Is Market Saturation a Big Problem for Disney Theme Parks?

[Peter Pirate]

DL started it all way back in 1955. Since then WDW has emerged as the biggest vacation destination in the world. Along the way other competetion had begun. First willing to be satisfied with Disney overflow, later findng a niche of their own, now not worried about competing head to head with Disney, these other parks are increasingly lauded as complete, well themed and even superior in some cases.

At this point we always start talking about failures and attendance sprinkled with much of our own personal interpretation and prejudices. But I'm wondering how does Disney stay on top and still make the money the stockholders demand? Will simply providing more quality do it? Do they need to continue to expand? Or could it be that maybe there are too many good choices and not enough guests that can be lured to Orlando and be expeted to 'stay put' as was the case in the past?

Can Disney continue to count on their 'demographic' to continually come back to them or is there a real problem down the road. Further, if there is a saturation problem how should Disney react?

I'm wondering if Disney might be seeing a big wall at the end of the gold paved road. A wall that might be more easily and profitably traversed by the smaller entity?

Thoughts?

 

[miko]

I think Disney (WDW) is trying to find the correct formula for todays demanding consumer. As you stated, previously they were the only game in town. Universal and Seaworld now have a fair share of the visitors time. They bothy have updated their attractions to suit the 'technology' turned-on rider. Thrill rides have made an extraoridinary come back in the past several years, success by Six Flags and others attest to this. The park visitor wants to have a diverse coice of rides, modern high tech, thrill rides and some nostalgic favorites. WDW still emphasizes the nostalgic theme and is trying to catch up on the other 2.
Service and safety are still very important and WDW has a slight advantage there, however their "service" element which was their major selling point has been going through a difficult time lately.
I also noticed on your post that it was number 999, you might want to get over to WDW today and ride Haunted Mansion!

 

[KNWVIKING]

I wonder how many Orlando guests were siphoned off with the opening of DLP, Tokyo and the soon Hong Kong ?

Right now I consider Central Florida to be the worlds biggest theme park. IMO WDW is still the reason people travel to Orlando, but every year there is something new to try. I don't believe these other attractions are doing things better or Disney is doing things worse, they are just new and different. IMO there is only just so many vacation dollars to spend in this country. With everybody seeing the jackpot Disney had with their theme parks it would only make sense that they try hard to emulate what Disney does. I think todays family wants a "packaged" vacation. Go to one place,stay in one place,play in one place, then return home. WDW and the International Drive area offer the perfect opportunity for this kind of travel. Because it is so great an area, people will make muliple trips. Because there is always something new to do in the area, returning guests will spend less time in WDW then they would have 5-10 years ago. When you look at the total dollars being spent in the area by everyone in competition with Disney, it would be impossible for Disney to spend enough each year to present a nearly new vacation experience for each retutrning visitor. What i'm trying to say is, Disney could match dollar for dollar what US or SW is spending, but when you consider what US,IOA,SW,WnW,Busch,all other attractions combined, then the figure is just too large.

 

[Peter Pirate]

Mr. Viking & miko, so you see my point that perhaps Disney see's itself in a bit of a quagmire, perhaps in a ''no man's land"?

And into the equation add the distinct differences in the way people travel and spend compared to the past and the expctations that are heaped upon them from the consuming public and you have a situation that may not be so easy to solve...

 

[KNWVIKING]

And our arguements don't even take into account that we are living in a society with many more disfunctional families, where immorality is becoming the norm, wholesome entertainment is belittled as boring or some kind of right wing religious fantasy land. People want loud & extreme. They want sexual innuendo. They want "reality" television.

I think the latest round of new E-rides is Disney becoming aware of this.They believe -and I do to - that to attract future generations they need to move beyond rides like PotC and JC,( but not abandon them).

 

[Peter Pirate]

Th only disagreement I have with you last catagorization

...where immorality is becoming the norm, wholesome entertainment is belittled as boring...People want loud and extreme. People want sexual inneundo. They want "reality" television.

Is that I don't see it as a one lane 'road to hell', I believe combined with the move toward loud, immoral, in your face is the parellell road of extreme conservatisim wanting to control everything we do, say or see. We're living in a very paradoxal times, IMO, with no middle ground (much like the middle class (lol) and I can't see how Disney, as a theme park leader can get a good grasp on what to do.

If they stick with the tried and true, no matter how good it may be they risk being labled as boring or unimaginative and be a failure...If they branch out they may get labled as opportunistic or exploitive and still be a failure...

 

[KNWVIKING]

**** "If they stick with the tried and true, no matter how good it may be they risk being labled as boring or unimaginative and be a failure...If they branch out they may get labled as opportunistic or exploitive and still be a failure..." ****

That's the point I was trying to make with my view of society. DL was built in the day of Opie and Andy. Today we're the Simpson's.

 

[EUROPA]

I can see where market saturation would cause the attendance figures to stall...but to go backwards? Really when you boil it down your trying to say that Disney has built so much in Florida that people don't want to go anymore? "There is just to much to do in Florida lets go to Six Flags instead". I'm a little shaky on that idea.

If your not buying the downturn in Disney quality and services and you not buying the Economy reasons then that only leaves one other choice....that Universal/SW/Bush are stealing those guest that in the past went to Disney. Or it just could be a combination of all of that. Which is what I'm more likely to think.

 

[Figmentrocks]

PeterPirate, great thread!

Here's my take, so take it for what it's worth.

Morals and so forth, well, I don't see any connection with Disney in regard to saturation. Geez, factor number one can be pretty simple, the price to come down here to Orlando on vacation is extrodinarily high today. Around $53 a day for a pay with tax.. So imagine taking two teenagers and up to a four day pass has no price break in it today. You're at over $800 for two adults and two kids for four days, not including food, lodging, and transportation.. let alone merchandise!

The saturation, I believe, rests right at Mr. Eisner's desk. Disney has essentially *****d out the brand to the point that people are sick of Disney. I grew up loving Disney, coming down here and to California on vacations, and loving all toys Disney, but my little ones aren't going to be like that. Our friends just came down with their 3 year old.

Nickelodeon and Spongebob are cool... Mickey Mouse is not. They stayed at the Windham Palace and didn't go to the theme parks. He absolutely cared less about seeing Mickey Mouse.

Disney's relentless self promotion has caused a lot of these parents to turn off to Disney and not purchase their products and go to the theme parks.

However, there is one way that Disney could add healthy numbers each year to the theme parks and add revenue.

Disneyland has an enormous customer based with annual passes and offers an extremely fair price for the passes. A non renewal for Florida residents will run you around $330 plus taxes per pass. Universal offers two parks for $99, or $159 for two years on their new promotion. If Disney would get off their high horse and realize that they aren't the "IT" place anylonger, they could attract a large sum of passholders from all over the state.

We have a friend who managed a location at Disney and before that worked at the MK for years. She took her two kids to the MK this month for the first time in like two years. She just couldn't believe how awful the place looked. That says it all to me. The specialness, rather the quality and uniqueness, has falled off, and the public is responding by losing interest.

 

[Peter Pirate]

Europa, I definately think it's a combination of those things. The competetion, while not as all encompassing as Disney, has emerged and in reality the breadth of WDW may be one of its biggest problems.

Certainly there are quality issues, but on the whole these are generally only noticed by the 'regulars' and especially by the Waltophiles (a PP registered word) like Landbaron and his ilk. The economy, especially travelers from the Continent, have distinctly hurt WDW more than most but this is still more of a factor than a reason for the current state of affairs, IMO.

All in all, I think there is too much (good stuff/new stuff) to do in Orlando which prevents Disney from increasing their market share significantly without a herculian effort in new development and services...And again there is no proof that even this effort would give the desired (necessary) results which puts WDW smack dab in a classic catch-22, if I'm not mistaken...

 

[KNWVIKING]

***"Really when you boil it down your trying to say that Disney has built so much in Florida that people don't want to go anymore? "***

It's not that Disney has built so much,it's that everybody else has. People still love going to Disney,still head on down to Orlando because of WDW.But when they arrive now, instead of spending the full week or so doing WDW, they may spend more days doing outside activities.

 

[Bob O]

Disney's problem isnt market saturation but it is the quality of the item they are giving the public for what they are charging. Disney hasnt spread it self so thin as to hurt their parks when it comes to attendance. Disney's problem is that they have siphoned money from the theme parks to put it into other company debacles!!! And while disney has failed to upgrade their parks properly(and then built half day parks)the competition has put money into their offerings, be it Universal/Sea World or regional parks like Six Flags/Cedar Point/Holiday World etc. If disney has been smart they wouldnt have built AK/DCA and instead used that money to upgrade their existing parks which are suffering with reduced maintence and little in new offerings!! Niether new park has live up to standards, be it in increases of attendance/revenue or have they lived up to the quality of the existing parks. When you look at parks like Epcot/DL as examples they have major holes which need fixing but disney apparnetly doesnt wan to fix them and is spending money/effort trying to get people into AK/DCA, which if they hadnt been built the money could be better used. Disney doesnt have the monoply anymore on great theme parks like they once had and seem unable/unwilling to compete.
Until disney improves on their product(spinners and carny games arent improvements) they shouldnt expect any great upward improvement in attendance as their are many other options fro American familes both in the US and overseas.
ps(what happedned to the so-called disney decade???)

 

[EUROPA]

Originally posted by Peter Pirate

Certainly there are quality issues, but on the whole these are generally only noticed by the 'regulars' and especially by the Waltophiles (a PP registered word) like Landbaron and his ilk. The economy, especially travelers from the Continent, have distinctly hurt WDW more than most but this is still more of a factor than a reason for the current state of affairs, IMO.

I'm not so sure...people in general have a knack for knowing when something is quality or not. You don't need to be a movie critic to see quality in a movie. You don't need to be a chef to see quality in food. It's easy for people to get off the HM and go wow that was so cool...and then to notice the lack of quality in Dinorama. It's easy for people to see they just paid 8 bucks for 3 chicken fingers a small order of fires and a small drink and been sneered at by the CM the entire time. Its easy for people to remember that 10 years ago they saw two spectromagic and two fireworks show all while being in the parks until midnight. This is the only aspect that Disney has control over. They can't control the economy they can't control Universal. So Disney's only chance is to beat them with Quality and Services. It just does not seem to me that they are ready to recommit to that again. That goes for almost every aspect of their business from movies, cartoons, ABC, and the Them Parks.

 

[crusader]

Here's what I see as the main concern: There is no longer a monopoly controlled by Disney. That means the company is forced to compete without the ability to hold the line on meeting a guests expectations. They're product aged and they must appeal to the next generation of vacationers. The only way to do that is by offering more options which fit the consumers preference.

There is enough population growth to spread vacationers out in Florida without hurting the attendance. Choice is one of the biggest expansions within our culture and we are conditioned as consumers to effectively decide amongst a realm of options. All Disney has to do is continue to attract people by providing the absolute best choice given the selection. Right now they still have that capability but it is becoming more and more difficult to maintain without adapting to a newer society.

 

[HB2K]

Disney's attendance problems are due to A) the bait and switch tactics being employeed with regard to their brand name and B) Stagnation.

Fool me once, shame on you....fool me twice....

Disney's customer base were accustomed to accept one product. Disney has chosen to sell them a different one.

This theory has applied to all of Disney's markets. Their movie business is such that they are afraid to attach the Disney brand name to their planned on, tent pole movie of the summer. Customer's can see the quality difference and are staying away from the company's Flicks in DROVES.

Theme parks are no different. Disney's regional park (DL) continues to succeed because of it's intent. It's vacation destination parks fail because with the cutbacks and the stagnation or poor application of attractions, people see no reason to return.

In short, people have learned to peel the Disney sticker off of the products and look at what the product actually is. And Disney's products as of late STINK.

As for the concept that people WANT a Six Flags type park, I disagree. The public's current enfatuation with extreemes and reality are not where the vacation industry is headed. There have always been thrilling rides, even before DL (Yes the thrills have increased, but the product has always been there).

Disney marketed a different product to it's customers. It offered an escape from having to walk around looking at the ground as the employees barked at you from their game booths. If offered an escape from putting the tikes on a ride and sitting there watching them. It offered a different product. And the people FLOCKED to it.

At one time Disney's only competition was themselves. There was NO other company offering the same product.

Then Disney brought themselves down to their competitor's level, yet complains when customers begin to compare since the products are similar.

I think Ei$ner read the Unabomber's Manifesto a little too closely

Before anyone goes APE on that comment, I'm trying to draw a sarcastic parallel between the Unabomber's distaste with new technology and the Disney company's apparent distain for new theme park technology.

The dead guy was one of the first to put a steel roller coaster into a theme park. Audio Animitronics were cutting edge. All of the attractions were one of a kind....things you just couldn't see anywhere. No park could match Disney's loading times or ride throughput due to people mover technology.

Now?

We're getting off the shelf ride technology with some signage (RnR, PW, Aladdin, etc). The same off the shelf technology then re-appears in EACH of the company's theme parks....usually with less signage. But the company expects me to go to all of their vacation destinations without giving any differenciation between them.

 

[KNWVIKING]

***"I'm not so sure...people in general have a knack for knowing when something is quality or not. You don't need to be a movie critic to see quality in a movie. "***

The things you mention in the rest of your post are fairly easy for you and I to see when we're there because we go very often (at least I assume you do). But my friends,family and co-workers go far less then I do....once every couple years or so, some first timers... and I have never heard anything but rave reviews, wished they had more time, can't wait to go back,etc. I can honestly say the only negative I have ever heard from them was the expense. Disney IS expensive. But look at the prices at US/IOA. We were just there in June. US/IOA costs more and the quality is less.

Maybe I just envy their ignorance.

 

[EUROPA]

Originally posted by KNWVIKING

The things you mention in the rest of your post are fairly easy for you and I to see when we're there because we go very often (at least I assume you do). But my friends,family and co-workers go far less then I do....once every couple years or so, some first timers... and I have never heard anything but rave reviews, wished they had more time, can't wait to go back,etc. I can honestly say the only negative I have ever heard from them was the expense. Disney IS expensive. But look at the prices at US/IOA. We were just there in June. US/IOA costs more and the quality is less.

Maybe I just envy their ignorance.

Ahhh but you see you've proved my point. People that don't go as often may not know why? ...but they do notice something is wrong. Yes they enjoy what is there..but something in their minds keeps telling them wow this is expensive. So therefore the quality of what they are getting does not match up to the price they pay. Some people are just better at putting their finger on the problems then others. If people thought they were really getting a qulaity product and service at a affordable price then you would not hear those types of things.

Lets not drag US/IOA into this again. We are talking about Disney's problems.

 

[KNWVIKING]

*** "Lets not drag US/IOA into this again. We are talking about Disney's problems." ***

Yeah, I'll give ya that one. But.....

***Ahhh but you see you've proved my point. People that don't go as often may not know why? ...but they do notice something is wrong. ***

No,thats not what my friend are telling me. GMC offers a great truck, but it's expensive. A steak house at the Sands Casino in Atlantic City has filet mignon(sp) that'll bring tears to your eyes, but it's expensive. My friends love Disney's product, but they realize it is expensive.

Just a question for the history buffs: Back when DL was opened, what was the admission/ticket price as compared to Walts competition ? higher,lower,on par ????

 

[Another Voice]

When Disneyland first opened it was roundly criticized for being extremely expensive. There was a lot of negative press (and a lot of internal debate) about even charging a whole dollar for general admission. That was unheard of for an amusement park of the day.

The public will pay lots of money for experience they find both pleasurable and unique. Disney's problem is that the public no longers believes that Disney is pleasurable or unique. It's not the competition's fault or the collapse of western culture or people having too much "choice" - Disney simply stopped trying to please the audience in the last ten years.

It's their own fault. And only they can fix the problem.

 

[crusader]

I think they have lost a valuable connection with their audience. To clearly define who that is today is so vastly different than who that was 35 years ago. We as a society have changed and Disney has yet to move into the 21st century which is pretty sad given the fact that the tech industry exploded in the last decade. Gone are the tremendous insurges of capital to play with and gone too, is the company's wealth which wasn't preserved or protected.

I am really glad to see the recent changes in venues. This is a great step in the right direction. They've started the ball rolling - and it's moving on course right now.

It is going to take all of this decade and beyond to redesign and renovate this company. They need to provide enjoyment to every type of family which is no longer the ozzie and harriett crowd enjoying a happy go lucky fun day at disney.