Domestic park attendance down 4% in Q3

[TheMaxRebo]

Agreed. But there always has to be balance. It has to be affordable with maintainable crowds. You don't want attractions running empty, but you also don't want 90+ minute lines. If you have lines that long, that means that's hundreds if not thousands of people queuing up instead of eating, drinking, buying.

Just out of curiosity, what do you see as the solution though? I agree crowds were a major issue and magic bands, etc. were aimed at helping with that and the rising costs have impacted crowds somewhat (I was there last month and felt wait times were totally reasonable - longest I saw was 110minutes for Space Mountain but generally things were well under an hour. Big Thunder was never more than 35 minutes and I never saw Toy Story Mania at more than 50 (and was even able to get a 4th FP for TSMM)

How to you keep it affordable but maintain crowds? Set capacity limits so they are hit every day and people camp out to get in? Easy to say build more parks but there will still only be one Magic Kingdom (plus, if they invest literally billions in more parks they have to get that money back somewhere)

 

[lockedoutlogic]

Pursuing or forgoing expansion don't affect their positioning for recessions at all...

But intelligent pricing/business approaches made with a lens that see the longterm does.

And that's where they've made themselves vulnerable.

And as Dave points out - where they may shoot themselves in the foot again if they see things like Star Wars as an immediate means to turn screws that have already been stripped for many...

 

[jade1]

Pursuing or forgoing expansion don't affect their positioning for recessions at all...

But intelligent pricing/business approaches made with a lens that see the longterm does.

And that's where they've made themselves vulnerable.

And as Dave points out - where they may shoot themselves in the foot again if they see things like Star Wars as an immediate means to turn screws that have already been stripped for many...

"may"?

So with a recession they just don't turn the screws. Or offer Star Wars packages that include additional FP+, or whatever.

And were have they shot themselves in the foot again? More capacity (fewer folks) and more dollars?

 

[lockedoutlogic]

"may"?

So with a recession they just don't turn the screws. Or offer Star Wars packages that include additional FP+, or whatever.

And were have they shot themselves in the foot again? More capacity (fewer folks) and more dollars?

I'm not nearly as big of a believer in "they'll just discount...what the problem?" As you are...

50% off $100 is still more than 10 or 20% off $50...

That's what we're talking about...100% inclease since Bob took over.

Tough during hard times...which is what we're talking about.

 

[jade1]

I'm not nearly as big of a believer in "they'll just discount...what the problem?" As you are...

50% off $100 is still more than 10 or 20% off $50...

That's what we're talking about...100% inclease since Bob took over.

Tough during hard times...which is what we're talking about.

Hmm, so if tickets were $50 (not $100), the capacity issue would be solved in your mind?

I wonder how full the hotels would be at 1/2 price, since they are now at 90% capacity.

 

[Madonna3]

Just out of curiosity, what do you see as the solution though? I agree crowds were a major issue and magic bands, etc. were aimed at helping with that and the rising costs have impacted crowds somewhat (I was there last month and felt wait times were totally reasonable - longest I saw was 110minutes for Space Mountain but generally things were well under an hour. Big Thunder was never more than 35 minutes and I never saw Toy Story Mania at more than 50 (and was even able to get a 4th FP for TSMM)

How to you keep it affordable but maintain crowds? Set capacity limits so they are hit every day and people camp out to get in? Easy to say build more parks but there will still only be one Magic Kingdom (plus, if they invest literally billions in more parks they have to get that money back somewhere)

First, you found 110 minute wait reasonable or did I misunderstand that?

Second, I don't know what the answer is. I'm a psychologist, not an economist, so I can only tell you likely how people think or act, not a good business solution to Disney's attendance woes. However, using what knowledge I have about the psychology behind how people spend I can say this:

People always spend with emotion. ALWAYS. Even if you have indifference, it's still an emotion. People still know what it feels like to have money tight. They haven't forgotten so they analyze what they're spending, where they're spending, and what they're getting. They run a few different scenarios. People's choice to go to Disney is usually based on emotion, not value and Disney banks on that. every. time.

Unfortunately, I agree with what Disney did, I just disagree with their timing of it. Disney should not have rolled out this pricing model at this time. They should have saved it for when there was actually something to see at their parks. Right now, with so much construction, they really needed to let Disney continue being a good value. I don't feel their attendance decline is solely because of the new pricing structure. I feel it has a lot to do with how people feel and right now, especially the local fan base, people don't feel Disney is as appealing and they're going elsewhere.

I feel that once the major projects are complete Disney's pricing model will make sense and will stabilize the attendance through out the year. People who can ONLY travel at Christmas for example are either going to pony up the cash to satisfy their emotions or they are going to evaluate if they have a stronger emotion to the value of their dollar vs nostalgia. What the general public has shown Disney is that they're willing to pay, but they are starting to set limits on what they're willing to pay for; the after hours MK event being one that the public rebuked. Until the major projects are complete, I believe there will be a steady decline to attendance and frankly, Disney can't handle the demand and therefore, must limit the supply by raising prices. However, in the future, instead of having 60 minute lines at 4 attractions, there will be 30 minute lines at 8 attractions. They'll create customer satisfaction by dispersing crowds, providing more experiences with acceptable wait times, and continue to explore the options with in place infrastructure, i.e., magic bands.

 

[johde]

Disney may be hitting the perfect storm especially at WDW. I saw mentioned on another message board that Disneyland had said their attendance was up for the quarter. Although, I can't find any verification of that. So, the 4% is domestic attendance could really be a 6%-8% decline at WDW and 1% - 2% increase at Disneyland.

You've got slowing economies in many of the foreign market that WDW relies on for attendance. You have parks that feel stagnant because of the hunkering down they did during the previous recession. You have 3 parks that just now getting the love they've desperately needed. They've had a couple of public technical misfires with attractions they did open. Rivers of Light still not being open, and Frozen Ever After opening to frequent breakdowns.

For WDW, I can see it only getting worse before it get's better. If Toy Story Land and Star Wars Land could still happen but construction could go at a glacial pace. It's already been announced that Paint the Night is closing at Disneyland. I could see them shipping it to Paris for it's 25th anniversary and Disneyland getting MSEP back from Disneyland leaving Disneyland with no night time parade. Then Paint the Night would come to WDW for the MK 50th. Disney would get three "special celebrations" out of one parade. It wouldn't be the first time WDW got a hand me down parade.

Add to all of that, Universal is breathing down their neck. USF and IOA are poised to overtake DHS and DAK in attendance if they haven't already depending on who you listen to. Comcast is showing no signs of slowing up. Universal used the last recession to build the WWOHP Hogsmead while construction labor was down and readily available. I could see them doing something similar with park Major park 3 on the new land the reacquired.

 

[jade1]

For WDW, I can see it only getting worse before it get's better. If Toy Story Land and Star Wars Land could still happen but construction could go at a glacial pace. It's already been announced that Paint the Night is closing at Disneyland. I could see them shipping it to Paris for it's 25th anniversary and Disneyland getting MSEP back from Disneyland leaving Disneyland with no night time parade. Then Paint the Night would come to WDW for the MK 50th. Disney would get three "special celebrations" out of one parade. It wouldn't be the first time WDW got a hand me down parade.

PTN might be coming to WDW it sounds in Jan.

 

[TheMaxRebo]

First, you found 110 minute wait reasonable or did I misunderstand that?

Second, I don't know what the answer is. I'm a psychologist, not an economist, so I can only tell you likely how people think or act, not a good business solution to Disney's attendance woes. However, using what knowledge I have about the psychology behind how people spend I can say this:

People always spend with emotion. ALWAYS. Even if you have indifference, it's still an emotion. People still know what it feels like to have money tight. They haven't forgotten so they analyze what they're spending, where they're spending, and what they're getting. They run a few different scenarios. People's choice to go to Disney is usually based on emotion, not value and Disney banks on that. every. time.

Unfortunately, I agree with what Disney did, I just disagree with their timing of it. Disney should not have rolled out this pricing model at this time. They should have saved it for when there was actually something to see at their parks. Right now, with so much construction, they really needed to let Disney continue being a good value. I don't feel their attendance decline is solely because of the new pricing structure. I feel it has a lot to do with how people feel and right now, especially the local fan base, people don't feel Disney is as appealing and they're going elsewhere.

I feel that once the major projects are complete Disney's pricing model will make sense and will stabilize the attendance through out the year. People who can ONLY travel at Christmas for example are either going to pony up the cash to satisfy their emotions or they are going to evaluate if they have a stronger emotion to the value of their dollar vs nostalgia. What the general public has shown Disney is that they're willing to pay, but they are starting to set limits on what they're willing to pay for; the after hours MK event being one that the public rebuked. Until the major projects are complete, I believe there will be a steady decline to attendance and frankly, Disney can't handle the demand and therefore, must limit the supply by raising prices. However, in the future, instead of having 60 minute lines at 4 attractions, there will be 30 minute lines at 8 attractions. They'll create customer satisfaction by dispersing crowds, providing more experiences with acceptable wait times, and continue to explore the options with in place infrastructure, i.e., magic bands.

I was using that as the absolute maximum wait time I saw - most times even for the big rides were well under one hour. Plus, we never waited more than 20 minutes for anything as we used FP (and were even able to get a 4th FP for TSMM, as an example) ... for peak season I thought lines were less than I was expecting

I agree with you at the timing - but I think it was in response to crowd levels that people were really complaining about. I think the really bad timing part was it was the same time as some negative things happened and people complaining about maintenance, etc. and then people felt really tough to have the price increases and then the teiring and then the bad optics of the paid extra morning and evening hours. Everything individually wasn't really a big deal but all at once I think turned people off

 

[jade1]

I feel that once the major projects are complete Disney's pricing model will make sense and will stabilize the attendance through out the year. People who can ONLY travel at Christmas for example are either going to pony up the cash to satisfy their emotions or they are going to evaluate if they have a stronger emotion to the value of their dollar vs nostalgia. What the general public has shown Disney is that they're willing to pay, but they are starting to set limits on what they're willing to pay for; the after hours MK event being one that the public rebuked. Until the major projects are complete, I believe there will be a steady decline to attendance and frankly, Disney can't handle the demand and therefore, must limit the supply by raising prices. However, in the future, instead of having 60 minute lines at 4 attractions, there will be 30 minute lines at 8 attractions. They'll create customer satisfaction by dispersing crowds, providing more experiences with acceptable wait times, and continue to explore the options with in place infrastructure, i.e., magic bands.

I agree with this, kinda what they are doing I think.

 

[Brocktoon]

I agree with most of this if not all.

But what would you prefer they do at this point?

They may have taken their eye off of WDW, but a lot went on as well.

Why not pivot back and throw Star Wars, Avatar and TS at WDW? If its too late, why continue?

At the point WDW is currently at, I do feel Disney is doing what it needs with the AK, DHS, and (hopefully) Epcot long term expansions. These expansions are critical for long term survival, but they also should have started years ago or should have been completed by now (speaking of Pandora).

As mentioned in a previous post (and knowing Disney's long timelines in park expansion) things may get worse before they get better as construction at WDW continues and Universal builds at a much faster pace ... but at least WDW seems to be on the right path.

My main concern ... As short term profit goals are pushed, will Disney cut the budget for the park expansions to get something faster and cheaper into the parks for a short term gain in attendance an to compete with Universal? Will we be left with a lackluster Star Wars Experience and Pandora scaled back from from all the concept work. I'm all for taking all the time you need for the expansions, but Disney really needs amazing innovation in the Florida parks. Especially with an IP like Star Wars

 

[Goofy DVC]

I mostly agree...

I think that the majority of Disney business...the core repeat customers and you're average, domestic family that makes one or a few trips over time...is on a "pivot" right now in regards to pricing.

They are still consuming at a high rate - based on the slightly slowing attendance but higher revenues - but I think if they decide (internally...where they live in their own bubble) that the "market" is craving their product but will continue to do so at a higher rate...then they could see a significant dropoff if they overplay their strategy.

Just my gut on this.

The other thing is that I think they have positioned themselves horribly for a recession. Definitely in WDW...less so in Disneyland. When people start caring about what things cost again? They're Going to choke on the prices.

That's all on the Iger regime.

I agree with most of this except for the positioning for a recession at WDW. I think WDW is insulated well due to three letters, DVC. During a recession DVC will help WDW ride it out. Just look at the evidence from 2007. And now the membership is much larger. Disney has a captive audience there. If a recession hits, one of two things will happen:
1. Members will rent their points resulting in heads in beds.
2. DVC will offer a nice AP discount and members will jump on it and end up adding that extra trip to increase the value of their AP.
Full disclosure, I'm one of those DVC members who would jump on the AP offer and take that extra trip to "save $$". And of course, would also be spending money on food and junk; I mean valuable collectibles.
Guilty as charged!

 

[lockedoutlogic]

I agree with most of this except for the positioning for a recession at WDW. I think WDW is insulated well due to three letters, DVC. During a recession DVC will help WDW ride it out. Just look at the evidence from 2007. And now the membership is much larger. Disney has a captive audience there. If a recession hits, one of two things will happen:
1. Members will rent their points resulting in heads in beds.
2. DVC will offer a nice AP discount and members will jump on it and end up adding that extra trip to increase the value of their AP.
Full disclosure, I'm one of those DVC members who would jump on the AP offer and take that extra trip to "save $$". And of course, would also be spending money on food and junk; I mean valuable collectibles.
Guilty as charged!

Even now...DVC is about 30% of the rooms...

I've seen a prolonged recession when DVC is in play...it's great for DVC but not pretty for twdc

You will grow out of buying their low grade junk...it happens to everyone eventually

 

[Goofy DVC]

Even now...DVC is about 30% of the rooms...

I've seen a prolonged recession when DVC is in play...it's great for DVC but not pretty for twdc

You will grow out of buying their low grade junk...it happens to everyone eventually

I hear ya but that's 30% that the Mouse doesn't have to worry about filling. That's nice come recession time. Not the cure all but not too shabby. And it's a number that is growing.

 

[jade1]

I hear ya but that's 30% that the Mouse doesn't have to worry about filling. That's nice come recession time. Not the cure all but not too shabby. And it's a number that is growing.

They are well positioned IMO.

Like you say, DVC alone is an amazing hedge against it.

New resorts are being built and being maintained by consumers (willingly), and WDW gets them back for free at the end.

College Program is almost free labor (willingly).

Most workers are part time or contract.

They can always offer discounts, more free dining dates, new ticket options (last year they had $199 for 4 days 4 parks).

New IP's and MM+ opened a lot of doors for packages they could offer. Additional FP+, early FP+ ressies, Star Wars packages, AK late night Avatar/ROL packages.

 

[beer dave]

They are well positioned IMO.

Like you say, DVC alone is an amazing hedge against it.

They can always offer discounts, more free dining dates, new ticket options (last year they had $199 for 4 days 4 parks).

New IP's and MM+ opened a lot of doors for packages they could offer. Additional FP+, early FP+ ressies, Star Wars packages, AK late night Avatar/ROL packages.

I agree that their position is good-- They are just hitting the point where avg joe is saying " enough is enough"--- but the pricing has hit the point where D makes higher profit with out Joe-- So when the economy tanks again (if?) D can just drop pricing to allow Joe back in--- Joe is happy cuz he can go back to D, and D fills some more beds. They will just ride it out with discounts and free not free stuff.

I guess the real question is how bad will (could) the economy tank?

And whatever shape the economy is in when the new lands open, the prices can/ will rise from wherever they happen to be at the time...

 

[jade1]

I agree that their position is good-- They are just hitting the point where avg joe is saying " enough is enough"--- but the pricing has hit the point where D makes higher profit with out Joe-- So when the economy tanks again (if?) D can just drop pricing to allow Joe back in--- Joe is happy cuz he can go back to D, and D fills some more beds. They will just ride it out with discounts and free not free stuff.

I guess the real question is how bad will (could) the economy tank?

And whatever shape the economy is in when the new lands open, the prices can/ will rise from wherever they happen to be at the time...

That wasn't the "point" being hit on.

4% did say enough. Could be economic, maybe waiting for new expansion, maybe not enough new to be worth the higher costs. Haven't argued that.

I was just countering that they (WDW) are positioned horribly if there is a recession. I think they are well positioned.

But if the recession is that bad, I will be the first to not care about WDW (and US) among many things.

The other thing is that I think they have positioned themselves horribly for a recession. Definitely in WDW...less so in Disneyland. When people start caring about what things cost again? They're Going to choke on the prices.

That's all on the Iger regime.

 

[lockedoutlogic]

I agree that their position is good-- They are just hitting the point where avg joe is saying " enough is enough"--- but the pricing has hit the point where D makes higher profit with out Joe-- So when the economy tanks again (if?) D can just drop pricing to allow Joe back in--- Joe is happy cuz he can go back to D, and D fills some more beds. They will just ride it out with discounts and free not free stuff.

I guess the real question is how bad will (could) the economy tank?

And whatever shape the economy is in when the new lands open, the prices can/ will rise from wherever they happen to be at the time...

It remains to be seen...
But I'll say it again...Disney parks are at their core a middle class product. If they bleed that segment out...you will not like how they respond.

Also...there is no "capacity problem"

This is a creation wait times being on an app...you never heard this before that.

They have larger attendance, yes...but nowhere near full.

To say that prices control crowds intentionally is fools gold. They're just bleeding you

 

[luisov]

To say that prices control crowds intentionally is fools gold. They're just bleeding you

That could be the case in California, though. The capacity over there is much smaller, and with lots of AP's treating the parks like some sort of daycare, raising the prices might sound reasonable. I agree that this is not the case at WDW though. There is a capacity issue at MK. There's plenty space to move anywhere else.

 

[lockedoutlogic]

That could be the case in California, though. The capacity over there is much smaller, and with lots of AP's treating the parks like some sort of daycare, raising the prices might sound reasonable. I agree that this is not the case at WDW though. There is a capacity issue at MK. There's plenty space to move anywhere else.

True...I was speaking of WDW only.

They did use price as a tool
In California...they doubled the price of the annuals...

Mk...again...does not have a capacity problem...I was just there smack dab in the middle of the summer and there was no problem whatsoever...

"Capacity problem" is not 3 weeks a year...they don't look at it that way and neither should you...

Does anyone remember waiting for pirates for 2 hours? In the 90's? I do...

Splash...the same...

Hour waits for spaceship earth? 1 for body wars? 90 for star tours? Hour for the movie ride?

It's not like they have much more then than now...

You know what they didn't have back then? Smart phones...

This is pretty simple conclusions here.

Attendance is higher...it's just slightly higher across the board...that's 365 days.

That's not "capacity"