My FP+ Park Strategy WILL SAVE ME ALMOST $20,000!!!

[cakebaker]

Ah, but if FP+ backfires on them and doesn't continue to attract on site guests- well I'll be waiting with my hands out.

I don't look for it to happen. I read the reports too- their occupancy rate is incredibly high. I think the perks of additional booking time along with how valuable EMH has become since the FP+ rollout will cause more and more to look at staying on site. But if it does....

 

[Cormoran]

Ah, but if FP+ backfires on them and doesn't continue to attract on site guests- well I'll be waiting with my hands out.
I don't look for it to happen. I read the reports too- their occupancy rate is incredibly high. I think the perks of additional booking time along with how valuable EMH has become since the FP+ rollout will cause more and more to look at staying on site. But if it does....

What I think is really interesting is this podcast about DVC: http://podbay.fm/show/452620851/e/1408770060?autostart=1

I don't know if it 's right, but it sounds plausible. I'm not questioning the occupancy rate, but here's my question. If I had a resort with 89% occupancy, I would eliminate all discounts and increase the rates. This is what Disney is doing in it's theme parks: they keep increasing the prices for everything and people keep coming. The price increases haven't effected attendance. So if their occupancy rate is so high, why haven't they followed their theme park model and raised resort rates and eliminated all discounts?

 

[Toad_Passenger]

What I think is really interesting is this podcast about DVC: http://podbay.fm/show/452620851/e/1408770060?autostart=1

I don't know if it 's right, but it sounds plausible. I'm not questioning the occupancy rate, but here's my question. If I had a resort with 89% occupancy, I would eliminate all discounts and increase the rates. This is what Disney is doing in it's theme parks: they keep increasing the prices for everything and people keep coming. The price increases haven't effected attendance. So if their occupancy rate is so high, why haven't they followed their theme park model and raised resort rates and eliminated all discounts?

I would also think Disney would look into raising their rates. As I posted earlier, they were booked up when we were there due to the Harry Potter Con at USO. Weekends when Disney is getting overflow from USO is the perfect opportunity to raise rates and take in some extra cash, especially from people who aren't spending 100% of their time on WDW property. Of course, this goes 2-ways, as well, with USO raising rates when they benefit from busier Disney events (i.e. Star Wars Weekends, etc.).

 

[cakebaker]

I would also think Disney would look into raising their rates. As I posted earlier, they were booked up when we were there due to the Harry Potter Con at USO. Weekends when Disney is getting overflow from USO is the perfect opportunity to raise rates and take in some extra cash, especially from people who aren't spending 100% of their time on WDW property. Of course, this goes 2-ways, as well, with USO raising rates when they benefit from busier Disney events (i.e. Star Wars Weekends, etc.).

I agree, but their occupancy rates are sky high right now and yet they still offering significant discounts and I sure can't explain that.

 

[Cormoran]

I agree, but their occupancy rates are sky high right now and yet they still offering significant discounts and I sure can't explain that.

I'm not trying to cause an argument, but I really do question these occupancy rates. According to Jim Hill's podcast, Disney plays a shell game with their resort occupancy. If they anticipate slow times, they take rooms out of their inventory for renovation. This is also the reason they have turned some of their resort rooms into DVC. By employing both of these methods, they are able to report a high occupancy rate because a lot of their rooms have been removed from the inventory.

I wouldn't believe this, but if their occupancy was really this high without employing these inventory management methods, why aren't they rising rates and eliminating discounts. I think they are even offering discounts during Spring Break.

 

[cakebaker]

I'm not trying to cause an argument, but I really do question these occupancy rates...

I'm sure you do...

It's in my personal best interest if they are inflated. While I'll pay an increased rate if it happens, I'd much prefer to see more discounts- my own personal "less for more"!

 

[Toad_Passenger]

I'm not trying to cause an argument, but I really do question these occupancy rates. According to Jim Hill's podcast, Disney plays a shell game with their resort occupancy. If they anticipate slow times, they take rooms out of their inventory for renovation. This is also the reason they have turned some of their resort rooms into DVC. By employing both of these methods, they are able to report a high occupancy rate because a lot of their rooms have been removed from the inventory.

I wouldn't believe this, but if their occupancy was really this high without employing these inventory management methods, why aren't they rising rates and eliminating discounts. I think they are even offering discounts during Spring Break.

I don't doubt they are playing with the numbers. However, even if they are doing some creative math, the sheer number of rooms they have available lead me to believe that they are still above the industry sweet spot of 81%. They would have to do a HUGE amount of shuffling numbers to pad their stats by 8%+. It's not out of the realm of possibility that they are still accurately in the 84%-85% range. Which is amazing.

 

[johde]

What I think is really interesting is this podcast about DVC: http://podbay.fm/show/452620851/e/1408770060?autostart=1

I don't know if it 's right, but it sounds plausible. I'm not questioning the occupancy rate, but here's my question. If I had a resort with 89% occupancy, I would eliminate all discounts and increase the rates. This is what Disney is doing in it's theme parks: they keep increasing the prices for everything and people keep coming. The price increases haven't effected attendance. So if their occupancy rate is so high, why haven't they followed their theme park model and raised resort rates and eliminated all discounts?

The key term there is DVC. Points are sold at DVC resorts so they will be at 90%+ occupancy all the time. The latest figures I've seen for WDW as a whole is 83% and probably lowest at the deluxe resorts. Why else do you think they converted the 4th floor of AKV, and several of the Poly longhouses to DVC, along with tearing down one of the Contemporary Garden wings for DVC. They are reducing the inventory of deluxe rooms that have low occupancy rates and increasing the number of DVC rooms that are virtually guaranteed to have a high occupancy rate, the people have already paid Disney upfront for many years of vacations.

I totally agree. The big difference is that the specific nature of the plan is different under each system.

Also, that tiny percentage of guests who used paper FP to ride certain things multiple times are going to have a harder time doing that.

That potentially the beauty of the system laketravis is suggesting even stripping away the staying and dining offsite. So long as Disney, Universal and SeaWorld see fit to "give away" the gate after paying for so many days, once you've decided to add an offsite activity portions of this plan potentially make sense. laketravis is doing it with AP because it helps with parking and multiple trips a year. It could also work with 8 day tickets. Instead of doing 6 days and 2 days at Universal get 8 days and 4 day tickets (or Power passes and 1 annual pass for parking and discounts). Use the extra FP+ to book repeat rides on your favorites. It could be a trip back to the MK to reride the mountains, or a trip to DHS for TSMM, TOT, Star tours and Fantasmic. The extra expense is minimal, or non existent if you can get rid of the Park Hopper option at WDW.

 

[Laketravis]

I'm sure there are some people with more time then me who could run a check on every single resort, but just for grins I pulled up several value, moderate, and deluxe resorts to see if I could get a room tonight.

Every one I checked had availability for several room classifications. Admittedly not a very scientific test but certainly not reflecting an 89% occupancy level.

The discounts are starting to scale back a bit, when the current AP room discount first rolled out for the spring it was as high as 37% off a deluxe and 30% of moderates (it's now down to 30% and 20% respectively). That's a pretty steep discount to be offering when occupancy is running in the high 80's, you'd have to wonder where they could even find the rooms to offer the discount.

Sustained occupancy levels over 85% are typically the signal to start construction and add more rooms to the pool. Bad news for those who think more people staying on-site is a good thing as it will further dilute park benefits.

However WDC arrived at their 89% occupancy level we'll never know, but perhaps their own pro-forma's lowered their confidence level in regards to sustainability thus their continued and substantial room discounts going forward.

 

[jade1]

The key term there is DVC. Points are sold at DVC resorts so they will be at 90%+ occupancy all the time. The latest figures I've seen for WDW as a whole is 83% and probably lowest at the deluxe resorts. Why else do you think they converted the 4th floor of AKV, and several of the Poly longhouses to DVC, along with tearing down one of the Contemporary Garden wings for DVC. They are reducing the inventory of deluxe rooms that have low occupancy rates and increasing the number of DVC rooms that are virtually guaranteed to have a high occupancy rate, the people have already paid Disney upfront for many years of vacations.

Yep DVC is a lot of rooms now, but also think how many have been added, how much the points per night has increased, how much money comes in through dues to keep them up, and how much the points cost now-more than double of what many of us paid.

I wonder how much money WDW rooms are bringing in each year now (including DVC sales and dues) compared to 10 years ago?

 

[Laketravis]

I wonder how much money WDW rooms are bringing in each year now (including DVC sales and dues) compared to 10 years ago?

Considering the continued level of new DVC activity, it must be substantial. What a smart move to have guests almost completely subsidize constructions costs; once WDC got a taste of that they haven't been able to stay away from the buffet.

It's great for first adopters like yourself, starts to suck for those who are late to the party.

Other big chains have begun to sell off their time-share units; once constructed and amortized they aren't as profitable to maintain with all of the hospitality overhead. The big bucks come from unit sales. At some point DVC could be deemed fully built out and WDC decides to sell if off to the highest bidder.

 

[cakebaker]

"The discounts are starting to scale back a bit, when the AP room discount first rolled out it was as high as 37% off a deluxe and 30% of moderates (it's now down to 30% and 20% respectively). That's a pretty steep discount to be offering when occupancy is running in the high 80's, you'd have to wonder where they could even find the rooms to offer the discount.

Sustained occupancy levels over 85% are typically the signal to start construction and add more rooms to the pool. Bad news for those who think more people staying on-site is a good thing as it will further dilute park benefits."

It's expected that the discounts for summer will be less than off season- nothing new.

The only thing that I can see that becomes less valuable as a perk are the EMH's. The morning hours aren't that great already for us- we avoided them for years under legacy and even now we often plan another morning park other than the one offering EMH mornings. Not always, sometimes we do go for mornings, but it's not because it's an EMH, it's because it happens to fit our schedule better. The evening ones- I've never been in the summer and stayed late for EMH's that at some point the parks weren't near empty. Not quite as empty wouldn't be a big deal.

The perks that count with me- proximity to the parks, FP+ perks, ADR advance booking, package delivery, and the perk they can't take away- total Disney immersion. None of those are affected by hotel capacity- other than possibly FP+'s becoming more difficult to get, but I'm guessing they adjust those numbers so the pain would be equally spread between off site and on site.

Other than that- I see no diluting of benefits- unless they choose to reduce them because FP+ perks end up being enough. I don't see that happening though.

 

[SmithSmith]

The discounts are starting to scale back a bit, when the AP room discount first rolled out it was as high as 37% off a deluxe and 30% of moderates (it's now down to 30% and 20% respectively). That's a pretty steep discount to be offering when occupancy is running in the high 80's, you'd have to wonder where they could even find the rooms to offer the discount.

When? One time in the last two years?

1/2/13-3/22/13. 20%-35% off Annual Passholder room-only rates
4/2/13-6/3/13. 35%-35% off Annual Passholder room-only rates
6/4/13-8/15/13. 5%-35% off Annual Passholder room-only rates
8/16/13-9/26/13 5%-35% off Annual Passholder room-only rate
9/27/13-12/24/13 5%-35% off Annual Passholder room-only rate
1/4/14-4/12/14 20%-37% off Annual Passholder room-only rates
4/27/14-6/15/14. 5%-30% off Annual Passholder room-only rates
6/16/14-8/2/14. 15%-35% off Annual Passholder room-only rates plus free Memory Maker
7/20/14-9/27/14. 20%-35% off Annual Passholder room-only rates
9/28/14-12/23/14. 20%-35% off Annual Passholder room-only rates
1/5/15-3/28/15. 15%-35% off room-only rates for Annual Passholders
4/6/15-6/15/15. 15%-37% off room-only rates for Annual Passholders

 

[Laketravis]

When? One time in the last two years?

That should have read "when the current AP room discount first rolled out for the spring" which your extensive research confirms ("4/6/15-6/15/15. 15%-37% off room-only rates for Annual Passholders")

I've corrected the original post but the original point remains. The current round of AP resort discounts started out as high as 37% (and have since been ratcheted down) and looking at your research that could be considered exceptional as it's only been that high one other time in the past two years. Strange that would be the case during periods of 89% occupancy, unless WDC anticipated a drop.

 

[Cormoran]

"The discounts are starting to scale back a bit, when the AP room discount first rolled out it was as high as 37% off a deluxe and 30% of moderates (it's now down to 30% and 20% respectively). That's a pretty steep discount to be offering when occupancy is running in the high 80's, you'd have to wonder where they could even find the rooms to offer the discount.

Sustained occupancy levels over 85% are typically the signal to start construction and add more rooms to the pool. Bad news for those who think more people staying on-site is a good thing as it will further dilute park benefits."

It's expected that the discounts for summer will be less than off season- nothing new.

The only thing that I can see that becomes less valuable as a perk are the EMH's. The morning hours aren't that great already for us- we avoided them for years under legacy and even now we often plan another morning park other than the one offering EMH mornings. Not always, sometimes we do go for mornings, but it's not because it's an EMH, it's because it happens to fit our schedule better. The evening ones- I've never been in the summer and stayed late for EMH's that at some point the parks weren't near empty. Not quite as empty wouldn't be a big deal.

The perks that count with me- proximity to the parks, FP+ perks, ADR advance booking, package delivery, and the perk they can't take away- total Disney immersion. None of those are affected by hotel capacity- other than possibly FP+'s becoming more difficult to get, but I'm guessing they adjust those numbers so the pain would be equally spread between off site and on site.

Other than that- I see no diluting of benefits- unless they choose to reduce them because FP+ perks end up being enough. I don't see that happening though.

In another post you mentioned your ability to return to the resort while the rest of your family remained at MK. I see that as one of the biggest benefits to staying on site

 

[smiths02]

I would also think Disney would look into raising their rates. As I posted earlier, they were booked up when we were there due to the Harry Potter Con at USO. Weekends when Disney is getting overflow from USO is the perfect opportunity to raise rates and take in some extra cash, especially from people who aren't spending 100% of their time on WDW property. Of course, this goes 2-ways, as well, with USO raising rates when they benefit from busier Disney events (i.e. Star Wars Weekends, etc.).

I think Disney has raised their rates and severely limited discounts. In 2009, we did the buy 4, get 3 deal. That was a HUGE savings. Free dining is more restrictive now with only QSDP for values, etc. Many categories of rooms or resorts are not available...standard rooms in all resorts seem harder to get discounts on,etc.
And rack rates have gone up.

 

[SmithSmith]

That should have read "when the current AP room discount first rolled out for the spring" which your extensive research confirms ("4/6/15-6/15/15. 15%-37% off room-only rates for Annual Passholders")

I've corrected the original post but the original point remains. The current round of AP resort discounts started out as high as 37% (and have since been ratcheted down) and looking at your research that could be considered exceptional as it's only been that high one other time in the past two years. Strange that would be the case during periods of 89% occupancy, unless WDC anticipated a drop.

You said the deluxe AP discount has dropped to just 30%. I provided the last two years of AP discounts and I'm asking where are you seeing this?

 

[johde]

I'm sure there are some people with more time then me who could run a check on every single resort, but just for grins I pulled up several value, moderate, and deluxe resorts to see if I could get a room tonight.

Every one I checked had availability for several room classifications. Admittedly not a very scientific test but certainly not reflecting an 89% occupancy level.

The discounts are starting to scale back a bit, when the AP room discount first rolled out it was as high as 37% off a deluxe and 30% of moderates (it's now down to 30% and 20% respectively). That's a pretty steep discount to be offering when occupancy is running in the high 80's, you'd have to wonder where they could even find the rooms to offer the discount.

Sustained occupancy levels over 85% are typically the signal to start construction and add more rooms to the pool. Bad news for those who think more people staying on-site is a good thing as it will further dilute park benefits.

However WDC arrived at their 89% occupancy level we'll never know, but perhaps their own pro-forma's lowered their confidence level in regards to sustainability thus their continued and substantial room discounts going forward.

I did a little bit of digging through Disney's financials I've found the numbers and some clues to what's going on. Sorry if this includes a lot of numbers.

The 89% occupancy rate is for Fiscal Year 2015 Quarter 1 (FY15Q1). This is compared to 81% occupancy FY14Q1 and 81% for FY13Q1. Disney's Fiscal year runs Approximately October - September (Technically the Fiscal year/Quarter ends on the last Saturday of the month). So these results are for basically Oct-Dec. This is for Domestic "Theme park and Resorts". So would include WDW, Disneyland, and the hotel portion of Aulani. Without more time, I can't tell if it include occupancy on the cruise ships or not. Their results are in the segment. The other piece of information to throw into the mix is the number of rooms available to rent. This is varies slightly from year to year based on how many DVC members trade out but changed significantly because of the Poly Longhouses getting converted to DVC on the negative side and Aulani Hotel (non DVC) rooms getting completed on the positive side. So looking at just Q1 results (in thousands of room nights).

FY15Q1: 89% occupancy * 2,591 room nights = 2,306 room nights rented
FY14Q1: 81% occupancy * 2,620 room nights = 2,122 room nights rented
FY13Q1: 81% occupancy * 2,623 room nights = 2,125 room nights rented

So, the 89% occupancy rate is a huge increase but that is partly because the cut room nights available because of the Poly DVC conversion. Had the conversion not been going on it would still be an impressive 88%. It's still almost 200,000 more room nights rented. Also, this is just 1 quarters results. FY13's occupancy rate for the whole year was 79% and FY14's Occupancy rate was 83%.

Disney had a stellar Halloween/Thanksgiving/Christmas season this year in terms of onsite hotel stays domestically. If you look back Historically, Disney likes running in the upper 80's to lower 90's in terms of occupancy rates. The lower numbers for FY13 and FY14 could be because of Art of Animation and filling up because of it.

 

[Laketravis]

You said the deluxe AP discount has dropped to just 30%. I provided the last two years of AP discounts and I'm asking where are you seeing this?

Today's current AP resort offer on the Annual Passholder's page:

 

[Laketravis]

I did a little bit of digging through Disney's financials I've found the numbers and some clues to what's going on. Sorry if this includes a lot of numbers.

The 89% occupancy rate is for Fiscal Year 2015 Quarter 1 (FY15Q1). This is compared to 81% occupancy FY14Q1 and 81% for FY13Q1. Disney's Fiscal year runs Approximately October - September (Technically the Fiscal year/Quarter ends on the last Saturday of the month). So these results are for basically Oct-Dec. This is for Domestic "Theme park and Resorts". So would include WDW, Disneyland, and the hotel portion of Aulani. Without more time, I can't tell if it include occupancy on the cruise ships or not. Their results are in the segment. The other piece of information to throw into the mix is the number of rooms available to rent. This is varies slightly from year to year based on how many DVC members trade out but changed significantly because of the Poly Longhouses getting converted to DVC on the negative side and Aulani Hotel (non DVC) rooms getting completed on the positive side. So looking at just Q1 results (in thousands of room nights).

FY15Q1: 89% occupancy * 2,591 room nights = 2,306 room nights rented
FY14Q1: 81% occupancy * 2,620 room nights = 2,122 room nights rented
FY13Q1: 81% occupancy * 2,623 room nights = 2,125 room nights rented

So, the 89% occupancy rate is a huge increase but that is partly because the cut room nights available because of the Poly DVC conversion. Had the conversion not been going on it would still be an impressive 88%. It's still almost 200,000 more room nights rented. Also, this is just 1 quarters results. FY13's occupancy rate for the whole year was 79% and FY14's Occupancy rate was 83%.

Disney had a stellar Halloween/Thanksgiving/Christmas season this year in terms of onsite hotel stays domestically. If you look back Historically, Disney likes running in the upper 80's to lower 90's in terms of occupancy rates. The lower numbers for FY13 and FY14 could be because of Art of Animation and filling up because of it.

Now THAT'S some great research!!

You'd think that would call for rate increases going forward, not big discounts?