Lay Off The Cleaning Lady Pete!!

[cxcelica]

To keep hotel occupancy the same as last year, WDW had to institute a buy 4 get 3 free. Now we have 7 for 4 part 2. Under anyone's definition, that is "lowering prices." WDW just chooses to "lower prices" through what it hopes are temporary incentives rather than overall lower fees.

And at what point, as I think Kevin pointed out, does the "temporary" lowering of prices (buy 4 get 3, "free" DDP) becomes a customer expectation rather than an incentive? I think we have already reached that point with "free" DDP.

But more to the point, even with these incentives WDW has still priced themselves too high because folks are not spending as much while in the theme parks.

True, the Theme Park business may not be losing money (though I'll be quite interested to see the November earnings report) but the market wants to see continued growth over last year's figures. That isn't happening despite 7 for 4 and "free" DDP.

Disney's problem is not increasing occupancy or attendance, they have done that already by lowering resort prices (through the programs you mentioned). The question is how to increase their revenue now. Either they can get rid of the promotions and start charging rack rates for the rooms or they can charge more once they get people in the parks and in the resorts.

You mentioned WDW has still priced themselves too high because folks are not spending as much while in the parks. When they calculate revenue per guest, they include how much was spent on the hotel room. So the lowered resort rate lowers the calculation.

 

[cxcelica]

I guess I dont see the disconnect between what I have posted and what you have posted.

Nowhere have I suggested that Disney has failed.

Disney is offering promotions in virtually every area and at times of the year that are typically the busiest.

My point in all of this is that I see Disney scrambling to fill rooms and to get bodies in the parks while offering less value, less services and raising prices.


In a similar vein, Disney Cruise Line has always let guests know that the lowest prices are available when dates are first released. The bigger the crowd on the ship....the higher the price. This model has had folks lining up to book the very best prices on the day the dates are released.

As DCL releases these incredible promtions, they are doing it for new bookings only. If you were a good customer and booked your dates when DCL first released them, you kinda get the shaft and get stuck paying a much higher price as there is a penalty associated with canceling after a certain date.

The byproduct of this business model is that loyal guests that were normally clamoring for DCL to release dates so that they could book at the lowest prices are waiting longer for DCL to offer price slashing promotions.

Kevin,

I see your points. My question would be this

1. You are running DCL and you always have given the best prices to the loyal customers. Then this depression/recession hits and they come to you and say listen we can't fill these sailings and have to find a new way to attract vacationers on to the boat? How do you do it.

2. Disney is scrambling to fill the rooms. I can agree with that. I think though that on one hand they are cutting services and cutting prices to fill the parks. I would assume that if they choose not to cut services, the prices would have been raised even higher. How do you resolve that issue?

I am not being sarcastic at all in these questions and am interested in your answers. I don't like everything they have done, but I am not sure I could come up with a more feasible plan.

 

[DisneyKevin]

Kevin,

I see your points. My question would be this

1. You are running DCL and you always have given the best prices to the loyal customers. Then this depression/recession hits and they come to you and say listen we can't fill these sailings and have to find a new way to attract vacationers on to the boat? How do you do it.

2. Disney is scrambling to fill the rooms. I can agree with that. I think though that on one hand they are cutting services and cutting prices to fill the parks. I would assume that if they choose not to cut services, the prices would have been raised even higher. How do you resolve that issue?

I am not being sarcastic at all in these questions and am interested in your answers. I don't like everything they have done, but I am not sure I could come up with a more feasible plan.

1. I completely understand the need to fill ships. Your loyal return guests have been trained to book and pay a deposit early. Refusing to allow them to take advantage of a new promtion by charging them a cancellation fee for re-booking at the lower rate is "guest hostile" and tells that loyal return guest that the smarter thing to do is wait and see if DCL releases a great deal.

This achieves two negatives in my opinion. It deprives DCL of the deposit money which is used as operarting capital. It also allows for the guest to "cool off". Leisure travel is a frill and not a necessity. Teaching a guest to rethink their immediate emotional response and to wait for the possibility of a lower price might just help that guest decide to not book at all. Disney takes advantage of the fact that guests become emotionally attached to the idea of travel. This new business model offers the possibility of losing that guest completely.

2. Disney has trained their guests to accept rate increases twice a year. There is a bit of grunbling and moaning, but it passes and we chalk it up to "business"... but even with the rate increases, we always expect that Disney is going to exceed our expectations. We have been taught to expect that. Disney is a good teacher and we are usually very forgiving.

Raising prices and cutting the things we come to expect from Disney has a drastic effect. It not only hits us in the wallet....it hits us in the heart.

I talked about this on a recent podcast. We went to the semi-annual Disney sale in Celebration. They sell Disney stuff at 70% off list price. In my opinion, it's most ly locals buying Christmas presents and people buying stuff to re-sell on Ebay.

If Disney marked some of this stuff at a lower price while it was still in the parks, it would hit a MUCH larger audience already in the Disney mndset and on vacation, where they are expecting to spend money.

Instead of doing this, Disney is "maintaining their brand" and losing the highly coveted "in park" spending.

No one wants to feel that they are getting less and paying more

I believe Disney is being short sighted in re-training their guests to wait for sales.

 

[jcb]

Disney's problem is not increasing occupancy or attendance, they have done that already by lowering resort prices (through the programs you mentioned). The question is how to increase their revenue now.

I generally agree. It is not occupancy or attendance but revenue. For the last two quarters, Disney has (to some degree) attributed lower operating income from theme parks to "decreased guest spending" (which includes revenue from the resorts). I say "generally agree" only because Disney looks at revenue over the long haul rather than "now." That isn't to say that current revenue is unimportant; obviously it is or else we wouldn't be seeing 7 for 4 and the other promotions Kevin mentioned.

Either they can get rid of the promotions and start charging rack rates for the rooms or they can charge more once they get people in the parks and in the resorts.

You mentioned WDW has still priced themselves too high because folks are not spending as much while in the parks. When they calculate revenue per guest, they include how much was spent on the hotel room. So the lowered resort rate lowers the calculation.

This is where we part ways in part. I don't think WDW needs to either "get rid of the promotions" or "charge more" to guests in the park. That wouldn't be economically smart.

There are many things Disney could do besides the two you suggested. We have kicked around a customer loyalty program, not increasing fees, or even (not meaning to be a sycophant to Kevin) provide a better quality product. Disney knows this last point quite well. Just in September, the CFO said (speaking about the entire Disney business): "Even as consumer spending improves, they're going to choose the higher quality, they're going to choose the brands that mean something, and they're going to choose to consume how they would like to." Where I disagree (with the CFO) is that the Theme Parks have done a "good job" of responding to the downturn (from either the POV of the customer or the shareholder). For that I go straight to the top.

I don't doubt revenue per guest includes resort income but when I say WDW prices itself too high resulting in guests spending less in the parks, I was referring to the second quarter statement which said merchandise spending was one of the factors (along with lower room rates and ticket prices) that resulted in "decreased guest spending." If folks are not spending on merchandise even when the room rates and ticket prices "lower" then the prices are still too high for the demand.

 

[dalt01]

I'm just hoping Pete and the team don't feel the need to censor themselves from here on out due to a thread such as this.

i wouldnt worry about it.

 

[lugnut33]

Kevin, first thing is I have mucho for everyone on the podcast crew and think you all do a great great job. Just wanted to get that out of the way.

The original intention of this thread was to call Pete out for using the term "cleaning lady" in a derrogatory (not sure that's the correct word to use in this instance) manor when describing Meg and her job results. I laid out my reasons why I don't think it's fair or right to be calling her that name.

While DU does a great job in promoting Disney (in many ways better than Disney itself) ultimately if things were a disaster at WDW you would be seeing a huge dropoff in clients at DU. DU's success depends heavily on the success of WDW and DCL to bring people in.

 

[lttlmc3]

Okay, I'm part of the "I agree with what Pete's said, but enough with the 'cleaning lady' refrences."
There, I've said my piece.

 

[DisneyKevin]

Kevin, first thing is I have mucho for everyone on the podcast crew and think you all do a great great job. Just wanted to get that out of the way.

The original intention of this thread was to call Pete out for using the term "cleaning lady" in a derrogatory (not sure that's the correct word to use in this instance) manor when describing Meg and her job results. I laid out my reasons why I don't think it's fair or right to be calling her that name.

While DU does a great job in promoting Disney (in many ways better than Disney itself) ultimately if things were a disaster at WDW you would be seeing a huge dropoff in clients at DU. DU's success depends heavily on the success of WDW and DCL to bring people in.

You have made you point several times.

I understood your reasoning for starting the thread but as I've already explained. I have no intention of taking a stand.

Dreams Unlimited Travel sells Disney products. You hypothesis that Dreams Unlimited Travel is doing well so therefore Disney must be doing well doesnt really hold water. One doesnt neccessitate the other. We are not the only purveyors of Disney travel. We could be extraordinarily busy and be the only folks sending guests to Disney. Disney could be dying and Dreams could be thriving.


Also....I have never used the word disaster nor have I alluded to the fact that I feel anything at Disney qualifies as a disaster. If that is what you are getting from what I am posting.....I apologize.

I feel they are short sighted by using their current business model and that they are alienating some folks with higher prices, lower standards and "guest hostile" practices. I've explained my reasons for feeling this way in my previous posts.

 

[dalt01]

And Kevin, if the price was out of line you guys wouldn't be paying it, but you are.

I think you have missed the point.



I explained that we were paying a wildly exorbiatant fee in order to have the party.

he's right, sometimes ya gotta do what ya gotta do, that doesnt mean ya have to like it.

 

[lugnut33]

You have made you point several times.

I understood your reasoning for starting the thread but as I've already explained. I have no intention of taking a stand.

That's fine, I understand that.

Dreams Unlimited Travel sells Disney products. You hypothesis that Dreams Unlimited Travel is doing well so therefore Disney must be doing well doesnt really hold water. One doesnt neccessitate the other. We are not the only purveyors of Disney travel. We could be extraordinarily busy and be the only folks sending guests to Disney. Disney could be dying and Dreams could be thriving.

Yeah, I'm just guessing that Disney is an important part of your business because of the podcast and huge website devoted to Disney. Maybe it's not?

Also....I have never used the word disaster nor have I alluded to the fact that I feel anything at Disney qualifies as a disaster. If that is what you are getting from what I am posting.....I apologize.

No no, I used the word disaster just as a dramatic highlight of how DU would notice it right away. Has DU noticed a huge dropoff in WDW bookings?

I feel they are short sighted by using their current business model and that they are alienating some folks with higher prices, lower standards and "guest hostile" practices. I've explained my reasons for feeling this way in my previous posts.

Your opinion carries a lot of weight since it is your business and I consider you a Disney expert. You are much more in tune with the current state than I am as all I can do is look at the results from the last few quarters and see that WDW is holding up well considering the current economy and how crowded the parks are reported to be.

My responses in red. It's all cool dude.

 

[cxcelica]

I feel they are short sighted by using their current business model and that they are alienating some folks with higher prices, lower standards and "guest hostile" practices. I've explained my reasons for feeling this way in my previous posts.

Thats a fair opinion to have. The only thing I can say is that unfortunately this is not something new. If you were to take a look at the last 5-7 years there have been numerous examples of Disney raising prices and/or cutting services. A search of this site would probably result in Hundreds and Hundreds of threads dealing with an action that Disney has taken which outraged the fan base.

However, right or wrong Disney has yet to place that proverbial straw on the back of the consumer which eventually breaks him or her. Maybe this is it, or maybe they never will....who knows.

These are desperate time for every business. Businesses are doing what they need to do to stay strong or even stay alive. To me it's hard to rip on a executive or any business owner who is running their business during these times. The better time for this debate may be when the economy eventually turns around.

 

[dalt01]

I feel that they are alienating some folks with higher prices

Disney has yet to place that proverbial straw on the back of the consumer which eventually breaks him or her.

its just retail 101 isnt it..........know your price point.........dont exceed it.........if you do, be smart enough to pull it back before any long term damage is done.

 

[WaltD4Me]

Kevin, first thing is I have mucho for everyone on the podcast crew and think you all do a great great job. Just wanted to get that out of the way.

The original intention of this thread was to call Pete out for using the term "cleaning lady" in a derrogatory (not sure that's the correct word to use in this instance) manor when describing Meg and her job results. I laid out my reasons why I don't think it's fair or right to be calling her that name.

I didn't see the original intention of your post as calling Pete out for using the term cleaning lady at all. You never even mention that except in the thread title. I took the intention of your original post to defend Meg Crofton's job performance. Which is fine if that is what you believe, but the reason this thread is still here is because you apparently believe Meg is doing a great job and all is well at WDW....two obviously debatable things, with the first definitely being a matter of one's opinion.

 

[aspen37]

Thats a fair opinion to have. The only thing I can say is that unfortunately this is not something new. If you were to take a look at the last 5-7 years there have been numerous examples of Disney raising prices and/or cutting services. A search of this site would probably result in Hundreds and Hundreds of threads dealing with an action that Disney has taken which outraged the fan base.

However, right or wrong Disney has yet to place that proverbial straw on the back of the consumer which eventually breaks him or her. Maybe this is it, or maybe they never will....who knows.

These are desperate time for every business. Businesses are doing what they need to do to stay strong or even stay alive. To me it's hard to rip on a executive or any business owner who is running their business during these times. The better time for this debate may be when the economy eventually turns around.

I work at a lumber/hardware store. If we did what Disney is currently doing we would be out of business. We are having a hard enough time, if we just decided to raise prices on everything people would not do business with us. We are the only lumber/hardware store in Aspen. People come in here because it is convent. If we did what Disney is doing they would drive the extra 20 miles down valley to save money. As a business you must be ready to deal with the ups and the downs. Disney does not want to deal with the downs, they want to keep making more and more money. What ever happened to being happy with doing well in this country?

 

[cxcelica]

I work at a lumber/hardware store. If we did what Disney is currently doing we would be out of business. We are having a hard enough time, if we just decided to raise prices on everything people would not do business with us. We are the only lumber/hardware store in Aspen. People come in here because it is convent. If we did what Disney is doing they would drive the extra 20 miles down valley to save money. As a business you must be ready to deal with the ups and the downs. Disney does not want to deal with the downs, they want to keep making more and more money. What ever happened to being happy with doing well in this country?

I hear you, but you say that you won't do what Disney is doing because you would go out of business. The difference is that Disney can do it and not go out of business.(at least they believe so)

Just like people can drive to another lumber store, people could also decide to go to Universal or Sea World or another vacation destination. But Disney believes they won't. It's a risk they are willing to take.

If you felt that you could save your store from hard times by raising prices and you felt that your customers would still keep coming I think it would make the decision a little tougher.

As far as being happy with doing well....I think that may have a lot to do with being a publicly traded company.

 

[WaltD4Me]

If you felt that you could save your store from hard times by raising prices and you felt that your customers would still keep coming I think it would make the decision a little tougher.

But as they are raising prices are they also lowering the quality of their products?

To me, that is a big part of the issue with Disney. It's one thing if you have to raise prices, it's another if you are raising prices and giving less.

It's hard to come up with a good comparision to Disney, so I will use restaurants. Almost all restaurants around here that I go to are doing one of two things. Raising prices, but keeping the same quality/quantity of food while offering some coupons that they probably normally wouldn't or keeping prices the same, but giving maybe smaller portions or not the same quality. I tend to go to the restaurants that have maintained their quality.

 

[dalt01]

To me, that is a big part of the issue with Disney. It's one thing if you have to raise prices, it's another if you are raising prices and giving less.

it is part of everyday life. take the great ice cream conspiracy. go to your freezer and look. your half gallon of neopolitan is really 1.5 qts. and it cost you more.

 

[DaParkers]

To your original point......I think that Pete knows this thread exists and I believe he knows about previous ones. I just don't think it's important enough for him to change the way he speaks about Meg. I think I can speak for most in saying that we like Pete a lot. I also believe that Pete is being what he accuses Disney of being....Arrogant! I'll give Pete credit for this. I truly believe that he listens to other people's points and even incorporates change where he sees fit, but this is not one of those things. We all have a little arrogance in us and there are some things that we just will not budge on. This may be Pete's. I find that particular rant to be very offensive, but someone else may think that he is offensive on just about any subject. So, you have a choice, don't listen or try to ignore what you don't like. For me, I'll continue to listen, but Pete, if you are reading, remember this. Some of these same people that are complaining about what you say on a FREE podcast are also DU customers. Do what you tell Disney to do. Try not to disregard the feelings of your customers.

Peace, Love, and Hairgrease.

 

[dpuck1998]

To your original point......I think that Pete knows this thread exists and I believe he knows about previous ones. I just don't think it's important enough for him to change the way he speaks about Meg. I think I can speak for most in saying that we like Pete a lot. I also believe that Pete is being what he accuses Disney of being....Arrogant! I'll give Pete credit for this. I truly believe that he listens to other people's points and even incorporates change where he sees fit, but this is not one of those things. We all have a little arrogance in us and there are some things that we just will not budge on. This may be Pete's. I find that particular rant to be very offensive, but someone else may think that he is offensive on just about any subject. So, you have a choice, don't listen or try to ignore what you don't like. For me, I'll continue to listen, but Pete, if you are reading, remember this. Some of these same people that are complaining about what you say on a FREE podcast are also DU customers. Do what you tell Disney to do. Try not to disregard the feelings of your customers.

Peace, Love, and Hairgrease.

That was an excellent response IMHO. Well said, a good example of making a point without going over board and pointing fingers. Thanks

 

[Madi100]

To your original point......I think that Pete knows this thread exists and I believe he knows about previous ones. I just don't think it's important enough for him to change the way he speaks about Meg. I think I can speak for most in saying that we like Pete a lot. I also believe that Pete is being what he accuses Disney of being....Arrogant! I'll give Pete credit for this. I truly believe that he listens to other people's points and even incorporates change where he sees fit, but this is not one of those things. We all have a little arrogance in us and there are some things that we just will not budge on. This may be Pete's. I find that particular rant to be very offensive, but someone else may think that he is offensive on just about any subject. So, you have a choice, don't listen or try to ignore what you don't like. For me, I'll continue to listen, but Pete, if you are reading, remember this. Some of these same people that are complaining about what you say on a FREE podcast are also DU customers. Do what you tell Disney to do. Try not to disregard the feelings of your customers.

Peace, Love, and Hairgrease.

Very well said. I agree. People can get bent out of shape over a lot of things, almost anything. I also believe that he knows that this thread is here, and I completely respect him for reading and not replying. I'm sure Pete knows all of what is said on the boards. Meg Crofton worked hard to get where she is, just as Pete worked hard to get where he is. I would never dream of taking away any of what he has built by by knocking what he was before. In fact, it is just the opposite. He had a goal, and he has worked very hard to get to where he is at. I highly respect him for what he and his team have built. I don't know Meg, and I don't know much about her, but I commend her for being very successful and achieving as much as she has.