Disney's Business Model - More like United Airlines now, Less like SW.

[donaldbuzz&minnie]

I've been saying the same thing for three years or so now. Disney now often uses the phrase "industry standard" as a way of touting a new rule, cost increase, change in perks, or even furnishings in a DVC room. It wasn't all that long ago when Disney set the standard. That acknowledgement has become a conscious philosophical-business choice as model. I know they're banking on people still buying the magic. Short term, I think they're safe. Long term, I don't know they're engendering the same sort of devotion from the current and future generations.

There was a time when I was loyal to two brands, Southwest Airlines and Disney. Southwest has changed over the years, not always for the best (witness their ever-increasing "early bird" fees), but basically their corporate culture has remained consistent. They remain the airline that doesn't nickel and dime you for every little item and at least they seem to care about their customers. 2 free bags, no change fees. We fly a lot and virtually exclusively with them because of this. When I book a flight, I go to their website and just buy the ticket - no hunting around for alternatives to save a few dollars here or there.

A long time ago we flew United almost exclusively. Now the only time I use them is when I can use up some of my accumulated United miles. They have proven to me over the years that the one and only thing they care about is the bottom line. Customers are just a means to an end. I will go out of my way to avoid flying them. This hard-nosed, "realistic" business model is the one I see Disney moving closer to every day. So much for the "magic". I'm really sick of Disney using that word. You can't have it both ways, Disney.

I agree with the quoted poster. The parks are packed right now, people are willing to pay for all kinds of expensive extras, quality overall has gone down and prices have soared. Maybe the United model will work for them forever, who knows. But SW keeps making money and holding on to a loyal customer base. Disney has lost the "magic" for me and my loyalty with it. I too wonder what will happen when Disney tries to appeal to future generations.

 

[hakepb]

It’s an interesting thought. In looking, I see Herb Kelleher (Southwest co-founder and CEO just passed away earlier this year). It will be interesting seeing if Southwest becomes more corporate without that founding influence...and that may be Disney’s biggest problem.

Southwest became successful because they maximized their most expensive asset, airplanes. Planes on the ground lose $$$, so the entire airline was built to keep them flying (using lesser airports meant fewer delays in airports, and all 737’s meant faster maintenance). Low prices meant more people could fly, so Southwest’s full planes were more profitable than the industry. And with profits, they paid well.

The only application to Disney might be ride capacity? If a ride isn’t always full at max capacity, it’s costing Disney $?
Otherwise, Disney never set out to be the low cost theme park, although there may have been a greater emphasis on being the “best experience value”

 

[donaldbuzz&minnie]

Disney never set out to be the low cost theme park, although there may have been a greater emphasis on being the “best experience value”

I totally agree with that. I would just argue that they are slowly eroding the "best experience value" to the point where someday lots of people may choose to spend their vacation dollars elsewhere.

 

[sleepydog25]

There was a time when I was loyal to two brands, Southwest Airlines and Disney. Southwest has changed over the years, not always for the best (witness their ever-increasing "early bird" fees), but basically their corporate culture has remained consistent. They remain the airline that doesn't nickel and dime you for every little item and at least they seem to care about their customers. 2 free bags, no change fees. We fly a lot and virtually exclusively with them because of this. When I book a flight, I go to their website and just buy the ticket - no hunting around for alternatives to save a few dollars here or there.

A long time ago we flew United almost exclusively. Now the only time I use them is when I can use up some of my accumulated United miles. They have proven to me over the years that the one and only thing they care about is the bottom line. Customers are just a means to an end. I will go out of my way to avoid flying them. This hard-nosed, "realistic" business model is the one I see Disney moving closer to every day. So much for the "magic". I'm really sick of Disney using that word. You can't have it both ways, Disney.

I agree with the quoted poster. The parks are packed right now, people are willing to pay for all kinds of expensive extras, quality overall has gone down and prices have soared. Maybe the United model will work for them forever, who knows. But SW keeps making money and holding on to a loyal customer base. Disney has lost the "magic" for me and my loyalty with it. I too wonder what will happen when Disney tries to appeal to future generations.

Well said. Perhaps not surprisingly, SW is about the only airline I will fly, as well. I know many out there argue--and with some merit--that Disney is simply doing what any other mega corporation does--protect its bottom line and keep major shareholders happy. Okay, but as you say, that flies in the face of "magic." Further, Disney has been making tons of money through most of their recent history, but they've done it with at least an effort toward their loyal customer base, the generations that grew up with Disney when it was truly magical. Was that a facade? Sure, but they worked to keep it that way. Now, I just get the feeling they don't care anymore; they figure the brand (and Marvel and SW) will carry them through. They may be correct, but in so doing, they're losing those who built them into the juggernaut they are today. I don't see them engendering the passions they once did. They're becoming the cosplay of theme parks, and while that may be good for the near to mid-future, I'm not so certain that fan base will be as loyal as what they had. At any rate, Disney has lost my loyalty, too. Oh, I'll still go (I am a DVC owner, after all), but we've started hitting the parks less, shopping less, and spending more time walking around resorts. And, we no longer recommend Disney to friends or family. Perhaps that's the biggest takeaway for us.