DDP Rumor and affect on DVC Member Perceived Value

[JimMIA]

Oh, and just for my own understanding, is Virgin the only bit of circumstantial evidence that appetizers getting dropped, or was there something else?

Yes, that's correct. Virgin Holidays is the only source of the no-appetizers change that anyone's heard of.

But you have to consider the context. What Virgin Holidays said was not that they heard...not that there was a rumor.

They said they had been advised by the resort (WDW) that the Disney Dining Plan has changed for 2008...as we have been discussing. They not only made that a part of the pre-purchase disclosures on their website, they personally notified all of their customers with existing reservations in writing of the change.

To me, that's a pretty dramatic statement that a well-known and presumably well-connected firm in the travel industry knows a change has been made. I just can't imagine them going to all that trouble without really knowing. Just doesn't make sense.

From only one source...yes. Only circumstantial...yes.

But fingerprint and DNA evidence are also only circumstantial.

 

[salmoneous]

Jim

This is all fun speculation. But to give my thought process (and *not* to argue that others are wrong) I'm left with two scenarios. Which is more likely:

1) Somebody at Disney passed unofficial speculation to a TA in a foreign country. The TA either (1) misunderstood that the information wasn't final and official, or (2) the TA felt the need to cover their *** and warn clients just in case.

2) Disney has made the decision to effectively gut the DDP, making it near useless for adults. Disney has shared that information with one foreign TA and let that TA give the information to their clients. But hasn't allowed anyone else to share the information.

Option (1) may seem odd, but (2) just seems crazy.

 

[pilferk]

Jim

This is all fun speculation. But to give my thought process (and *not* to argue that others are wrong) I'm left with two scenarios. Which is more likely:

1) Somebody at Disney passed unofficial speculation to a TA in a foreign country. The TA either (1) misunderstood that the information wasn't final and official, or (2) the TA felt the need to cover their *** and warn clients just in case.

2) Disney has made the decision to effectively gut the DDP, making it near useless for adults. Disney has shared that information with one foreign TA and let that TA give the information to their clients. But hasn't allowed anyone else to share the information.

Option (1) may seem odd, but (2) just seems crazy.

Given Disney's (and Virgin's) past history, I'd say 1 is completely out of character for either corporation and 2 seems to be indicative of how things have progressed historically (create incentive, milk it for increasing occupancy and attendance, gut it when it get's too popular/costly).

But that's just MHO.

 

[Inkmahm]

Given Disney's (and Virgin's) past history, I'd say 1 is completely out of character for either corporation and 2 seems to be indicative of how things have progressed historically (create incentive, milk it for increasing occupancy and attendance, gut it when it get's too popular/costly).

But that's just MHO.

Eactly. Number 2 is very likely I'd say.

 

[Sammie]

The information from Virgin is not incorrect, as to what affect that will have on the US plan is yet to be revealed. I would say US tour operators will get their info in a couple of weeks.

It is very possible that the plans will be different and while some think that would be a nightmare for servers, it will all be coded in the guest card just as if you were on a Silver or Gold plan where the options were different.

 

[Anthony1971]

Rumor form the inside as my Guide told me --and this was before any speculation thread on the Dis about this.... "it has to change as it is like giving the Cow away for free" That was durning a conversation about past dinning plans and this one and how cheap this is comapred to the past.
IMO it has to cahnge as I do not see how they are making money... But if they can get people use to eating at TS they will come back and pay full price or have thier family call them cheap among enjoying the sit down meals themselves

 

[tjkraz]

Disney has had many variations of prepaid dining plans over the years and none favored the comsumer nearly as well as the 2005-2007 plan. It's inevitable that changes will follow.

One of the main problems of the current plan is that it as positioned to help the resorts unit at the expense of the dining business unit. In order to book the DDP, one has to pay full rack rates and buy tickets in a package with the DDP. So the hotels are benefitting and ticket sales are benefitting while the dining unit is getting harmed in the process. All parties involved may have understood this from the outset, but that level of forgiveness gets lost over time. Before long the sliding profitability of the dining unit is being questioned. They respond by paring down menus, reducing portions and raising menu prices for those NOT on a dining plan. But those are merely stopgap measures. You can't continue to serve $50-60 meals for the stipend ($28?) provided by the dining plan.

I agree that there's a lot yet to be revealed on this. Perhaps they will change the dynamic of the entire package. In exchange for the modifications to the dining plan, perhaps the guests booking packages will start getting 10% off of their room rates.

Something is going to change and we'll know more before long.

 

[disneynutz]

Disney has had many variations of prepaid dining plans over the years and none favored the comsumer nearly as well as the 2005-2007 plan. It's inevitable that changes will follow.

One of the main problems of the current plan is that it as positioned to help the resorts unit at the expense of the dining business unit. In order to book the DDP, one has to pay full rack rates and buy tickets in a package with the DDP. So the hotels are benefitting and ticket sales are benefitting while the dining unit is getting harmed in the process. All parties involved may have understood this from the outset, but that level of forgiveness gets lost over time. Before long the sliding profitability of the dining unit is being questioned. They respond by paring down menus, reducing portions and raising menu prices for those NOT on a dining plan. But those are merely stopgap measures. You can't continue to serve $50-60 meals for the stipend ($28?) provided by the dining plan.

I agree that there's a lot yet to be revealed on this. Perhaps they will change the dynamic of the entire package. In exchange for the modifications to the dining plan, perhaps the guests booking packages will start getting 10% off of their room rates.

Something is going to change and we'll know more before long.

Disney is not in the business of loosing money. Their stock is up 17%. Last year saw record attendance. What does a $60 dollar meal actually cost Disney. We know that they get their Soft Drink syrup for free but I don't see them giving away free drinks. What other deals do the have in place for food items? One Disney unit may look on paper as if they are loosing money but the other units are making more than enough money to make up for it. As a Cast member told me, "it all comes back to the Mouse".

 

[Chuck S]

True, but the privately owned places at EPCOT can't keep losing their profit. It may all go into the Mouse's pocket, but each division needs to show profit. Even a $3.00 beverage, if the syrup is free, would cost Disney $$ to give away. The cost of labor, the cost of water, and the cost of "location", debt service, taxes, payrool taxes...much, like your grocery store, there needs to be $X profit per square foot of food service area.

For instance, if a video store rents movies for $3, sells a coke for $1.95 that cost $.50 and makes $2 profit, then offers a special of a free coke with two rentals, it still loses profit on the transaction.

See, if the coke makes $1.45 per bottle profit, then the movie makes $.55. So renting two movies still gives less profit ($1.10) than the single movie and coke sale. Then add the $.50 cost to the store for the coke, then the profit is down to $.60...so even if the store rents 6 movies and gives away 2 cokes, they are still cutting their actual profit by 20 cents to $1.80.

Gross profit looks great, net profit still suffers.

Evidently there was not enough increase in restaurant volume to offset the loss in net profit in the food division.

 

[DBorges]

Here is a thing to think about i had a bottle of Nivole moscato d'asti at disney last month it cost me 28 plus tax I buy that same wine at home for 7.50.

When disney is buy food stuff ie fish beef .

They buy big and get it cheapo..

So your 35 dollar steak is costing them about 2 buck for the steak and the items with it are cheaper.

So are they making money of the dinning plan as it is now YES volume alone covers it.

Plus the fact people go there just to get the dinning hence they make money on the resort end

Also Park addmission is need for alot of places so that is more money they make ..

Like I have said before this is a rumor virgins contract has no bearing at all on the ddp

Relax have a beer and watch the SOX WIN..

so on the meal that cost you on the bill actualy cost them 30.00 but they got you for booze and admission then if you are a sap like me I tip on top of that is the service is good.

Disney is not losing on that they have us by the stones like always why do you think the staff memebers smile lol

 

[salmoneous]

Evidently there was not enough increase in restaurant volume to offset the loss in net profit in the food division.

To be picky for a second, do we have any evidence that there has been any loss in profits at the food divisions?

 

[Chuck S]

To be picky for a second, do we have any evidence that there has been any loss in profits at the food divisions?

There would almost have to have been, especially in cost to profit ratio, as you now have to serve more meals to get the same actual profit.

For instance, if the average non-DDP entree cost Disney $4 to produce and they make $20 per entree at the table if folks just eat the entree, then adding the cost of beverage, appetizer and dessert for DDP cuts into that profit. Less profit per dollar spent, a lower profit to cost ratio.

 

[DBorges]

Actually, when the first brochure went to press, a bunch of newbies panicked and started a bunch of threads freaking out because a LOT of restaurants were not in the brochure. Other people were counseling those folks to just relax, because the lineup would be the same. And sure enough, those wise souls were right.

Those wise souls from last year are the same people who are saying the rumors are right this year.

I think Sammie's post above is worth re-reading and remembering. There are always many, many people in the Disney organization who are not privy to every decision made. There are, after all, 65,000 employees at WDW alone.

But just because not everyone is in the loop yet, doesn't mean decisions haven't been made...and communicated to important partners.

Personally, I would love to see DDP remain as it is...with a modest price increase if necessary. But I do not think that is what is going to happen...or has already happened, depending on where you sit.

Jim we are why to much alike it is scarey RUMOR IS RUMOR untill you have the fact or have the knowledge to make not that..

We have nothing at all tp prove anything

 

[CarolA]

Here is a thing to think about i had a bottle of Nivole moscato d'asti at disney last month it cost me 28 plus tax I buy that same wine at home for 7.50.

When disney is buy food stuff ie fish beef .

They buy big and get it cheapo..

So your 35 dollar steak is costing them about 2 buck for the steak and the items with it are cheaper.

So are they making money of the dinning plan as it is now YES volume alone covers it.

Plus the fact people go there just to get the dinning hence they make money on the resort end

Also Park addmission is need for alot of places so that is more money they make ..

Like I have said before this is a rumor virgins contract has no bearing at all on the ddp

Relax have a beer and watch the SOX WIN..

so on the meal that cost you on the bill actualy cost them 30.00 but they got you for booze and admission then if you are a sap like me I tip on top of that is the service is good.

Disney is not losing on that they have us by the stones like always why do you think the staff memebers smile lol

You leave out the one "unknown"

Are the resturants NOT owned by Disney losing money? And I think that may be one of the issues. Remember last year they signed the contracts very late in the process (as was evidenced by the fact that none of them were included in the initial "offical" information on the dining plan and that's not rumor it's fact) I think they may be pushing back and pushing back HARD on this. (I would if I was one of them.) They may or may NOT be covered by "Disney's volume" deals on food etc. Who knows how all that works? But if Disney isn't either paying them more or subsidizing thier costs then somethings got to give. They either find a way to make more money or drop out of DDP which dramatically reduces the options since I think it's about half of the Epcot resturants and most of the DTD resturants. If they drop out that puts a LOT of pressure on the remaining resturants to "fill the gap" making reservations even harder to get. (Resulting in people mad at Disney when they can't use the DDP) So Disney needs to keep them in and profitable. They can't be a "loss leader"

They don't care that the resorts and/or parks divisons are making money. That's not thier goal, thier goal is to make money for themselves!

(And here is the deal anything you hear from Virgin Supervisors, Disney CMs etc is not the "facts" Contrary to the DIS board view Disney executives don't tell bus drivers, CRO etc. thier plans. They KNOW those folks can't keep a secret. So unless Meg Croton sends you a personal message..... it's all rumor and fun to talk about.)

 

[keishashadow]

I expect to pay a pricey markup for wine/liquor in a restaurant; esp. since we're used to it in in PA with our arcane state store system.

IMO, $28 for a bottle of wine is a steal @ WDW

During our June trip, @ Ca Grill the tab for 1 glass of lowest priced chardonnay, tax & gratuity included $16+

 

[salmoneous]

There would almost have to have been, especially in cost to profit ratio, as you now have to serve more meals to get the same actual profit.

For instance, if the average non-DDP entree cost Disney $4 to produce and they make $20 per entree at the table if folks just eat the entree, then adding the cost of beverage, appetizer and dessert for DDP cuts into that profit. Less profit per dollar spent, a lower profit to cost ratio.

First, to be clear, we have no evidence that profits are lower, only speculation. Right?

Second, none of us know what profit measures Disney uses to evaluate the performance of its restaurants. We have no idea if Disney looks at a profit/dollar spent, profit/customer, profit/table, profit/assets, etc.

Third, as far as I know, we have no clue how internal accounting at Disney deals with the Dining Plan, do we? So how do we know what the profit / dollar spend (assuming Disney looks at such a ratio) compares between DDP and non-DDP customers.

 

[DBorges]

You leave out the one "unknown"

Are the resturants NOT owned by Disney losing money? And I think that may be one of the issues. Remember last year they signed the contracts very late in the process (as was evidenced by the fact that none of them were included in the initial "offical" information on the dining plan and that's not rumor it's fact) I think they may be pushing back and pushing back HARD on this. (I would if I was one of them.) They may or may NOT be covered by "Disney's volume" deals on food etc. Who knows how all that works? But if Disney isn't either paying them more or subsidizing thier costs then somethings got to give. They either find a way to make more money or drop out of DDP which dramatically reduces the options since I think it's about half of the Epcot resturants and most of the DTD resturants. If they drop out that puts a LOT of pressure on the remaining resturants to "fill the gap" making reservations even harder to get. (Resulting in people mad at Disney when they can't use the DDP) So Disney needs to keep them in and profitable. They can't be a "loss leader"

They don't care that the resorts and/or parks divisons are making money. That's not thier goal, thier goal is to make money for themselves!

(And here is the deal anything you hear from Virgin Supervisors, Disney CMs etc is not the "facts" Contrary to the DIS board view Disney executives don't tell bus drivers, CRO etc. thier plans. They KNOW those folks can't keep a secret. So unless Meg Croton sends you a personal message..... it's all rumor and fun to talk about.)

I DO NOT CARE about non DISNEY resturants ...

After all it is the "disney dinning plan"

As too your second part of this and" here is the deal " that is just a totaly misplaced committ I have been saying it is rumor for days and days but yet

You continue to throw things out llike get all the facts So I did that and yet you seem to say now that all rumor and unless meg who ever send me a personal message it is what I have said it was to the past # days A RUMOR!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1

Funny how now we agree it is only a rumor and there are no fact too prove it ..(humble pie for a few i think)

 

[keishashadow]

While I generally agree I am very concerned that the tip MUST be mandatory on DDP. I have followed the various DIS boards and spent too much time at Disney to have much faith in my fellow travelers. I can see this logic ALL to easily.... "DDP costs me $38. I figure they pay $25 of that for the TS meal 18% of of $25 is $4.50 so that's my tip"

Don't believe me. Read this board there is at least one poster who seems to be saying he/she doesn't tip as a high percentage at Disney because "meal are overpriced" So he/she "inflation" adjusts the tip? (Of course living in Orlando is also fairly costly from what I learned when I looked at a job down there, but that never comes up LOL!)

It is not fair for the servers to be "ripped off" because of this change.

I'm the first to champion decent wages for a fair day's work.

I'm told that tipping in other countries follows different practices, which is why many of the restaurants suggest the 'proper' tip - jik. Perhaps it's a gentle reminder to us all.

while i champion fair salaries, again i do feel that the food @ WDW is expensive (as at most resorts/attractions) and that for medicore to average service, 18% is more than ample.

of course, if the server is professional or even is friendly and puts forth some extra effort; we increase the gratuity accordingly - because we want to and the server earned it

If the plan isn't profitable as is, would prefer a tiered system (base price, dessert add-on, appetizer add-on or the complete pkg.). Think a variation of the MYW pkg only applied to DP.

Do hope that whatever Disney decides it turns out to be the right thing, yet still keeping costs reasonable.

 

[DBorges]

I expect to pay a pricey markup for wine/liquor in a restaurant; esp. since we're used to it in in PA with our arcane state store system.

IMO, $28 for a bottle of wine is a steal @ WDW

During our June trip, @ Ca Grill the tab for 1 glass of lowest priced chardonnay, tax & gratuity included $16+

It was a half bottle too boot ouch it hurt to pay that

Well Like i have said before rumor is rumor and I do not care about not DISNEY resturants..

If I did I would eat at a burger joint !!!!!!


JIM HELP!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1

 

[disneynutz]

True, but the privately owned places at EPCOT can't keep losing their profit. It may all go into the Mouse's pocket, but each division needs to show profit. Even a $3.00 beverage, if the syrup is free, would cost Disney $$ to give away. The cost of labor, the cost of water, and the cost of "location", debt service, taxes, payrool taxes...much, like your grocery store, there needs to be $X profit per square foot of food service area.

For instance, if a video store rents movies for $3, sells a coke for $1.95 that cost $.50 and makes $2 profit, then offers a special of a free coke with two rentals, it still loses profit on the transaction.

See, if the coke makes $1.45 per bottle profit, then the movie makes $.55. So renting two movies still gives less profit ($1.10) than the single movie and coke sale. Then add the $.50 cost to the store for the coke, then the profit is down to $.60...so even if the store rents 6 movies and gives away 2 cokes, they are still cutting their actual profit by 20 cents to $1.80.

Gross profit looks great, net profit still suffers.

Evidently there was not enough increase in restaurant volume to offset the loss in net profit in the food division.

What about the money made on DDP by reducing the menu and Guests that don't use the DDP to their fullest advantage. How many millions of of Guests use their TC to buy a $10 dollar meal. How many unused credits are there? Because they are credits, people don't think of them as money. It's like a Disney dollar. How many are sitting a home never to be used?

We were at BCV and went to B&C intending to use a CS credit for a hamburger at lunch. We waited in line and and finally got a table. When the CM came to take our order she informed us that they only accept TS credits. I made the comment as we left, "who in there right mind would use a TS credit to buy a $8 dollar hamburger"? Her reply was, "about a hundred people a day".

When I made our last ADRs the CM said to me, based upon your ADRs you must be on the DDP. I said yes, how did she know? She said she knew because we only booked at the most expensive restaurants. I said, "I bet you see this all the time". Her reply was, "not as much as you would think".

My point is, all sales programs are designed to make the seller money. If it doesn't they cancel the program and come up with another.