Budget cuts at Walt Disney World

[DDLand]

Noted, thanks. Do you happen to know if Disney regard DVC as purely an extra revenue source from WDW, or do they also see it as also driving business to WDW? The natural lock-in of such an arrangement would suggest the latter, but Disney's seeming lax attitude to DVC points rentals, suggests they're comfortable with DVC being what it is.

There's definitely synergy there. They're able to leverage the location and name to sell highly priced time shares, but at the same time WDW is receiving benefits from the arrangement. Those DVC guests are locked into going on vacations year after year and spending more and more on tickets, merchandise, and food.

I do think there was interest in turning DVC into a much more standalone business with destinations away from the park. Around the time Aulani, with its 400ish two bedroom equivalents was announced, Disney expressed their interest in a Ski resort and a resort in the Caribbean. Neither happened. I think the Disney of today is satisfied with DVC just being a way to drive visits to the parks.

 

[Ensusieasm]

There's definitely synergy there. They're able to leverage the location and name to sell highly priced time shares, but at the same time WDW is receiving benefits from the arrangement. Those DVC guests are locked into going on vacations year after year and spending more and more on tickets, merchandise, and food.

I do think there was interest in turning DVC into a much more standalone business with destinations away from the park. Around the time Aulani, with its 400ish two bedroom equivalents was announced, Disney expressed their interest in a Ski resort and a resort in the Caribbean. Neither happened. I think the Disney of today is satisfied with DVC just being a way to drive visits to the parks.

Disney bought land at National Harbor near DC for a DVC resort that never happened there. I don't know if they still own the land.

 

[JMar54]

I saw the Festival of the Lion King today and yesterday and at both performances there was no one playing the role of Kibibi. Does anyone know if this is a part of budget cuts?

 

[rteetz]

I saw the Festival of the Lion King today and yesterday and at both performances there was no one playing the role of Kibibi. Does anyone know if this is a part of budget cuts?

Which one is Kibibi? It's possible that the actor called in sick for the day.

 

[JMar54]

Which one is Kibibi? It's possible that the actor called in sick for the day.

The female who sings Can You Feel The Love Tonight. I was thinking that too, but two days in a row? Wouldn't they bring in another performer?

 

[DDLand]

Disney bought land at National Harbor near DC for a DVC resort that never happened there. I don't know if they still own the land.

Indeed they did! I forgot about that particular purchase myself. As I recall they've since sold it, but yes, another solid example of their attempts at diversification. It would've been interesting to see what they came up with, though I do like the development in the parks and I'm glad to see that happening.

 

[lockedoutlogic]

Noted, thanks. Do you happen to know if Disney regard DVC as purely an extra revenue source from WDW, or do they also see it as also driving business to WDW? The natural lock-in of such an arrangement would suggest the latter, but Disney's seeming lax attitude to DVC points rentals, suggests they're comfortable with DVC being what it is.

I can tell you 100% that the concept and the first 20 years or so of operation were designed around the latter...

As in it was meant to lock people in and get them there to buy stuff...and create multigenerational demand.

Recently...it's been more cash up front and "good luck getting what you want out of it"

The goose has been strangled by the greed in near 100% of historical cases.

 

[lockedoutlogic]

DVC is a part of a separate division. WDW has been and will continue being profitable all on its own. DVC makes waves, but nothing like the Billions they make from Admissions, Hotels, and Food/Merch.

All the profit is made on merch...the rest is to cover operation. That's the way it should be...

...but wait...we, the people, have allowed a 100% increase in the cost of everything else since 2005 without a whisper of descent.

Bread and circuses for every board memeber then.

 

[rteetz]

The female who sings Can You Feel The Love Tonight. I was thinking that too, but two days in a row? Wouldn't they bring in another performer?

Usually yes they would but I just can't imagine that part being cut. There must've been something where they couldn't get a performer for that part those two days.

 

[sachilles]

http://www.orlandosentinel.com/business/tourism/os-disney-cuts-20160304-story.html

Here's a follow up article in the Sentinel…which will be largely ignored. i do like that they quote Deb in it - as opposed to an adjunct Econ Professor from the University of halifax or something...

So the teamsters haven't had reason to put up a stink. 100 painters, and 10 DHS street performers axed. Hours marginally reduced short term. Lodging staff reduced, but claimed to be about systems efficiency.
I don't think things are crazy or out of hand.
EDIT: not implying lockedoutlogic thinks its crazy either....just quoting his post about the article.

 

[lockedoutlogic]

So the teamsters haven't had reason to put up a stink. 100 painters, and 10 DHS street performers axed. Hours marginally reduced short term. Lodging staff reduced, but claimed to be about systems efficiency.
I don't think things are crazy or out of hand.
EDIT: not implying lockedoutlogic thinks its crazy either....just quoting his post about the article.

I agree...

Just not about the "marginal reduction" of hours.

8 hours is a big deal when you're in the neighborhood of minimun wage.

 

[DDLand]

All the profit is made on merch...the rest is to cover operation. That's the way it should be...

...but wait...we, the people, have allowed a 100% increase in the cost of everything else since 2005 without a whisper of descent.

Bread and circuses for every board memeber then.

I would guess Walt Disney World's revenue is more heavily weighted towards food then other Resorts. I recall Tokyo Disney being about half Admissions and half Food/Merch. I think that should be consistent with Walt Disney World. Only whereas Tokyo Disney moves more merchandise, Disney World sells meal after meal of highly priced food at not only quick serve, but also higher margin sit down restaurants too.

 

[lockedoutlogic]

I would guess Walt Disney World's revenue is more heavily weighted towards food then other Resorts. I recall Tokyo Disney being about half Admissions and half Food/Merch. I think that should be consistent with Walt Disney World. Only whereas Tokyo Disney moves more merchandise, Disney World sells meal after meal of highly priced food at not only quick serve, but also higher margin sit down restaurants too.

Right...but you're talking revenue...not profits. I'm more talking profits.

 

[DDLand]

Right...but you're talking revenue...not profits. I'm more talking profits.

Well even then margins on Fast Food or Olive Garden quality products that they're selling for about 2 times their typical going rate should be extremely high. I agree that the merchandise is undoubtably high margin, but I'd imagine in both Revenue and Profit Food would be in the same ball park or greater. On a 5 day WDW vacation it's not a guarantee that people buy high margin merchandise everyday. It is basically assured that people buy at least one high margin meal for their family. That can quickly add up.

 

[lockedoutlogic]

Well even then margins on Fast Food or Olive Garden quality products that they're selling for about 2 times their typical going rate should be extremely high. I agree that the merchandise is undoubtably high margin, but I'd imagine in both Revenue and Profit Food would be in the same ball park or greater. On a 5 day WDW vacation it's not a guarantee that people buy high margin merchandise everyday. It is basically assured that people buy at least one high margin meal for their family. That can quickly add up.

Profit is as high as 95% in the giftshop...it's as low as break even at the ticket booth or lunch counter...it's just how the accounting works.

But my info is dated (15 years)...so the massive price increases - and they have bee just that - probably have outrun the operational costs.

 

[DDLand]

Profit is as high as 95% in the giftshop...it's as low as break even at the ticket booth or lunch counter...it's just how the accounting works.

But my info is dated (15 years)...so the massive price increases - and they have bee just that - probably have outrun the operational costs.

Yeah I don't see how they're just breaking even. Especially with the proliferation of DDP, they have people spending more and more of their vacation dollars on dining. Just their counter service pricing would make the likes of any restauranteur jealous or a little repulsed.

 

[lockedoutlogic]

Yeah I don't see how they're just breaking even. Especially with the proliferation of DDP, they have people spending more and more of their vacation dollars on dining. Just their counter service pricing would make the likes of any restauranteur jealous or a little repulsed.

Probably...

And if I had to bet - I would say that the ddp was done for one reason: to get the dining cost out of the way long In advance so mom and dads allowance money during the vacation goes to the giftshop. I've smelled that fish before.

If it also has driven aggregate dining spending up - then that's just sauce for the goose.

 

[tgropp]

Does the video gone viral of the worker at Arts of Animation Hotel Restaurant who is seen Scrubbing the floors with the mop and then using same mop wipe off the tables where people eat have anything to do with Budget cuts? Third party cleaning service but all due to cutbacks. If you had seen this happen at a restaurant where you eat back home, would YOU EAT AT THAT RESTAURANT AGAIN? the person who took the video sent many numerous emails till he found a Disney exec to act on it. This does not make me feel warm and fuzzy about Disney's attitude toward the paying public.

 

[Eoghann]

Why is 2015 a statistical blip? Occupancy was up. Guest spending was up. Revenue was up. Attendance was up.

2015 was the beginning of a turn around.

No I wouldn't go that far. You can't call it a turn around on a single year's data. You also can't call it a blip without further data.

You @DDLand tend to take an overly positive spin towards Disney, while the person I was responding to is taking an overly negative one.

The reality lies in the middle. For the last 6 years attendance has been stagnant, but the raw numbers are okay. Attendance isn't really the problem.

 

[Eoghann]

Disney bought land at National Harbor near DC for a DVC resort that never happened there. I don't know if they still own the land.

Disney has never had much success with resorts (or other similar enterprises) that aren't attached to their parks. I think without the draw of the park, the expense becomes higher than the magic quotient. They like the idea on paper, but they can't execute on it.