Budget cuts at Walt Disney World

[lockedoutlogic]

And I think that will change with avatar and rivers of light.

You got about a 50/50 shot on that.

And then the wookies come to town and AK may get the brunt of the park cannibalization

 

[SoCalTrojanSkip]

Ohhhh ok I see. They are banking on there being enough people within a close enough radius to travel there. Maybe that's why they decided to build 3 parks that are relatively close together (Toyko,Shanghai, and Hong Kong)?

Having never been to any other parks but WDW and DLR personally Disneyland Paris made the most sense to me..there is a strong enough liklihood of the locals visiting but also you are in a strategic position where you can get tons of outside visitors who can easily make the trek there and even some people from United States and Canada have made the trek out there.

As I understand it - the Hong Kong development is still not a resounding success. Very "euro" in its operational history...

Shanghai is gonna be interesting. I think Disney is very worried. And I don't believe they feel it's gonna go well. The entire project was based on projections of a "growing" economy that simply isn't there...


Disney is a global brand...no doubt, but perhaps Disney parks should just be a "NATO" thing.

From what I've heard, Shanghai has been a problem from day one...
There have been labor problems on both the contractor side and the WDI side. The contractor side, simply couldn't get it together in terms of finding competent, willing, construction labor near the site so labor was being shipped in from other parts of China, with limited success.

On the WDI side, there were large incentives being offered to a lot of the WDI employees because they simply could not find enough people interested in moving to Shanghai.

The economic analysis here is spot on...
These parks were built (partly) on analysts forecasts (and hopes) that the Chinese economy would continue to grow steadily indefinitely...
As anyone who's been paying even the littlest bit of attention will tell you, this has not happened and the Chinese economy has actually hit a major stumbling block (due in part to things out of their control, and due in part to issues of their own making) that has caused a lot of contraction in the sort of incomes that they were hoping to attract.

I think that Hong Kong was the canary in the cage, and TWDC didn't know (or refused to acknowledge) there was gas in the shaft that is China until very recently....

I keep hearing about record profits for the Disney Theme Parks division. Surely, the company can dip into these to use for Shanghai as opposed to cutting costs for the other theme parks?

And perhaps, Disney has extended itself way too much. Maybe they should think about slowing their expansion and concentrate on fixing their locations that are currently open.
But that would be too logical, I guess.

I read (or heard) somewhere recently that while TWDC was experiencing record revenues in the billions, their actual net profits are actually much smaller than we think...

 

[rteetz]

You got about a 50/50 shot on that.

And then the wookies come to town and AK may get the brunt of the park cannibalization

AK is truly an underestimated park.

Star Wars of course will bring a draw away again but at least it will truly be a full day park.

 

[jade1]

AK is truly an underestimated park.

Star Wars of course will bring a draw away again but at least it will truly be a full day park.

I agree.

I do wonder though how many guests (%) stay "all day" at any park, even MK anyway.

Doubtful many at US and IOA either, and they close so early anyway its not a good comparison.

Would guess very few locals, esp FL AP. Any hoppers obviously don't. Frequent visitors with AP probably hop a lot as well since its included. Arrival and departure days are 1/2 at best.

More attractions the better of course, just spread into 4 parks seems better IMO, and 1/2 day visits are probably more common than full day anyway.

 

[dlavender]

http://www.orlandosentinel.com/business/tourism/os-disney-layoffs-hours-cut-20160216-story.html

Another casualty...

Bring your own paint...

 

[Ursula's Apprentice]

http://www.orlandosentinel.com/business/tourism/os-disney-layoffs-hours-cut-20160216-story.html

Another casualty...

Bring your own paint...

"Right now it's not a normal thing to do," he said, "but they're looking at things they can cut that won't affect the guest experience."

...I'm pretty sure in one way or another, all of those cuts affect the guest experience. That's a pretty dumb thing to say.

 

[Josh Hendy]

What REALLY sucks is that CMs at profitable, successful parks are having their hours cut, and that patrons of said parks are also losing out in order to finance parks they may never see. How about some incentives and deals for US visitors to visit Hong Kong or Shanghai?

Had to cut the lowliest CMs' hours. The only alternative would be to cut executive bonuses ... shudder ... too horrible to think about.

But seriously ... this all reflects very badly on Iger, his executive team and the board of directors. For years I've been reading very well researched articles about the terrible problems that were lurking in the economies of both Europe and China. The one having completely intractible problems.with welfare spending and debt, combined with ticking demographic, ethnic and political timebombs, the other one experiencing one of the most egregious debt bubbles in all of history. In 2001 I read a lengthy article outlining the inevitable disintegration of the Eurozone, and around he same time an article stating that China's inflationary bubble would certainly end in a 1929 style crash that would threaten the world economy. The articles were damning in themselves but even if they failed to convince ... did anyone ever hear of hedging, risk management and contingency planning?

I never followed ESPN or the cable business but did you really have to be an expert on telecom technology to know that the internet will largely replace cable tv and landline monopolies?

To make a long story short ... if the lousy and obviously (for the last ten years) doomed business units are now causing serious harm to one of Disney's successful business units then the shareholders and employees should seriously consider suing the responsible executives and directors for breach of fiduciary duty.

 

[dlavender]

Had to cut the lowliest CMs' hours. The only alternative would be to cut executive bonuses ... shudder ... too horrible to think about.

But seriously ... this all reflects very badly on Iger, his executive team and the board of directors. For years I've been reading very well researched articles about the terrible problems that were lurking in the economies of both Europe and China. The one having completely intractible problems.with welfare spending and debt, combined with ticking demographic, ethnic and political timebombs, the other one experiencing one of the most egregious debt bubbles in all of history. In 2001 I read a lengthy article outlining the inevitable disintegration of the Eurozone, and around he same time an article stating that China's inflationary bubble would certainly end in a 1929 style crash that would threaten the world economy. The articles were damning in themselves but even if they failed to convince ... did anyone ever hear of hedging, risk management and contingency planning?

I never followed ESPN or the cable business but did you really have to be an expert on telecom technology to know that the internet will largely replace cable tv and landline monopolies?

To make a long story short ... if the lousy and obviously (for the last ten years) doomed business units are now causing serious harm to one of Disney's successful business units then the shareholders and employees should seriously consider suing the responsible executives and directors for breach of fiduciary duty.

I don't know....

If those painters would have painted faster, or those curb side greeters would have smiled bigger, would we be where we are today???

 

[Mackenzie Click-Mickelson]

"Right now it's not a normal thing to do," he said, "but they're looking at things they can cut that won't affect the guest experience."

...I'm pretty sure in one way or another, all of those cuts affect the guest experience. That's a pretty dumb thing to say.

lol that sure is a dumb thing to say. I don't know how many reviews I've read lately that say "the parks need touch ups, it's looking tired (and they mean the paint but also other things when they say that) and they say that of both Universal and WDW. Appearantly they don't think people will notice paint chips, fading paint, etc except that they do. Any cut will in some way affect guest experience just some more than others or some cuts take more time to affect guest experience.

It's reminds me of a recent situation we had here at home. A popular theater restaurant initally had over a 100 people in a 2-3 day period get sick with the norovirus..the head management called it a "non-story"...till over the number climbed to 390 people where they expanded the time period to 5-7 days and the head management backpeddled and said basically "I shouldn't have said it was a non-story". When all was said and done over 600 people got sick during the outbreak. While people were upset that safety violations were found what really got people pissed was the wording "non-story". Anyone getting sick at a place (especially when it's from a sickness that easily spreads) is important just as any cuts to WDW is important to any guest who go to the parks.

Less/no painting=park looking tired, unkempt which can make the guest feel as though the appearance of the park isn't important to management
Less CMs=more strain on an individual CM, harder to find assistance when needed, etc
Less custodial=more trash left on the ground or in trash cans as they cannot be cleaned up as fast with less workers (something that has also been mentioned on reviews people have posted)
Less entertaiment=less chances of seeing fireworks and parades as the number reduced. This could lead to over-crowding at the times of the scheduled fireworks/parades which can reduce overall guest experience

Heck people were even complaining about no more towel characters at least at the Value resorts..something that to management might be an extremely small detail but to others it made it seem slightly less magical.

 

[Eoghann]

An army is lead by the guys at the head of the column.

The cooks in the back are guilty as well...but it's all relative.

Well following the same logic... someone has been signing off on those budgets and the expenses that exceeded the budget.

AK is truly an underestimated park.

Star Wars of course will bring a draw away again but at least it will truly be a full day park.

It's an unbalanced park. I love it, but they did need to include more rides because that's what a significant portion of their customer base is looking for. Pandora goes a long way to correcting that (and some guest flow issues as well) but it's arguable whether two rides is sufficient to complete the job. Depends on the rides I suppose.

 

[rteetz]

Well following the same logic... someone has been signing off on those budgets and the expenses that exceeded the budget

And one of those guys Bruce Vaughn is already out the door.

 

[Planogirl]

http://www.orlandosentinel.com/business/tourism/os-disney-layoffs-hours-cut-20160216-story.html

Another casualty...

Bring your own paint...

Does anyone else see a potential attraction here?

 

[rteetz]

Does anyone else see a potential attraction here?

Well they do have colortopia in innoventions....

 

[lockedoutlogic]

They are a unit in a behemoth public corporation...not an art studio.

Really NEED to clear the decks and adapt a little bit...even if it means fewer trips to Nepal

...imagineering..that is

 

[lockedoutlogic]

That sentinel article is filled with a flaming pile of poo...not the writing itself.

The "32 hours" routine is the big nugget there...that was their "drastic measures" implemented in 2002 when the resorts were running between 30 (AKL) and 75%...

That gives you some historical context.

Tough being rich and climbing into bed with China and the NBA, huh?

 

[rteetz]

They are a unit in a behemoth public corporation...not an art studio.

Really NEED to clear the decks and adapt a little bit...even if it means fewer trips to Nepal

...imagineering..that is

Again this isn't just Joe Rohde they all do it. Look at the Norway trip they took for the frozen ride. Even if they still took the trips they don't need to go as over budget on things as they do when nothing more is added to account for going so over budget.

 

[rteetz]

That sentinel article is filled with a flaming pile of poo...not the writing itself.

The "32 hours" routine is the big nugget there...that was their "drastic measures" implemented in 2002 when the resorts were running between 30 (AKL) and 75%...

That gives you some historical context.

Tough being rich and climbing into bed with China and the NBA, huh?

One problem I see with the sentinel when they write anything about Disney as they'll see oh Disney is making cuts ok let's ask them about it Disney spokesperson "we are always looking for ways to help the guest experience". The sentinel thinks that's good enough, they never dig any deeper. They could really show what is going on if they just did a little bit more.

 

[lockedoutlogic]

One problem I see with the sentinel when they write anything about Disney as they'll see oh Disney is making cuts ok let's ask them about it Disney spokesperson "we are always looking for ways to help the guest experience". The sentinel thinks that's good enough, they never dig any deeper. They could really show what is going on if they just did a little bit more.

It's always been straight from the sundial at the sentinel...remember Disney largely built and for about 30 years ran that town.

They have been a little more fair in recent years...they published an article that said they were lowering pay of low paid employees...after the announce record profits...after new policies roll out to increase prices a couple times a year...

A dog can put those tidbits together and get angry about it.

 

[lockedoutlogic]

Again this isn't just Joe Rohde they all do it. Look at the Norway trip they took for the frozen ride. Even if they still took the trips they don't need to go as over budget on things as they do when nothing more is added to account for going so over budget.

I haven't blamed joe rohde here...if you notice.

Definitely shares the blame...but it's across the board as you say.

Just how "overbudget" are we talking with avatar?

And I blame them all including the heads...but approving a budget doesn't make them accountable if they end up going over by 150%.

You know what the rumor was on Everest? Take a guess...

 

[Budshark]

Well they do have colortopia in innoventions....

Oh good point. Good opportunity to cut some more.