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mjstaceyuofm
09-13-2002, 02:59 PM
Yet another article (http://www.marketwatch.com/news/story.asp?siteid=yhoo&guid=%7BDC2C3168%2D0731%2D4457%2D9935%2D8DE02209CB E8%7D&) from CBS MarketWatch.com about the financials of Disney. One particular passage has me intrigued:...Disney needs to key in on turning around ABC because it is somewhat powerless to correct problems at its theme parks. The crippled economy, along with a slide in air travel, has killed business for its centerpiece Disney World theme park in Florida....OK - so it appears that Wall Street has bought into the "woe is me/terrorist/downturn in economy" excuse for park attendance. What I want to know is since when has WDW had to be packed to the gills to be profitable?

Yes, I know referring to the past (and how things used to be at WDW) can be a dangerous game on these boards with you clever posters, but as I recall from experiences in the 80's and 90's in the parks, they never seemed to be so packed that they were totally unmaneuverable and things financially seemed to be fine back then. How does a 6-10% drop in attendance produce such catastrophic results in today's market?

OnWithTheShow
09-13-2002, 05:12 PM
It doesnt.

HB2K
09-13-2002, 07:30 PM
It doesnt.
No it doesn't....a horrible business plan, horrible aquisitions, a stubornness to get back to basics, a general disregard for it's customers...

Yeah those are the things that bring the catastrophies.

Planogirl
09-13-2002, 10:00 PM
A line later in the same article states:

The park relies heavily on air travel for business. Consensus is that until conditions improve, Disney can't do much more to help that situation.

After all if little can be done to lure all of those supposedly-missing travellers, why not cut services in order to cut costs? There's nothing Disney can do about it.

Phooey. :mad:

Pig Pen
09-14-2002, 07:54 AM
Hey, we are DRIVING there from Vermont!

Maybe a park mid-way (say Virginia?) would help matters. HA.

treesinger
09-14-2002, 09:13 AM
But there's also another factor. If Disney wasn't careful with their profits, they could put themselves in dire trouble should attendance slump even a little bit. But it still makes it their fault.

johare
09-14-2002, 10:27 AM
Disney's not powerless to increase attendance...they just need to pay attention to what some of the better parks in Orlando have done...

For only $50 each, I bought SeaWorld Bronze passes which are good until the end of the year. Great savings and a great way to attract customers.

For only $99 each I renewed 4 annual passes to Island's of Adventure/Universal Studios. If I wanted to spend $159 per ticket I could get 2 year passes, as could anyone...not just renewals. Another great deal and great way to get people into the parks.

Disney?!? Lets see. No special offers. Actually INCREASED price of Play-4-Days passes to $109 which only lets a person visit the parks 4 times during a few month period. Great...I'm sure people are lining up to get back into WDW.

While other parks are doing what it takes to bring in customers to help cover costs, Disney is raising prices and then when nobody comes they cut services.

Tara8595
09-16-2002, 03:16 PM
In talking with co-workers and friends, I've become aware that Disney really may be powerless to correct their tourist slump. What I'm hearing is that many think that Disney World is a terrorist target, and they don't want to be near something that is an obvious target. Their very popularity is keeping frightened 9-11 shell-shocked citizens from going there. Couple this with a large segment of the population who are still scared to fly and that means disaster for WDW, and really, there's not a thing they can do about it.

Oh, and as an aside - that 6-10% attendance slump is really more like a 30% decrease according to an earlier press-release that I read around mid-August.

So... what can you do if the *real* reason people aren't going is because they're afraid they'll get killed? I think it's just like the article said, focus business elsewhere and let time take care of the rest while just trying to maintain operations. I hope ABC has a great year.

raidermatt
09-16-2002, 05:09 PM
Tara, certainly a portion of the slump is due to the economy and fear of terrorist attacks.

However, there are indications that other resort destinations are recovering faster than WDW.

Also, there is no question that WDW has made significant cuts in various areas, most noticeably hours and nightime entertainment.

One can argue the merit of such cuts, however, there is no denying the cuts have been made.

Therefore its at least a possibility that guest reaction to the cuts of the last 4-5 years is one of the reasons WDW is finding a recovery to be slower than expected. Disney does seem to at least be considering this possibility as well, hence the upcoming experiments with hours and nightime entertainment.

luvindisneyworld
09-16-2002, 08:22 PM
i have been to disney several times in years past, but we were there in april and it did not look like a decrease to me, the parks were so full they had to close them down,and only letting the ones taking the disney busses into the parks, and the same went for the water parks, they closed them down by 10am to everyone but the people coming in on busses, i myself dont see that there is too much of a decrease in attendance, but there may be if they keep raising the prices of the tickets, i can say that i think that is totally ridiculous, we are dvc owners and if the prices keep going up on tickets i will use my points at the other off-site resorts.
misty

Buschfan
09-16-2002, 08:53 PM
You took the words right out of my mouth johare! Disney needs to discount like the other Florida parks to attract more visitors. They are ignoring what is going on around them at Universal and the Busch parks and not responding. They can't continue to blame the economy when the other parks are showing an increase in attendance. The latest price increase at Disney is just another blow to to them. It is amazing to me how Disney is willing to accept lower attendance without responding to market conditions. That's why we have annual passes to Universal and the Busch parks because they have chosen to make their parks affordable to the local market.

Luckymommyx2
09-17-2002, 06:48 AM
I guess I just don't understand those that complain about the lack of service, cut-backs, increased ticket prices, etc. but still go back to the parks every month?? We were thinking of extending our DCL vacation next year by spending a few days at the parks but I just can't justify it. Hopefully the DCL will not follow suit with what's been happening in the parks! :rolleyes:

d-r
09-17-2002, 08:46 AM
Originally posted by johare
Disney's not powerless to increase attendance...they just need to pay attention to what some of the better parks in Orlando have done...

For only $50 each, I bought SeaWorld Bronze passes which are good until the end of the year. Great savings and a great way to attract customers.

For only $99 each I renewed 4 annual passes to Island's of Adventure/Universal Studios. If I wanted to spend $159 per ticket I could get 2 year passes, as could anyone...not just renewals. Another great deal and great way to get people into the parks.

Disney?!? Lets see. No special offers. Actually INCREASED price of Play-4-Days passes to $109 which only lets a person visit the parks 4 times during a few month period. Great...I'm sure people are lining up to get back into WDW.

While other parks are doing what it takes to bring in customers to help cover costs, Disney is raising prices and then when nobody comes they cut services.

Johare, come on now. You can get a florida resident seasonal pass to walt disney world for about $160 - it has more black out dates than the universal pass does, but it has two more parks, too, and they stay open later in the off season. So, the special $99 rate at universal is about $50 per park, with two parks, sea world, one park $50 (until the end of the year, right), the $160 at wdw is about $40 per park for four parks.

Universal and sea world raised their one day ticket prices to about $50 MONTHS ago, disney only recently raised their one day tickets to the same price.

d-r
09-17-2002, 08:55 AM
You know, this year there has been some of the best discounts ever on Disney resorts - values from $49, moderates from $70, deluxe from $119. These aren't just to limited audiences like AP holders either - these are widely advertised and avialable to anyone.

Even with those sort of rates, with carribean beach closed and two sections of the mansions closed at dixie landings, there are still rooms available at the moderates. Those with reservations at cbr were offered AKL or Polly for $99 a night, shades of green is closed and people are staying at contemporary for shades of green prices, and the disney institute is closed, yet there are still rooms available at the deluxes. Over labor day weekend our plan schedule changed on Friday night and we were able to add THAT very night at dixie landings for the $79 rate.

Off property, I continue to read and hear about rooms under $20 per night.

mjstaceyuofm
09-17-2002, 09:16 AM
Originally posted by d-r
You know, this year there has been some of the best discounts ever on Disney resorts - values from $49, moderates from $70, deluxe from $119. These aren't just to limited audiences like AP holders either - these are widely advertised and avialable to anyone.

Even with those sort of rates, with carribean beach closed and two sections of the mansions closed at dixie landings, there are still rooms available at the moderates. Those with reservations at cbr were offered AKL or Polly for $99 a night, shades of green is closed and people are staying at contemporary for shades of green prices, and the disney institute is closed, yet there are still rooms available at the deluxes. Over labor day weekend our plan schedule changed on Friday night and we were able to add THAT very night at dixie landings for the $79 rate.

Off property, I continue to read and hear about rooms under $20 per night. So what does all this tell us? Maybe that Disney has too many rooms! Or at least too many rooms relative to the amount of capital spent on the parks. I simply refuse to fall into the Clintonesque "it's the economy stupid" blame-game. HB2K had it right. Just plain 'ole bad business.

d-r
09-17-2002, 09:38 AM
Yes, Disney clearly has too many rooms for the demand right now, I think you are absolutely correct in your insight.

DR

Tara8595
09-17-2002, 11:07 AM
"Tara, certainly a portion of the slump is due to the economy and fear of terrorist attacks.

However, there are indications that other resort destinations are recovering faster than WDW." - Raidermatt


I think you're missing the point of what I said. I'm pointing out the fact that many people are scared to go to Disney World because it is an obvious and noted terrorist target. They are not scared to go other places because they are NOT terrorist targets, or not considered to be targets by them or others. The result of this is that other resorts gain guests and WDW does not, simply because guests who may be scared to go to Disney choose to go to other parks which aren't as risky in their opinion.

So the point I was making was that you can't really do anything to persuade people that Disney is as safe as other theme park type resorts, when to them it is an obvious target and far more so because of its 'Happiest place on Earth' theme.

mjstaceyuofm
09-17-2002, 11:12 AM
Yes, Disney clearly has too many rooms for the demand right now, I think you are absolutely correct in your insight.Being the person that I am with not the best people/email/posting skills, I'd say that there was a bit of sarcasm there. ;) Yeah I'd say it's well deserved on my part as my remark was a fairly simplistic one to a more complex problem. Ok, enough of my buffoonery....

Just bad business? Was it bad business back in 2000 when the rooms were full without the hugely discounted prices? Or is it just bad business that Disney couldn't predict the future?How about bad business planning? Could they possibly have thought that they would be able to keep the parks that full without adding anything new/innovative to see? Yes the Millenium Celebration was a nice affair and it was just another reason to go and visit WDW on top of a newly opened park (AK being around 1 1/2 years old at the time), and a few new attractions, but once you did that, did you need to come back the next year? The year after that? They did nothing (or very little) to insure return visits.

I guess I'd like to go back to my original question about when WDW had to be overflowing at the gills to be profitable. Let me put my question in context a bit more: forget ABC, forget DCA, forget go.com, forget the lack of animation features and get right to WDW. Theme parks is a business unit of Disney. WDW is a business unit of Theme parks. WDW is comprised of many other business units - the parks, the hotels, the DVC, DD, etc. Is it that the number of hotel rooms got so out of balance in how they contribute to WDW's bottom line that the occupancy of these has to be at such a high level to make WDW a profit? Or, in reference to my experience in the 80's/90's - the number of hotel rooms on property was lower so the attendance of the park(s) played a bigger factor in the overall WDW bottom line. Add more rooms and less parks and things get out of whack.


OK, OK - I've kind of gone off on a tanget from where this thread orginally started as I'm not the most coherent writer. Am I making any sense to anyone? :crazy:

Walt's Frozen Head
09-17-2002, 11:25 AM
So the point I was making was that you can't really do anything to persuade people that Disney is as safe as other theme park type resorts, when to them it is an obvious target and far more so because of its 'Happiest place on Earth' theme. I guess Disney's alienating guests and undermining the value of their own products is really part of their secret plan to keep US citizens safe from terrorists, then?

From my forthcoming book, "Everything I really needed to know I learned watching _The Big Chill_:"

William Hurt: "Why is that what you just said sounds like a massive rationalization?"
Jeff Goldblum: "Don't knock rationalization, it's more important than sex."
William Hurt: "Come on, nothing's more important than sex."
Jeff Goldblum: "Yeah? You ever gone a week without a rationalization?"

-WFH

d-r
09-17-2002, 11:31 AM
Originally posted by mjstaceyuofm
Being the person that I am with not the best people/email/posting skills, I'd say that there was a bit of sarcasm there. ;) Yeah I'd say it's well deserved on my part as my remark was a fairly simplistic one to a more complex problem. Ok, enough of my buffoonery....


No Matt, not sarcasm exactly, and absolutely not mean spiritedness, just agreeing with you on the obvious - you are bringing up some good questions and thikning about the complex issues, but I think we will only know what the answers are based on what happens in the future. I am pretty sure that if Disney knew how to increase attendance and make more money that they would do it, and I think they are trying, and I think that they are working hard to give guests a good experience.

DR

Buschfan
09-17-2002, 09:04 PM
D-R, you are right that the other Orlando parks increased prices first. However, all of them are offering at least a $10 discount off admission with promotions through AAA and other coupons. Disney is the only park that is not discounting 1-day passes making their admission price higher than the competition. I stand by my statement that Disney is ignoring the discounts the other parks are offering on 1 day and season passes. They will continue to lose guests to other parks as a result. Disney can cut prices on hotels all they want, but it is not going to help their park attendance that much. The local market is helping the other parks get through these tough economic times and this demographic has little need to stay onsite even at reduced rates.

You make a good point about the price per park with a Florida resident rate. We would only like admission to Epcot and MGM on an annual basis. However, Disney only offers a pass to all 4 parks. Busch prices passes based on the parks you want to go to. You can just buy a pass to Sea World, not Busch Gardens and Adventure Island if you wish. Disney also needs to offer more season pass options to be competitive.

raidermatt
09-17-2002, 09:44 PM
I think you're missing the point of what I said. I'm pointing out the fact that many people are scared to go to Disney World because it is an obvious and noted terrorist target.

No, not really, I was just bringing things up that have been reported and are starting to be substantiated.

I realize you have some anecdotal experience with people who claim they are only avoiding WDW because of fear over terrorism, but WDW is not the only potential terrorist target in the country, and there is little indication that this fear regarding WDW itself is the cause for very many people. After all, these are the same people that would also be avoiding travelling to places like Los Angeles and San Francisco, yet California is reporting that overall tourism is up this year over last.

PKS44
09-17-2002, 09:49 PM
I actually think Disney is wise to not get into the discounting tickets game...it is a slippery slope---the problem is not that ticket prices are too high, it is that what they are offering for that price is too little......one way to distinguish yourself in a market can be by price--that is never the way Disney succeeded in the past- they distinguished themselves by offering a superior quality---their problems have come from trying to continue charging superior quality prices without making much of an effort to provide superior quality experiences...If their new business model is to compete on price, the kinds of profits they enjoyed in the past will never be seen again...they will be operating in a land of narrow margins and fierce competition...but the parks are currently run by a retailer who seems to feel more comfortable with that kind of business model...Disney can be the Nordstrom's of vacations or the Wal-mart...they cannot be both.

Baileymouse
09-18-2002, 08:56 AM
Maybe one of the reasons that the on-site hotels are under utilized is that Disney sold so many people on the DVC. The people who always stayed on-site were the target customers for the DVC (like my family).

In the NYC area we haven't seen a huge decrease in the amount of air travel to FLA. I had better air rates before 9/11 - 118.75 r/t on Delta - than I do now. We're going down in Nov. for the traditional "Jersey Week" when kids are off from school and we couldn't book out of Newark even months in advance. Instead, we're trekking to Laguardia.
Downturn? What downturn?

mjstaceyuofm
09-18-2002, 09:20 AM
Downturn? What downturn?Kind of what I'm thinking. To the lay-person who doesn't follow the industry and visit every month and keep track of things, a 6-10% drop in attendance probably isn't that noticeable. Now I haven't been to WDW since 9/11, but every time before that the flights I've taken have been packed to Orlando (flying from Detroit Metro). The parks also seem to have attendance patterns similar to what's been documented (i.e. seasonal/holiday attendance). So people are flying to Orlando and by all means the parks have decent attendance, just not setting records every year.

I'm starting to convince myself that it's not the parks attendance, but the hotel occupancy rates that are causing the problems. If you can stay for $25 a night just outside DTD off-site, why stay on-site for significantly more. There's absolutely no significant perks for on-site guests anymore other than being a few minute closer to the parks (which actually can be a big deal if you visit off-season when things shut down early).

d-r
09-18-2002, 10:41 AM
Just my opionion on one thing, I think I've flown 5 or 6 times since 9/11 last year. The flights have usually been full. But the thing is, there are fewer flights than there were before. I've had the experience a couple of times of having flight times shifted quite a bit, because two flights on the previous schedule were combined into one on the new schedule. I don't know the figures about this or if it still continues, but my impression is that there are fewer flights now than before. Could be wrong.

DR

mjstaceyuofm
09-18-2002, 10:57 AM
No, I can believe what you are saying about the flights. My observations are purely unscientific. ;)

Bstanley
09-18-2002, 11:00 AM
There are really two seperate issues here.

First - the actual drop in the # visitors to Orlando is real.

If you go to the MCO (Orlando International AIrport) website you can see the statistics for # of travelers. Comparing month to month 2002 to 2001 there was a 20% drop in domestic travelers (30% international) in January and it's been improving so that in July (the last month where they show data) it was only 10% lower (20% international).

It's also interesting to note that the number of domestic travelers in 2001 was down from 2000 (about 5% - 10% depending on the month). So basically for every 100 people who visited Orlando in July 2000 only ~ 90 visited in 2001, and only ~ 80 visited in 2002.

Second - have the various cutbacks at WDW been the reason that people have chosen not to visit WDW?, or is it a general 'fear of flying'?, or is it the economy?, or etc. etc.

My personal opinion is that it's mostly the economy or a generalized reluctance to travel. I say that because most people who are going to WDW don't really investigate what's going on to decide whether to go or not. When people come to ask me questions about visiting WDW they never ask about the hours, or how many shows there are, or any of the things that we Disney 'fanatics' are so aware of. It's basic questions about crowds, costs, and timing.

johare
09-19-2002, 01:25 PM
Johare, come on now. You can get a florida resident seasonal pass to walt disney world for about $160 - it has more black out dates than the universal pass does, but it has two more parks, too, and they stay open later in the off season. So, the special $99 rate at universal is about $50 per park, with two parks, sea world, one park $50 (until the end of the year, right), the $160 at wdw is about $40 per park for four parks

A Florida resident seasonal pass for WDW with blackout dates is $189. My USF/IOA annuals with NO blackout dates were $99. Could have gotten 2 years with no blackout dates for $159. That comes out to 71 cents per day for Disney and 27 cents per day for USF/IOA...22 cents per day if you go for the 2 year pass.
On top of that you get free parking at USF/IOA.

The point is though that compared to last year the other parks are trying to attract customers with deals and special offers. Not only is Disney NOT doing that, they actually increased the price of the Play 4 Days pass by 10%. That move cost them $400 from me.

raidermatt
09-19-2002, 01:57 PM
The first instinct in these kinds of problems is to lower price. And its usually a mistake in the long term. This is one area where Disney is doing the right thing by keeping long term pricing in mind, rather than slashing prices to get people in the parks now with reduced margins.

mjstaceyuofm, airlines generally don't like to have flights, especially long distance ones, that aren't full or close to it. So they cancel flights if they are not full, keeping the plane you are on full.

Bstanley- You're right about most guests not knowing all of the details about hours, showtimes, etc. But, they do know what their last experience was like. And since cuts have been fairly steady (with a steep acceleration over the last year), for about 4 years now, it follows that those who visit WDW every 3 years, for example, would be just a tad less likely to visit now.

Certainly the Disney fanatics also have some impact...

I do agree however, that the economy/reluctance to fly is a very significant factor. However, this problem is exposing WDW's other self-inflicted problems. In challenging environments, the only companies that do well are strong, well-focused, and understand their product and what their customers truly want. Disney has lost some of that understanding, hence their decision to cut things that some guests consider critical to their Disney experience. The guest may not figure out that hours are 10% shorter than last time, but they will notice that they only get to be in MK at night once during their stay, or they only get one shot to see FITS and Spectro... And they will get the sense that it "just wasn't as good as the last trip...)

Bstanley
09-19-2002, 04:30 PM
Mr. Matt, it is certainly a good question.

What is the long term impact of the cutbacks on the average 'tourist' visiting WDW this year? People go down to Disney on their once in three year WDW vacation and come back thinking - what? -> "You know WDW just isn't that much different than <fill in the blank> anymore" and maybe they decide to not come back for 5 years instead of 3...

Or when the economy picks up - do they forget/forgive and come back in 3 years anyway?

It may take several years to see the real impact.

tstobb
09-21-2002, 07:18 AM
As a "regular" WDW visitor (3 hr drive), it seems to me that the reasons for lower attendance are not only because less people are travelling, the cut back in hours, the cutback in services, but also the cutback in SERVICE! 5 years ago, you could ask any cast member working at the MK what time the fireworks at Epcot were and they HAD to know the answer - now, more often than not, you get a blank stare or the wrong information. Case in point - we were recently at Epcot for 1 day following a 7 day DCL cruise (COMPLETELY different experience (read great) from the parks!) and I was looking for an ATM (park map isn't clear AND is wrong) and asked at guest services & got a wrong answer (sorry, that is a disabled telephone, NOT an ATM). Finally decided to return my stroller & use the ATM just outside the gate (that I knew was there) and the stroller attendant gave detailed, correct directions to the closest ATM (behind DVC booth).
Point being that the level of training of cast members has declined greatly (starting way before 9/11) and this is the main reason we're going back less & less.

montessori
09-21-2002, 08:57 AM
quote:
In talking with co-workers and friends, I've become aware that Disney really may be powerless to correct their tourist slump. What I'm hearing is that many think that Disney World is a terrorist target, and they don't want to be near something that is an obvious target.

This comes as a surprise to me. I haven't heard anyone express concern about a terrorist attack at DW and I talk to lots of people who vacation there.

Many of you have posted excellent theories about Disney's financial status and business operations. I won't pretend to be as astute in these matters.

I try to visit DW every other month or so. I feel a little depressed when I know I am not going there within the next few weeks! Sad, but true. That said, I am disappointed in some of the cutbacks. I definately see a difference in the CM's and I agree that the MK should never close before dark (even though we hardly go there anymore). I think maybe I am in car #2 now, not sure though.

I live 3 hours away from DW. I own a pre-school. I help plan many Disney vacations for young families who don't know about all this stuff. Each and every family has a magical vacation and begins saving and planning for the next one as soon as they return home.
Maybe we know too much, we dissect and pick apart every little thing about Disney World. I'm going to fight it though, I want to wear my rose-colored glasses for a while longer!

NotUrsula
09-27-2002, 04:06 PM
I can think of several factors which are adversely influencing attendance right now:

1. News has been slow lately, so all of the networks are playing the hurricane season hype for all it's worth. They are giving the impression that the entire southeast quadrant of the US is under several feet of water. I even heard an NPR show host out of NYC tell a phoned-in panelist that "it must be really awful in Orlando right now with the hurricane." The panelist pointed out that the weather was perfectly sunny.

2. WDW ticket prices are high. This is not unusual, of course, but the economy is tanking at the moment, and someone in fear of his/her job is not going to blithely sink $1000 into theme park tickets for a family of 5. How to get around that? Packages. Discount the h*** out of limited expiration passes in low season with a minimum onsite stay. People buy packages on impulse if they think they are getting a good deal.

3. The killing of EE was a death-blow to off-season onsite bookings. So far, the resurrection has not been trumpeted nearly enough. Start inviting in the radio DJ's to do onsite stints; that always has a huge positive response. (If the rooms are empty anyway, why not comp them to radio personalities to get some free airtime?) Throw in a free stay giveaway and the stations will be knocking down the doors to participate. Push atmosphere and dining to older guests who are not that interested in theme parks, but love eating well.

4. Fall and spring airfares to Florida are MUCH higher this year than they have been in past years. Add higher rental car charges and the dampening effect is obvious. I flew from STL to MCO last year on Sept. 19th; my previously-booked airfare was $109 rt. When I looked to book the same general dates this year, the best I could find was $168.

I have not heard anyone say that they are really worried about WDW's chances for a terrorist attack. Personally, I don't think it would be chosen as a target; too many children. Even in the Arab press, deliberate targeting of thousands of young children would not be well-received.

The other thing I think that WDW should be doing right now is heavily discounting big-ticket purchases for DC members and AP holders. These are people who really WANT to spend money with Disney; make it worth their while to keep that card.