Bad CMs or Bad Business Plan - Let's discuss

[DisneyChristmas]

It's been a tough 15+ months financially for many people. WDW management wants to keep guests in the rooms and cash flowing through the park concessions/restaurants despite the recession.

So, it's good news for guests who get three free nights by staying 4 previous nights...and then the deal is even sweeter with two free meals a day. Suddenly the resorts are filled to capacity. Restaurants are busy all hours of the day and evening.

Meanwhile management cuts CM positions - mousekeeping, food services, park maintenance. Who's going to keep EVERY resort room clean every day? Who's going to serve hundred of meals an hour? Who's going to keep rides running and get holiday decorations hanging? How can the resorts and parks run full-out as if every week is a peak seaon week? It's easy to blame the CMs you can see, but what's really happening?

Didn't anyone see a disaster in the making? Or was it just a deperate desire to show a strong bottom line each month?

Let's discuss...

 

[luvdisney77]

Well, after reading this thread....http://www.disboards.com/showthread.php?t=2389991 (and others like it) and having a similar experience at CBR, you can certainly make a case for it.

 

[ppandey43]

Disney earnings offer few signs of theme-park turnaround

Featured, Jason Garcia, News — By Jason Garcia on February 9, 2010 at 4:26 pm

Magic Kingdom StockWalt Disney World and the rest of the Walt Disney Co.’s theme parks, battered for more than a year by the economic downturn, still aren’t showing many signs of a turnaround.

Disney said Tuesday that room reservations at its U.S. resorts for the January-through-March quarter are running 10 percent behind last year’s levels, the weakest booking pace the company has reported since the global recession began.

“Consumers remain tentative,” Jay Rasulo, the parks-chairman-turned-corporate-chief-financial-officer, told analysts during a conference call to discuss the company’s latest quarterly earnings. “We expect the environment to remain challenging in the coming quarters.”

The sober outlook followed a better-than-expected fiscal first quarter for Walt Disney Parks and Resorts. After a year of plummeting profits, operating profit at the division slipped just 2 percent to $375 million during the three months that ended Jan. 3, on total revenue that was essentially unchanged at $2.7 billion.

Those results, along with improved advertising sales at the company’s cable-TV networks, helped Disney top Wall Street estimates in the final three months of 2009 with a quarterly profit of $844 million, flat with a year earlier. Total revenue inched up 1 percent to $9.7 billion.

The first-quarter results for the parks were inflated by a quirk in Disney’s fiscal calendar: Because the quarter ended Jan. 3, it included the full benefit of the Christmas-New Year’s holiday travel rush — unlike the previous year, when Disney’s fiscal first quarter ended Dec. 27.

With that favorable timing, combined attendance at Disney World and Disneyland in Anaheim, Calif., was 9 percent higher than a year earlier. But when the New Year’s effect was stripped out, attendance was up 4 percent — down 1 percent in Orlando but up 15 percent in California. Average hotel occupancy at Disney World was down four percentage points from a year ago, to 81 percent.

Combined guest spending between Disney World and Disneyland fell 4 percent for the quarter, reflecting the continued discounts Disney has been offering to keep its theme-park turnstiles clicking.

While Disney has in recent months been attempting to wean travelers off such promotions by offering less-generous packages, company executives acknowledged Tuesday that pulling back is tricky.

“What we do is we test the marketplace. …You maintain pricing — meaning higher pricing — to a point, and, then, if the marketplace doesn’t respond to that, that’s when you judiciously roll out your promotional strategy,” Disney Co. President and Chief Executive Officer Bob Iger said. “I’m pretty confident that we’re going to be able to drive the volume that we need over the course of the year. The question is how much we will have to discount to get it.”

Those discounts might have to deepen quickly for Disney to narrow the 10 percent booking gap going forward, said Laura Martin, a stock-research analyst with Needham & Co.

“They’ll have to add back promotions,” Martin said, though she said she still does not expect the discounts to be as deep as they were in early 2009, when the global recession was at its worst point.

Disney, Martin added, also appears to be grappling now with some of the downside to its discount strategy. The soft pace of bookings so far this spring, she said, suggests that last year’s promotions may have left a whole in demand this year, as vacationers who might have made their trips in 2010 traveled in 2009 instead to take advantage of the deals.

“It looks as if they may have pulled attendance from this year into last year,” Martin said.

Still, Disney said it is confident that at least some of the lag in future bookings will narrow, given travelers’ increasing tendency to wait until the last minute to book trips. “The 10 percent that we are down today for me is not fully indicative of where the quarter is going to end up,” Rasulo said.

Beyond its theme parks, Disney was once again boosted by its television networks, where operating profit climbed 11 percent to $724 million. Disney’s cable-TV channels were again a particular source of strength; sports giant ESPN, for example, churned out record ratings and higher affiliate and advertising revenue.

After a dismal fiscal 2009, operating profit at Disney’s movie studios rose 30 percent during the first quarter to $243 million, and executives said they have high hopes for upcoming releases such as Alice in Wonderland and Toy Story 3. Iger said Toy Story 3, which will be infused throughout the company’s properties, “represents the essence of our franchise strategy.”

Operating profit at Disney’s consumer-products division fell 8 percent to $243 million, weighed down by slowing sales of High School Musical and Hannah Montana merchandise. Losses at Disney’s video-game unit narrowed from $45 million to $10 million.



http://www.orlandosentinel.com/

 

[Disneylvr]

Well, after reading this thread....http://www.disboards.com/showthread.php?t=2389991 (and others like it) and having a similar experience at CBR, you can certainly make a case for it.

A agree and it's just not at one resort. Good housekeeping, maintenance and customer service at the resorts seems very spotty now days. It was all of those things that made us a repeat customer (20+ visits) but if have an experience like I have read on these boards and it isn't taken care of in a timely and satisfactory manner we will take our vacation dollars elsewhere. In these tough economic times, we are allot more careful where our money is going and that will be our way of life even when the economy improves.

 

[JPN4265]

I have seen a drop in the quality of food, and service ever sense Disney has started outsourcing these positions. The people that do this now, just don't care. They are only in it for the pay check. I believe that the quality of the food, and service will continue to drop. I don't see Disney ever changing back to the way it was.

 

[swald91]

I thought that Disney put out these specials b/c of the economy-but I also thought that although they were filling the resorts-they weren't getting people to SPEND on merchandise...
I can't complain on our resort rooms cleanliness-but definitely had issues with it this time around...just things not working & nothing being done to fix it. Again, this wouldn't stop us from going there-we just go when we can find a good deal.

 

[CanadianGuy]

I missed something.. I never saw the 2 meal free along with buy 4 get three as a combo offer..

Did I miss one?

 

[Tara922c]

My friend who works for Disney (management) told me most of the layoffs are people in corperate, or what they call "non essential" castmembers. For instance, she said some of the event planners were laid off. Also a few managers were laid off. She said they didn't layoff any hourly cast members, but they may have cut their hours. I do know that drastically cut down on the amount of people doing professional internships (not college program). I know one semiester, they didn't have anyone doing professional internships. Another thing they are doing is hiring more international college program kids. Disney only has to pay them a fraction of what they pay an American student, and their gov't pays the rest. Most of them are from Hong Kong, and China. (this is what my friend told me last May when I was there asking about layoffs). I know Disney is big on their college program, I did it. They pay their college program people less money than their part time or full time employees. College program get no benefits other than over time. For instance, if a FT castmember works 7 days in one week, they get double time on their 7th day, College program does not. There are about 6000 students doing the college program at any given time, and those students are given hours no one else wants. Go to any of the CS places, and merchandice stores at night, and I guarntee you 90% of the CMs there are college program kids. I understand that Disney may have to make cut backs because they are not bringing in what they use to. They can't be, it is so much cheaper to go than it use to be. While park attendance is up (and I do beleive the only reason is because of discounts) in park sales are way down. Even though people are coming to disney, they are not buying as many souvies, or spending as much money on food and snacks.

I don't know, I like the discounts because the benefit me, and I didn't notice a lack of CMs last time I went in May on a discount. Even with a discount I still spend a good chunk of change to go to Disney, and I don't want the service to suffer. I also understand Disney needs to do what they need to do to keep a float. Because afterall, the bottom line is Disney is a business, and without people going to the parks, they will fail, and there will be no disney.

 

[Burnt Toast]

I missed something.. I never saw the 2 meal free along with buy 4 get three as a combo offer..

Did I miss one?

No, because you can't combine discounts. OP was... what's the word I'm looking for?

 

[swald91]

No, because you can't combine discounts. OP was... what's the word I'm looking for?

Well I can't find it & I know I did read it-I think it was yesterday about someone getting 2 deals combined in one-they were worried that if they booked it that they would have problems at check-in but I think they spoke to more than 1 CM & they said it could be done??????

 

[KellyNY]

All I can say, our room back in May was spotless, CMs were friendly as usual. I did not notice any difference in quality of food, slightly more expensive, yes, but that is all. They do not cut housekeeping, so rooms should be clean as always. Sure sometimes there is bad service, dirty rooms and so on, but just because some members here came across problems does not mean there are deeper problems.

 

[angwill]

My friend who works for Disney (management) told me most of the layoffs are people in corperate, or what they call "non essential" castmembers. For instance, she said some of the event planners were laid off. Also a few managers were laid off. She said they didn't layoff any hourly cast members, but they may have cut their hours. I do know that drastically cut down on the amount of people doing professional internships (not college program). I know one semiester, they didn't have anyone doing professional internships. Another thing they are doing is hiring more international college program kids. Disney only has to pay them a fraction of what they pay an American student, and their gov't pays the rest. Most of them are from Hong Kong, and China. (this is what my friend told me last May when I was there asking about layoffs). I know Disney is big on their college program, I did it. They pay their college program people less money than their part time or full time employees. College program get no benefits other than over time. For instance, if a FT castmember works 7 days in one week, they get double time on their 7th day, College program does not. There are about 6000 students doing the college program at any given time, and those students are given hours no one else wants. Go to any of the CS places, and merchandice stores at night, and I guarntee you 90% of the CMs there are college program kids. I understand that Disney may have to make cut backs because they are not bringing in what they use to. They can't be, it is so much cheaper to go than it use to be. While park attendance is up (and I do beleive the only reason is because of discounts) in park sales are way down. Even though people are coming to disney, they are not buying as many souvies, or spending as much money on food and snacks.

I don't know, I like the discounts because the benefit me, and I didn't notice a lack of CMs last time I went in May on a discount. Even with a discount I still spend a good chunk of change to go to Disney, and I don't want the service to suffer. I also understand Disney needs to do what they need to do to keep a float. Because afterall, the bottom line is Disney is a business, and without people going to the parks, they will fail, and there will be no disney.

From what I heard from a CM friend at first they cut all the hours and then put on a hiring freeze. As people quit due to not having enough hours or set hours so they could get a second job they then started ove work the CM's to make up for the missing employees since they were not hiring new to replace the old.

 

[CanadianGuy]

Well I can't find it & I know I did read it-I think it was yesterday about someone getting 2 deals combined in one-they were worried that if they booked it that they would have problems at check-in but I think they spoke to more than 1 CM & they said it could be done??????

Yes. I know that thread. The OP came back after trying to actually book it and said "It couldn't be done"..

Disney doesn't allow discount stacking.

They have more discounts to choose from than every before.. But ultimately.. you can only pick one.

So.. yeah.. there is no 'combo discount'.

To your point - there have definitely been more housekeeping issues posted about than I recall in recent memory.. but there have always been housekeeping issues.. as you would expect at any resort destination with over 50,000 rooms and over 65,000 employees..

And it's worth remembering people are more motivated to come to the internet and post a complaint than they are to come and say "Everything was fine. Resort was great. Nothing to see here. Move along" .. KWIM?

Heck, one time during my stay at a value I woke up to see a water drip from the ceiling in my room .. .dripping down onto the carpet. I went out for breakfast and when I came back ... a good chunk of the ceiling had fallen on the carpet and the water was leaking even MORE!

I called maintenance and reported the problem and expected to be moved rooms.

When I came back from the parks, they had fixed the leak, replastered, painted and fixed the ceiling, the carpets had been steam cleaned! I was floored! You literally could not tell anything had been wrong in that room. I figured for sure my room would be out of service for days. Turned out, the person above had left water running that overflowed the tub or sink.

Their room was flooded and it leaked down to mine. Woopsie.

That was pretty cool they did it all so fast. And only about 18 months ago.

OTOH, on the same trip I made the mistake of looking under my bed. YUCK. It clearly hadn't been vaccuumed or cleaned in a LONG time. There was a kids sock, gum wrappers and all kinds of gross stuff... I called housekeeping and said "EWWW"...

They cleaned it later that day .. but still.. you're in a hotel. There's going to be stuff like that.

 

[eliza61]

Disney like many businesses are walking a fine line these days in a rough economy.

1) They must offer deep discounts to keep the rooms full. Truthfully, would you go to Disney you had to pay rake rates? but deep discounts do not bring in big profits. Stock holders are not generally flexiable people, they want to see their dividends go up.

2) People are holding tightly onto their money. So even if they go, they are not buying tons of stuff that bring big markups.

3)Cuts are starting to be seen. I'm not going to rehash the argument of what causes food quality to go down (dining plan or no) but the bottom line is overall quality is down. Food is getting a reputation of being mediocre, cutbacks in services (fantasmic cutbacks, no pre show live entertainment, etc) are noticeable especially to returnees.

Not sure where it will end. for the first time in 15 years we do not have a trip in the planning. The value is simply not there for us, so we're taking our vacation dollars else where. That makes me sad. I have a dvc so I can bank my points, I plan on returning in perhaps 2 years hopefully to the old Disney magic.

 

[IMGONNABE40!]

I stayed at both POFQ and WL last month and had no issues with mousekeeping or getting a quick response from maintenance when the lock on my safe "stuck". Took about 10 minutes to get a manager up to observe the CM change out the lock.

I also had great experiences at food courts and all modes of transportation. Other than sub-freezing temps, I can't think of a thing that went wrong with my trip.

That being said, I know others have been experiencing "issues". I would imagine that "somethings gotta give". How can Disney keep offering discounts to the extent that they have and not have to cut somewhere? Perhaps it is no longer reasonable for us to expect the same high standards if we are no longer paying the same top dollar that we have in the past?

 

[ctjsowens]

When we were there last June at WL everything was perfect. No problem with housekeeping or anything. Everything in the parks seemed normal. The only thing I did notice was the air conditioning on some of the rides was not as cold as it used to be.

 

[Misti]

They pay their college program people less money than their part time or full time employees. College program get no benefits other than over time. There are about 6000 students doing the college program at any given time, and those students are given hours no one else wants.

Wowsa, things must have changed since I did College Program. We got paid the same plus an increase for every foreign language you spoke. This was a while ago mind you. Did Guest Relations at EPCOT. Some of my fondest college memories to be honest!

That being said, Disney pays very poorly in general. The Concierge CM's who work their behinds off and have to deal with some pretty nasty guests a lot of the time get paid barely above minimum wage. Given what they earn, I think overall Disney CM's do an exceptional job most of the time. There's always stories of bad experiences but I've been fortunate to have pretty good stays overall.