Continued Cut Theme Park Hours

[Figmentrocks]

It's the summer and as we progress through the next month, the Magic Kingdom has most nights closing at 10 and MGM at 9, not to mention Future World at 7 PM. The company is under fire and to reward the division that brings in the core of their profit, they continue to keep these reduced hours even during the bust summer. The CFO admits that attendence at the parks is now down only about 6% from this time last year. Give us a break! :) We're so sick and tired of lowered expectations with this company and it should be a real fun time at places like the MK that reach full capacity on many days and closes at 10. Just a rant, but it's truthful. Hey, they need to cut those hours to get us to spend money at Downtown Disney at night, instead of riding attractions where we've paid for it already.

[Eeyore2U]

Originally posted by Figmentrocks
The CFO admits that attendence at the parks is now down only about 6% from this time last year. Give us a break!

I guess it all depends on what you believe. If attendance is still down why would they keep the parks open longer?

[Panthius]

If attendance is still down why would they keep the parks open longer

Keeping parks open longer is a relative statement. Keeping them open longer than less-busy season hours...well, that should definitely be the case due to the vast difference in the attendance at the parks. Keep them open longer than when they were originally reduced due to NOBODY being in the parks due to external events which had affected tourism, well, that should be the case due to the increasing atendance as time seems to go by. Keeping them open longer than past summers, now that is not what anybody is asking for since past summers they were open to midnight and sometimes later. What it seems Disney has done is when the attendance has shrunk, they opened the parks later and closed the parks earlier. Now that the seasons have changed, they made the mandatory hour changes that they normally do from season to season. however, the problem is that attendance levels are getting closer and closer to where they were before they decided to shorten the hours, but Disney is not changing the hours back to what they originally were before the attendance had plummeted. If my mind is working correctly today (which is debatable), then that is the concern here.

Panthius

[OnWithTheShow]

Your info on park hours is a bit misguided.

Disney MGM Studios is 9am to 10pm with a Fantasmic at 9pm and 10:30pm. Also Rock n Roller Coaster and Tower of Terror remain open until 10:30pm.

Epcot Future World is 9am to 7pm with Test Track, Journey Into Imagination, Honey I Shrunk the Audience, Innoventions East and West, and Spaceship reamining open until 9pm (I really do not see any reason to have the other Future World attractions open until 9pm).

Animal Kingdom is now 9am to 6pm so you have gained an hour at that park.

[Panthius]

What are the hours at Magic Kingdom, arguably Disney's most popular park? And what were they before they were shortened?

I suppose the only way to justify any arguments on park hours as compared to park operating hours would be to have actual attendance figures to reference when looking at the changes of the park hours. I do not know what the hours were for each park last Summer during this time, but supposedly, there were 6% more people at the parks. Now if you look at the park hours last Summer during this time, are there 6% more hours? or is it more like 25% more hours? I do not know the answer to this and my resources presently do not allow me to find this information, but that is the "fair" way to look at this issue. This is also assuming that the hours last summer were the same as they have always been for each individual park.


Pan

[Eeyore2U]

Are we living in this world or the past. Hours will never be to 12 or 1am.

http://www.btinternet.com/~tonyrichardson/horse.gif

[DVC-Landbaron]

Hours will never be to 12 or 1am.Why not?

[Peter Pirate]

We're going to DL this summer and their hours are 8-11 (it was originally posted as 12!)...DCA is 8-10...What would the scenerio be that allows DL the longer hours do you think?
:cool: :cool: :bounce: :cool: :cool:

[DVC-Landbaron]

What would the scenerio be that allows DL the longer hours do you think?Peter, as usual, I don't understand what you are saying. Would you mind explaining. (No garden path, I just want to know)

Thanks

[Peter Pirate]

Sorry, my friend...I'm just wondering crcumstances allow DL to get such great hours vs. what is happening at WDW...
:cool: :cool: :bounce: :cool: :cool:

[DVC-Landbaron]

Ah! I understand now. I didn't know you were comparing DL with WDW. I thought it had something to do with DCA. My mistake.


Anyway, I don't know. Think Paul has something to do with it? Whatever the reason, the MK hours STINK :mad:. They created sooooo much MAGIC in those last two hours. By cutting them, they sent me right over to the "dark" side. And now they are even worse. I'll let you know August 1st how the trip went, and I'm sure I'll have some thought on those miserable hours!!

[d-r]

At WDW there are 4 theme parks - plus PI, DD - lots of space to fill. Most of the visitors at WDW are tourists - they can be funnelled around different parks during the day.

At DL /DCA - you have 1 and a "half" theme parks with 3 hotels in walking distance, plus lots - tons of locals - there isn't any place else for them to go besides the theme parks, they do have a DD, but its a completely different demographic all around.

I can see where MK would be open late on weekends when you have more people coming in, but during the week 10pm seems pretty reasonable. Even with summer crowds - you have 4 parks plus so much else to do in the evenings. The resorts at WDW are much different as well.

DL/DCA is totally different than WDW and really can't be compared effectively to each other. There is such a completely local crowd at DL - its very hard to understand without seeing it first hand.

Just out of curiosity - what are the hours at SeaWorld, USO, IOA?

[d-r]

I did check the hours of the other Orlando parks out of curiosity and found that SeaWorld has listed there hours from June thru August as 9-10pm daily (even weekends) and Universal for both parks is the same 9-10 daily (even weekends) with hours cutting back gradually in August.

Like I said originally weekends are different at WDW - particularly MK, but 10pm during the weekdays seems pretty reasonable and isn't out of line with the rest of the area. Of course all the parks can adjust there hours as necessary and they do.

So no my other question is how often does MK reach capacity? I know during holidays or spring break I've heard it has, but didn't know about the summer - we try everything possible to avoid WDW during the summers so we just aren't that familiar with the crowds then.

Melissa

[raidermatt]

Raidermatt makes a rare and brief weekend appearance, just to get some facts out...

July numbers:

According to Laughingplace, MK was open 409 hours last year, 27 days until 10, 3 days until 11, and 1 until 1 am.

According to Disney.com, MK is open 402 hours this year, 5 days until 9, 23 days until 10, 2 days until 11, and 1 until Midnight.

That is a 1.7% decrease in hours. Even if you add 2 hours a week for EE, the decrease is less than 4%.

So this actually seems pretty good, if the 6% decrease in attendance is correct.

Now, Baron, I know your point isn't last year's hours, but pre-1998 hours, and this comparison does not change your very valid point.

However, since this thread was referencing attendance compared to last year, and speculating that hours were down 25%, I though the above facts were relevant to the discussion.

(Also, there is still the possibility of a few hours being added here and there in July. I don't know if it happened in June, but it happened several times in May).

[Another Voice]

The same website shows that for both 1999 and 2000 the Magic Kingdom was open from 9-11 for 30 days in July and from 9-1 for July 4th of both years. That seems to work out to a total operation of 436 hours. I’d say a drop to 402 is a pretty decent cut – it works out to over two full 14-hour days of from the 2000 Calendar. And let’s not forgot all the additional hours lost do to Early Entry and E-nights. A lot of people on this board seem to have used those as well.

As for the Animal Kingdom, in 1999 the July hours were 7am – 7pm. In 2000 that was cut to 8am – 7pm. So is the current 9-6 hours much of a gain? Even I won’t say that Animal Kingdom has had a 25% reduction in attendance over the last three years – so what justification should we look for about these cuts?

This is the Doritos game. The one where the price of bag of chips stays the same, but they just put less chips in it. Same deal with the parks – the price of the ticket stays the same, but you get less product. And The Company pockets the difference. It’s not attendance, it’s not about “without the crowds people can see so much more” – it’s just good old fashioned budget cuts.

Nibble, nibble, nibble, nibble.

P.S. – Sorry to intrude on your rare weekend outing Mr. Raidermatt. I just thought the numbers were interesting and I had to take a look for myself.

[OnWithTheShow]

They are still having e-nights and have been having 2-3 e-nights per week for the last several weeks.

[DVC-Landbaron]

D-R. I’m thinking I may come off as a little blunt. So please, no offense is meant. At WDW there are 4 theme parks - plus PI, DD - lots of space to fill. Most of the visitors at WDW are tourists - they can be funneled around different parks during the day. What in the world does that have to do with MK staying opened until midnight? If you happen to enjoy PI and fall within the proper demographics you may (and I stress may) be able to have a night, or possibly two, filled up. But being from Chicago, PI is a sad and lame representation of ‘real’ night life and with five kids in tow, it is certainly not a place that I want to hang around all night.

The next is a bit out of order but I have to. It'll flow a little better! Even with summer crowds - you have 4 parks plus so much else to do in the evenings. You have really got to be kidding!!! Have you ever been there in the summer? Have you ever witnessed the mass exodus of a ten o’clock closing? I have. And I can tell you, you have nothing – NOTHING else to do!!!

OK. You’re in the MK. And it is now ten. What are you going to do? Where else can you go to do that, “so much else to do in the evenings”? Maybe you mean that unique Disney experience of shuffling towards the exit like cattle. Only to find an hour long wait for a bus, simply because there are sooooo many people. Is that the, “so much else to do in the evenings”, you are talking about? Not my idea of fun!!!I can see where MK would be open late on weekends when you have more people coming in, but during the week 10pm seems pretty reasonable. WOW!!! You really haven’t been to WDW in the hot, humid summer, have you? The weekends, as virtually every guide book and seasoned summertime visitor will tell you is the least crowded. It seems the locals avoid the place like the plague. And those two days, for a vast majority of people, are travel days, to and from WDW, thus making Mondays one of the busiest!!
but during the week 10pm seems pretty reasonable. PLEASE!!!!!!! Visit during the summer before you write on the subject!!! I don’t claim to know anything about September thru May. I don’t know what hours used to be and I don’t know what hours are now. I don’t know the crowds and I don’t know attraction counts. But I am an EXPERT on the summer!!! I’ve lived and breathed it since 1972!! And closing at 10:00pm is not only unreasonable, it is insanity!!! The crowds are huge!!! The place is packed. And it is NOT a pleasant way to end the day.
Just out of curiosity - what are the hours at SeaWorld, USO, IOA?OH MY GOD!!!! Ahhhhhhhhhhhhh!!!!!! HOW MANY TIMES DO I HAVE TO TYPE IT!?!?!?!?!

It doesn’t matter!!!! Not in the least. Disney is Disney!!! Not Sea World, 6 Flags or the carnival down the street!! They set their own standards!! They wrote the book, for God’s sake!!! How about if they just live up to that standard and let Sea World and the rest of them try to keep up with them!!!! That’d be nice for a change!!! Kind of the way it used to be!!!!

So no my other question is how often does MK reach capacity? In my thirty years I’ve seen it reach capacity many, many times during July and August. But are you really saying that it has to “reach capacity” until a midnight closing is feasible? That’s absurd!!!

Sir Raider!! Now, Baron, I know your point isn't last year's hours, but pre-1998 hours, and this comparison does not change your very valid point.Thank you. Since you were nice enough to bring it up – I won’t dwell on it!! :)

OnWithTheShow, thanks for the info. I really mean it. The sarcasm is directed toward you management team, of course, not you!!They are still having e-nights and have been having 2-3 e-nights per week for the last several weeks.Oh goodie!! I always love paying for a part of something that used to be included, in it’s entirety, with you purchase. But I can find no way to avoid them, because without them you cannot possible do everything you want to do, within the hours they have provided.

So there goes another 12 bucks, times seven, times two!! For a quarter sized park!!!! Thanks Ei$ner!! I hope it helps line that parachute and I hope you’re able to use it real soon!!!!!!!!!!!!!!!!

[doggy]

Lets face it folks....Disney will do what ever they want to and you know what.......we the customer will continue to support them no matter what???

Untill they really feel the pinch in the pocket book like the rest of america is feeling, Disney will do it their way and not what the customers want.....

OK I understand they do listen once in a while, but overall they still are a Large company looking out for the Profit First!!!!!

Anyone that does not agree with that is looking through rose colored glasses...

They should stay open til at the very least 11pm for the months of June, July and August.......It is Always Hot in Florida, isn't it???

Yes California has cut back a little, but it is still 11PM.....

Send those emails and letters to WDW that is Your Voice!!!!and money they are using!!!!

[Figmentrocks]

DVC-Landbaron,

THANK YOU! Our sentiments exactly. For those of you smitten with the Walt Disney Company, you fall exactly into the trap of what they love, settling. Also as DVC noted, weeknights during the week at the Magic Kingdom are a nightmare. We usually avoid the park during the summer because it is so busy.

As AV noted, we remember last summer of AK opening at 8, ALL of Epcot closing at 9 PM, MK at 11 most nights & midnight some nights along with MGM at 10:30. Closed attractions, reduced operating hours with an always increasing price for us. There is no excuse or justification to be made by the public for the company. AND, the fact that attendance is off very little (6% or so publically reported) considering September and a RECESSION, that's incredible. Not to mention the fact that Disney was reaching a maximum point of visitors with the amount of attractions. AV, I might not be a Walt Disney Co. executive, but logic would dictate to me that if I was in a business position, if I brought capital to the theme parks, producing a few blockbuster attractions, it would bring a rise in attendence, to an untapped market, or people who will only come when new and cool attractions open. Attendance numbers were also being based on the amount of people coming during an unprecidented economic expansion inflating travel numbers.

The bottom-line is that the executives of the Walt Disney Company will use September as an excuse as long as possible to keep taking away from what was standard operating fare. Do we need to mention: The Skyway, 20,000 Leagues closed, Country Bears, Timekeeper, CoP, Tiki Birds, Hall of Presidents on limited hours to save them even more money. That's not acceptable, period. You think that maybe with the surge of interest in patriotism, they might want to keep the Hall of Presidents open the entire day? No, that costs money. We've seen our share of people ticked when going to the door and being told it's closed the past few months. $19.00 for t-shirts that are of way lower screen printing quality versus past years, increases in food (that they casually have slipped in the past few months)... Also, never compare Universal, SeaWorld, and Disney hours. They have always operated with independence of one another. Maybe some of you agree, maybe some don't, but Disney is just another example of another conglomorate who continues to charge more and more, while trying to take away as much as they can before too much complaining from the dear customer comes into play. Disney just continues to chugg along with a fan base dedicated to the founder, so rare today in the world.

:)

[Eeyore2U]

Originally posted by Figmentrocks
The bottom-line is that the executives of the Walt Disney Company will use September as an excuse as long as possible to keep taking away from what was standard operating fare.

Can you show me where Disney says Septemeber is the reason for their decisions? I've yet to see that. I've seen mention of attendance being down, tourism being down. I know I'm spiltting hairs but lets represent this somewhat accurately.

Figmentrocks,

Should Disney operate like Enron or Worldcom? Should they give and give put themself out of business? Have you been to US/IOA? We were there the past two Februarys and since we were there early we couldn't eat since nothing was open. And not everything was open either. I love how it is easy to bash Disney and then say the others are so good, when they offer less.

Disney just continues to chugg along with a fan base dedicated to the founder, so rare today in the world.

My fascination or loyalty has nothing to do with Walt. It has to do with immersive feeling I get at the park.

If so many are unhappy why do they return?

[padisneyfan]

I almost hate to get in this discussion, but having just returned from WDW on 6/27 I want to share that during my stay hours in the MK were extended on 6/24 until midnight and 6/25 until 11pm because of the expected increased crowds. Apparently, it was crowded in MK on 6/24 during the daytime (but that was a Monday and MK is always crowded on Monday), however we went over in the evening on both 6/24 and 6/25 after the rain stopped and walked onto all the rides. As stated before certain rides in future world in EPCOT were open till 9pm and MGM RRC and TT were open until 10:30pm along with Fantasmic at 9pm and 10:30pm. Having just returned from 7 days, the crowds are down and the current times in the parks seem to be accomdating the people who are there. We usually go a week earlier and I was concerned that because of the decreased park hours the parks would be really crowded, but I just didn't find this to be a problem. So I really can't complain about the park hours.

[d-r]

No offense is taken - DVC -Landbaron - we just have different opinions about it. While we do not go to WD during the summers now, many a summer night did both DR and I spend at MK. We never noticed there being a problem - if it was crowded or on a weekend the hours were extended or open late automatically and now as adults - I guess outside of the occasional e-night - after 10pm we generally go to bed. My point is that not everyone spends everynight at MK - there are many other options of places to go in the evenings - whether or not they appeal to you is another story, but WDW can't possibly make everyone happy.

Quite the contrary to what some people may think - neither DR nor myself think that WDW can do no wrong. Going during the off seasons park hours can drive us nuts - mostly because ticket prices are the same, but that's the way things go. I do however think its relevant to look at what other companies within the same industry are doing - we would with any other industry.

Ultimately it boils down to choosing whether or not to go. If the crowds are that unbearable and it makes the evenings so unpleasant and you have let you concerns be known directly to WDW with no response to your approval - you don't have to go.

Melissa

[manning]

I have been going to WDW since early 1972, and as remember the parks stayed open late in good times and bad. That is except since recently.

Something has changed. All of a sudden penny pinching. That is not a good sign.

[Another Voice]

Enron and Worldcom went under because it gave its customers too much? I missed that explanation on CNBC.

Late closings and slow closings have been a feature at the parks since they opened. There’s really nothing new to that practice. But the fact that WDW seems to have to resort to that really does indicate the demand for the parks is greater than the hours they are willing to post.

And I think the entire issue would be different if the hour cutbacks were really the result of attendance levels at the parks. But they’re not. For the last five years The Company has relied more and more on the parks to generate ever greater amounts of money to offset the problems with the rest of the company. With growth and price hikes at the parks no longer possible, it’s now a matter of profit margin: reduce costs against the same amount of revenue.

If anyone can remember back to the letter Eisner sent out before the annual report, he talked about all the cutbacks in response to 9/11. And he also mentioned that he expected even greater benefits once the parks “returned to normal” because many of those cuts would not be restored.

We’re in the middle of that right now.

P.S. – How long do you think it would take before some one would post “it’s not like I go to Animal Kingdom every day of trip, so I don’t mind if it’s closed on Wednesday”?

P.S.S. - If Disney is supposed to be so responsive to crowds these days, do you think they reopen 'Twenty Thousand Leagues Under the Sea' if a whole bunch of us showed up and stood in line?

[Another Voice]

The more important question is will Disney really listen if a whole bunch of people don’t go to WDW anymore.

That’s certainly the situation at California Adventure, yet The Company’s main response is simply more cutbacks. If attendance at WDW continues to decline – who’s to say that simply won’t trigger deeper cuts?

[Figmentrocks]

AV, Exactly.

Eeyore, Enron and Worldcom didn't have their problems because of the great things that they did for the consumer... Far from it.. More like corporate executives taking hundreds of millions of dollars EARNED by the company from the consumer and pocketing that money and others taking out minimal interest loans. I don't understand your analogy. Cooked numbers, etc, all out-of-greed.

Bashing Disney and not IoA.. That's not what I did.. Yes, we've been to IoA and Universal many times since February, and they were doing the same thing as Disney, however, Universal has been losing money on their property and the loss of attendence really hurt them a lot harder money-wise. Disney was hit with a partial loss of business and was still reaping huge profits. However, in the months since February there have been major changes at Universal with expanded hours, productions, and so-forth with their new President. Closed dining spots are not in the same league as closed attractions, though. Disney has been doing plenty of this, well with both, actually. We love going to Disney, but I find that it's very fair to point out the truth about their business practicies. That's not bashing. Just because you're loyal to a political party doesn't mean that you have to going lock and step with every position of their party, same deal here.

Eeyore, I also understand that people enjoy going to Disney, that would seem like a no-brainer, but many people are very loyal to the company because of Walt Disney and will give the company the benefit of the doubt all these years later. That's the truth, I've seen it in my own family.

The point that AV and that I've been attempting to make is that Disney is using current events as an excuse, but that is not why Disney is doing this. These are LONG-TERM changes that they are doing to add to their bottom-line. I guess we should all cry the night away when this is a company that earns $260 million in PROFIT each quarter on the theme parks.

AV, what we assumed was that these changes were coming anyways and the company had the perfect excuse put into their laps. Would that be a fair assessment?

When business slumps, companies usually invest in bringing customers in, not taking away from them. If any of you have been to DCA, you might see why some of us really have a new perspective on the company.

There isn't much more to say, except that when you visit in a few years, the MK is incredibly busy at 10 PM, and you then go "Why are they closing this early?", remember when and why they supposedly reduced hours, and what they were really doing. This is a company that only takes, not gives... They'll give $1 million dollars to open an education center down here in Central Florida, but ONLY if a half-cent sales tax increase occurs in Nov. Why? The truth is that their property rates will be slashed. So nice to see that they care so much, but only if something better happens for them. No sales tax increase and lower property rates, no money for the center. Nice folks, huh? :)

[EUROPA]

Originally posted by Eeyore2U


Should Disney operate like Enron or Worldcom? Should they give and give put themself out of business?

HA !!!

Wow these two Company’s problems could not be further apart from what Disney is doing if they tried. The only common thing they share within each other are neither of them followed GAP and Anderson did some work for WorldCom as well. What exactly do you think that Enron or WorldCom was giving to their Customers? There was no giving by these two companies. Disney is not giving us anything either. I seem to remember paying a higher price every year for less attractions, less onsite perks and less operating hours. If this is what you mean by giving then yeah they are "giving" it to us all right.

[Peter Pirate]

I seem to remeber paying higher prices every year for less attractions...
A little nitpicking, but, WDW did not raise prices this year and they were the only Orlando theme park not to do so..


:cool: :cool: :bounce: :cool: :cool:

[EUROPA]

Originally posted by Peter Pirate

A little nitpicking, but, WDW did not raise prices this year and they were the only Orlando theme park not to do so..


:cool: :cool: :bounce: :cool: :cool:


I guess we will all start to qualify our statements. Should I say a trend of higher prices over several years?

Of course there are more attractions now after AK opened then there were before. Heck there are more attractions now then when WDW was still swampland and orange groves.

I'm sure that Universal raised prices as well...but seems like I'm going to be paying less this year for my tickets then we did in 1999. Maybe raised them but are giving better discounts.

[raidermatt]

I'm sure that Universal raised prices as well...but seems like I'm going to be paying less this year for my tickets then we did in 1999. Maybe raised them but are giving better discounts.

Universal discounts because they have to. They are not a benevolent non-profit organization that just feels like collecting fewer dollars. They need to charge the discounts they do because if they didn't, they'd be lucky to break 5 million in attendance. Besides, I thought Disney was supposed to set its own standard, not try to match others on price?

Figmentrocks- Look, I'm not going to say that I wouldn't be happier if hours were longer. But this thread was started with a comparison to last year's attendance and a claim that the cut in hours from last year far surpassed the attendance drop. That is simply not true. Yes, the same points about attendance from 3+ years ago can be made, and that's fine. But they do not apply to a 2002 vs 2001 comparison.

When business slumps, companies usually invest in bringing customers in, not taking away from them.

This is simply not true. Companies take different strategies, but "re-trenching" and "belt-tightening" are far more common than increasing investment. When people just refuse to get on airplanes for 3-4 months, or get laid off, they are not going to WDW. Offering a discount, or keeping the parks open until 1am will do very little to change that.

AV, 2002 hours are in line with pre 9/11 hours, assuming that attendance is still off by 6%, or even 2%. The letter you referenced also specifically pointed out that some of the cuts would not be sustainable and would be returned when attendance improved. There was nothing about which cuts would stay or go, but the numbers do not support your statement that hours are one that is staying. Compared to 3+ years ago, yes, but you specifically used 9/11 and that is not yet supported with respect to hours.

That’s certainly the situation at California Adventure, yet The Company’s main response is simply more cutbacks. If attendance at WDW continues to decline – who’s to say that simply won’t trigger deeper cuts?

Very good point. I think you could throw in AK as well, though to a lesser extent. Plans were scaled back or completely cut when attendance was less than anticipated.



Again, to clarify, I am not saying that keeping the parks open less than in 1999 is a good strategy, or fits with the philosophy Disney should be operating under. But using inaccurate info to support the position does not further the cause.

[EUROPA]

Originally posted by raidermatt
[B]

Universal discounts because they have to. They are not a benevolent non-profit organization that just feels like collecting fewer dollars. They need to charge the discounts they do because if they didn't, they'd be lucky to break 5 million in attendance. Besides, I thought Disney was supposed to set its own standard, not try to match others on price?



Not reallly my quote you used there about Disney standards..nore did I make the comparsion with Universal to start with. However Universal prices for the guest are less then they were in 1999 and they have not cut back on attractions and are in the process of adding new attractions as well. They also have the same if not better onsite perks as Disney. So seems in this case Universal is setting the standard or at least adhearing to it. But alas many people will throw the "magic" in your face everytime you do any comparsion with Universal.

[Another Voice]

Mr. Raidermatt, what I’m saying is that the hour cuts have nothing to do with the response from 9/11 but are part of a longer and more significant trend.

The Company is cutting operations regardless of attendance.

Margins are driving the hours. The point of Eisner’s letter was to expand that concept to the investors – cuts made by this temporary downturn will be kept to generate greater profits later. Closing down a hotel when you’re not selling rooms is not really a cut – those rooms weren’t going to sold anyway. But reducing hours of operations even though people have already bought tickets is a cut.

The fact that this year’s hours are only slightly less than last years – for the Magic Kingdom only I might add – only points to the fact that the “temporary” cuts aren’t. If the attendance is off so much, why haven’t hours been cut even more? And why are people somehow willing to brave air travel to get to the Magic Kingdom, but are too scarred to fly to the Animal Kingdom?

And the cuts at DCA and AK being justified by their attendance levels, yes there are to a degree. My concern is that cuts are Disney’s only response to those two troubled places. Would not a smarter business move to be fixing those places so that they can live up to their potential, rather than hacking them down to the guests’ lowered expectations?

[raidermatt]

However Universal prices for the guest are less then they were in 1999...

Again, due to discounts that are only offered out of necessity. The poor suckers who aren't shrewd enough to find discounts pay more. Single day tickets are higher than WDW.

...they have not cut back on attractions and are in the process of adding new attractions as well.

WDW is opening two new attractions next year.

They also have the same if not better onsite perks as Disney.

Again, because of bottom-line financial motivation. The main perk sited is FOTL, which is offered out of necessity, and because the attraction:guest room ratio is much smaller at Universal.

So seems in this case Universal is setting the standard or at least adhearing to it.

Low prices and discounts set a standard alright, but it has little to do with quality entertainment.

But alas many people will throw the "magic" in your face everytime you do any comparsion with Universal.

Maybe, but I didn't. I was just pointing out the reality of how "un-magical" those discounts are.

[EUROPA]

Originally posted by raidermatt
[B]

The poor suckers who aren't shrewd enough to find discounts pay more. Single day tickets are higher than WDW.


A point I think I brought up in another post. But I don't think that all discounts are out of need.



WDW is opening two new attractions next year.


Now what will the quality of those be? Still up in the air I guess at this point. I guess Universal could throw the next two attractions in the toliet to match Disney if they wanted to.


Again, because of bottom-line financial motivation. The main perk sited is FOTL, which is offered out of necessity, and because the attraction:guest room ratio is much smaller at Universal.


And what is Disney's response to lower Finanicals?? Remvoe the onsite perks and hours and charge the same price? I'll take Universal's ideas over Disney's



Low prices and discounts set a standard alright, but it has little to do with quality entertainment.


Ok so your not a fan of Universal? Fine ... I'll say that you just don't get the "French Magic".

[raidermatt]

AV, maybe I'm following the Pirate's lead and nitpicking, however...

I remember the margins reference, and it was very vague. It could have been interpreted to mean just what you said, or it could have meant that since part of what was cut was "fat", it wasn't coming back. It didn't differentiate between hours, room closures, or the number of maintenance workers on staff.

The point is, any interpretation of what it really meant is so subjective there isn't much point. We just have to look at what actually happens.

I honestly can't say what % of the shows have comeback. The answer to that (which somebody probably has) would be key.

You asked this question: "If the attendance is off so much, why haven’t hours been cut even more?" I think this proves the point that we don't yet know if the hours cut from last year will be returned or not. If there were plans to slash hours by x% anyway, wouldn't 9/11 have been used as an excuse to cut them even more? Yet the cuts have for the most part coincided with attendance estimates. As attendance has creeped closer to 2001 levels, so have the hours.

Yes, the hours being cut at MK are less than at the other three parks. I did a quick estimate, and got about 6% at MGM, 10% at AK, and 17% at Epcot, though that counted FW as being closed at 7pm, which isn't really true since TT, SE, HISTA and I think Innoventions remain open. Regardless, when factored in with MK's cuts, it comes out to about 8%, slightly more than the 6% attendance drop. However, that assumes no changes to hours during July. Any adds (or cuts) would change that %.

Now, again, I'm not saying I support mgmt's overall philosophy, and specifically the reduction in hours from 3+ years ago. My point (and maybe it is just nitpicking), is that when bringing these issues out in the open, I feel we need to stop crying wolf everytime there is an announcement or change. There are enough concrete changes that can't be explained away, that we shouldn't have to pull up hour cuts that pretty much fall in-line with what we'd expect the company to do given current attendance.

I look at it as if we were trying to make these points to somebody who actually had some authority to make some change, but needed to be convinced with concrete facts. Any potential symptom that can only be supported with speculation hurts our credibility.


And the cuts at DCA and AK being justified by their attendance levels, yes there are to a degree. My concern is that cuts are Disney’s only response to those two troubled places. Would not a smarter business move to be fixing those places so that they can live up to their potential, rather than hacking them down to the guests’ lowered expectations?

This, I agree with completely, though I see adding ToT to DCA as being a significant move. I know, the indications you've heard are that its watered down, and I agree that is a mistake. Its just that by nature, I have a hard time taking that as fact just yet. Bugtown? We'll see. Admittedly, I would prefer to see more of these potentially significant moves being made. (I consider the concerts to be a nice little move, but only a drop in the bucket).

[All Aboard]

Epcot, though that counted FW as being closed at 7pm, which isn't really true since TT, SE, HISTA and I think Innoventions remain open.I wondering what peoples' thoughts are on this. Was this the better PR move for Disney? Show the closing time as 7pm, but keep the more popular attractions open until 9. Or, show the closing time as 9 but list some of the attractions as having limited operating hours?

[Peter Pirate]

Lets not forget the most recent updates from WDW have Disney drastically increasing hours on demand (I believe I read 12,11 & 11 in one week alone).

So this may show us that the hours of the future will be a 'game time decision'. I know this doesn't help vacation planners & the potential for let down certainly exists, but Landbaron if during your July visit, its unexpectedly busy & Disney opens the MK to midnight two or thee times will the effect be magical or dismay?

cool: :cool: :bounce: :cool: :cool:

[manning]

Universal is, I think, making the right move. Yes, they have raised prices, but they are also bringing their operations back. When you cut hours and not prices it is a price increase. Disney just hopes you don't catch on. Also, when Disney is closed, where else do you go. I'm sure Universal folks have asked that question.

As I said before, prior to the last couple of years, Disney stayed open late in the summers. Now they close earlier and on certain nights they have E-night. another price increase.

Hour cuts plus E-nights equals how many price increases?

And the thing that's driving it is executive stock options and pay. You pay and they play.

Gee, hope I know what I'm talking about or I'm going to look silly.

[Peter Pirate]

raidermatt already pointed out that Disney's hours were on track to be minimally down this year from last and that didn't take into account the extra hours that have now been reported for June. So I'd say Disney did not raise their prices, US & SW did and also cut their hours...
:cool: :cool: :bounce: :cool: :cool:

[EUROPA]

I think that AV pointed out as well what the hours were down compared to two years ago....

[Peter Pirate]

OK, so it appears hours did drop some two years ago, but this year seems to be running about equal...What does this mean???

Again, I think the writing is on the wall as to how closing hours are going to be handled in the future. Is this acceptable?
:cool: :cool: :bounce: :cool: :cool:

[raidermatt]

For me, the most important thing is the end-result. Theoretically, if the posted hours are less, but adjustments were made at "game-time", I'm happy. I'm all for efficiency and matching resources with where they are needed most. Post hours on the conservative side, and lengthen when appropriate.

As I've already said, I don't really see any evidence that WDW is shortening hours THIS year. Clearly they did several years ago, and I do think that's a legitimate beef. But it's at least a possibility that with respect to hours, the "slippery slope" may have leveled off.

I realize that even if true, it doesn't mean a philosophy has changed, its just the reality of the situation.

gcurling, I agree with Scoop. Posting FW closing as 7pm rather than 9pm is better from a PR standpoint, and also just from a plain honesty standpoint. The most popular attractions may remain open, but there are still a significant number that don't.

[EUROPA]

Still leaving out EE and E-nights in those numbers as well. Saying several does not change the fact that it was only two years ago and that they are still cutting the hours this year as well. For me and I'm sure alot of others..cutting hours, perks or the number of attractions is not the way to bring guest back. That is assuming the attendace figures are correct.

[raidermatt]

E nights were cancelled in May, but have been running through June and July. But since you brought it up....

How in the wide wide world of Disney can someone take Disney to task for its current philosophy, yet still count Enights as a plus? You don't want them to close the parks earlier, but you want them to charge for those same hours that used to be free?

If they did permanently cancel enights (which they haven't), it would not be the same as lowering hours, since it is a separate paid admission. The whole basis for saying fewer hours is a bad thing is that we pay the same price for less. That does not apply to Enights, which significantly increase your admission price.

Even with MK's two EE days/week, hours would only be cut about 4%. The other parks only had one EE per week, so very small impact on overall hours. Also, EE was not available to off-site guests, so its not really fair to even count an EE hour as a regular hour.

For me and I'm sure alot of others..cutting hours, perks or the number of attractions is not the way to bring guest back.

Yet attendance continues to get closer to last year's numbers, as do hours.

That is assuming the attendace figures are correct.
True, but we have been told in the past that the numbers are usually inflated, if anything.

[DVC-Landbaron]

Regardless, when factored in with MK's cuts, it comes out to about 8%, slightly more than the 6% attendance drop. However, that assumes no changes to hours during July. Any adds (or cuts) would change that %.OK!!! That’s as far as I got with this thread before I couldn’t take it any longer!!!!!!!!

YOU PEOPLE ARE NOT FOCUSED!!!!!!

Please!!!! Stop!! Before you drive me CRAZY!!!!!! :crazy:

There are, as I see it, only two issues in this thread.

1- Other amusement park hours
2- WDW hours (MK in particular)

THAT’S IT!!

And it doesn’t matter what % of this and minus what % of that. And people coming and people going and attendance figures and blah!! BLAH!! BLAH!!!!

The simple fact is that Disney has been cutting hours since 1998!!! That’s it!!

There’s nothing else to say about it. IT IS A FACT!!! And it has nothing whatsoever to do with 9/11 or attendance or the way the planets are aligned!! It has to do with the bottom line and that quirky little thing I call, ‘The Philosophical Change’.

If you want to figure percentages, figure the hours being cut from midnight! Every night! Two parades!! Every night!! Fireworks!! Every night! And most important, NOT ENDING ON AN EVENT!!!!

What other amusement parks do is of no consequence at all. Disney is the leader. Or at least they used to be.

:mad:




(Oooops!!) Just re-read my post. Maybe it’s my turn to be cranky? Did it sound that way?:earseek:

[EUROPA]

Originally posted by raidermatt
[B]E nights were cancelled in May, but have been running through June and July. But since you brought it up....

How in the wide wide world of Disney can someone take Disney to task for its current philosophy, yet still count Enights as a plus? You don't want them to close the parks earlier, but you want them to charge for those same hours that used to be free?

If they did permanently cancel enights (which they haven't), it would not be the same as lowering hours, since it is a separate paid admission. The whole basis for saying fewer hours is a bad thing is that we pay the same price for less. That does not apply to Enights, which significantly increase your admission price.

Even with MK's two EE days/week, hours would only be cut about 4%. The other parks only had one EE per week, so very small impact on overall hours. Also, EE was not available to off-site guests, so its not really fair to even count an EE hour as a regular hour.





Simple I want everything back...I've never dismissed E-nights. Now apprently what I want and what Disney does is two different things, but I can still want it.

[YoHo]

I don't want E-nights back. E-nights were annoying. I want the park to be fully open til midnight during Peak times without it costing me an extra $10 a head.

[DVC-Landbaron]

I don't want E-nights back. E-nights were annoying. I want the park to be fully open til midnight during Peak times without it costing me an extra $10 a head.Like he said!!!!

[Eeyore2U]

Originally posted by EUROPA


Simple I want everything back...I've never dismissed E-nights. Now apprently what I want and what Disney does is two different things, but I can still want it.

Someone once sang,

“No, you can't always get what you want
You can't always get what you want
You can't always get what you want
And if you try sometime you find
You get what you need ." (edited to accomodate Baron)

Europa, as we have been around this road before, Disney will do what it thinks is best.

I'll take my lashing for the comparison to Worldcom/Enron.

The problem I have is that no matter happens at WDW, there are some that won't be happy. Maybe we should have Eisner hand the keys to the kingdom over to the esteemed members of this board and see if they can do a better job and make a profit.

[Peter Pirate]

Landbaron my friend, I truly would like an answer to the question I posed of you...Thanks...
:cool: :cool: :bounce: :cool: :cool:

[space42]

The problem I have is that no matter happens at WDW, there are some that won't be happy. Maybe we should have Eisner hand the keys to the kingdom over to the esteemed members of this board and see if they can do a better job and make a profit.

Well is there any evidence that shows us the huge profit margin and stock increase since they started cutting the hours in 1998?

[Eeyore2U]

Originally posted by space42


Well is there any evidence that shows us the huge profit margin and stock increase since they started cutting the hours in 1998?

No.

But can you do it better in this economy?

Although I don't agreee with everything Eisner does, I think over the long haul he has done a good job. It's kinda like Nixon. Only after his death and history writes about will we realize what a great leader and President he was.

[EUROPA]

Wall Street also wants to see growth at Disney's famed theme parks. Sales in the most recent quarter fell 8%, to $1.5 billion, while operating income declined 15%, to $280 million. But earnings at the parks and resorts tend to rise and fall with the economic cycle, and this business now appeara to be on the way out of a significant trough in earnings that began a few months before September 11.



THis was taken from an article that was posted here. Sales fell by 8 but they decreased operating cost by 15. So we are back to the same place again. They are trying to make us pay for Failed Internet ventures, ABC, bad movies and cartoons that kids no longer watch. Its not all realated to the parks. These cuts are net result of the whole company failing not just a deline in the parks.

[raidermatt]

Lord Baron, I only figured and posted the percentages because the original points and arguments here, as well as several that have followed, insisted on using comparisons to 2001 as proof of the slide. Those comparisons do not, however, prove there has been a slide, or that one is continuing. But I am not pointing out this reality in an effort to prove that there have been no cuts. Believe it or not, I am trying to keep us FOCUSED on what the real issues are, and what the real proof is.

What is the real issue? As you said, hours have been cut since 1998. But if those who feel this is truly an issue want to make that point to others, they have no hope of successfully communicating this valid point using false evidence.

Let's say, for example, that the sky truly was falling, and I were the only one who knew it. Would it do any good for me to tell you it were falling if the proof I chose to make my argument was an acorn that fell on my head? (pause for processing....)

What if I had real proof, but packaged it with the acorn proof? Certainly you would question the validity of any proof I presented if I were capable of letting an acorn convice me.

So when if I make an effort to debunk the evidence behind an argument, it is not necessarily because I disagree with the main point, only that I want to remain FOCUSED on the real issue, and the real proof behind that issue.


I don't want E-nights back. E-nights were annoying. I want the park to be fully open til midnight during Peak times without it costing me an extra $10 a head.

I agree. (But isn't it $12?)

[DVC-Landbaron]

I’m sorry Cap… Peter!! I must admit that this thread really bugs me. People are talking as though this can be explained in any way other than philosophically. And I really, to the marrow of my bones, believe it cannot be. (And then we get an Ei$ner cheering section!!! AHHHHHHH!!! It’s almost more than I can bear!! And I thought I was making headway on this board!!)

Anyway, in answer to:So this may show us that the hours of the future will be a 'game time decision'. I know this doesn't help vacation planners & the potential for let down certainly exists, but Landbaron if during your July visit, its unexpectedly busy & Disney opens the MK to midnight two or thee times will the effect be magical or dismay?It will most certainly be serendipitous dismay!! Especially if they do the prolonged hours on the days I have pre-scheduled for other events (Hoop-Dee-Do, Luau, IOA, secret meetings with fellow DIS people, etc.) If they would have announced it I would have scheduled appropriately. As it is, it may be hit or miss. And if it is a miss, I will certainly cry FOUL!!! :mad: Someone once sang, " you can always get what want, you can't always get what you need."Not quite right. The real lyric goes:

“You can always get what want, but if you try sometime, you might find, you get what you need”

Unfortunately Disney is not giving me what I "need" to battle the crowds during the summer months. I NEED TIME!!!

[OnWithTheShow]

AV you say the changes are permanent yet everytime there is greater attendance they increase the hours???? It is a fact that people are booking their vacations weeks in advance instead of the months in advance that used to be the case. The constantly fluctuating park hours are a reflection of this. Also you compare the park hours to those of 2000 instead of those of 2001. The hours as it has been mentioned are down only slightly from those of 2001. Well maybe that could be because there was a huge attendance drop from 2000 (a record setting year) and 2001? No that must not be possible it must be the evil execs in Burbank trying to cheat the WDW guest! Geez.....

You are playing the same numbers game you always complain about twisting the facts to support your own view.

[DVC-Landbaron]

There are sooooo many gems to chose from, I hardly know where to start!!! Let’s just pick one at random: But can you do it better in this economy? Almost anyone could!!

Although I don't agreee with everything Eisner does, I think over the long haul he has done a good job. Can you possibly site some specifics, because quite frankly, I’m at a loss!

Only after his death and history writes about will we realize what a great leader and President he was.Are you seriously saying that after his tenure has ended, we will consider him a “great” leader and CEO of Disney!!!! :crazy: Please tell me that in your excitement your hyperbole was bit overextended!!!

On to other matters. Sir Raider: What is the real issue? As you said, hours have been cut since 1998. But if those who feel this is truly an issue want to make that point to others, they have no hope of successfully communicating this valid point using false evidence.What other evidence do we need. From 1972 to 1997 the MK stayed opened until midnight and at times one o’clock in the morning. All summer long! From mid-June until mid August! Now they close at ten!

Your Honor!! I rest my case!!!!

[raidermatt]

Lord Baron-

What other evidence do we need. From 1972 to 1997 the MK stayed opened until midnight and at times one o’clock in the morning. All summer long! From mid-June until mid August! Now they close at ten!


AHHHHHHHHH!!!!!!!!!!

ok. I'm back.

I don't need anymore evidence. I agree.

I was only trying to say that comparing 2002 to 2001 does not prove this point. It misses the point. I know, YOU did not do this, but the original post, and some that follow DID.

I'm with you, bring back the hours. I'm just trying to differentiate between actual substance (hours cut from 1998), and just "piling on" (hours cut 25% from 2001). The former advances the cause, the latter muddies it.

[Eeyore2U]

Here goes. Know ing this board all to well, i'm sure the answers won't suffice.

Almost anyone could!!

Hmmmmm. How many large companies have you run?

Are you seriously saying that after his tenure has ended, we will consider him a “great” leader and CEO of Disney!!!! Please tell me that in your excitement your hyperbole was bit overextended!!!

Not at all, Mr Baron. I don't think those with axes to grind can make clear judgements. I think that it takes time to realize a job well done or poorly done.

[hopemax]

But can you do it better in this economy?

I always hate these types of answers. And since we're singing

''That's just the way it is
Some things will never change
That's just the way it is
Ah, but don't you believe them"

IMO, it's a cop out. It's a reason to stop investigating the alternatives. On both sides. From the consumer, outside the window perspetive, it stops people from doing actual research, looking for other companies that are successful while doing things differently. And from the business, inside perspective, it provides the excuse to not deviate from their SOP. It's the most accurate answer with the least amount of "work." It doesn't mean there aren't more accurate answers, just that they require a lot more work to reach them.

Yes, this economy will blow over, but my prediction is that the companies left standing will be the ones who took an offensive approach (new philosophies, new products) and the ones who played defense (cut backs, bunkering in) will be left in the dust.

[Another Voice]

"Well is there any evidence that shows us the huge profit margin and stock increase since they started cutting the hours in 1998?"

The stock is Eisner’s problem, but I can certainly show you where you theme park money has been going. Hang on number fans – this is ‘Soaring over Annual Reports’ The Ride:

I’ll start in 1997 since that is the first full year that ABC affected Disney’s books. In that year, Parks and Resorts accounted for 22% of the total company’s revenues, but represented 26% of the company’s “profit” (on the financials it’s listed as the operating income, but profit is good enough for here).

Jump ahead two years to 1999. The parks now account for 26% of the company’s revenues (they were picking up some of the slack from Film and Consumer Products), but for a whooping 43% of the company’s profit. So – Disney made close to half its profits from the parks, even when that parks count for less than a quarter of the company’s business.

How did they do this? By improving the margins. In 1997 out of every $1 spent at the theme parks, Disney spent 77 cents and kept 23 cents for profit. But in 1998, for every $1 someone spent in the parks, Disney now spent only 68 cents and pocketed 32 cents in profit. So not only did the amount of revenue grow during this time (the only business segment in Disney to so increase every year since 1997), they were keeping even more of it in profits. That a really quick way to really make lots of money.

So how did the parks do in miserable 2001 – The Horrible Year? The year of the cutbacks? Parks increased their share of portion of Disney’s overall revenues to 28% and their share of the profits to 45% of the total. So, the year the parks were “suffering” and the year of the “profitable” ‘Pearl Harbor’ – the parks contributed an even greater of their share in profits than ever before. And the margins stayed right at 31% as well – there’s no impact of any discounting to be seen.

For comparison, the ratio of profit contributed by the Studio and Consumer Products (Disney combined these to in the 1997 numbers) was 44% of Disney’s total profit. By 1999 that was down to 21% and last year they represented only 16% of the total company profits.

In summary – Disney has been relaying on its theme parks for a greater and greater part of the company’s total profit even though its share of the revenues have remain about the same. One quarter of the company (the theme parks) now make up almost half of Disney's profits. They have done this by cutting expenses pure and simple, especially compared with the other divisions in the company

The question becomes when does this trend stop helping the company and start hurting the parks. There is only so much savings that can be squeezed out of any business. Soon you stop cutting fat and begin cutting muscle. For different people that point is different – for some it’s been early entry, for other the operating hours.

What’s your threshold?

[manning]

Landbaron - Let me sum up my view.

When I was working (retired), I had to make plan and change them because something unexpected always came up.

I went to WDW to change my routine and relax making my plans according to WDW published schedules. It made me happy.

Now, if I go to WDW, I now have to play guessing games on what I have to do because schedules change at the last minute?

Give a break! I'll go to the beach first, and it won't be a Disney beach!!!!

[space42]

Wow, Sir Voice! That is some VERY interesting reading.

Yup, just as I thought. It all makes perfect sese now.

I’ll start in 1997 since that is the first full year that ABC affected Disney’s books

This is very telling.. shortly after this many people realy started to notice the current decline...

[Eeyore2U]

AV,

Don't most companies have cash cows and losers? Isn't that they key to huge conglomerates? Isn't it important for an entertainment company to be involved in all aspects of entertainment or is Disney just an amusement park company?

[Another Voice]

Mr. Eeyore2U - that's one of the things you can see in the numbers. Back in 1997 the company was nicely split between Broadcasting, Theme Parks, Studio Entertainment and Consumer Products. But as the other divisions have had problems, Theme Parks have had to become more and more of the "cash cow" than the other divisions of the company. And this has been done by cutting the expenses at the parks - giving the guests less for the same amount of money.

The parks have always been very profitable. But now they have very much become the cash cow for the company. And many people worry they are also becoming a scarifical cow as well.

[EUROPA]

Gosh why would a company want a loser. It may happen but trust me no company wants a loser.

[Eeyore2U]

Originally posted by EUROPA
Gosh why would a company want a loser. It may happen but trust me no company wants a loser.

In Disney's case they needed TV, aka Cap Cities. Although it has been more of a loser then they imagined, it gave them a TV and cable outlet.

[EUROPA]

Originally posted by Eeyore2U


In Disney's case they needed TV, aka Cap Cities. Although it has been more of a loser then they imagined, it gave them a TV and cable outlet.

That is just it...it was not a loser until they took it over. I'm hoping they did not take it over with the mindset of running it into the ground to compete with the WB.

[manning]

Eeysor2u - I have been in the business world for 32 years and employed by one of the biggest. I have seen the losers bring the conglomerates down more times than not. You reach a point that you have to get rid of the losers to survive. One of the biggest problems is that it is not reconized in time to dump the losers until it is too late.

At ALL cost, you protect your money maker in order to survive, and the theme parks are the money makers. The simple fact is when you run them into the ground, nothing is left. Nothing!!!

In my opinion you make the cuts in all areas EXCEPT the theme parks. If it means getting rid of ABC, so be it. Get rid of it!!!

Being involved in all aspects of the entertainment isn't necessary. It's spreading yourself too thin. There is a point when you get too big and Disney has reached that point.

[Eeyore2U]

Being involved in all aspects of the entertainment isn't necessary. It's spreading yourself too thin. There is a point when you get too big and Disney has reached that point

If ABC ends up with 2 or 3 shows in the top 10 this will be a moot point.

That is just it...it was not a loser until they took it over. I'm hoping they did not take it over with the mindset of running it into the ground to compete with the WB.

I'm sure they didn't.

[DVC-Landbaron]

Here goes. Knowing this board all to well, i'm sure the answers won't suffice.Hmmm. I’m not quite sure what this means. Anyone? Anyone? (Ferris?)Hmmmmm. How many large companies have you run?Would you mind if I added one small word to the end of your question? (He cups his hand to his ear and listens as hard as he can.) I’ll take the silence I am experiencing as an assent. Therefore, I hereby add the word “well”. And my answer would be, “As many as Ei$ner!!”Not at all, Mr Baron. I don't think those with axes to grind can make clear judgements. Should I assume that you mean all the good people on this board that are not in car #1, or just me in particular?I think that it takes time to realize a job well done or poorly done. Geeze! How much time do you think we’ll need? Until the stock reaches $14.00 a share? How about $10.00 a share? If ABC ends up with 2 or 3 shows in the top 10 this will be a moot point.Don’t you think that’s a pretty big IF?

[manning]

Eeysor2u - reread my post. You protect your cash first. ABC was in trouble when it was sold and it is in trouble now. The big play isn't in free tv anymore. They have tried to call the shots in cable, but the cable operators wheren't keen on that approach. Oh, and how about the fiasco over at ABC when they tried to get Letterman.

And another thing, when they start to look in all the corners to cut, start to get nervous. People don't work too well when they are constantly looking over there shoulders. In fact, the good ones say "enough with this" and are the first to leave. Been there, seen that and done that.

[Another Voice]

Hours:

From Mr. Show – “It is a fact that people are booking their vacations weeks in advance instead of the months in advance that used to be the case. The constantly fluctuating park hours are a reflection of this.”

Actually no, the fluctuation in the hours is a very recent feature. Summer closings for the Magic Kingdom and Disneyland at 11pm and Midnight have been a feature since the 1970s. In the eighties Disneyland would have 1am closings in the summer (I still have bloodshot eyes to prove it). Epcot was open until at least 9pm since the early eighties. I even remember midnight closings of World Showcase (that much more time for beer runs).

And the lead time on planning vacations just corporate spin. No one books a hotel room for Disneyland yet the company can gage attendance pretty well. And in Florida hotel bookings are just one of the factors that go into the attendance projections. Big conventions or discounts at major hotel chains can swamp out the trends that Disney is seeing on its own property. And the current downturn is nothing compared to past recessions or the Gulf War or the Gas Crisis. Somehow the company went through those without playing “What’s Today’s Operating Hours” with the guest.


Park Financials –

Imagine if the parks were run as a normal business and all the extra money went back into them instead of out to California. Imagine all the investments that could be made in the parks. Imagine all the debates about half day parks suddenly went away. Imagine if the parks still provided perks provided to resort guests. Imagine everyone whisked around property in a state-of-the-art transportation system that’s a model for cities throughout the world. Imagine all those happy on-property resorts guests eagerly spending more and more money at such a wonderful place. And Disney would still be pulling a b*ttload of money out the place each and every day.

But that’s not happening. We’re getting shorter hours, closed attractions, half completed parks and more busses than bingo night in Atlantic City because someone thought it be a great idea to rerun ‘Who’s Line Is It Anyway” fourteen times a week.

All businesses need investment to survive and entertainments demand even more – “new” is the strongest attraction any theme park can offer. WDW has fallen behind on the refreshing its offerings and is now cutting into what remains. That is not the way to make a business succeed in the long term.

[Bstanley]

{Doing my best John Wayne imitation from Big Jake}

"Nope, I'm not going to do it. I'm not going to get involved, it's none of my business...Oh, now why did they have to kick the boy... DOG! Let's go..."


Point #1:

The PERCENTAGE of total Disney corporate profit provided by the 'Parks & Resorts' (P&R) segment has NO direct linkage to the actual $ profits of the P&R segment and further has no direct linkage to actual park expenses. What!? Please follow-on:

Example Year 1:
P&R had a Gross of $10, Net of $2
Broadcasting had a Gross of $10, Net of $2
P&R is 50% of corporate profits.

Example Year 2:
P&R had a Gross of $10, Net of $2
Broadcasting had a Gross of $10, Net of $0
P&R is 100% of corporate profits!! They ripped the wallet right out of my hand at the parks to pay for broadcasting right? Nope, the P&R segment Net is identical and they still spent the same amount of money on operating/maintaining/etc the parks.

Point #2:

The P&R segment has made approximately the same NET profit of 20-23% each year for the last ten years (I don't have data for earlier years). So what? Well it indicates that for at least the last ten years anyway there has NOT been some great sea change in corporate direction mandating a "squeezing of the parks" for additional profits.

Point #3:

The P&R segment has averaged spending MORE THAN 100% of NET profit on Capital Expenditures for the last ten years (ditto data). That's right, over the last ten years for every dollar in NET profit there has been a matching dollar of Cap. Ex. Speaking personally if I were a corporate raider I would have taken a bunch of that $11B and used it to buy me another Gulfstream IV, or another network or something instead of plowing it back into the parks. Shoot - I could have doubled the profit of the segment!

Conclusion:

You may not like all the ways the Cap. Ex. money was spent over the last ten years -> AK, DCA, hotels, cruise ships, new parades, fireworks, attractions, etc, blah blah blah.

In fact - You may be abso-posi-lutely convinced that a trained seal could have done a better job with the Cap. Ex. money, but the reality is that the same % of P&R income HAS been reinvested into the P&R segment year after year for the last ten years and HAS NOT been going to pay for new shows on ABC or carpet at Cap Cities headquarters...

[Another Voice]

Again, since 1997 when Cap Cities became part of the company –

Point One

You are technically correct that the percentages do not indicate the absolute dollar value. It is a illustration that The Company is now much more dependent on the Parks for its profit than before. As all the other divisions tank, the Parks are left to pick up the load of supporting Eisner’s stock options.

And in fact, the profits from the Parks have almost double in dollars since the ABC era:

Operating Income by Business Unit:

Parks and Resorts:
1997: $1.136 billion
1998: $1.287 billion
1999: $1.992 billion
2000: $2.197 billion
2001: $2.190 billion
Total $8.802 billion

For comparison, the profits from Studio/Consumer Products fell from $1.882 billion in 1997 down to $0.798 billion in 2001.

Point Two

I’m sorry, but according to Disney’s annual reports the margins on the parks (measured by taking the operating income and dividing it by revenue) have increased from 22.7% in 1997 to 31.3% in 2001. The biggest jump occurred from 1998 (23.3%) to 1999 (32.4%) which happens to be when most of the significant cost cuts started. In comparison, the Studio’s margin fell from 17.2% at the start down to today’s 9.2%. Media has stayed right at 20% during the entire period.

The parks had to get better at changing a dollar taken into a profit because the other areas of the company either haven’t improved or they have actually gotten a lot worse at it over time. While the Parks’ profit almost doubled, their revenue in 2001 revenue was only 40% higher than in 1997. The majority of the profit increase came from lower operating expenses.


Point Three:

Since 1997 the Parks have brought in $8.8 billion dollars in net profits. Unless you want to claim that the Big Hat at the Studios is made out of gold, where did all that money go? Even with the giant projects of the last ten years – Animal Kingdom at $0.8 billion, California Adventure at $1.2 billion, the cruise ships at $0.3 billion each, the Disney/MGM studios at $0.5 billion on opening day, ‘Tower of Terror’ and ‘Indiana Jones’ at $0.1 billion each we seem to be way in the hole. Of course as we are all finding out these days “capital” can be used for a whole lot of things beside expanding a company’s asset base.

The squeeze is a recent trend. Most of the capital for the initial expansion came from ‘The Lion King’ and other company successes. And even that captial is factured out of the Parks' Operating Income number through the amortization expense. Without profits from the other areas, the parks are left to refill the pot. Unless all those profits from ‘Bubble Boy’ actually provided the cash for Fox Family...



Conclusion –

Over the last five years, the operating income from Parks has doubled to offset declines in other divisions. The first problem was the steep decline in Studio and Stores. After the ‘The Lion King’, hits became rarer and further spaced apart. And costs at the Studio increased as they chassed bigger and bigger movies. To add to the troubles, there were no hits to bring people into The Disney Stores. They too stagnated and sank.

Today’s problem is caused by the slippage in Broadcasting. Profits in 2000 were $2.154 in 2000 and slid down to $1.934 in 2001. But these numbers do not reflect the disastrous 2001/2002 season at ABC which will show a steep drop in the 2002 numbers. Since Disney is a quarter to quarter company – Parks have been tapped once again to make up the difference.

Disney has to show earnings growth quarter to quarter to quarter. Disney the last five years has been all about its stock price. As the other areas of the company have faltered – first the Studios and now ABC – they have been forced to rely more and more on the Parks to make up the difference.


Personal Note: Each and every time some cut has been made at WDW it has been justified as “Disney is a business” on these boards. And they’re right. What I find interesting is that everyone gets squeamish when they truly have to confront that fact.

The simple fact of the matter is that you don’t get Beastly Kingdom because the movies stink and you don’t get early entry because they can’t find a decent show to put on ABC.

Disney is a business.

[Bstanley]

Point 1:

I'm seeing an anomaly AV - are your numbers right or mine?

Here are the numbers that I used. They are from the 2001 Annual Report .PDF file - page 74 "Note 11. Segment operating income, Parks and Resorts":

1997: $1.136 billion
1998: $1.287 billion
1999: $1.494 billion
2000: $1.615 billion
2001: $1.586 billion

Was there an accounting change or something?

And yes - the other operating segments numbers are in the tank compared to P&R. But if the above numbers are correct the corporation hasn't been 'skimming' money off the parks - well any more than the average of the last ten years anyway - just the 'normal' 20-23%.

Point 2:

I'll wait until we figure out the 'numbers' situation before I respond. If I've got the wrong numbers it's a waste of electrons to answer.

Point 3:

Well - partly it's that numbers thing again - 'my' numbers show just over $7B in NET, not almost $9B - but there are things you haven't included as well: AKL, PC, other resorts that were 'updated', the 'infrastructure' for the ships (leasing Castaway Cay for example), changes at DTD, etc. Oh, also the costs for The Grand California hotel and DTD-West (or whatever it's proper name is).

Conclusion:

Help me with the numbers please - I may have to agree with you ...

[hopemax]

The $1.2 Billion AV listed for DCA includes the cost of DD and the Grand Californian. It was $1.2 Billion for the DL resort expansion project.

[Another Voice]

Even though it’s probably unfashionable these days, I was using the “as reported” EBITDA numbers lower down on page 54. Those numbers strip out a lot of the corporate overhead, allocations, and other fun & games. It gives a clearer picture of the segments operating results as opposed to the strictly financial/accounting results. I don’t think taking write-downs for the Angels or amortization of corporate executive stock options should really count against the Parks even though that’s where the accounting ends up. And Disney REALLY knows how to do some interesting tricks with spreadsheets.

If we use your numbers, Mr. Bstanley, then the park’s margin has remained steady at around 22%. But even here you can see a trend. Look at the money that “goes missing” between the two numbers, that ratio has increased over the last three years: from 25% of the 1999 results up 28% in 2001. Interest rates have not gone up, neither have income taxes. That really leaves depreciation, amortization and allocations as the only major factors – and they all work really well as mechanisms to move cash from the parks to Corporate. Interesting is it not? As an auditor, wouldn't someone wonder why all these cost cuttings and price increases seem to have no result on the margins?

The numbers are hardly perfect, but it’s the best information that’s available and they do show a definite trend.

On the other expansions, I’ve heard rumors that Animal Kingdom Lodge cost about $0.3 billion (it was on the high end), but the three All Stars and Pop Century cost under $0.1 each (they really are inexpensive boxes with some orientation). Building costs in Florida are tremendously cheap and it helps that Disney sets their own building codes. I’ve also heard that most of the Westside expansion was paid by the tenants with little outlays by Disney itself. The Vacation Club properties have their own financing and are paid for up front by the initial purchases (that’s why time shares are such a booming business). It’s rumored that the California Adventure park cost $0.75 billion, the remainder is the cost of the hotel, Downtown Disney, renovations to the other hotels, and infrastructure upgrades to support and parking.

Whether you want to use $7 billion or $9 billion I think the recent investments in the parks still falls short of a complete reinvestment of earnings back into the parks.

[Bstanley]

Hmm interesting, I hadn't considered EBITDA vs NET - although it makes sense that the parks would get hit harder than the other segments on depreciation.

I'll give the boys the benefit of the doubt (there's that Pixie dust again...) for the moment and say that the $600M in depreciation the last couple of years was caused by the writing down of AK/DCA and the accountants were just trying to save some tax dollars... but if they wanted to shuffle some money around it IS a really big bucket...and well, accounting machinations are certainly all the rage these days...

[larworth]

Disney has been pretty open with the street about their cost cutting efforts for many years now. Hard to imagine there was that much fat in the organization they could take out all these costs with no affect at all on their value proposition(??)

Divisional cash flow results are interesting. If I look at the financial statements I too see a division that has generated no real positive cash flow for over a decade. However, here is a recent quote from an interview with T. Staggs Q. What about long-term growth at Disney? A. (Staggs) We’re not making specific growth projections, and I’m not sure it’s a good practice to do that anyway. The theme parks REMAIN a HUGE contributor to cash flow. Our cable networks… It would be interesting to try to match up the investments we can identify against the reported capital investment each year. Wonder if we could get some reasonable picture of the baseline infrastructure investment.