Disney, Why...? The TDO Footprint Constraint

[OtherScott]

UK theme parks used to have a lot of vending machines, particularly in queue lines but have replaced them with staffed kiosks. I think there is often a general feeling of not trusting the machine and what happens if it takes money and doesn't vend. I have noticed that a lot more people purchase from a staffed kiosk than they would at a machine. Also if the kisosk has a full till then credit cards can be accepted and annual pass discount given, I personally was a lot more likely to purchase when I get discount!

But I think Disney could provide some machines, particularly if a magic band could be used for payment (or even snack credit redemption) in some areas but they would have to get the technology and theming spot on.

Not a perfect analogy, but vending rep that services my building (and all city owned buildings) told me that sales are through the roof since transitioning to credit card capable machines. His opinion is that convenience of cashless transaction is main driver. He also said that maintenance costs are down due to 80% reduction in use of mechanical payment mechanisms (coin separators and bill readers).

Both of these factors enhance trust.

Get machines that read MBs? Lights out!

 

[lockedoutlogic]

Not a perfect analogy, but vending rep that services my building (and all city owned buildings) told me that sales are through the roof since transitioning to credit card capable machines. His opinion is that convenience of cashless transaction is main driver. He also said that maintenance costs are down due to 80% reduction in use of mechanical payment mechanisms (coin separators and bill readers).

Both of these factors enhance trust.

Get machines that read MBs? Lights out!

I think the consumption by those that Consume has gone through the roof..like Starbucks...

But the overall pool of users has most likely shrunk...which means that vending machines would be a bad bet in the parks...

And Europeans LOVE 4 euro cokes...though we Americans invented over consumption and tooth decay...it seems to be less exotic from where I sit...

Maybe it's just geography for me?

 

[OtherScott]

I think the consumption by those that Consume has gone through the roof..like Starbucks...

But the overall pool of users has most likely shrunk...which means that vending machines would be a bad bet in the parks...

And Europeans LOVE 4 euro cokes...though we Americans invented over consumption and tooth decay...it seems to be less exotic from where I sit...

Maybe it's just geography for me?

1. If pool is shrinking, doesn't increasing consumption of those still in make sense?

2. If pool is shrinking, doesn't that weigh against all manner of transaction?

I guess one could make the argument that the soft drink/water purchase is the result of interpersonal upsell...but I'd probably disagree.

 

[lockedoutlogic]

I don't really have a strong opinion either way...just throwing it out there

 

[dvczerfs]

Cast
Members can only afford the beers at the Big bamboo...
And I think that closed

 

[tjkraz]

Thank you, clsteve, for summarizing what many of us have been saying for eons. Staffing is a very real challenge to any ongoing WDW expansion. Also profitability is an issue as more destinations does not directly result in proportionately higher guest spending.

Despite what people may think about crowd levels, the current parks aren't close to maxing out their capacity. And if numbers continue to grow, careful expansion of the current parks is far less costly than an entirely new gate.

If there is to ever be a "5th gate", I still maintain it will be more of a "boutique" park like Sea World's Discovery Cove. It will be something which is relatively inexpensive to build, requires few cast members to maintain, yet offers such "unique experiences" that they can command very high daily prices.

As for WDW vs. Universal, Disney's own profitability is far more important than any measures of market share. Looking at attendance, WDW has continued to climb while USF is also making gains at its parks. Disney's comparative share of the market may be lower, but it's an expanding market. They won't change their approach to the parks until there is an obvious (and lasting) impact on the bottom line.

Universal is the recipient of a lot of good will (or at least favorable comparisons to WDW) due to the amount they are investing in their parks. Frequent WDW guests make comments along the lines of "I'm making my first ever trip to Universal because at least they're building new stuff."

Objectively, I would still propose that the Disney parks are (collectively) superior to Universal. What's different is that--to someone who has never been to Universal--it's all "new to you." To someone who has made 10 or 20 visits to WDW and zero visits to Universal, obviously many new experiences await them at USF. Even with a $500M investment like Pandora, the 2-3 attractions, restaurant and shops they may build won't compare to 40-50 new rides and shows awaiting at Universal.

But, make a handful of visits to USF--such that very little is "new" anymore--and see how the two compare.

Universal is seeing very good returns on their current investments but eventually that ROI curve will begin to flatten just as it has for Disney.

Living in a middle-to-upper-middle class community in the Midwest, a trip to Walt Disney World is considered a rite of passage for young children. Most families visit at least once--some catch the bug and visit much more often than that. Disney will always have that advantage. That's not to say that they can completely rest on their laurels...but it does help keep the parks in more of a maintenance / profitability state rather than an expansion state.

Um... so I'm the only one stuck on what TDO means?

Yeah, "TDO" stands for Team Disney Orlando...a term Disney uses internally to refer to management of the Florida parks. About 2-3 years ago, the "cool kids" in Disney discussion circles adopted it, seemingly to sound more like insiders.

 

[SoarinSC]

I've often wondered why the parks don't use more vending machines in lieu of manned carts for drinks, especially with CC capability. I know there is upsell potential on every interpersonal transaction, but other factors seem to cut against that - location, convenience, employee cost, etc.

I personally drink enough Diet Coke to justify at least one machine.

Could it be an aesthetics issue? I think a garish, brightly lit machine would throw off themeing, especially at Disney, unless the machines were custom-tailored for their particular themed area.

 

[clsteve]

Thank you, clsteve, for summarizing what many of us have been saying for eons. Staffing is a very real challenge to any ongoing WDW expansion. Also profitability is an issue as more destinations does not directly result in proportionately higher guest spending.

Despite what people may think about crowd levels, the current parks aren't close to maxing out their capacity. And if numbers continue to grow, careful expansion of the current parks is far less costly than an entirely new gate.

If there is to ever be a "5th gate", I still maintain it will be more of a "boutique" park like Sea World's Discovery Cove. It will be something which is relatively inexpensive to build, requires few cast members to maintain, yet offers such "unique experiences" that they can command very high daily prices.

As for WDW vs. Universal, Disney's own profitability is far more important than any measures of market share. Looking at attendance, WDW has continued to climb while USF is also making gains at its parks. Disney's comparative share of the market may be lower, but it's an expanding market. They won't change their approach to the parks until there is an obvious (and lasting) impact on the bottom line.

Universal is the recipient of a lot of good will (or at least favorable comparisons to WDW) due to the amount they are investing in their parks. Frequent WDW guests make comments along the lines of "I'm making my first ever trip to Universal because at least they're building new stuff."

Objectively, I would still propose that the Disney parks are (collectively) superior to Universal. What's different is that--to someone who has never been to Universal--it's all "new to you." To someone who has made 10 or 20 visits to WDW and zero visits to Universal, obviously many new experiences await them at USF. Even with a $500M investment like Pandora, the 2-3 attractions, restaurant and shops they may build won't compare to 40-50 new rides and shows awaiting at Universal.

But, make a handful of visits to USF--such that very little is "new" anymore--and see how the two compare.

Universal is seeing very good returns on their current investments but eventually that ROI curve will begin to flatten just as it has for Disney.

Living in a middle-to-upper-middle class community in the Midwest, a trip to Walt Disney World is considered a rite of passage for young children. Most families visit at least once--some catch the bug and visit much more often than that. Disney will always have that advantage. That's not to say that they can completely rest on their laurels...but it does help keep the parks in more of a maintenance / profitability state rather than an expansion state.



Yeah, "TDO" stands for Team Disney Orlando...a term Disney uses internally to refer to management of the Florida parks. About 2-3 years ago, the "cool kids" in Disney discussion circles adopted it, seemingly to sound more like insiders.

The "rite of passage" Disney Trip for so many American families is a true benefit to the Disney bottom line that cannot be ignored. I have a friend who calls WDW "Middle Class Mecca" - every family has to go once. Add that to Disney's aggressive and very successful international marketing, where many or most of them only go once due to cost of travel, it's easy to see that a significant portion of Disney guests are fine with the current state of rides and the Parks - it's all new to them, no matter what. These are significant factors in Disney's ability to remain very profitable as a Farmer Company. Along with the headcount size and geographical employee pool constraints - these may be the most significant factors considered in their strategic decision making.

This also is a factor in any expansion/addition decisions by the Company. One of the main data points I would really love to see (but never will) from Disney is the percentage of first time guests. Now, that would really change a lot of the DIS discussions, I would think......

 

[OtherScott]

The "rite of passage" Disney Trip for so many American families is a true benefit to the Disney bottom line that cannot be ignored. I have a friend who calls WDW "Middle Class Mecca" - every family has to go once. Add that to Disney's aggressive and very successful international marketing, where many or most of them only go once due to cost of travel, it's easy to see that a significant portion of Disney guests are fine with the current state of rides and the Parks - it's all new to them, no matter what. These are significant factors in Disney's ability to remain very profitable as a Farmer Company. Along with the headcount size and geographical employee pool constraints - these may be the most significant factors considered in their strategic decision making.

This also is a factor in any expansion/addition decisions by the Company. One of the main data points I would really love to see (but never will) from Disney is the percentage of first time guests. Now, that would really change a lot of the DIS discussions, I would think......

Disney also has the advantage of indirect marketing of the parks by way of its entertainment products across generational lines. Disney connects outside of the parks in a way that US never will. And the connection moves in both directions.

To your original point, at some point won't this affect US?

 

[BuzzyBelle]

Cast
Members can only afford the beers at the Big bamboo...
And I think that closed

Sadly, yes, it was torn down Thanks to the OP for a great post. I think your theories are well thought out and logical In my experiences the quality of CM has gone down a lot over the years as a WDW has expanded and the need for employees has grown. I'm not saying that there aren't a lot of wonderful CMs there now, but they seem to be fewer and farther between. I never really thought about the lack or warm bodies to fill the spots as a hindrance to expanding, but of course that would impact plans. I just want another park and more rides!

 

[jon18uk]

This article also has some good points on why Disney doesn't need to chase Universal. http://www.****************.com/fea...hy-disney-won-t-do-anything-fend-increasing-c

I agree with the thought that Disney already did their big investment bit in the 80s/90s when they opened additional theme parks, water parks and resorts. Universal are only now having their big expansion and they still have a long way to go, particularly with resort room capacity.

 

[rteetz]

This article also has some good points on why Disney doesn't need to chase Universal. http://www.****************.com/features/20140611/18495/all-star-roundtable-5-reasons-why-disney-won-t-do-anything-fend-increasing-c I agree with the thought that Disney already did their big investment bit in the 80s/90s when they opened additional theme parks, water parks and resorts. Universal are only now having their big expansion and they still have a long way to go, particularly with resort room capacity.

I think we are at the beginning of another set of large expansion. New fantasyland, Avatar, disney springs, Star Wars at some point, frozen in Norway?, new soarin film, changes in future world, more DVC, who knows what else.

 

[clsteve]

Cast
Members can only afford the beers at the Big bamboo...
And I think that closed

Sadly, yes, it was torn down Thanks to the OP for a great post. I think your theories are well thought out and logical

Ouch, they need a new hangout.... Every group needs a "safe house" where they feel comfortable discussing work issues without the fear of upper level management dropping in for a cocktail.

The 7-Eleven parking lot, downing 40's, just doesn't cut it...

This article also has some good points on why Disney doesn't need to chase Universal. http://www.****************.com/fea...hy-disney-won-t-do-anything-fend-increasing-c

I agree with the thought that Disney already did their big investment bit in the 80s/90s when they opened additional theme parks, water parks and resorts. Universal are only now having their big expansion and they still have a long way to go, particularly with resort room capacity.

Interesting article with several excellent points. This quote from Jim Hill:

"...So, if anything… I don't necessarily see Disney making a decision to move creatively forward. If anything, because management back in Burbank now sees WDW as a maturing business, the goal nowadays isn't necessarily reinvesting in the property, but, rather, making the most of what the company already has in Orlando..."​

is right in line with the "Farmer Company" analogy.

Disney also has the advantage of indirect marketing of the parks by way of its entertainment products across generational lines. Disney connects outside of the parks in a way that US never will. And the connection moves in both directions.

To your original point, at some point won't this affect US?

They sure hope so...

When a corporation matures to the level of "Farmer", it means you've established a brand with such loyalty (or a level of monopoly) that top-line revenue and profitability growth can still be achieved by maintaining quality, optimizing expense and future liability, while aggressively marketing the brand - without the heavy investment in growth.

UOR would love to reach that point - what corporation wouldn't? And they seem to have a solid strategy for achieving it.

 

[dvczerfs]

I usually don't post on threads about CMs or the company. I will say yes, you can find I "bad" CM along the way but I would like to offer you a challenge.
when you go into work tomorrow, take the elevator up two floors into another department, walk past the first six desk and ask the next person you come to a question about your department. when you don't get the answer your looking for, call that person a name that I cant post here, and ask them, "well, don't you work here"

if you don't work in a large company, go into your local sears store, go into the bra department and ask the person about what kind of battery operated drills do they sell. when you don't get the answer your looking for, ask them "don't you work here? you have a sears name tag on"

again, not saying all are perfect but I have an easier time with CMs then I do dealing with most corporations in the world today.

 

[practicallyperfect77]

Thanks OP for a well thought out thread. Not sure if I missed it, but any clue why benefits more than doubled. Holy smokes! I know health care costs have increased drastically but with as many employees as they have I would think they have good shot at negotiation of prices too.

 

[Planogirl]

What a thoughtful, well-written analysis. Truthfully I never thought about WDW possibly being built out but it makes sense.

The notion of service without CM's is a bit daunting. Disney is still known for their great customer service and I'm not sure if people will feel that way if they deal mostly with automation. Besides Disney isn't great with such things at times and the idea of checking into a hotel and dealing with a surly, Disney-programmed machine doesn't appeal at all.

I enjoyed the linked article but don't agree with some of the commentary that Universal employees don't measure up. We must be extraordinarily lucky because we get excellent service at both resorts. Of course Universal would be expected to go through growing pains to a point as they add attractions that require more workers such as Diagon Alley. That in turn would also take away from that shrinking worker pool come to think of it...

 

[clsteve]

Thanks OP for a well thought out thread. Not sure if I missed it, but any clue why benefits more than doubled. Holy smokes! I know health care costs have increased drastically but with as many employees as they have I would think they have good shot at negotiation of prices too.

That just seems to be the environment all businesses are operating in, unfortunately. The percentage increases over that timeframe seem to track with corporate averages. It's why so many are proactively addressing it by increasing their outsourcing of non-core functions such as Grounds and Maintenance, Recruiting, Security, etc., or increasing their percentage of part-time vs. full-time employee count. It would be interesting to hear from any CM's if that's the case at Disney.

For my small business (emphasis on small), benefits increases are my biggest concern and influence every strategic decision made. What can you do but deal with it, I keep telling myself........

 

[clsteve]

What a thoughtful, well-written analysis. Truthfully I never thought about WDW possibly being built out but it makes sense.

The notion of service without CM's is a bit daunting. Disney is still known for their great customer service and I'm not sure if people will feel that way if they deal mostly with automation. Besides Disney isn't great with such things at times and the idea of checking into a hotel and dealing with a surly, Disney-programmed machine doesn't appeal at all.

I enjoyed the linked article but don't agree with some of the commentary that Universal employees don't measure up. We must be extraordinarily lucky because we get excellent service at both resorts. Of course Universal would be expected to go through growing pains to a point as they add attractions that require more workers such as Diagon Alley. That in turn would also take away from that shrinking worker pool come to think of it...

Yes, I'm a bit "old school" on that as well. I like being greeted at the front desk and enjoy the CM interaction! It feels more like arriving at a resort destination to me and starts the trip off on a personal note.

Also, I guess we've also been lucky ones and have never had a bad CM/TM experience at either place. I've met a few that might not have been the most knowledgeable, but I see that more of a reflection on the company and how well they're preparing them and not a reflection on the individual.

And that's a good point on the UOR impact on the geographic employee pool. Disney had decades where they were able to get all the best. There just wasn't the level of competition there is now. I remember seeing several threads talking about how some of the top talent was jumping over a while back. That's a great thing for good talent. It forces both companies to do what it takes to get and keep them. Not a bad thing, at all....

 

[practicallyperfect77]

That just seems to be the environment all businesses are operating in, unfortunately. The percentage increases over that timeframe seem to track with corporate averages. It's why so many are proactively addressing it by increasing their outsourcing of non-core functions such as Grounds and Maintenance, Recruiting, Security, etc., or increasing their percentage of part-time vs. full-time employee count. It would be interesting to hear from any CM's if that's the case at Disney.

For my small business (emphasis on small), benefits increases are my biggest concern and influence every strategic decision made. What can you do but deal with it, I keep telling myself........

I work at large company (fortune 50) and our costs have increased but not that much. Which the minimal increases are always talked about how well we are doing managing those costs, but didn't realize others were seeing more than double. I do see lots of folks having a flexible workforce too. Best of luck to to you in your business as well.

 

[tjevans]

What is "TDO"?