Annual Pass Rumors??

[TraderStitch]

Warning. May contain speculation, conjecture or opinions.

The Reedy Creek dissolution issue is not connected to the issue of whether Florida resident APs remain for sale because of a requirement on TWDC for environmental mitigation for social disruption impacts due to approval of a land use development permit. Disney controls annual passes; not Reedy Creek.

The Reedy Creek dissolution has not gone away. The law passed and is on the books. The law states the dissolution happens in the summer is 2023. Only subsequent legislation can prevent the implementation unless there is a Florida court opinion that becomes final and beyond appeal that invalidates the statute. The statute does state the districts dissolved can be reformed, but that too would take subsequent action.

....ok......

 

[Ms Bibbidi]

....ok......

 

[Miffy]

With no annual passes, we'll be going just once per year, 10 day tickets. If we had annual passes, we'd add a second trip booking a hotel room, eating at restaurants, buying lots of merch. Disney is losing money by not offering an annual pass in our case.

Exactly this for us as well. That second or third trip would be completely off the table without our APs. And we stay on-site, so all our $s go to WDW.

 

[Brian Noble]

I don't get the perception that AP holders don't spend as much money in the parks as a day ticket guest. Someone who is willing to make the cash outlay for an AP seems to be a much more invested fan who would be more likely to want to accumulate Disney merchandise, pay for unique Disney experiences, etc.

It's not a perception. It's measured by the company, and they've said it over and over again, so either they are lying in earnings reports (not likely) or it's true.

And, it's not a question of total spending so much as spending per park day wich is the "per capita revenue" that they talk about in earnings reports. So yes, an average AP holder might spend 2x what an average day guest spends in a year. But, if the AP holder visits the parks 3x as often, it's a net loss for the company if they can be replaced by someone else. And based on the numbers, it appears that the company can forgo AP visits, have fewer day-ticket visits, and still be better off: that's essentially the summary of the year-to-date domestic theme parks of 2022 vs. 2019. Attendance in 2022 has been slightly lower, but the per-capita revenue is significantly higher, and overall the parks are more profitable.

in other words, the reason we are all hoping APs come back is the same reason that the company doesn't really want to right now: we'd like to visit the parks more often for a lower cost per day. The company would prefer we visit less often and pay more, to make room for other people who also visit less often and pay more.

If there is a sudden dramatic drop in demand for the parks, all of this will change. APs will be welcomed back with open arms. I'm not saying we should hope for a recession but...

There’s one thing that all the data analysis in the world can’t tell them about this AP holder, and I assume all others, how many trips are taken just because someone has an AP.

They probably have a pretty good idea in the aggregate, because they measure the travel patterns of lots and lots of guests. They don't need to predict what any individual guest does, they just need to have a sense of what a large group of guests will do--and being wrong in one direction with one person tends to be canceled out by being wrong in the other direction about someone else. In some ways, the larger the group you are trying to understand and predict, the easier it gets.

 

[HopperFan]

With no annual passes, we'll be going just once per year, 10 day tickets. If we had annual passes, we'd add a second trip booking a hotel room, eating at restaurants, buying lots of merch. Disney is losing money by not offering an annual pass in our case.

Us too.

With AP we travel from out of town for 5-6 weeks per year.

Without AP we will travel once every other year for 1 week.

There are other parks that will take our money.

Warning. May contain speculation, conjecture or opinions.

The Reedy Creek dissolution issue is not connected to the issue of whether Florida resident APs remain for sale because of a requirement on TWDC for environmental mitigation for social disruption impacts due to approval of a land use development permit. Disney controls annual passes; not Reedy Creek.

The Reedy Creek dissolution has not gone away. The law passed and is on the books. The law states the dissolution happens in the summer is 2023. Only subsequent legislation can prevent the implementation unless there is a Florida court opinion that becomes final and beyond appeal that invalidates the statute. The statute does state the districts dissolved can be reformed, but that too would take subsequent action.

AGREED. 100% correct.

The Reedy Creek Agreement mentions nothing about tickets, discounts, attractions etc. The agreement is an operational type agreement, a commitment to maintaining the land above standards, to pay for all of that, to be committed to the state and local area to maintain. Everything that Reedy Creek does is in essence what any local government would be responsible for, and Disney does it above and beyond standard requirements. Disney applies to Reedy (govt) for permits and then Reedy applies to Orange/Osceola Counties (govt) for final approval. And some can't even go to the Counties until the State Water Management has approved it and that is a complicated process. Disney can't even put up a sign without County approval. The hoops they jump through are above and beyond any other business.

Dissolution - completely agree as well. Why is there no news, no Disney making waves, no nothing. This is a huge impact to Disney but ... crickets. The lawyers are likely working hard, talking to people with the State, lining all their ducks in order .... but smartly waiting until after the November elections because the outcome could change the entire situation. There are persons in a position to comment who state if it does become null it will likely be reinstated shortly thereafter, maybe with some adjustments like bond payment issue. And if elections don't change course Disney has the ability to upend things in Florida in court for years. They aren't the only RFID/CID in the state and wouldn't it be a nightmare if Disney challenged they all be dissolved.

Last point - there were no AP when WDW opened. They came later. They have a purpose, especially at WDW. I mean there are days only AP can make reservations - if they were a second class guests why would that be? Disney is still going through growing pains on reopening, letting in tons of people without having the staffing and ability to run efficiently. If they were eliminating they wouldn't allow renewals. Lots is reopening and gearing up this last quarter and into first quarter. Hopefully by end of calendar year they make a decision one way or another and announce their plans.

 

[cakebaker]

Once I walk on property, they can track spending, fine. I know that and frankly don't care.
Point is, how do they know if I'm there on property for them to track 2 times extra with the AP or 10 times extra?
They don't.
So they don't know anything about how much the AP I hold is gaining them in the way of money. Or not gaining them.
That's all I'm saying. Unless they can read my mind and know how many additional trips I am taking because I hold an AP they do not know which of those trips they are tracking are from me having an AP and which are not. Maybe I'd be there the same number, maybe not. They do not know. If they think every out of state AP holder is there the same amount, they are probably wrong. I suspect most are making more trips than they would without an AP. So in that aspect, I am betting those AP holders are bringing in additional money

And I'm not touchy, you are missing the point.

They have ways of tracking things and making pretty accurate assumptions on guest behavior that can't be imagined by a lay person- just because you might make fewer trips per year without AP's is no more indicative of trends than the fact that I will continue to make as many trips as I normally make even if I don't have an AP. I happen to have one, just activated it last month, but I'm the only one in my family who does. Yet, we are making another trip in the middle of September- actually 2 just a week apart (pre-cruise, post cruise) and I will make at least 2 more before it's time to renew- with people who do not have AP's. Can they read you mind? Almost...and they have market research that does just exactly that. They know what they're doing.

It's causing me all kinds of angst because between the last trip and this next set, we could've all bought AP's making any other trips much less costly. But, we want to go so we'll suck it up and do it.

 

[Jrb1979]

Us too.

With AP we travel from out of town for 5-6 weeks per year.

Without AP we will travel once every other year for 1 week.

There are other parks that will take our money.


AGREED. 100% correct.

The Reedy Creek Agreement mentions nothing about tickets, discounts, attractions etc. The agreement is an operational type agreement, a commitment to maintaining the land above standards, to pay for all of that, to be committed to the state and local area to maintain. Everything that Reedy Creek does is in essence what any local government would be responsible for, and Disney does it above and beyond standard requirements. Disney applies to Reedy (govt) for permits and then Reedy applies to Orange/Osceola Counties (govt) for final approval. And some can't even go to the Counties until the State Water Management has approved it and that is a complicated process. Disney can't even put up a sign without County approval. The hoops they jump through are above and beyond any other business.

Dissolution - completely agree as well. Why is there no news, no Disney making waves, no nothing. This is a huge impact to Disney but ... crickets. The lawyers are likely working hard, talking to people with the State, lining all their ducks in order .... but smartly waiting until after the November elections because the outcome could change the entire situation. There are persons in a position to comment who state if it does become null it will likely be reinstated shortly thereafter, maybe with some adjustments like bond payment issue. And if elections don't change course Disney has the ability to upend things in Florida in court for years. They aren't the only RFID/CID in the state and wouldn't it be a nightmare if Disney challenged they all be dissolved.

Last point - there were no AP when WDW opened. They came later. They have a purpose, especially at WDW. I mean there are days only AP can make reservations - if they were a second class guests why would that be? Disney is still going through growing pains on reopening, letting in tons of people without having the staffing and ability to run efficiently. If they were eliminating they wouldn't allow renewals. Lots is reopening and gearing up this last quarter and into first quarter. Hopefully by end of calendar year they make a decision one way or another and announce their plans.

I think APs will eventually come back. IMO they will be drastically different with lots of block out dates that they will change on the fly depending on reservations and how booked resorts are.

 

[jujubiee4]

Well a bullet point from the earnings call yesterday was in an article....

• Christine, in speaking on levers of demand within the parks, mentions the sticky subject of Annual Pass availability and sales, stating that if demand would decrease, this could be revisited. BUT, she also notes that no demand decrease has been seen to date, suggesting that we may not be seeing resumed Annual Pass sales anytime soon.

https://www.wdwinfo.com/news-stories/the-walt-disney-company-q3-2022-earnings-call-recap/

 

[Mrs.AMC]

At end of the day I don’t have a dog in the hunt. We have AP and don’t need to buy any additional ones. If we did happen to let ours expire for some reason we’ve even got vouchers valid till 2030. Heck, they've got the money we spent on those vouchers already, plus the money we spend on the renewal each year. I'm not going in to the long drawn out reasons of why cause it's long, drawn out and frankly, our business. Guess Disney looks at that as money they didn't need too. Or did they have a magic 8 ball in their actuarial dept that figured that kind of spending out already? I don't care how many smart people who think they can read trends, there are too many variables in human behavior for them to get it right. They can get close but is close really good enough? Time will tell I suppose. I know one place that's happy. Universal. They are sending a whole lot of guests over there. We've doubled our number of days spent at Universal on a given year. They act happy to see us. We've even got AP Days coming up soon. Imagine that, entire promotion dedicated to AP holders.

I have a friend I really feel for. She bought her AP in the brief window when they opened sales and planned to get her kids on their next paycheck. Well that didn’t happen. Nor did their additional trips without them. So Disney made money on her. She would have been much better off with just tickets. Did Disney read her mind? Did they get her prediction right? Doubt it. And I doubt she's alone in the fact that she spent more buying an AP than she would if she's just stuck with tickets. Others do too. It's why many parks sell AP, they know a fair number of guest buy them and don't utilize them. I know we fit that category for Dollywood 2 years in a row. I know they can track that type of guest. Wonder how many Disney has?

 

[HIRyeDVC]

It's not a perception. It's measured by the company, and they've said it over and over again, so either they are lying in earnings reports (not likely) or it's true.

And, it's not a question of total spending so much as spending per park day wich is the "per capita revenue" that they talk about in earnings reports. So yes, an average AP holder might spend 2x what an average day guest spends in a year. But, if the AP holder visits the parks 3x as often, it's a net loss for the company if they can be replaced by someone else. And based on the numbers, it appears that the company can forgo AP visits, have fewer day-ticket visits, and still be better off: that's essentially the summary of the year-to-date domestic theme parks of 2022 vs. 2019. Attendance in 2022 has been slightly lower, but the per-capita revenue is significantly higher, and overall the parks are more profitable.

in other words, the reason we are all hoping APs come back is the same reason that the company doesn't really want to right now: we'd like to visit the parks more often for a lower cost per day. The company would prefer we visit less often and pay more, to make room for other people who also visit less often and pay more.

If there is a sudden dramatic drop in demand for the parks, all of this will change. APs will be welcomed back with open arms. I'm not saying we should hope for a recession but...


They probably have a pretty good idea in the aggregate, because they measure the travel patterns of lots and lots of guests. They don't need to predict what any individual guest does, they just need to have a sense of what a large group of guests will do--and being wrong in one direction with one person tends to be canceled out by being wrong in the other direction about someone else. In some ways, the larger the group you are trying to understand and predict, the easier it gets.

Perfectly said. Disney wants people to come less and spend more when we’re there. Putiing more limits and restrictions on APs seem to be the middle ground

 

[Lewisc]

At the very least, they should open it up to DVC owners.

To be more specific offered only to new direct purchasers.
The original sales incentive for DVC sales was included tickets for 10 years. My memory was you had the option of checkin day or checkout day. Disney could go back to something like that, possibly with some kind of charge

 

[Cynner]

There’s one thing that all the data analysis in the world can’t tell them about this AP holder, and I assume all others, how many trips are taken just because someone has an AP.

Oh yeah. That’s us. We are only going two more times this year because we have DVC credits from the Covid shutdown. We would have done 4 more trips if we had an AP.
We had an AP and were halfway through 6 visits when everything shutdown. We canceled the AP and did not extend it, and stupidly waited instead of buying new ones when they were available. We drive down from MD, stay on prop - rented DVC points or Club level. But since we can’t get APs, we are just doing those two trips and no more. Probably won’t be back for years.

 

[Cynner]

Another note:
Though they say ‘unfavorable mix’ - what Bob didn’t say was ‘the park was full and more ticketed guest couldn’t get in’. Cause if that’s not the case, they didn’t loss money, they got money from AP holders when they would have gotten none.
On the conversation about how they are still filling the capacity of the park and if that goes down maybe they’ll add more AP capacity - they also said the capacity is NOT at 2019 levels yet. It’s the pool size thing - if we move to a bigger pool there will be (potentially) more room for APs.

 

[imbelle]

When we took the Keys to the Kingdom tour, our guide told us that guest entrance fees basically just covers employee payroll. According to him, where WDW makes its profit is from merchandise sales (hence the "dumps" into the gift shops). If there's any truth to this, then it seems like the focus should shift from taking money from AP holders and still trying to fill their spots with day guests. The Orlando locals that I know who were the types to pack a lunch were priced out of APs long ago.

 

[Ms Bibbidi]

"so to the extent you had lightened demand, you could loosen up some of those to bring more people back to the park..."

The phrase 'some of those' in that sentence refers to the 'limited number of annual passes that we have' in the first paragraph.

To me that statement implies that IF demand drops in the future (i.e. lower daily park attendance due to recession) Disney's only intended remedy is to loosen the number of blackout dates FOR THE AP'S THAT ARE CURRENRLY SOLD--and not to resume selling new AP's.

I've seen a lot of posts from non-AP holders (like me) who are hopeful that they'll start selling new AP's again in a recession or once the post-Covid 'revenge travel' dies down. But looking at what was said vs not said (loosen blackout dates vs resume new sales) by Disney as their current thinking for a contingency plan, I'm afraid that's a false hope...

Warning. This reply post may contain speculation, conjecture or opinion.

Sadly, I tend to agree. I don't see MK renewals, AP new sales or anything like that in the near term future. I think looking to a recession prying them loose is a false hope.

1. We have new data I have suspected for a while. Christine McCarthy, Executive Vice President and Chief Financial Officer, who also clearly qualifies legally as a “person most knowledgeable” has stated a new fact: DISNEY HAS SET AN EXPRESS LIMIT ON THE NUMBER OF ANNUAL PASSES THEY WILL SELL AND ALLOW TO BE OUTSTANDING. So, until enough people forfeit their annual passes, they will not sell them again.

2. She referenced using only one tool to bring more people into the parks; loosening blackout dates. However, even when they add a bonus day for passholders, if it lands on a Sunday, the Pixie passholders who are blocked on Sunday cannot make the reservation. The effect of a bonus day is it does not count against the limit on the number of park holds.
3. Ticket holders and passholders who choose from the resort bucket (bucket #1) because they are staying in a Disney resort or one of the 15 huge Orlando area resort hotels that pay Disney so their guests who are passholders can get bucket #1 on-site privileges. So, to make easing blockout restrictions effective for bringing more people into the parks, this has to target those passholders in bucket #2. Those would be, mostly Florida residents, not using the resort reservation bucket and most likely local.

4. To make this tool most effective and not interfere with more favorable guests, it would be short notice availability. Almost zero planning lead time. That favors local passholders, like the Pixie passes they continue to sell.

5. She said they could bring more of those people into the park … and just enjoy the park and spend some money. The statement envisions a lack of connection booking a resort. Couple this with the fact that only resort guests in bucket #1 do the advance planning and advance dining reservations, the good stuff is already taken by the time local passholders can book one of their three days. So they just enjoy the ambiance of the parks and spend some money. The bucket #2 passholders are severely throttled by Disney’s own design.

6. If Disney wins the lawsuit and they are enabled to manipulate the park reservations at will without restraint, then they may sell an unlimited number of annual passes and just heavily use the throttling levers on those unfortunate souls in bucket #2. You know — the marginally less valuable guests, the unfavorable attendance mix guests, the ones not the right mix, the deplorables. The class certification motion is expected to ne ruled on in January 2023. If that happens the trial is expected in about July 2023.

Immediately after AP sales ceased on November 21, 2021, a Disney employee said they were expected to return in 2022. I doubt that employee had the picture of the lawsuit and the amount of time, the travel serge and that duration, the scarcity of employees, or the other many factors that caused Disney to pause sales. What we know today is after that time, Disney has set a finite number on how many annual passes they will have outstanding. That tells me sales are probably not seasonal. If new sales open up again it may be for days or just hours to fill those who did not renew.

Lately, recessions do not last very long. But sales of new annual passes with the expectation of renewal could last decades. So, even a recession is less likely to trigger new annual pass sales. Disney is focused on opening availability for throttled passholders who already have APs. That means bucket#2. Because they love park reservations and buckets. Those are not going away.

 

[AnnaKristoff2013]

At the very least, they should open it up to DVC owners.

Why? DVC is selling like hotcakes. They have no need to. In their minds, DVC members are definitely the “least favorable” type of guest. We don’t even pay for hotel stays!

 

[Ms Bibbidi]

Well a bullet point from the earnings call yesterday was in an article....

• Christine, in speaking on levers of demand within the parks, mentions the sticky subject of Annual Pass availability and sales, stating that if demand would decrease, this could be revisited. BUT, she also notes that no demand decrease has been seen to date, suggesting that we may not be seeing resumed Annual Pass sales anytime soon.

Warning. This post might contain speculation, conjecture or opinion.

I have not read the entire transcript, but I did not see any language from Christine McCarthy that said sales of new annual passes could be revisited. She talked about manipulating blackout dates on existing passes. She said they had capped the number of APs sold. But nothing about restarting new sales.

 

[DeeBee3]

Why? DVC is selling like hotcakes. They have no need to. In their minds, DVC members are definitely the “least favorable” type of guest. We don’t even pay for hotel stays!

I'd say that's true, but some people will use the resort and not do the parks. It would be hard for me to do with my little kids, but I could see doing that when older and going to Universal or other places in the area. Obviously some people do that now.

 

[Ms Bibbidi]

Warning. May contain speculation, conjecture or opinions.

This one is classified as rumor.
On May 30th Disney stopped sales of all remaining Magic Keys at DLR.
They also cancelled ongoing online renewals.
Cast Members informed guests they would be offered a renewal opportunity during their renewal window — which opened about July 16th — 40 days before the first MKs were sold.
Nothing happened.
CMs updated and said renewals this summer.
Nothing.
A blog rumor was August for renewals.
No sign of it.
Newest rumor — the CMs have now told some passholders there will not be any renewals of the MK program.
Crickets from Disney in the face of this rumor.
At Q3 yesterday Chapek referred to MK passholders as unfavorable.
Crickets again.

 

[Ms Bibbidi]

Warning. May contain speculation, conjecture or opinions.

There was nothing in the transcript of the 8-10-22 Q3 Earnings call about annual passes and a recession.