All FP machines to be removed from Animal Kingdom by next week and....

[rebbyparker]

Who was then overruled by the other guy who proposed raising prices by 40% but then giving a 35% discount. Because everybody loves a bargain, right?

I'd just like to get my hands on the guy who proposed FP+.

and and

 

[Eastern]

Who was then overruled by the other guy who proposed raising prices by 40% but then giving a 35% discount. Because everybody loves a bargain, right?

Every time we see the new prices and changes we swear we are done. I think we're actually getting to that point now though. My kids are all older and interested in doing different things. For the price we are paying Disney we have a lot of other options! And they probably won't be so bossy to us!

 

[doconeill]

You might interpret the numbers that way, but not bean counters nor investors.

Total available room nights increased because they built more rooms.

And their math indicates that as a percentage of available rooms, occupancy is down.

That is what the people who run the business pay attention to. They aren't going to get excited that 1,000 more people stayed onsite if they built 10,000 more rooms. They will get concerned.

When you build a lot more rooms, it takes time to build up the occupancy of those rooms. People have booked months in advance, and already have rooms elsewhere booked. They can start booking rooms in advance of opening, but there can be uncertainty on availability. And having the rooms doesn't instantly translate into more guests arriving. So to start, you're probably diluting your existing guest pool, but getting SOME bump from the "newness" factor (more people booking to go to AoA because it is new, that otherwise wouldn't book or would book offsite).

I haven't looked, but I'd be surprised if the SEC report didn't state that the number of rooms increased.

 

[Laketravis]

The point is that the decrease in occupancy rate year over year did not occur with the same number of available hotel rooms.

If you look at year to date occupancy rates in Orlando excluding Disney hotels you will find the following:

Lake Buena Vista Drive: 77.9%
International Drive 71.8%

That might be a valid comparison if you also considered how many rooms were added to the offsite inventory.

But you didn't.

If you don't think Disney would be concerned about a decline in occupancy percentages, fine. I'm have no interest in convincing you otherwise.

You cannot extrapolate all of this out to fit your narrative at how much you believe that Disney is running its business into the ground mainly just because of your disdain for the whole FP+ program.

And then of course you had to go there.

Goodnight, Tozer.

 

[doconeill]

Who was then overruled by the other guy who proposed raising prices by 40% but then giving a 35% discount. Because everybody loves a bargain, right?

Discounts, free stuff, etc...all look better on an advertisement to the masses than just a price cut...especially when you don't put the actual prices in the advertisement...

 

[Laketravis]

When you build a lot more rooms, it takes time to build up the occupancy of those rooms.

No it doesn't. They are immediately available as soon as they are released into inventory.

The only reason it would take time to fill them is if there wasn't a demand for them to begin with.

 

[doconeill]

No it doesn't. They are immediately available as soon as they are released into inventory.

But that doesn't instantly make them occupied.

 

[Laketravis]

But that doesn't instantly make them occupied.

Why not? If 50,000 people are staying offsite, and Disney opens up another 5,000 rooms, how long does it take to fill those rooms? A year? five years? And why? Because nobody knows about them yet?

I understand your point, but my point is (and please have Tozer look this up to verify) that isn't how the hospitality industry operates. They don't add 1,000 rooms to inventory and give it a couple of years to fill up.

They add 1,000 rooms to inventory with the expectation that they will be booked to as high a percentage of occupancy as possible as soon as they are released to inventory.

 

[Tozer]

That might be a valid comparison if you also considered how many rooms were added to the offsite inventory.

But you didn't.

If you don't think Disney would be concerned about a decline in occupancy percentages, fine. I'm have no interest in convincing you otherwise.



And then of course you had to go there.

Goodnight, Tozer.

Oh, I do think there is a level of concern, of course from a business standpoint because you always want to see year over year improvement. But where we do not see eye to eye is on what the decrease of 2% over year to year actually means overall for Disney.

 

[doconeill]

Why not? If 50,000 people are staying offsite, and Disney opens up another 5,000 rooms, how long does it take to fill those rooms? A year? five years? And why? Because nobody knows about them yet?

I understand your point, but my point is (and please have Tozer look this up to verify) that isn't how the hospitality industry operates. They don't add 1,000 rooms to inventory and give it a couple of years to fill up.

They add 1,000 rooms to inventory with the expectation that they will be booked to as high a percentage of occupancy as possible as soon as they are released to inventory.

I'm not saying it takes a couple years, although it depends on the number of new rooms, and what the demand they are experiencing beforehand is. If there is no demand for new rooms when they add them to inventory, they aren't going to suddenly be occupied.

But when you are talking about an FY report, even a couple months can have an impact on the bottom line.

 

[Laketravis]

I think AoA opened summer of '12, so that would have been at least a full year by close of FY13.

 

[doconeill]

I think AoA opened summer of '12, so that would have been at least a full year by close of FY13.

Right...and I'm not saying it was wholly unoccupied for the year. But if their original OR is 81%, then increase the number of rooms, the OR goes down initially, then it grows back up to 81%, but for the whole year, the OR will be < 81%, because it wasn't 81% for the whole year.

In the report, the OR is on average for the whole year, not what it was on the busiest day, or the last day.

 

[Vidia2]

If there is no demand for new rooms when they add them to inventory, they aren't going to suddenly be occupied.

Why not increase demand by developing a system that encourages offsite guests to stay onsite to be able to make advanced FP+ reservations?

I think they released new rooms in conjunction with new Fantasyland updates thinking that the demand would absolutely be there.

Disney is too aggressive to allow any slippage in occupancy to go unnoticed without a counter action.

There are many new high priced DVC units being sold now. Should someone who stays at the Holiday Inn be given the same perk as someone who buys points at Grand Floridian Villas, or even someone who stays at the Grand Floridian? Units are being built at the Poly as well.

 

[Laketravis]

Right...and I'm not saying it was wholly unoccupied for the year. But if their original OR is 81%, then increase the number of rooms, the OR goes down initially, then it grows back up to 81%, but for the whole year, the OR will be < 81%, because it wasn't 81% for the whole year.

In the report, the OR is on average for the whole year, not what it was on the busiest day, or the last day.

Correct. But it is available by quarter:

1Q13: 81% 1Q12: 85%
2Q13: 80% 2Q12: 82%
3Q13: 79% 3Q12: 79%
FY13: 79% FY12: 81%

I noticed it was the same year over year for the third quarter and then saw that park attendance was also up 3% that quarter versus 1% the same quarter a year earlier, which means (1) even more guests stayed off site that quarter, (2) many more day visits by AP holders, or (3) a combination of both.

Any way you slice it, that indicates a downward trend to those myopic bean counters

My suggestion is that those numbers are not escaping Disney; my hope is they could mean we can look forward to additional room discounts/free dining offers in 2014. Or at the very least, a reduced velocity in price increases.

And yes, it could also possibly mean that FP+ is somehow used as a tool to improve those numbers.

 

[amylevan]

I'm not saying it takes a couple years, although it depends on the number of new rooms, and what the demand they are experiencing beforehand is. If there is no demand for new rooms when they add them to inventory, they aren't going to suddenly be occupied.

But when you are talking about an FY report, even a couple months can have an impact on the bottom line.

But in the case of AOA people were actually booking rooms for it before it was even opened. Did you visit the resorts board during that time? People were counting down until they were able to book. So, yes, as soon as rooms were available people were in them.

 

[doconeill]

Why not increase demand by developing a system that encourages offsite guests to stay onsite to be able to make advanced FP+ reservations?

I think they released new rooms in conjunction with new Fantasyland updates thinking that the demand would absolutely be there.

Disney is too aggressive to allow any slippage in occupancy to go unnoticed without a counter action.

There are many new high priced DVC units being sold now. Should someone who stays at the Holiday Inn be given the same perk as someone who buys points at Grand Floridian Villas, or even someone who stays at the Grand Floridian? Units are being built at the Poly as well.

Sure, if they can time it right, they can take advantage of the increased demand. Often not easy to do.

But any investor report should say that they increased the number of units based on projected demand, resulting in a drop in occupancy rates in the short term.

 

[Laketravis]

But any investor report should say that they increased the number of units based on projected demand, resulting in a drop in occupancy rates in the short term.

And a shrewd investor may counter that you overshot demand

I think your observations are just as valid as mine even if we differ. In the end, I think it means the same for Disney, and that is they need to improve some things. I'm looking forward to them doing that, and am intrigued to see how they do it.

I think we will all ultimately benefit.

AFTERTHOUGHT: Oh! And not to mention tapering and the eventual end of QE3 which will ultimately make a Disney vacation more expensive for non-domestic guests (ie: Tour Groups!).

 

[Tozer]

Correct. But it is available by quarter:

1Q13: 81% 1Q12: 85%
2Q13: 80% 2Q12: 82%
3Q13: 79% 3Q12: 79%
FY13: 79% FY12: 81%

I noticed it was the same year over year for the third quarter and then saw that park attendance was also up 3% that quarter versus 1% the same quarter a year earlier, which means (1) even more guests stayed off site that quarter, (2) many more day visits by AP holders, or (3) a combination of both.

Any way you slice it, that indicates a downward trend to those myopic bean counters

My suggestion is that those numbers are not escaping Disney; my hope is they could mean we can look forward to additional room discounts/free dining offers in 2014. Or at the very least, a reduced velocity in price increases.

And yes, it could also possibly mean that FP+ is somehow used as a tool to improve those numbers.

And those myopic bean counters also see that while the overall occupancy rate percentage dropped from previous year, the per room guest spending increased $10 from $257 to $267 which equates to a 3.89% year over year.

 

[clsteve]

Correct. But it is available by quarter:

1Q13: 81% 1Q12: 85%
2Q13: 80% 2Q12: 82%
3Q13: 79% 3Q12: 79%
FY13: 79% FY12: 81%

I noticed it was the same year over year for the third quarter and then saw that park attendance was also up 3% that quarter versus 1% the same quarter a year earlier, which means (1) even more guests stayed off site that quarter, (2) many more day visits by AP holders, or (3) a combination of both.

Any way you slice it, that indicates a downward trend to those myopic bean counters

My suggestion is that those numbers are not escaping Disney; my hope is they could mean we can look forward to additional room discounts/free dining offers in 2014. Or at the very least, a reduced velocity in price increases.

And yes, it could also possibly mean that FP+ is somehow used as a tool to improve those numbers.

The flat revenue/room night or rev/room/guest would suggest they have little leeway in price increases with occupancy flat. With FP+ already a quarter in and not done, you'd think they'd have to wait until FY15 to push it over free dining and other discounts, if they were planning that..

 

[pilferk]

And those myopic bean counters also see that while the overall occupancy rate percentage dropped from previous year, the per room guest spending increased $10 from $257 to $267 which equates to a 3.89% year over year.

Which their reports attribute wholly to price increases.

So they're not actually buying more, just spending more.