Fewer take Disney's free ride from OIA

[Michael623]

From the Orlando Sentinel:

More passengers are landing at Orlando International Airport this year, but Walt Disney World is taking fewer of them straight to its own hotels.

New airport data show that ridership aboard Disney's Magical Express, the complimentary shuttle-and-luggage service that Disney World offers to guests staying in its resort hotels, is in the midst of its first extended decline since its launch five years ago.

Traffic on Disney's buses fell 3.8 percent during the first nine months of the year. From January to September, Disney transported about 1.6 million arriving passengers at OIA to its hotels — about 64,000 fewer guests than it carried during the same period last year.

What makes the decline especially striking is that Disney's bus traffic is shrinking even though overall airport traffic is growing: Passenger traffic at Orlando International Airport is up 1.9 percent this year through August, the most recent month for which figures are available.
It's a reversal from just one year ago, when ridership aboard Disney's Magical Express grew 1.2 percent even as overall airport traffic sank 5.5 percent.

Experts aren't sure what's causing the shift, though they say it's likely a combination of factors. They note, for instance, that Disney has been slowly scaling back the discounts it used last year to prop up attendance, which is likely steering some travelers to off-property hotels. They also suspect Disney now faces stiffer competition from Universal Orlando and its new Wizarding World of Harry Potter, though the declines in Magical Express ridership began months before Wizarding World opened in June.

Whatever the reason, some analysts say the shift has significant implications for Disney. Magical Express riders are among the resort's most valuable customers: guests likely to spend their entire vacation — and their entire vacation budget — on Disney property.

"If you look at the business model at Disney, they say, 'We're a destination unto ourselves, and we're so strong we can keep people on our property the whole time,' " said Scott Smith, a professor in the University of Central Florida's Rosen College of Hospitality Management. But "if they [tourists] are not riding that [Magical Express], then they're venturing out to the other theme parks and the other attractions."

Disney downplays the significance of the slide in shuttle traffic.

"The ridership of Disney's Magical Express alone is not an indicator of business performance," Disney World spokeswoman Andrea Finger said. "By any measure, Disney's Magical Express is extremely successful. Not only do our guests love the service, but it also positively impacts the airport and our community in numerous ways."

Launched in May 2005, Disney's Magical Express quickly caught on with resort guests, who are bused from Orlando International to Disney's hotels while their luggage is shipped separately and delivered straight to their rooms. By its second full year of operation, the service was already ferrying more than 2 million people away from OIA each year.

It has been just as popular with Disney executives. The company has credited Magical Express with driving both higher hotel occupancy and higher spending, as guests without rental cars spend more time visiting Disney's theme parks, shopping in its stores and eating in its restaurants.

Disney's bus traffic began to slide late last year, according to the airport data, and the declines have continued through most of 2010. In its worst single month — February — ridership tumbled 10.5 percent from a year earlier.

Falling ridership is clearly linked to a broader slump in hotel occupancy at Disney World. Occupancy in the resort's roughly 25,000 hotel rooms and time-share suites was down a little less than 9 percent during the six months that ended July 3, the most recent company data available.

Disney is scheduled to report results for the July-through-September quarter next month. The Magical Express data suggest the resort's slump in hotel occupancy has continued.

Though Magical Express ridership spiked 5.9 percent in July — the first full month of operation for Universal's Wizarding World — it then plummeted 9.7 percent in August and an additional 4.6 percent in September.

Many industry followers think Disney's theme-park attendance is likely getting a boost from the popularity of Wizarding World, as the huge crowds drawn to Universal also spend time in Disney's parks. But they also say those travelers are far less likely to be Magical Express riders.

"If Harry Potter was bringing you to Orlando, and you book a trip and you were going to include Disney, the one perk that would probably not interest you is Magical Express," said Robert Niles, publisher of ThemeParkInsider.com. "Disney's not going to drive you there."

And it's Magical Express riders who are especially valuable to Disney, said Smith, the UCF professor.

Scott noted that, in addition to keeping guests on property, Magical Express benefits Disney through a concept he called " mental accounting." Many tourists have a set budget in mind of how much money they are going to spend on their vacations, and when they don't have to shell out for a rental car or taxi ride, they are more likely to spend that money somewhere else rather than save it.

"Now, not only do you not have all of their spending, but they have a smaller budget to spend with you," Smith said.

 

[Golf4food]

Shocking. Disney keeps raising prices on their already overpriced hotels and more people are staying off-site. Doesn't take a genius.

 

[Jason71]

Potter. One word says it all.

 

[Uncleromulus]

Didn't the article say the delcines began months before Potterberg was opened??

"EXPERTS" aren't sure what's causing the shift".
Sounds like a hundred different "experts", a hundred different theories.

Quick question tho-does Universal offer any similar service to those staying at their small handful of hotels??

 

[DCTooTall]

Quick question tho-does Universal offer any similar service to those staying at their small handful of hotels??

Not to my knowledge.

At the very least, they don't hype it as much as Disney does on their site's marketing.

I think part of it may be the fact that Universal is much smaller than Disney when you factor in all your shopping/dining options, so it's harder to spend a prolonged vacation just on Universal property without venturing outside their "world". The fact they also have just 3 hotels "onsite" (which I believe may not even be owned by Universal) and in turn partner with many other area hotels with it's packaging, may also make it harder to create a system anywhere near as efficient and cost effective as Disney's ME.

 

[TheBeadPirate]

Perhaps the decreased food quality and overall sub-par dining experiences coupled with the prolonged closure of PI is causing more people to rent cars?

It seems as if the fine dining off property has indeed picked up over the last year or so. We hear a lot of tourists talking at adjacent tables.....

... and every other person you meet at Citywalk is in line taking the cab back to Disney at the end of the night!

 

[DCTooTall]

Perhaps the decreased food quality and overall sub-par dining experiences coupled with the prolonged closure of PI is causing more people to rent cars?

It seems as if the fine dining off property has indeed picked up over the last year or so. We hear a lot of tourists talking at adjacent tables.....

... and every other person you meet at Citywalk is in line taking the cab back to Disney at the end of the night!

Very good point.

I know that since I don't have kids, I like to have some more adult things to do at night....especcially since I tend to go in the off season when the parks close earlier. There just aren't enough after hours things to do on Disney Property since PI closed the clubs to keep me onsite, and i'd put good money up that I'm not the only one who feels that way.

 

[Luv2Roam]

I am sure there are many factors. However I agree the new life at IoA and no adult night life at WDW were contributors.
The lack of adult activities sure made a major difference in where we spend our time and money, and we are locals.

 

[Oglet]

Citywalk V's Downtown Disney now thats a hard one.....

NOT!

I live and breath Disney however DTD has nothing on Citywalk after you've done Cirque and DQ

 

[Uncleromulus]

Guys--you know you aren't the only ones who feel that way. But you must know by now that Disney DOES NOT CARE if the adult crowd goes to CityWalk. Threats to spend your time and $$$ there don't matter very much. They no longer want that sort of business.

As to what that meant to ME--not much I reckon. I imagine CityWalk is as much of a locals place as it is for tourists. The "EXPERT" in the article didn't even mention it by name.

 

[Luv2Roam]

We don't "threat". It's just a way of life now to go somewhere else -- has been for two years.
Agree, obviously they do not care. que sara sara

 

[zulemara]

Potter. One word says it all.

and nothing to do at night!

 

[Ron from Michigan]

We were at WDW from Oct. 14-23 and went took the boat to DD at least 4 nights. Every night when we were done with dinner the place was packed.

 

[wbk]

If you've ever used the bus system, it is fine going to your resort. It isn't so fine going back to the airport. The problem isn't the buses. The problem is with getting seats/boarding passes for you flight. Our last family outing to WDW, admittedly a few years ago, we 11 people were scattered all over the plane. No consideration was given to the fact that there were children under the age of 8 who would not be sitting with even one of their parents. Only the goodwill of singles on the plane who were willing to trade seats made it possible for the children to sit with at least one parent.

If this is changed, I guess I should say "never mind." But with all the hassles now associated with flying especially baggage fees and airport security, it's no wonder fewer are taking the bus. Unless I have no choice, flying is no longer in my future. It's just not worth the hassle.

 

[jlewisinsyr]

I think it's like death by a thousand paper cuts...well, not so much of a death, more like a small flesh wound by a thousand paper cuts.

Disney has done very well in maximizing their profits in their Food & Beverage while quality has plummeted, conserved cash leading up to and continuing through the downturn and made some generally bad decisions in general (ie. PI). This has occured while some of the other companies have expanded their offerings, increased quality and made some home runs.

I think Disney has taken notice, but I as of late, I fear they're going to be once again haphazardly implemented or supported on the long term. Again, will any of this be the death of Disney, no, but they are missing out on financial opportunity that others are picking up on.