Fate of the Moderate Resorts?

[DVC-Landbaron]

Landbaron, are you saying that Walt Disney World was originally intended to be the Magic Kingdom, the resorts around SSL, and Epcot, and NOTHING else??? Are you sure?

YEP!! Not withstanding Mr. Scoop's conspiracy theories (watch the grassy knoll, it looks like a Pirate over there)!! The Magic Kingdom, the resorts around the Magic Kingdom and EPCOT (the full blown city)! I've never heard of any other plans. Have you?

Ok, I'll buy your numbers on the Tower. $75 in 1979 is $192 today. I can get it for $199.

Is that $199 a discounted rate or rack rate. We need to do apples to apples (for a change ).

 

[Buckleybunch]

where can you find "married to a mouse" at??

 

[YoHo]

I'm pretty sure that in the 70s, there weren't the aggressive discounts that there are now (I won't get into why)

I'm gonna side with Landbaron on this. I have never heard of EPCOT being a ruse. I work with people who think Walt was evil too. Is that true too?

I personally have no problem believing the handwritten motels map for the simple reason that it makes sense to me. Disneyland suffered from cheap motels not owned by Disney. Why not own them and thus reap the benefits AND have them meet whatever it is you consider your Motel-Disney Standard.
No, its not hard to buy at all.

Trust me though, EPCOT was no ruse.

 

[All Aboard]

YoHo, I think you are agreeing with LandBaron on the ruse issue but disagreeing with him on WDW being limited to MK, Epcot and some deluxes circling SSL. Am I right?

When Walt was presenting the Florida Project on TV (and I'm sure you've seen this) he speaks about having "enough land to do everything we can dream of." While I don't profess to be a mind reader I'm suspicous of "everything we can dream of" being limited to that short list above.

No more parks? No more resorts anywhere else on property? Really? I'm not sold on this.

 

[nigel-bigel]

Land Baron, thanks for the explaination.

I don't have much of a response, just kind of letting it all sink in. I totally see your point about compromising Disney's standards with the "lesser" (for want of a better term) resorts. Personally, I don't understand how a place can be called a "resort" and not even have a full-service restraunt. I call that a motel. A resort is a place that has everything you could need or want, and with so many ameninites that you wouldn't want to leave the property.

Maybe that's it! The deluxes should be the only ones referred to as resorts, with moderates being hotels and budgets being motels. I think those terms more accuratley reflect the level of service one should expect from these places. Disney could still provide the level of service and accomodations to Disney standards, but the extent of these services would be dictated by industry norms.

Just trying to make everybody happy... I do agree with Greg, that by not servicing every segment of the market they could seem elitist. However, I'm not sure that's a bad thing. The Four Seasons and the Ritz don't serve every sector of the market, and that is precisely why they have the reputation for excellence that they do.

And yes, I still love this!

Nicole

 

[DVC-Landbaron]

No more parks? No more resorts anywhere else on property? Really? I'm not sold on this.

I am. Walt wanted EPCOT (the city). He often said the only reason that he condescended to the 'Magic Kingdom" concept was to generate capital and excitement for his "Florida Project". Which was EPCOT! NOT WDW!!

 

[raidermatt]

Next he designed and built it according to what he liked.

I think we are all extremely grateful that Walt had this gift. He built things the way HE liked them, and, bata boom bata bip, it was succesful. He believed in what he liked, and it turned out it was what many of us liked. This gift, in conjunction with his determination, made Disney what it was. However, the business landscape is littered with the ruins of those who had this same belief, but were wrong. They felt no less passionately than Walt. They worked just as hard. But they didn't have his gift. And the reality is, if one does not have this gift (and very few really do), you must temper some of your enthusiasms with prudent business sense.

If dvclb's theories about rising rates at the deluxes is true, its because Walt was able to get away with not getting everything he could from the resorts because his company was in an almost constant state of tremendous growth. The pressue to make the ratios look good was there, but at nowhere near the level it is today. If the original resorts were under-priced, and it appears to a certain extent they were, it was inevitable that price increases would come. If not from current Disney management, then from whomever convinced the shareholders they could do it better.

Company's experiencing high growth periods, as Disney was during much of Walt's tenure, can get away with under utilizing resources. But as we've seen all too well in the last few years, there comes a point when the company must become more financially responsible, because super-growth cannot last forever. If financial responsibility does not occur, the company is doomed.

So raising rates was a given, whether we like it or not. The next question becomes does Disney try to reach further down the middle-class ladder? (This question actually exists whether the deluxe prices rose or not). Obviously, the decision was yes, and I find it difficult to criticize it from a business point of view. If we are defining the caste system as different levels of service for different prices, then this system already exists everywhere else anyway, including the restaurants on property.

This does not mean I am in full support of Eisner's decisions. There's a difference between financial responsibility and gutting the creative heart out of your company, but that's another story...

 

[nigel-bigel]

Okay Scoop, call me thick. I don't get your comment. Kumquats? Jewell (yuck!)? Could you clarify that for me please?

And so what if The Four Seasons doesn't cater to families and kids? My point is that they don't try to be all things to all people. They just worry about excellent service, and the public knows their standards. Why couldn't Disney focus on excellence in family accomodations?

Disney is starting to put its name on everything, and the brand will soon lose its cachet.

 

[DVC-Landbaron]

Scoop Duchovny :

I believe you will find that Epcot was never intended for residents and office parks...it was always intended for tourists after the worlds fair success.

Do you really believe that Walt never intended to build EPCOT (the city)?

I will grant you that after his death, no one, including Roy, knew how to fulfill this dream. But do you really think that if Walt had lived another 15 to 20 years we would still see an amusement park EPCOT instead of a city? Maybe a failed but city, but a city nonetheless!

nigel-bigel

And yes, I still love this!

Great! Keep posting!!

And your welcome!! (I love trying to convince people about this rather abstract concept, so in a couple months, ask again! )

 

[raidermatt]

Walt wanted EPCOT (the city). He often said the only reason that he condescended to the 'Magic Kingdom" concept was to generate capital and excitement for his "Florida Project". Which was EPCOT! NOT WDW!!

This was my understanding as well, admittedly through far less research than most others have performed. Certainly the motivation for presenting EPCOT as a ruse could have been there, had the ultimate goal been a WDW type resort. But its my understaning that it was Roy who pushed for MK, and when Walt passed, it became a done deal.

Regardless, I hope we are not saying that Walt's EPCOT should have been built, even after his passing??? With Walt at the helm, I can see him pulling anything off. But clearly, the same passion for EPCOT did not exist among the post-Walt leadership. Without this passion, and Walt's continued direction throughout what would have been a very trying development process, I can't see EPCOT being pulled off succesfully.

Given the way things played out, I'm happy with the WDW we do have.

 

[DVC-Landbaron]

Raidermatt, A couple of questions and a few comments, if you please.

However, the business landscape is littered with the ruins of those who had this same belief, but were wrong.

But that's just the point! He was not wrong! He had the business plan for success! Yes, he was instrumental in initiating it, but once started it could pretty much run on auto-pilot. And it was for a while (read: Walker/Miller) and it could have been kept that way if they just realized what assets they were sitting on and protected their value.

If dvclb's theories about rising rates at the deluxes is true

It is.

The pressure to make the ratios look good was there, but at nowhere near the level it is today.

Why? What makes the 'pressure' more intense today. Except that we, as a society, are more aware of 'the market'. But to the individual stockholders, it was every bit as important as it is today. They were buying a company and a product. A concept. Same as smart investors do today!!

If not from current Disney management, then from whomever convinced the shareholders they could do it better.

You make the same mistake that bicker often makes. Your confusing every other business in the world with Disney. You see, the experience FOR THE RELATIVELY LOW PRICE, is the product!!! Take away either the low cost or lessen the experience and it is no longer "Disney"! It becomes ordinary instead.

So raising rates was a given, whether we like it or not.

I respectfully, disagree!!

Obviously, the decision was yes, and I find it difficult to criticize it from a business point of view.

So do I.

If we are defining the caste system as different levels of service for different prices, then this system already exists everywhere else anyway

And that is why the Disney experience used to be sooooo unique!!

including the restaurants on property.

I'm sorry. I can't equate a restaurant with a 'Disney' Resort. I know what you mean, but I think the analogy falls way short of the mark.

There's a difference between financial responsibility and gutting the creative heart out of your company, but that's another story

Ahhhh! But to me that is the story!!!


PS:

Regardless, I hope we are not saying that Walt's EPCOT should have been built, even after his passing???

WHOA!! Absolutely not!! I think that Scoop is right to a certain extent. They people who took over after Walt's death keep up the pretense of EPCOT for quite a while. I think at the beginning their intentions were honorable. But they soon came to realize that it would be impossible. And they finally had to admit that they could not do it. But they admitted it only to themselves. They neglected to inform the Florida legislature for years and years!!

PPS:

My point is that they don't try to be all things to all people. They just worry about excellent service, and the public knows their standards. Why couldn't Disney focus on excellence in family accommodations?

OH YEAH!!!! You gotta keep posting!!! Right on the money in one!! How about it Scoop? I couldn't have said it any better myself and it would have taken me four time the words!!!

 

[Captain Crook]

Oh, I think Walt would have built EPCOT, whatever it was to be, but the concept was still so abstract that there were no concrete plans to follow, no feasibility studies to be made, nothing but "one man's dream" if you will. Had Walt lived he probably would have attempted his EPCOT, but since he didn't and no plans had been made to do so, the actual development was left to Roy & the group to decipher - And remember they always followed the "what would Walt do" dogma and the Epcot we have is what we were built.

From reading about the acquisitions & particularily the problems they had establishing what they needed to establish with Reedy Creek I don't think we'd have gotten the magical EPCOT Walt dreamed of anyway. The bueracracy hurdles were enormous & we would have ended up with a more imaginative Celebration, IMO. So, (again IMO) the WDW we all know and love is as much thanks to Roy as it was Walt (the basic concepts were all Walt, of course but the actual course of expansion of the WDW Resort was far more Roy & Eisner).

Now to the actual moderate debate...This is where the LB contingent begins to look like the "Disney elitist" we've discussed previously. Tell me why a moderate (say CSR) which appeals to a segment of the population not used to staying at such a nice and oppulent Resort, (dare I say fancy Resorts?) as heretofore offered, and are thrilled with the quality and the detail they see, the beauty around them...(dare I say magic?) of the CSR moderate. Why is that unacceptable? I myself feel very out of place at a Ritz-Carlton. Don't get me wrong, I recognize and appreciate the amenities & classiness, but I am not personally happy there, so does that automatially make a fancy Marriot, for half the price, inferior?

 

[Another Voice]

I try to catch up on some reading and the place turns into a bad ‘X-Files’ fan fiction site.

Nope, EPCOT was not a malevolent scheme by Walt to seize control over mankind, or even the state of Florida. By the early sixties, he was at the age when a man asked what he’s really accomplished with his life and what has he done to leave the world a better place. Walt was never one to think about trust funds, bank accounts or anything small – he really thought he could change the way people lived.

Whether his ideals were shared by many others in the business is debatable, but he was very sincere about his plans. And Walt’s plan remained the official master plan for the property until about 1980 when his heirs admitted they lacked the confidence to proceed. No one ever really accused Ron Miller or Card Walker of much vision.

The master plan included the recreation zone centered around the Magic Kingdom, six deluxe resort hotels, camp grounds and golf courses. The center of the property was to be EPCOT with about 20,000 residents. The large tower in the center of the city was to have been a hotel and office complex. A large section of “Downtown” was a World Showcase style shopping and entertainment complex. Surrounding the center were to have been homes, apartments, neighborhoods. To the east was to be a non-EPCOT housing development for vacation homes, condominiums and corporate housing (which was built as designed, but was turned into the Disney Village resorts instead of being sold). South of EPCOT was a large industrial park, a research and development campus and other businesses (an idea that Eisner really likes and may yet be built). At the extreme southern end of the property was supposed to be an airport and transportation center serving all of Central Florida (again, another project that has current designs sitting in Glendale).

Much of Walt’s plan is still in WDW in one form or another. And much of the rest is still possible.

I should also say that one third of the property was have been left in its natural state in the form of a nature preserve. This was another important part of Walt’s plan. But the nature preserve was bulldozed to build Animal Kingdom in an act of irony that goes beyond words. Another sizable amount of acre was to have devoted to green space, flood control and gardens. The master plan called for actually developing just over half of the land Disney owned at the time.

Perhaps over the holiday I’ll have a chance to dig through the archives and find some more details. And by the way, cheap motel rooms were never part of the plan. Walt had several occasions to build those at Disneyland or put them in the WDW Plan. He just wasn’t interested in them.

 

[JeffJewell]

neither do they market towards families and kids...I believe we have a kumquats sighting...someone call Jewell for an official ruling, please

...I think it's legitimate to say that Disney was once the Four Seasons of family vacation resorts. Now they try to be every family vacation resort, including the TraveLodge of family vacation resorts. That's a noticeable, and regrettable, difference.

Jewell (yuck!)?

"Yuck?" How humiliating.

Jeff

 

[seashoreCM]

The problem with the EPCOT that Walt envisioned is that the Disney corporation could lose control quickly. Any U.S. community is governed by voters, who are the actual people residing there.

In order to build Walt's rendition of EPCOT, a section of land must be incorporated into a town or city different from the one (Lake Buena Vista?) that MK, AK, EPCOT and MGM and the resorts are in. Is Celebration so separately incorporated?

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[raidermatt]

He had the business plan for success!

I agree, provided there were enough new ideas and growth opportunities to make his plan work. In a lower, sustained growth model, I fear his plan would not have been as successful, and he may have encountered some insurmountable problems.

What makes the 'pressure' more intense today?

Its not so much the intelligence of investors that has changed, but more the short-term focus of investors. Investors in general want to see results now. I fear the recent .com failures will only exacerbate this. I'm not saying this focus is better, or more intelligent, only that it exists in greater abundance today than 30-40+ years ago.

Your confusing every other business in the world with Disney. You see, the experience FOR THE RELATIVELY LOW PRICE, is the product!!! Take away either the low cost or lessen the experience and it is no longer "Disney"! It becomes ordinary instead.

I could not disagree more. Price is a component in the value proposition, but it is absolutely NOT a part of the product. The Experience itself is the product, period. We do not marvel at Peter Pan because we paid an affordable price for the ticket or DVD. I certainly was not thinking about price when I walked hand in hand down Main Street with my son the first time.

Increasing WDW/DL/DVD, etc prices 100% across the board would not decrease the magic of the experience. It would make the experience less accessable, but the experience, or product does not change. Likewise, decreasing prices 50% would not make for a "better" product. Only a more affordable one.

I'm sorry. I can't equate a restaurant with a 'Disney' Resort. I know what you mean, but I think the analogy falls way short of the mark.

True, the scope is smaller, but the concept is the same. Family A can afford PS's at Cinderella's Royal Table. They can afford to drop $30-40 per person on dinner and are treated as royalty in the castle. Family B can only budget for dinner at Cosmic Ray's. They may get a nice value, but clearly the quantity of service received is different. I don't see how this is different than paying more or less for the hotel room, and getting the corresponding quantity of service. (note, quantity, not quality. EVERY guest should get high QUALITY service)


I also don't believe financial responsibility means the creative heart must be removed. Finding new revenue streams, or making better use out of current streams does not mean creative energy must be stifled. Its expense cutting that is the culprit. When I say responsible cutting, I'm referring to more efficient scheduling, making better purchasing decisions, etc. I do NOT mean these as code words for elimination of Imagineering, or decreased guest services. I do believe that some of the expense cutting that has occured is not RESPONSIBLE expense cutting.

 

[nigel-bigel]

Jeff, I must apologize. I had no idea who Jewell is. Scoop was talking about kumquats, which I still don't understand, so when he referred to Jewell, I assumed it was the singer (who deserves the "yuck"), because that is the only Jewel I know of, and it would make sense because I wouldn't understand what she would have to do with this discussion, either. She would be as relevant as kumquats, get it? I certainly did not mean to offend a real-live rational person whose just-stated opinion I agree with!

And Land Baron, you had me laughing! I'm checking in after dinner, reading your post, thinking that you really know your stuff and seem like a pretty smart guy. And then you go agreeing with and complimenting me!!! Ah, yes, we great minds do think alike...

Gentlemen, please continue, I am enjoying this. BTW, am I the only woman here? Cool!

Nicole

 

[YoHo]

Well, there is Sarangel, but she's a mod, she spends most of her time feeding us ravenous Rumour readers the juciest of online Disney Morsels. Rarely does she stay to feast on the Kill.

 

[JeffJewell]

...no sweat, I was just funnin' you.

Planogirl and Hopemax are the women regulars here that spring right to mind. Several others who mostly lurk have been known to mix it up every so often, when the mood strikes them.

Jeff

 

[nigel-bigel]

[This is where the LB contingent begins to look like the "Disney elitist" we've discussed previously. Tell me why a moderate (say CSR) which appeals to a segment of the population not used to staying at such a nice and oppulent Resort, (dare I say fancy Resorts?) as heretofore offered, and are thrilled with the quality and the detail they see, the beauty around them...(dare I say magic?) of the CSR moderate. Why is that unacceptable? I myself feel very out of place at a Ritz-Carlton. Don't get me wrong, I recognize and appreciate the amenities & classiness, but I am not personally happy there, so does that automatially make a fancy Marriot, for half the price, inferior?
[/B][/QUOTE]

One could actually say that THIS is an elitist statement. In essence, that a deluxe resort is too fancy for Joe Six-Pack, and Joe would really be more comfortable with lesser services and amenities, so Disney is just giving the simple man what he wants.

I understand your reservations (pun intended, I guess) regarding a property such as the Ritz-Carlton. However, I'm betting it is the formality of these places that you don't want. But who doesn't feel comfortable at the Beach Club, for instance? Top-notch service, decor, amenities, and you still feel comfortable walking through the lobby in flip-flops. Excellence does not have to be synonomous with stuffiness.