/Releases/2007/january/recordyear.htm


And for the record, I really hate having to use google for people.


Which proves record "attendance", and record revenue, and record per capita spending just like WDW had in '06...but doesn't show they have "recovered" growth lost since 9-11. It also doesn't show anything about profitability, that I can see.

YoHo
05-02-2007, 05:40 PM
Matt, you can't expect someone whose never participated in this board before to read what other people have written so they know the facts and are capable of discussing things logically. You need to keep all this information at your fingertips so that you can spam the board with it every time a new ficus shows up.

Also
:confused3 :confused3 :confused3 :confused3 :confused3

YoHo
05-02-2007, 05:42 PM
«Despite downside risks facing global tourism twelve months ago – in particular terrorism, health scares due to avian flu and rising oil prices – 2006 was another year of good growth above the long-term forecast rate of 4.1%, backed up by one of the longest periods of sustained economic expansion », according to UNWTO Secretary General Francesco Frangialli.

http://www.msnbc.msn.com/id/17421641/

nternational tourism to pass pre-9/11 levels
U.S. collected a record $107.4 billion in travel receipts in 2006

pilferk
05-02-2007, 05:50 PM
The "opinions" weren't just about A-V's personal like or dislike of those projects, but about how they aren't meaningful because they're old (OLC--if pre-2001 doesn't count, how can this quarter-century old relationship?), relatively insignificant (Cruise Line), not something created by Disney (ESPN), and/or, although successful, still underperforming expectations (DVC).


His OPINIONS on why they’re not meaningful. I disagree. OLC has generated more revenue in the more recent years than in years prior. Part of that has been the current management, part OLC’s. The Disney Cruise Line is hardly “insignificant” in the tourism industry, or to the company as a whole….it seems you’re poo-pooing it simply because it deflates your assertions. The purchase of ESPN was a good business move. DVC, by all accounts, has been quite successful. I’ve never heard a claim it “underperforms”. Can you point me to that?


Huh? Stock splits dilute value?


Bad use of terminology on my part. I was composing quickly. I should have said “split dilutes stock price”



This is getting confusing. What time period are you talking about here? Surely not in the post-9/11 declining operating income period, right?


At many points throughout Disney history.


Please link some "Wall Street" analysis that says you just throw out the pre-9/11 numbers and don't look at them at all? You saying analysts aren't looking at how quickly tourism and travel driven businesses are recovering from 9/11?


Why? Considering that’s not what I said? What I said is comparing a pre 9/11 year directly to a post 9/11 year isn’t a valid comparison when looking at things like operating income. It’s an invalid comparison because so much has changed. More common is to trend the entire period and “explain out” the peak and valley around 9/11. You simply can’t expect growth to have remained the same between years, or expenses to be the same.


It was you who challenged qualifications.

I did no such thing. I said they were “from someone who doesn’t know THE business”, not business in general. Unless AV is currently serving as a Disney executive or board member, he doesn’t. He only has access to the same info we all do…the publicly available stuff. Sure you can’t think you can make judgement calls about operations based simply on that?

pilferk
05-02-2007, 05:51 PM
Bull. You've made assertions of your own, then complained that others' assertions don't come with numbers/evidence. If numbers/evidence is required for arguments to be valid, you have to produce as well.

Ask away. Just remember: " I think"'s and "IMHO"'s aren't assertions. They're aptly labeled opinions.

YoHo
05-02-2007, 05:52 PM
dude, you really need to search through some old threads before you start making assertions about facts in evidence and people's qualifications...I'm just sayin.

pilferk
05-02-2007, 05:58 PM
Let's just cut to the end here so we can just close this thread.

You can't provide numbers. You don't have any. You don't have any agruement, all you can do is stick your tongue out at others and drop silly little high school debating tactics.


Pot. Kettle. Black. And belligerently, to boot.

But at least I’ll admit it, and point to the fact that those that ARE making decisions have a LOT more data than those second guessing them.



The only question left is if palm trees get paid by the word.

WDW has problems. Serious problems. They are the result of bad management decisions and those poor practices continue through today. Many, many people have already seen a lot of what they liked about WDW disappear - what was once the "vacation kingdom of the world" is now perceived by millions and millions as a tacky tourist rip-off filled with long lines, bad food and weird people trading pins.



In your opinion, and you’re welcome to it. The truth is that the financial analysts don’t agree with you. The stockholders don’t seem to agree with you (hey continually support this management). The numbers, by and large, don’t agree with you. So who does?

I’m reminded of the same doom and gloom forecasts from the late 90’s. None of them came to pass. You’re another in a long line sounding the death knell of WDW.


Some of us miss the Real Disney, the things that WDW used to be and what it used to represent. We wish Disney would get back to the hard work and make the place "magical" again - instead of just hiring PR firms to bully people. There is nothing in the laws of nature that says Disney will always be better or good or wonderful. It takes the rentless work of lots of talented people to make things.

But it takes only the greed of a few to ruin a century of effort.

Oh jeesh…not the “what would walt do” argument. Please. Disney has to exist in today’s business environment. People need to accept that. It’s not “greed”, it’s survival.

Another Voice
05-02-2007, 06:11 PM
The Disney Cruise Line is hardly “insignificant” in the tourism industry,
They’re two modest sized ships! Please at least attempt to look things up before you proclaim “facts” – count the number of cabins Disney sells and then see what Royal Caribbean, Carnival and others offer. Hell, you can probably fit the passenger of both Disney’s boats on the latest Royal Caribbean megacruiser. Insignificant – yes.

The purchase of ESPN was a good business move.
Except the Disney bought ABC, a partial interest in ESPN just happened to come along. And can you sight the numbers that show the post-acquistion profits from ESPN have offset the post-accquistions losses of ABC and the cost of capital?

You demand facts – let’s see them. We’ll wait for your answer.

Unless AV is currently serving as a Disney executive or board member,…
Wanna grab a quick lunch in the Rotunda…?

and point to the fact that those that ARE making decisions have a LOT more data than those second guessing them.
And yet there all such bad decisions... Maybe starring at PowerPoint presentations can't make up for a basic lack of undestanding Disney, the entertainment business and talent.

I’m reminded of the same doom and gloom forecasts from the late 90’s.
From which was followed a period where the CEO was fired, the core of the company (Feature Animation) was closed, the third largest business unit (the Stores) was given away, the stock price hovered in the mid thirties (just like today), the company was rated as having the worst board in the country, maintenace was so poor at Disneyland that guests were killed, the company spent SEVEN BILLION DOLLARS to buy a competitor because Disney couldn't make a profitable movie.

And now WDW is so warm and glowy with half finished hotels, major sections of the all the parks closed and shuttered, empty hotel rooms being turned into time share and OVER ONE THIRD OF WDW PROPERTY BEING SOLD OFF.

But at least ABC is now a distant third place instead of a distant forth.

Stunning golden age - you must glow with excitment.

Disney has to exist in today’s business environment.
And they're doing a miserable job at it.

It’s not “greed”, it’s survival.
Ask the cast member at WDW working for seven bucks an hour.

pilferk
05-02-2007, 06:19 PM
The "opinions" weren't just about A-V's personal like or dislike of those projects, but about how they aren't meaningful because they're old (OLC--if pre-2001 doesn't count, how can this quarter-century old relationship?), relatively insignificant (Cruise Line), not something created by Disney (ESPN), and/or, although successful, still underperforming expectations (DVC).


His OPINIONS on why they’re not meaningful. I disagree. OLC has generated more revenue in the more recent years than in years prior. Part of that has been the current management, part OLC’s. The Disney Cruise Line is hardly “insignificant” in the tourism industry, or to the company as a whole….it seems you’re poo-pooing it simply because it deflates your assertions. The purchase of ESPN was a good business move. DVC, by all accounts, has been quite successful. I’ve never heard a claim it “underperforms”. Can you point me to that?


Huh? Stock splits dilute value?


Bad use of terminology on my part. I was composing quickly. I should have said “split dilutes stock price”



This is getting confusing. What time period are you talking about here? Surely not in the post-9/11 declining operating income period, right?


At many points throughout Disney history.


Please link some "Wall Street" analysis that says you just throw out the pre-9/11 numbers and don't look at them at all? You saying analysts aren't looking at how quickly tourism and travel driven businesses are recovering from 9/11?
[/quote}

Why? Considering that’s not what I said? What I said is comparing a pre 9/11 year directly to a post 9/11 year isn’t a valid comparison when looking at things like operating income. It’s an invalid comparison because so much has changed. More common is to trend the entire period and “explain out” the peak and valley around 9/11. You simply can’t expect growth to have remained the same between years, or expenses to be the same.


It was you who challenged qualifications.

I did no such thing. I said they were “from someone who doesn’t know THE business”, not business in general. Unless AV is currently serving as a Disney executive or board member, he doesn’t. He only has access to the same info we all do…the publicly available stuff. Sure you can’t think you can make judgement calls about operations based simply on that?


Again, it's certainly sensible to take the effects of 9/11 into consideration. It's absurd to act as if no pre-9/11 figures matter. Also again, certainly the financial analysts are looking at the rate of recovery.


Yes, but that’s not what we were discussing. We were discussing comparing 2000 directly to 2006 numbers. Not trending. Not “taking into account”. Direct comparison. You want to trend from 2000 to 2006 to see where the drop off occurred, and what’s happened since then…go for it. But straight up comparing one to the other is misleading.


In any event, the revenue/operating income figures I posted earlier weren't about the rate of (or "arrest of") growth. In fact, they are allowing for a substantial recovery period.


But not taking into account factors which have changed since that time period which MAY (and I don’t know…I don’t have a detailed breakdown of operating expenses..but then, neither do you) have a significant effect.

[quote]
Because the operating income figures are not broken down into the East Coast Resorts, among other things. But you brought ESPN into the discussion--not in the business unit.


Again, I was simply providing a list of “successes” for the company and it’s management.



Right. But with opportunity cost.


But we don’t know what that cost is. You can argue “opportunity cost” til your blue in the face, but you don’t know a) the value of the opportunity or b) the evaluated success rate of the opportunity. You’re playing the “what if” game…with little evidence basis for your ‘what if”. What if it fails miserably? And WDW makes money, regardless, from those that DID take the risk?


Whoa! What makes you think that guests arriving in 2010 have already chosen to stay on site? The folks staying at the All-Stars NOW have made that choice, but they don't have the Western Development alternative to chose from, do they? The choices will be altered when the Western Development takes place--you seem to take for granted that this choice won't look any different to the potential guest than the 192 options--I think these may be much more attractive options (and as developer Disney will be working to make it so).


2010 isn’t so far away. They may not have made a conscious decision, but the behaviors of “the mob”, with some market research, aren’t too hard to model. I’d be shocked if Disney didn’t do that kind of research on this project.

You think. But do you have any evidence to back it up? I don’t either, but again, I’m betting Disney does.

They might not have WB to choose from, but they have similar options to choose from. No, not exactly the same, but closer, in price and style, than the Disney Budget hotels. Disney will likely make them more attractive than the surrounding “off property” resorts, but will likely minimize their ability to directly compete with the AS hotels. For example by not allowing them to offer the same perks Disney hotels do.


Perhaps, but even if 25% cannibalize from Disney, that would be significant.


It sure SOUNDS significant, huh. But we don’t know what effect that will have on Disney’s bottom line. But I bet they do. Assuming they can’t fill a good portion of those 25% of rooms (and that’s a big if) with other guests…you’re assuming they don’t make up the loss (some revenue offset by decreased expenses due to lower occupancy) on what they’re getting from the WB development. I’d certainly not be so sure of that.


Of course I know Disney has run the numbers and is happy with their projections. But it's reasonable to question what the nature of the revenue objective is for the number-crunchers. Are they just looking at relatively short-term results by developing this property and selling it off, as with Celebration, or for the long-term revenue stream. Recent history suggests the former.


Sure it is. But questioning implies a certain amount of objectivity. The truth is, you’re not going to get your answers until sometime around 2015 or so. Also, define long term in your mind. And is it the same as what the stockholders and management would define as “long term”.


Well, that depends upon the package of benefits that Disney puts together. The dining stuff and ME and such all are recent developments. And of course they all have a cost. Disney created those benefits because they compete with other properties--they aren't inherent to being on-property.

ME is around for awhile, assuming Disney honors their contracts. The dining plan….we’ll have to wait and see. But Disney has a pretty long term history of offering “perks” that consumers find valuable. I certainly don’t see any evidence that’s going to change.

pilferk
05-02-2007, 06:21 PM
http://www.msnbc.msn.com/id/17421641/

Thanks..that's a good link.

So it's taken HOW many years to surpass the numbers attained prior to 9-11?

pilferk
05-02-2007, 06:23 PM
dude, you really need to search through some old threads before you start making assertions about facts in evidence and people's qualifications...I'm just sayin.

No, I don't.

The discussion is taking place HERE.

And I didn't ask for people's qualifications. I said they don't know the inner workings/specifics of Disney's business.

If they indeed do, please, by all means, correct me. I just didn't think Disney's upper level management, decision support, and bean counters would be posting on the DIS.

Another Voice
05-02-2007, 06:51 PM
I just didn't think Disney's upper level management, decision support, and bean counters would be posting on the DIS.
You're right somewhat, I'd never think the person who said, "Herbie Fully Loaded - I love the script, let's spend seventy million dollars to make that movie!" would be able to use something as complicated as a computer. Of course not. That's why they pay for a whole garden full of people to do it for them. Then again, on the internets no one knows who's a dog...

So it's taken HOW many years to surpass the numbers attained prior to 9-11?
Well, at least one fewer than WDW. You also missed in the article the fact that tourism to Florida is down...and what's the primary place all the pale, mouse-starved English people come to Florida for....? Please tell us it's Gatorland.

Oh jeesh…not the “what would walt do” argument.
Walt started out as a farmboy and turned a cartoon mouse into the most recognized company on the planet. Bob Iger has been running ABC for decades, has a twenty-five billion media monster behind him and can't even select a sitcom that will last for more than 13 weeks.

I'll stick with my guy that always talked about quality, giving your audiences all you can and respecting them. You can stick with the guy that thinks Wife Swap and Stitch Encounter are crowd pleasing, money making entertainments.

CanadianGuy
05-02-2007, 07:12 PM
You're right somewhat, I'd never think the person who said, "Herbie Fully Loaded - I love the script, let's spend seventy million dollars to make that movie!" would be able to use something as complicated as a computer. Of course not. That's why they pay for a whole garden full of people to do it for them. Then again, on the internets no one knows who's a dog...

Ok - in the interest of clarity.. I'm NOT defending this movie.. cuz it stunk..

BUT..

It has made over 100 million in world wide box office and according to IMDB.com had an estimated cost of 50 mill.. so let's assume 20 mill for marketing.

It's already profitable..at least in the way Hollywood does the "math". And I'm not counting home video-DVD, video on demand, pay per view, HBO, and network TV airings... or the rest of the life of the title.

Having said that.. none of that undercuts your point about he or she who greenlit this steaming pile of Lohan-poo.

Knox

EUROPACL
05-02-2007, 08:19 PM
Ok - in the interest of clarity.. I'm NOT defending this movie.. cuz it stunk..

BUT..

It has made over 100 million in world wide box office and according to IMDB.com had an estimated cost of 50 mill.. so let's assume 20 mill for marketing.

It's already profitable..at least in the way Hollywood does the "math". And I'm not counting home video-DVD, video on demand, pay per view, HBO, and network TV airings... or the rest of the life of the title.

Having said that.. none of that undercuts your point about he or she who greenlit this steaming pile of Lohan-poo.

Knox

In the past AV has pointed out that really the way Hollywood does "math" a movie needs to make back 3X its cost to really turn a profit.

YoHo
05-02-2007, 08:47 PM
No, I don't.

The discussion is taking place HERE.

And I didn't ask for people's qualifications. I said they don't know the inner workings/specifics of Disney's business.

If they indeed do, please, by all means, correct me. I just didn't think Disney's upper level management, decision support, and bean counters would be posting on the DIS.


Why should we be expected to repeat ourselves, because this is the first thread you decided to click on?

CanadianGuy
05-02-2007, 09:24 PM
In the past AV has pointed out that really the way Hollywood does "math" a movie needs to make back 3X its cost to really turn a profit.

Well in that case I'm happy to redact !!

Thrilled in this case actually.

Knox

Another Voice
05-02-2007, 09:36 PM
Sadly any money that Herbie FL made for Disney went right out to pay for Lindsay's rehab and to clean up the burn marks from the "birthday" party they threw for her at Disneyland.

But Herbie does look like a winner when compared to Santa Clause 3: Our Other Rehab Project and Mel Should Have Spoken Mayan in Malibu.

larry_poppins
05-02-2007, 10:53 PM
Thank you AV!
You speak the truth more clearly than I ever could.
Keep up the good work!

Larry

raidermatt
05-03-2007, 01:46 AM
Which proves record "attendance", and record revenue, and record per capita spending just like WDW had in '06...but doesn't show they have "recovered" growth lost since 9-11. It also doesn't show anything about profitability, that I can see.

Nobody said it had anything to do with profitability. You're mixing arguments.

Nobody said "potential growth" had been recovered.

But at least I’ll admit it, and point to the fact that those that ARE making decisions have a LOT more data than those second guessing them.
And once again your fallback, "trust in them". Why are you choosing to spend time discussing something you believe you are not qualified to discuss, with others you believe are also not qualified to discuss?




Mr. Guy, another point on Herbie (or any other project) is that of opportunity cost. Perhaps it did make a neat little profit on the $70 million investment, even with creative Hollywood accounting. A profit that will largely be realized over the course of about 2-3 years, and then trickle for a few years after that to nearly nothing.

In order to evaluate that in the proper context, we have to ask what else could Disney have done with that $70 million?

Same thing with the Four Seasons deal. Disney will not likely have to invest a huge amount of capital (though we don't yet know who is paying for all the infrastructure), and will likely make a nice profit off of the lease payments and land that is sold.

But what else could they have done with that land? Is it possible that they have the capability to create something with that valuable assetand some capital that could generate more profits in the long run than they will make as a landlord?

If one's answer to that is "no", and I'm not saying that is your answer, I would have to ask what exactly it is about today's Disney company that one finds interesting...

Tyler's Dad
05-07-2007, 11:33 AM
Here is where I get lost on some of the arguments against deals like these. I see people saying they could have used the land for something Disney designed and runs, but then everyone is quick to point to Disney's failures at California Adventure and the Asia parks? Which do you want. Perhaps Disney is seeing this as a way to make some immediate income from the land development deals and parlaying that money into the growing number of refurbs throughout the parks? I just don't see how finishing the POP would possibly create more revenue for Disney?

Another thing that Disney has in their pocket in all of this is the ability to manipulate the deals guests get at the parks by staying onsite. While the dining plan being offered for free is in one case a sign that Disney is doing everything possible to fill rooms during slow periods, it also creates a sense of familiarity for people with it, which means they will be more likely to look for it in future visits.

Another Voice
05-07-2007, 12:17 PM
...Disney has in their pocket in all of this is the ability to manipulate the deals guests get...
But that's exactly the problem.

Disney knows how to bring in people - you create something truely amazing, wonderful and unique. You make people go "oh" and "ah", you get people to wonder "how did they do that?". You astound people, you make a place that's like no other on earth.

But doing that takes talent, it takes effort and it takes imgination.

Today's Disney can't be bothered.

So instead we get manpulation of resort pricing and available to squeeze a couple more bucks out. We get parks that are created to wow accountants and not paying guests. Disney would rather throw free churros at us than honestly entertain us. Disney cab produce marketing campaigns and run pointless business gimmicks that an MBA can understand, the problem is that simply don't work to make Disney a successful entertainment company.

With the proper application of imagination Disney could finish Pop Century (even without the current themeing and without spending anymore money) and have guests banging down the doors because it would be such an amazing place to stay. People will always pay money to be truely amazed. But Disney can only sell "cheap" these days, not "value". Free food and special ticket pricing isn't going to make up for the lack of innovation and shear entertainment in the parks.

Tyler's Dad
05-07-2007, 12:32 PM
And that is why I say they are in a sort of no win situation. There are a lot of rides in need of refurbishing, they could use some new attractions, and the hotels they already have need to be on a constant schedule of refurbishment. This all takes money and the easiest way to get that money is to do the deals that are unpopular right now. (i.e. the Ritz and the Alfredo's contract) These are quick revenue makers and as any business would show, sometimes you have to make unpopular decisions to make larger changes. I guess I am just not sure what you think would be a better option at this point. This thread is full of people pointing out things Disney should do, but nobody pointing out how to pay for them.

EUROPACL
05-07-2007, 12:53 PM
And that is why I say they are in a sort of no win situation. There are a lot of rides in need of refurbishing, they could use some new attractions, and the hotels they already have need to be on a constant schedule of refurbishment. This all takes money and the easiest way to get that money is to do the deals that are unpopular right now. (i.e. the Ritz and the Alfredo's contract) These are quick revenue makers and as any business would show, sometimes you have to make unpopular decisions to make larger changes. I guess I am just not sure what you think would be a better option at this point. This thread is full of people pointing out things Disney should do, but nobody pointing out how to pay for them.

Dear God...Disney makes enough from the parks to pay for refurbishing and then some. For the last 20 years Disney thanks to Eisner and his type have used the money the parks have generated on wasted projects like Go.com, buying Power Rangers, crappy TV shows and even worse really crappy movies.

YoHo
05-07-2007, 12:54 PM
No win situation?
This isn't 1955, they aren't struggling to make enough money to pay the animators here. They are making obscene amounts of money. For goodness sake, We have to accept that Disney would sell off the dreams of the company because as a giant multinational entertainment conglomorate they can't afford to refurb their parks? Are you frickin kidding me?

Tyler's Dad
05-07-2007, 01:04 PM
Yet all you read about on these boards is their financial failures with California Adventure, the Asia parks, and Animal Kingdom? Why put more money into development when it is obviously not working? Even with the refurbs, there is constant complaining about the timing and how they are doing it. What exactly do you want them to do with these profits?

YoHo
05-07-2007, 01:22 PM
I don't even understand what point you're trying to make.

Hong Kong, Studios Paris and DCA were both incredibly cheaply. The money put in was absolute peanuts compared to say Disney Seas or even the struggling Animal Kingdom which also had it's budget cut. You can't say they put money into development on any significant scale, because they didn't. They spent nothing and got nothing for it.

The fact that they also suck at knowing what to build is important, but doesn't excuse anything.
You can't maintain profit margins without innovations in that field.

Another Voice
05-07-2007, 01:23 PM
Why put more money into development when it is obviously not working? Even with the refurbs, there is constant complaining about the timing and how they are doing it. What exactly do you want them to do with these profits?
The parks failed becasue they were designed under false assumptions about "economics" and "financial realities" - you can't build a theme park using more PowerPoint than imagination. The industry doesn't work that way and Disney are fools (and paid the price) for ignoring lessons the company had painfully already learned.

Build a good, Disney level park and people will flood the gates.

The Company spent a lot of money to refurbish Disneyland for the 50th Anniversary of WDW's Marketing Department - and it's paid off for them massively. All of Southern California has "rediscovered" the park. It's no longer a place of closed rides and rotting buildings. New attractions, freshed older attractions and the general improvement of the place is booming.

If Disney does things right the business can be tremendously profitable. However Disney tries to cut corners and creates show less than what the audience demands - and that's causing all the problems. California Adventure isn't a falilure because it's a bad business decision - the park is a flop because it's a bad theme park. Just like Disneyland, it's within Disney's ability to fix. That will take money, money the parks already generate. But instead of being thrown away on ESPN Mobile and 'The Bachelor #73 - Another Bucket of Bimbos', it needs to be reinvested back into mainteance and new attractions.

Disney needs to treat all the parks as full-fleddged businesses of their own, not some get-rich-quick scheme needed to fund inept mangement of the other businesses. I'm tired of seeing all the money I pay for the parks wasted on webistes and horrible cable channels no one watches.

Tyler's Dad
05-07-2007, 01:39 PM
I guess my point is that if they don't have the people in place to make the correct decisions on what to build and how to build it, why keep banging your head against that wall? I think if anything, Disney has realized from the CA park, once you build it, you are pretty much stuck with it.

EUROPACL
05-07-2007, 02:01 PM
I guess my point is that if they don't have the people in place to make the correct decisions on what to build and how to build it, why keep banging your head against that wall? I think if anything, Disney has realized from the CA park, once you build it, you are pretty much stuck with it.

The point is...they do have and have had the people in place that can make the correct decisions. They have in the past fired those people ...and allowed them to build IOA....or fired them to start Drreamworks and Pixar. The point is that some of us aren't ready to just say "oh well I guess this is the best Disney can do...here is my wallet take as much as you need to get that Caveman TV show on the air while we watch WDW rot into the ground".

Tyler's Dad
05-07-2007, 02:51 PM
And my point is that I would rather them take the time to refurbish the existing rides and attractions (which it seems like they are doing at a better rate now) than jump into somehting they obviously aren't prepared to do right now. Maybe the extra revenue from a couple of places will give them the ability to add on in a quality way, rather than cheaply and make both the business side and the consumer side happy for once. With the addition of EE and the Nemo pavilion at AK, the addition of Soarin' and Mission Space at Epcot, along with the refurbs of SE and The Living Seas, and the new attractions at MGM, I think they are doing a pretty good job of adding some quality to each existing park like they should.

EUROPACL
05-07-2007, 02:59 PM
And my point is that I would rather them take the time to refurbish the existing rides and attractions (which it seems like they are doing at a better rate now) than jump into somehting they obviously aren't prepared to do right now. Maybe the extra revenue from a couple of places will give them the ability to add on in a quality way, rather than cheaply and make both the business side and the consumer side happy for once. With the addition of EE and the Nemo pavilion at AK, the addition of Soarin' and Mission Space at Epcot, along with the refurbs of SE and The Living Seas, and the new attractions at MGM, I think they are doing a pretty good job of adding some quality to each existing park like they should.

Its almost as if you didn't read the thread at all. Or undstand anything that has happened with Disney in the last 25 years.

tidefan
05-08-2007, 12:14 AM
Here is where I get lost on some of the arguments against deals like these. I see people saying they could have used the land for something Disney designed and runs, but then everyone is quick to point to Disney's failures at California Adventure and the Asia parks?

OK, I'll give you HK, but haven't the Tokyo parks been a success, especially with the opening of DisneySea in 2001?

YoHo
05-08-2007, 01:52 PM
Disney doesn't run the Tokyo parks.

JoeEpcotRocks
05-08-2007, 02:50 PM
And my point is that I would rather them take the time to refurbish the existing rides and attractions (which it seems like they are doing at a better rate now) than jump into somehting they obviously aren't prepared to do right now. Maybe the extra revenue from a couple of places will give them the ability to add on in a quality way, rather than cheaply and make both the business side and the consumer side happy for once. With the addition of EE and the Nemo pavilion at AK, the addition of Soarin' and Mission Space at Epcot, along with the refurbs of SE and The Living Seas, and the new attractions at MGM, I think they are doing a pretty good job of adding some quality to each existing park like they should.


Agreed. :thumbsup2 I love the new attractions. :) Disney is a quality company. :cool2:

YoHo
05-08-2007, 03:05 PM
Agreed. :thumbsup2 I love the new attractions. :) Disney is a quality company. :cool2:

How can you have Epcot Rocks in your username and say this?

JoeEpcotRocks
05-08-2007, 03:46 PM
How can you have Epcot Rocks in your username and say this?

Very easily. :cloud9:

There's room for improvement of course, but it (almost) always seem Disney is working hard to improve the quality of their parks. :thumbsup2

EUROPACL
05-08-2007, 04:37 PM
Very easily. :cloud9:

There's room for improvement of course, but it (almost) always seem Disney is working hard to improve the quality of their parks. :thumbsup2


Calm down your job is safe.

YoHo
05-08-2007, 04:38 PM
My Allergies are starting to act up from all the vegitation in here.

meghanet
05-08-2007, 04:41 PM
I went this last September for 2 weeks for my honeymoon towards the end of the month. We stayed at the POR and wanted to extend our stay by a day or two and when we went to the front desk to see about it they said there wasn't a single room available so we could extend just one more night! We had them check all the moderate and all the value resorts and there was not a single room! This was the first night of the food and wine festival and we were told that's why they were at capacity. But if they can get to capacity in all moderate and value resorts in late September, early October (value season), I don't see how they'd have a problem filling rooms during peak season.

Just seems odd to me. Of course, there could have been some conventions or other events in as well during our stay that caused them to reach capacity.

tidefan
05-08-2007, 05:04 PM
Disney doesn't run the Tokyo parks.

Correct, they are run by Oriental Land Company, but Disney Imagineers did do the design for both parks. To me, DisneySea represents what they COULD do in the States if Disney gave the Imagineers free reign.

shanomi4
05-10-2007, 02:21 PM
YAAAWWWNNn,
Some posters just love to write.:surfweb:

YoHo
05-10-2007, 02:55 PM
:confused3