"Disney Examining Cost Structures" article

[RussellDisney]

http://www.foxbusiness.com/story/markets/industries/media/disney-cfo-disney-examining-cost-structures/

While short, this article mentions a few things I found interesting: that each unit (ABC, ESPN, theme parks, movie studios, etc.) would respond specifically to the downturn rather than across the board cuts; that more would be spent on "capital" expenditures in 2009 than in 2008 and comments about not losing their focus and that market share is often gained in a downturn.

[JoanneNC]

Thanks for sharing. It's often suicide when a company retracts too much during economic down turns. It's finding the right balance that could make all the difference.

[CarolA]

http://www.foxbusiness.com/story/markets/industries/media/disney-cfo-disney-examining-cost-structures/

While short, this article mentions a few things I found interesting: that each unit (ABC, ESPN, theme parks, movie studios, etc.) would respond specifically to the downturn rather than across the board cuts; that more would be spent on "capital" expenditures in 2009 than in 2008 and comments about not losing their focus and that market share is often gained in a downturn.

Actually expect the "unit" theory to go deeper. I interviewed with Disney's accounting team a few years ago. Basically everything is run as a "business" So Theme Parks has subunits like dining, lodging etc that will be examined. That's why instead of "across the board layoffs" after 9/11 you saw some things like the closing of whole resorts. So they will try to figure out "line by line" where to cut.

[Bill From PA]

I've posted elsewhere about the WDW response to the recession. They risk damaging their brand if they eliminate or reduce the things that distinguish them from, say, a Six Flags operation. They may have axed the Adventurer's Club and the Comedy Warehouse along with the rest of PI recession or not, we'll never know. But with that gone, cut-backs in the number of Spectro and Fantasmic, Pam Brody and on and on, it will be interesting to see if WDW feels like the same to us next March. We've discussed splitting our March trips between Disney and Universal, if that happens, we may just discover that WDW isn't all that special after all. If the suits at Disney focus on quarterly results, they risk losing repeat business over the long haul. Interesting times.

Bill From PA

[RussellDisney]

If the suits at Disney focus on quarterly results, they risk losing repeat business over the long haul.Bill From PA

Oh rest assured, those suits are now, will be and have always been focused on the quarterly results. WDW is a business like any other and will continue to be ran as such. The difference in WDW and, as you said, Six Flags is that Disney starts with a quality product and generally knows what to cut and what not to. With that said, they have stumbled in the past and are likely to again. I'm personally questioning such deep cuts in Spectro and Fantasmic!, as well as showing them on the same nights.:confused3

There's a fine line in making cuts to help the bottom line without going so far as to actually hurt it in the process. Cuts, at Disney and any company, should be made with surgical precision rather than with a hack saw.

[CarolA]

I've posted elsewhere about the WDW response to the recession. They risk damaging their brand if they eliminate or reduce the things that distinguish them from, say, a Six Flags operation. They may have axed the Adventurer's Club and the Comedy Warehouse along with the rest of PI recession or not, we'll never know. But with that gone, cut-backs in the number of Spectro and Fantasmic, Pam Brody and on and on, it will be interesting to see if WDW feels like the same to us next March. We've discussed splitting our March trips between Disney and Universal, if that happens, we may just discover that WDW isn't all that special after all. If the suits at Disney focus on quarterly results, they risk losing repeat business over the long haul. Interesting times.

Bill From PA

You do realize tha the "Pam Bordy" "cut" is due to the fact that she is in a rehab hospital recovering from a fall? Not due to a Disney economic decision?

Pam is on medical leave. Now I will say that at her age a fall runs a HUGE risk that she may not be able to make a full return, but you can't blame Disney!

[Brian_WDW74]

I've moved this thread to the Disney Rumors and News board. :)

[zulemara]

I've posted elsewhere about the WDW response to the recession. They risk damaging their brand if they eliminate or reduce the things that distinguish them from, say, a Six Flags operation. They may have axed the Adventurer's Club and the Comedy Warehouse along with the rest of PI recession or not, we'll never know. But with that gone, cut-backs in the number of Spectro and Fantasmic, Pam Brody and on and on, it will be interesting to see if WDW feels like the same to us next March. We've discussed splitting our March trips between Disney and Universal, if that happens, we may just discover that WDW isn't all that special after all. If the suits at Disney focus on quarterly results, they risk losing repeat business over the long haul. Interesting times.

Bill From PA
This is what disturbs me. You can make cost cutting measures that are not going to drastically effect the guest experience. Cutting fantasmic and Spectro way back and then showing them on the same night is going to make a difference and on top of that, they are charging the same price for tickets! Less is not more Disney, get it through your thick skulls!

[Mouseaholic!!!]

We have just returned from 10 wonderful days at WDW and the cutbacks are already obvious...sadly.

Our magical place where dreams come true is beginning to look shabby in the corners. Wait until January when travel comes to a true grinding halt.

[SteveS]

the cutbacks are already obvious...sadly.


We too just returned from a 10 Day trip and "Cutbacks weren't obvious to me" and I take a lot of trips to WDW. Some peoples expectations are unrealistic.

[Peter Pirate 2]

We too just returned from a 10 Day trip and "Cutbacks weren't obvious to me" and I take a lot of trips to WDW. Some peoples expectations are unrealistic.

And some people can't see the forest for the trees.
pirate:

[DC7800]

Anyone care to discuss specifics? What is happening now which differs from the guest experience of, for instance, six months to a year ago? I've seen noticable and obvious cutbacks at Walt Disney World since the mid-1990's at least. Some periods, such as 2001 (but starting before the September 2001 terrorist attacks), have been particularly severe (and arguably an over-reaction to economic events - a phenomenon I expect to recur in 2009).

the cutbacks are already obvious...sadly

Unfortunately I don't doubt that for a second, but again, what cutbacks are more noticable and are most significantly impacting the guest experience?

Some peoples expectations are unrealistic.

Actually, they aren't. Some of us just want to hold Disney to the high standards which it established for itself decades ago. The company hasn't done that in a long time. Any cutbacks now just keep digging the hole they're in a little deeper.

[zulemara]

sometime in the last couple years they started letting guests get out on both sides of the parking tram so they can run less trams


they have cut fantasmic and spectro WAY down even during the peak time according to upcoming calendars

Even during peak times last summer they cut the sized boat they were using to go from MK to ft wilderness campground. I'm talking at park opening to the MK, they send this put put boat and theres 50-100 people waiting on the dock and it took 45 minutes to even get the put put boat there!

That's just what I can think of off the top of my head. I'll know more when I get there in jan

[Mouseaholic!!!]

Anyone care to discuss specifics? What is happening now which differs from the guest experience of, for instance, six months to a year ago? I've seen noticable and obvious cutbacks at Walt Disney World since the mid-1990's at least. Some periods, such as 2001 (but starting before the September 2001 terrorist attacks), have been particularly severe (and arguably an over-reaction to economic events - a phenomenon I expect to recur in 2009).



Unfortunately I don't doubt that for a second, but again, what cutbacks are more noticable and are most significantly impacting the guest experience?



Actually, they aren't. Some of us just want to hold Disney to the high standards which it established for itself decades ago. The company hasn't done that in a long time. Any cutbacks now just keep digging the hole they're in a little deeper.



A couple of observations regarding cutbacks.

Parking and Road Maintenance.

* The road leading up to the ticket booth into the Magic Kingdom - far right lane - was riddled with open potholes....big enough that you had to slow down or risk blowing a tire.

* Parking Lot at the Magic Kingdom. I have a photo of my DH in his Dalmation costume next to Dopy 107 3 years ago. Now the paint has faded and worn that you cannot always read which row you are in. Looks VERY shabby.


Lets not talk about bathrooms at the end of the night....THAT impacted, at least, the ladies....tough to listen to children crying a tugging to leave because of the smell.


Christmas Tree was not put up until AFTER the filiming of Regis and Kelly - cost savings.


Small and VERY shabby boat launch from the Wilderness Lodge to the MK. Remember the big boat that you could roll onto with your wheelchair? Now the have a funky boat with a striped canopy. It would probably be fun....except the paint is badly faded and the transome (back of the boat) was covered with black exhaust soot - very nasty. I'm a boater....you NEVER allow that to happen on your boat.


Shabby patch in the Rock Waterfall Wall at the Wildie <--broke my heart to see. It's vertical patch and obvious because they did nothing to blend the color with the other "Disney" rocks.....very sad.


Little stove that could at BWV........rusty and not all the burners worked...poor little thing! Dripping showerhead ..... no response from maintenance after 2 calls in 2 days.




Here are just a few that came to mind this AM. We were not going out of our way to look for them.....they were just WAY too obvious.


These would NEVER have happened in the past before the budget cuts.

[KINGBOBOFTHENORTH]

And let's not forget that Disney has not invested in new rides in a long time. Universal has awesome coasters under construction and that whole Harry Potter Land.

Universal can never be what Disney is due to sheer size but Disney needs to get off their butts and improve the place. The only thing that gets built are more timeshares and more outsourced restaurants and gift shops.

And watch them have the gall to raise prices come next August!

BobK/Orlando

[manning]

Disney is a place to exercise your imagination. The rumor is that they will shortly be putting park benches down the middle of main street. After you pay your admission and enter the park you go to one of the benches, sit down, close your eyes and.......exercise your imagination:rolleyes1 :duck:

[troynkasey]

Disney is a business. You have to realize they have to have a reason to make these changes. Cutting Spectro and Fantasmic is a business choice. They want the theater full for Fantasmic. These shows cost money. If the Theater isn't full, then the demand isn't high enough for shows every night. Cut back the shows and the demand goes up, the theater is full and everyone gets a packed house show. And the costs are down due to only running one show.

If costs are down, then profits go up and you won't see as many cuts. Cuts are inevitable when guests aren't flocking in waves like they used to. That's just a fact of life...

We are going in late May, early June. I will be able to see how things have changed now compared to the previous 7 trips we've taken the last 11 years.

[Mouseaholic!!!]

We too just returned from a 10 Day trip and "Cutbacks weren't obvious to me" and I take a lot of trips to WDW. Some peoples expectations are unrealistic.


Sorry to disagree....but I do.

DH is a castmember.....we know what is going on inside Disney costcenters. Trust me....our expectations were PAINFULLY realistic. We knew exactly what to expect.

You must not travel to WDW enough to notice the difference. It is very obvious to those of us who remember Disney trips in past years.

I have posted in other places specifics and don't need to repeat here.

I'm happy you had a great trip.

However, anyone who thinks this economic downturn is not hurting Disney is simply kidding themselves. As an example....look at all the discounts Disney is offering right now....we all know they NEVER give anything away unless they have to! Heck - 40% off for a return visit is almost castmember rates!

They will recover, they always do. Until then....it's not going to all Pixie Dust.


Don't get me wrong....we had an absolutely magical time - we always manage to find our own Pixie Dust there. It was just disappointing to watch the changes.

[Peter Pirate 2]

Disney is a business. You have to realize they have to have a reason to make these changes. Cutting Spectro and Fantasmic is a business choice. They want the theater full for Fantasmic. These shows cost money. If the Theater isn't full, then the demand isn't high enough for shows every night. Cut back the shows and the demand goes up, the theater is full and everyone gets a packed house show. And the costs are down due to only running one show.

If costs are down, then profits go up and you won't see as many cuts. Cuts are inevitable when guests aren't flocking in waves like they used to. That's just a fact of life...

We are going in late May, early June. I will be able to see how things have changed now compared to the previous 7 trips we've taken the last 11 years.

We understand that Disney is a business but if being a prudent business is the only standard you hold Disney to then there is little point for discussion with those of us who remember how Walt established things (with quite a bit of success, I might add).
pirate:

[King Triton]

That is so true. Disney needs to get it in gear and focus on improving the parks with new rides, and keeping up the high standard of quality we've grown to love. Universal is doing all the right things to compete with Disney. With this new Harry Potter land, I will definitely be checking that out. Note to Disney....we need less time shares and MORE Disney magic. pixiedust:

Ever since the mid 80's there has been a decline in quality with Disney. I hate to say this but Disney has lost some of it's magic. :eek: I blame the top suits for taking their eyes off the vision. :sad2: Wait until you see Harry Potter land at Universal - that will be a wake up call for Disney. :idea:

I just got back from Disneyland and was sad to see a lack of maintenance on some of the rides and lots of wear and tear down Main Street. Some of the shops on Main Street had a lot of chipped paint and I saw more trash on the ground - something you would never have seen years back. While riding Splash Mountain, some of the props were not working. :sad2: Where is quality control? Don't they check out the rides every morning? I know times are tough but come on Disney - let's get it together.

I love Disney and I will always a true Disney fan for life. I understand the Magic along with some other true Disney fans on this board. Whoever is calling the shots is off track. :sad1:

Time to wake up Disney. :worship: :mic:

[King Triton]

If you cut too many Fantasmic shows and Spectromagic parades it could backfire. If you pay big money to visit Disney World and can't get into the show due to the over flowing demand for the very few showings of Fantasmic then you miss out on the magical experience and perhaps think twice about coming back. Disney saves money in the short run but risks losing a lifetime customer. Too many cut backs can hurt you if you go over the line. If Fantasmic has been in low demand then I can understand this. Every time I went it was a full house. If most of the shows are only half full through out the year then I stand corrected.

[TheLittleRoo]

I don't know the whole story on the F! and Spectro showings being consolidated, but in the spectrum of cuts Disney could make, I'd much rather they cut some shows to preserve the quality of the shows they keep.

Same thing with hotel shutterings... good idea! Why run them all at 40% occupancy? These are things I as a consumer would support, rather than cutting staff IN the parks, or not having the streets cleaned as often, or having shabby paint jobs.

If I were running Disney, I'd be looking not only at where I could cut costs, but which ones least impact the customer experience. I'm always going to side with eliminating parallel choices, in favor of keeping the lights on inside the parks.

[portocall]

I don't know the whole story on the F! and Spectro showings being consolidated, but in the spectrum of cuts Disney could make, I'd much rather they cut some shows to preserve the quality of the shows they keep.

Same thing with hotel shutterings... good idea! Why run them all at 40% occupancy? These are things I as a consumer would support, rather than cutting staff IN the parks, or not having the streets cleaned as often, or having shabby paint jobs.

If I were running Disney, I'd be looking not only at where I could cut costs, but which ones least impact the customer experience. I'm always going to side with eliminating parallel choices, in favor of keeping the lights on inside the parks.

I couldn't agree more! Yes, I am happy with the resort I booked, but would'nt mind being moved if it means that the resort I am at is full and full of Disney magic. As a kid, we could always tell when times were tough on Disney, but I haven't been in years, and really want this to be a magical trip. I would so prefer them to target their cuts into the areas less noticed... not the paint or lack of CM's...