Domestic park attendance down 4% in Q3

[LAS2AMS]

I like how repeated comments on here imply that there used to not be lines for rides in the summer...
Not true...they were MUCH worse.
Infact...in many cases summer is better than it ever has been.

The simple reality is that the attendance "uptick" is due to much larger (but still not peak Heavy) crowds in what use to be dead months...October, November, January, February...may and to a certain extent September.

They have done a good job at dispersal and have pushed the market to increase attendance and revenues.

But these price increase are just that: price increases. "Crowd control" is a hoax. Don't swallow that.

Disney releases quarterly attendance figures. Don't be fooled -- while it's true that attendance has grown disproportionately offpeak than it has peak, the gains during peak travel times have been significant.

http://www.orlandosentinel.com/business/tourism/os-disney-earnings-20160510-story.html
And Disney itself has indicated that it raised prices partly to moderate attendance; it would be very unwise for a public company to make those claims if they were truly a hoax...

 

[lockedoutlogic]

Disney releases quarterly attendance figures. Don't be fooled -- while it's true that attendance has grown disproportionately offpeak than it has peak, the gains during peak travel times have been significant.

http://www.orlandosentinel.com/business/tourism/os-disney-earnings-20160510-story.html
And Disney itself has indicated that it raised prices partly to moderate attendance; it would be very unwise for a public company to make those claims if they were truly a hoax...

Has Disney attendance spiked more than 2 or 3%...when it wasn't after a bad economic situation to rebound?

It's pretty much consistent...slow gain.

And prices will not stem that too much and they know it (trust me...they do)

But you won't...oh well.

There is a general softening of the travel market right now...we'll see how they do. But that's a larger economic issue - not their "price control policy"

Heres a good rule of thumb: whatever "leaks" out..."unofficially" from "inside the company" when a new pricing structure rolls out...like this one last year and this spring...is 100% a corporate cover story. That's assured. There are no "leaks" on these types of things. They know what they're doing.

I'm probably shouting to the wind...so that's all I will say. No desire for more back and forth.

The one add on is that the attendance figures are unofficial, internal, and not regulated by FCC filings. I have no reason to question them too much...but they do get massaged and nothing would stop that. That's not the most rock solid of numbers. And that not my theory...it's been brought up on hundreds of threads for
Years.

 

[Alfredo68]

Heres a good rule of thumb: whatever "leaks" out..."unofficially" from "inside the company" when a new pricing structure rolls out...like this one last year and this spring...is 100% a corporate cover story. That's assured. There are no "leaks" on these types of things. They know what they're doing.

I totally agree! I also have a friend who is a Cast Member working at Disney Animation in Los Angeles and what you say parallels what I have heard her say before. They are very strict about secrecy so when something comes out, it is meant to and not 'leaked.'

 

[lockedoutlogic]

I totally agree! I also have a friend who is a Cast Member working at Disney Animation in Los Angeles and what you say parallels what I have heard her say before. They are very strict about secrecy so when something comes out, it is meant to and not 'leaked.'

Honesty...don't doubt it for a second...

But that rocks the core of some of the webboards...so you'll get all kinds of flak.

There's no such thing as a pricing/finances "leak"...that's cold and calculated since day 1.

And I think a lot of the imagineering "leaks" are tolerated and have been for years...if that gets out...it Increases the conversations and makes it seem like twdc is working harder than they are to build stuff for their "valued" customers...when it's really calculated and on comparatively minimal levels...in truth.

 

[LAS2AMS]

Has Disney attendance spiked more than 2 or 3%...when it wasn't after a bad economic situation to rebound?

It's pretty much consistent...slow gain.

And prices will not stem that too much and they know it (trust me...they do)

But you won't...oh well.

There is a general softening of the travel market right now...we'll see how they do. But that's a larger economic issue - not their "price control policy"

Heres a good rule of thumb: whatever "leaks" out..."unofficially" from "inside the company" when a new pricing structure rolls out...like this one last year and this spring...is 100% a corporate cover story. That's assured. There are no "leaks" on these types of things. They know what they're doing.

I'm probably shouting to the wind...so that's all I will say. No desire for more back and forth.

The one add on is that the attendance figures are unofficial, internal, and not regulated by FCC filings. I have no reason to question them too much...but they do get massaged and nothing would stop that. That's not the most rock solid of numbers. And that not my theory...it's been brought up on hundreds of threads for
Years.

You're right that attendance figures aren't audited and are vulnerable to being "massaged" from time to time ... but if you're comparing attendance figures over periods of time, that's an absurd argument.

Nor is there a "general softening of the travel market right now" -- 2016 will break records. Through the first six months of the year, Orlando itself saw a 10% (!!!) increase in air arrivals, 4.5% increase in average nightly hotel rate and per-visitor increase in spending.

Could it be that Disney's attendance "woes" have more to do with a drop in annual pass holder visits, discounted convention tickets and other types of passes that increase the number of people via turnstiles, but not necessarily add substantial revenue?

 

[Lee Matthews]

Disney are not fussed about lower attendance really as long as revenue continues to go up. Attendance will peak like I said when Avatar, Toy Story, Star Wars and WDW 50th are happening. Park attendance will max and then Disney will really start having to think about opening a 5th gate

 

[lockedoutlogic]

You're right that attendance figures aren't audited and are vulnerable to being "massaged" from time to time ... but if you're comparing attendance figures over periods of time, that's an absurd argument.

Nor is there a "general softening of the travel market right now" -- 2016 will break records. Through the first six months of the year, Orlando itself saw a 10% (!!!) increase in air arrivals, 4.5% increase in average nightly hotel rate and per-visitor increase in spending.

Could it be that Disney's attendance "woes" have more to do with a drop in annual pass holder visits, discounted convention tickets and other types of passes that increase the number of people via turnstiles, but not necessarily add substantial revenue?

Airline travel is struggling for the year and prices are flattening...that is a story that has been picked up.

There are things going on other than what the Orlando business journal puts out. They are still having a strong year...no doubt...but are poised for a small, but significant slowdown.

I'm not sure I believe there is an attendance problem...I think it's just easing across the board due to a lot of factors...

But the parks are nowhere near "capacity"...we've talked about this at length. Just pull up the app and check the "terrible" wait times or the restaurant availability randomly - it's an easy thing to get a view of. People just whine too much about it now.

A popular theory (and it is just that) is that people who already booked are just following through right now and they will have a real decline. That remains to be scene but I'm skeptical there too...

The suggestion...which again...popped up last year as "insiders sources" that they "had to increase prices to limit the unmanageable crowds..." Is a cover story. Like I said - price stories/reasons don't "leak" from Disney...they are planted. That's always the way it has been. How convenient for them, no? It's not THERE fault they increased passes and day tickets 25% after no real growth in offerings over 10 years...it's because those darn consumers won't go away (in relative the same numbers they've been coming since the recovery - more or less)...
Must be so hard for those pour magic dealers

Ticket increase would have turned some people away...no doubt. But my take is that the aggregate of 10 years of price raising across the board is the real culprit. You don't charge $52 for mediocre steak at Le cellier - a converted cafeteria - to limit crowds. Nor do you charge $425 for a room at wilderness lodge that goes empty because nobody will pay it...
...what you do there is closed half the rooms and gut for timeshare because you've overplayed your hand...which comes off the pool for your "great occupancy rates". That's the other highly suspect "internal" number - occupancy. That is very easily manipulated with rehabs...which are constant and can be increased or decreased for the Street's purposes.

You're a watcher...I get it...so am I. We just watch from a different lense. We problably actually see eye to eye on many more things than it would appear.

 

[manning]

The airline industry say there flights are at full capacity. What they don't tell you they have reduced the number of flights in order to fill their planes. Also they are using smaller plane. By reducing capacity gives them the chance to...increase fares.

 

[lockedoutlogic]

The airline industry say there flights are at full capacity. What they don't tell you they have reduced the number of flights in order to fill their planes. Also they are using smaller plane. By reducing capacity gives them the chance to...increase fares.

The amount of domestic flights has fallen year over year since the 90's...

And airlines have complained that "fares will remain low for at least this year"

Boo hoo. But if you do believe In supply and demand (which applies sometimes and often in a limited capacity). Lower fares = reduced demand = fewer people flying.

...back to Disney...it will be interesting to see how crowds and earnings are for the next 3 quarters or so...

 

[jperrot1]

Could it be related to an increasing number of guests spending more time at Universal instead of the WDW parks but still staying on-site?

I believe that would be correct. There are many off site hotels and these folks aren't locked into where they need to tour. I feel the Harry Potter magnet pulling oh so much stronger.

 

[lockedoutlogic]

I believe that would be correct. There are many off site hotels and these folks aren't locked into where they need to tour. I feel the Harry Potter magnet pulling oh so much stronger.

You missed that question...it was whether people were staying in Disney, but bleeding more days to universal...hence high occupancy, decline in gate.

It's possible...one thing universal has done - to there credit - is seized momentum and kept full speed ahead since potter...

They have an amazing new park opening next year...and acquired land That could really create problems for Disney due to size...something hey never thought would happen.

Interesting...to say the least

 

[LAS2AMS]

Airline travel is struggling for the year and prices are flattening...that is a story that has been picked up.

Air travel is most definitely not struggling -- 2016 will set records for both passenger traffic and domestic industry profits. Airlines like Spirit & Frontier grew rapidly and offered cheaper fares than Wall Street would've liked to fill seats, which placed some downward pressure on industry & lowered profit margins -- and this has garnered a lot of media attention. Not to worry, capacity is retracting beginning in September, so you'll pay higher fares once and again and Wall Street will be pleased.

There are things going on other than what the Orlando business journal puts out. They are still having a strong year...no doubt...but are poised for a small, but significant slowdown.

My information didn't come from the Orlando Business Journal, I'm sharing facts that the community (of which WDW participates in) puts out: in 2016, Orlando is seeing a significant rise in visitors spending significantly (re: much higher than inflation) more money than they did in 2015. In fact, as it did in 2015, Orlando will beat the forecasts. There's no reason to suspect a "small, but significant slowdown," nor is the region predicting one -- in fact, while it's nervousness about the impact of the Brexit (British tourists spend big), it's still expecting another record year in 2017.

But the parks are nowhere near "capacity"...we've talked about this at length. Just pull up the app and check the "terrible" wait times or the restaurant availability randomly - it's an easy thing to get a view of. People just whine too much about it now.

The disagreement is on how the term "capacity" is being used. If you're using "capacity" in the sense that I can freely walk around the Magic Kingdom, than sure. But WDW is expensive, and people come for the attractions & entertainment. Disney itself used the term "capacity" to describe its additions to the MK in recent years & the need for additional parking / demolition of the WDW Speedway.

The suggestion...which again...popped up last year as "insiders sources" that they "had to increase prices to limit the unmanageable crowds..." Is a cover story. Like I said - price stories/reasons don't "leak" from Disney...they are planted. That's always the way it has been. How convenient for them, no? It's not THERE fault they increased passes and day tickets 25% after no real growth in offerings over 10 years...it's because those darn consumers won't go away (in relative the same numbers they've been coming since the recovery - more or less)...
Must be so hard for those pour magic dealers

By the late 1990s, WDW had overexpanded. Domestic travel was already softening by the Millennium and plunged after 9-11. As it was recovering, the country entered the Great Recession. In the subsequent recovery years, travel to Orlando has been phenomenal -- last year, the region hosted twice as many visitors than it had 20 years prior. It defeated even the most aggressive projections from the early 2000s. While WDW doesn't release projections, the growth had to have surprised them.

You're basically saying WDW should've expanded its attractions & entertainment offerings to prepare for crowds it couldn't have expected. Unfortunately, that's not how business operates. When WDW says it raised ticket prices in part to "moderate" crowds, there's no reason to doubt them. WDW is one of the options we get for our annual corporate conferences. Two years ago, the convention tickets to Epcot and the Studios were offered to us for $40. This year, $90. That's $90 for a ticket ("after 5PM") that allows at most 4 hours in the park. Do you not think WDW realized there would be a significant drop off in ticket sales???

Nor do you charge $425 for a room at wilderness lodge that goes empty because nobody will pay it...what you do there is closed half the rooms and gut for timeshare because you've overplayed your hand...which comes off the pool for your "great occupancy rates". That's the other highly suspect "internal" number - occupancy. That is very easily manipulated with rehabs...which are constant and can be increased or decreased for the Street's purposes.

It's hardly suspect and fairly common. Most resort areas Las Vegas, Anaheim, Mexico/the Caribbean -- do section off large numbers of rooms during off-peak travel period, in effort to minimize discounting. Even Orlando -- there was a time period in which Disney's free dining plan was so damaging that many larger outside properties removed large quantities of rooms from inventory. Ultimately, every business tries to find the equilibrium between revenues, expenses and maximizing profits.

 

[lockedoutlogic]

Ok...we actually agree here a little...

You be Begin..ill be Sadat...

travel is most definitely not struggling -- 2016 will set records for both passenger traffic and domestic industry profits. Airlines like Spirit & Frontier grew rapidly and offered cheaper fares than Wall Street would've liked to fill seats, which placed some downward pressure on industry & lowered profit margins -- and this has garnered a lot of media attention. Not to worry, capacity is retracting beginning in September, so you'll pay higher fares once and again and Wall Street will be pleased.

Not here...it's difficult to get hard numbers on this...especially in realtime. I can only refer to some or the pre travel season articles that ran in some national outlets that stressed declining airfares and "anxiety"...I think this year will end up being flat...that remains to be seen.

My information didn't come from the Orlando Business Journal, I'm sharing facts that the community (of which WDW participates in) puts out: in 2016, Orlando is seeing a significant rise in visitors spending significantly (re: much higher than inflation) more money than they did in 2015. In fact, as it did in 2015, Orlando will beat the forecasts. There's no reason to suspect a "small, but significant slowdown," nor is the region predicting one -- in fact, while it's nervousness about the impact of the Brexit (British tourists spend big), it's still expecting another record year in 2017.

Ok...Orlando NEVER does anything but predict travel increase. Never...not once. They have too...they suckle the nectar...it's 75% + of their economy. Two things are assured in Orlando: large scale unnecessary over expansion during "boom" periods...and tears during down times. They are always blindsided

We will - ultimately - wait and see on this. But you're a fan of economics, no?
Does not the cycle keep spinning? We are more vulnerable to crashes
Now than ever...if not now...not next year...then when?

The disagreement is on how the term "capacity" is being used. If you're using "capacity" in the sense that I can freely walk around the Magic Kingdom, than sure. But WDW is expensive, and people come for the attractions & entertainment. Disney itself used the term "capacity" to describe its additions to the MK in recent years & the need for additional parking / demolition of the WDW Speedway.

The speedway demo (theory) is to allow for transportation redesign spaces longterm and DVC additions...I don't think it was about more parking spaces. That lot was full about 3 times in decades.

I'll hit capacity Below.

By the late 1990s, WDW had overexpanded. Domestic travel was already softening by the Millennium and plunged after 9-11. As it was recovering, the country entered the Great Recession. In the subsequent recovery years, travel to Orlando has been phenomenal -- last year, the region hosted twice as many visitors than it had 20 years prior. It defeated even the most aggressive projections from the early 2000s. While WDW doesn't release projections, the growth had to have surprised them.

Here's where I do agree. They did "over expand" in a way... And had some leeway...

Then they did nothing for ten years...used the rope...and got caught flat footed.

One minor correction: disney suffered a severe slowing prior to 9/11...no really...i watched the forecasting and revenue numbers every day. Then 9/11 accelerated it. The fallout of the tech bubble crash was delayed pat 2000 in a weird "honeymoon" situation.

I agree that the response in the housing crash recovery has been impressive in Orlando...a lot of that is the heat Comcast had brought and Disney's forced responses...

And frivolous credit spending - the new normal - which leaves Traveltown, USA even more susceptible to crashes. Travel spending and stupidity speculation in warm areas is the FIRST thing to go.

You're basically saying WDW should've expanded its attractions & entertainment offerings to prepare for crowds it couldn't have expected. Unfortunately, that's not how business operates. When WDW says it raised ticket prices in part to "moderate" crowds, there's no reason to doubt them. WDW is one of the options we get for our annual corporate conferences. Two years ago, the convention tickets to Epcot and the Studios were offered to us for $40. This year, $90. That's $90 for a ticket ("after 5PM") that allows at most 4 hours in the park. Do you not think WDW realized there would be a significant drop off in ticket sales???

I doubt them because it's a typical (personal experience) crap excuse from above.

In Disneyland...geographically restricted...perhaps. Not so in Orlando. It's not a matter of not handling crowds...it's much more simple.

Have you not noticed the overhead shaving that has gone on the last 10,15,20 years in Orlando?

That's good business...but why the "we can't control crowds" is crap. They have the space and existing facilities...they just won't increase their overhead. Longer hours, more staffing...that's how they have controlled crowds since day one. Not rocket science. MK to 12...Epcot till 11...studios and AK to 9...lots of smiles.

It's really how you frame it...

You can't say "we have too many" and jack rates in 2015...and by 2018 be begging for more because you need revenues to justify the downtown disney, ak, and studios investments...

Wait for it...it's coming...

It's hardly suspect and fairly common. Most resort areas Las Vegas, Anaheim, Mexico/the Caribbean -- do section off large numbers of rooms during off-peak travel period, in effort to minimize discounting. Even Orlando -- there was a time period in which Disney's free dining plan was so damaging that many larger outside properties removed large quantities of rooms from inventory. Ultimately, every business tries to find the equilibrium between revenues, expenses and maximizing profits.

Again...I agree.

But they have significant difficulty moving Their "deluxe" rooms and it's been a growing trend. They are the last to go off the rack at the WDW website. Not a coincidence...they have overpriced them...this is a trend. It's the wilderness lodge story...but it doesn't stop there. So the occupancy numbers are highly suspect.

I'll give you a tangible example: i booked a $485 rack room in the brown/earth tone paradise for $223 on short notice for July 20. Almost carribean price (which is why moderates are the biggest ripoff going)

They can't sell them and are dumping massive blocks at discounts to wholesalers.

And no...the parks were NOT crowded. It was hot...no doubt...but they just didn't have the bodies around.

But make no mistake...I agree with your take on occupancy manipulation...

 

[OldsDr]

Hey there, another person from CT *waves*

Was it Quassy or Lake Compounce that (has/had?) the free soda?

Lake compounce has the free soda

 

[lborne]

We are only about 1.5 hrs away and used to spend quite a bit of time at both Disney and IOA/US. Lately, we've been going to IOA/US much more often. The main reason for us has nothing to do with price - it is just easier and more relaxing than being at Disney. To make a Disney trip now, we have to plan our FPs in advance and make dining reservations far in advance - and then hope you don't have to make any changes. Service has slipped - most noticeably at the resorts. The parks seem a bit more of a hassle too - and Disney Springs has been a mess for quite a while. In comparison, we spend about the same amount to stay at one of the US/IOA resorts which gets you front of the line passes. Once you experience that, it is brutal to have to wait in lines again. And we have had very few problems getting into restaurants either in the parks or at City Walk. Both parks, City Walk and the resorts are all within walking distance of each other. No having to drive or taking a bus. We still go to Disney, for food and wine and other times, but never with the intention of actually riding rides all day.

 

[ChipnDale79]

When WDW says it raised ticket prices in part to "moderate" crowds, there's no reason to doubt them.

Actually there are plenty of reasons to doubt them. They didn't raise their rates to moderate crowds at all, they did it because they could and would make more money. If they really wanted to moderate crowds, why are discounts flying out to people right now? When Iger says they raised the prices to offer those who pay more, a better experience, he's spinning a negative. He wants those parks filled to capacity every single day, at the highest price possible. He doesn't care about anyone's experience, he cares about the bottom line. Period.

 

[manning]

Actually there are plenty of reasons to doubt them. They didn't raise their rates to moderate crowds at all, they did it because they could and would make more money. If they really wanted to moderate crowds, why are discounts flying out to people right now? When Iger says they raised the prices to offer those who pay more, a better experience, he's spinning a negative. He wants those parks filled to capacity every single day, at the highest price possible. He doesn't care about anyone's experience, he cares about the bottom line. Period.

That's right. The company (board) is not there for you, they are their for the investors (stock holders). If they could get blood out a turnip they will. If they can't, they'll try anyway. Now if we could get someone to buy Disney and take it private (waiting for a snowball to not melt in hell). In other words it will never happen.

 

[lockedoutlogic]

That's right. The company (board) is not there for you, they are their for the investors (stock holders). If they could get blood out a turnip they will. If they can't, they'll try anyway. Now if we could get someone to buy Disney and take it private (waiting for a snowball to not melt in hell). In other words it will never happen.

...start a Collection and I will take it private.

It is the only way...you don't have to watch for long to notice that the stock market is bogus and built entirely on "perception" these days...

Like chase can get hit with $500 million in fines for lying as bankers...and post record gains for the year...

Or some other "minor technicality"

 

[rlbates13]

Heres a good rule of thumb: whatever "leaks" out..."unofficially" from "inside the company" when a new pricing structure rolls out...like this one last year and this spring...is 100% a corporate cover story. That's assured. There are no "leaks" on these types of things. They know what they're doing.

I totally agree! I also have a friend who is a Cast Member working at Disney Animation in Los Angeles and what you say parallels what I have heard her say before. They are very strict about secrecy so when something comes out, it is meant to and not 'leaked.'

Sadly....this is very true and pretty typical for all large companies, government agencies, and other visible or public entities. "Leaks" are common to and are part of a communication strategy. It really is a shame what goes on with corporate communications. Truth in corporate communications is difficult to find anymore. What ever happened to "the truth" in society?