Lay Off The Cleaning Lady Pete!!

[Launchpad11B]

We enjoy talking about dead horses......and cake and pie......

There's always room for cake and pie.........................................and a dead horse.

 

[jcb]

I've thought about this topic all weekend, hesitated to weigh in, except to mention the new pass, but after contemplation, I have to say, I just don't understand the reference.

Now, I don't get out all that much but I'm usually pretty good at understanding references of this ilk - it's a good part of my day job (I even do training on the subject).

I work with HR folks all the time. None that I know of have any prior experience being a cleaning lady (or gentleman) and a few I have worked with might could have profited from having that experience. I've never heard them referred to as "cleaning ladies", however.

Fine print: I completely agree with Pete's assessment of Crawford's performance but since I don't understand the reference, I'm hesitant to say whether I "approve" or "disapprove" of it. I do know that Pete's done just fine on the podcast without me trying to tell him what not to say.

 

[doconeill]

The cake is a lie.

 

[Launchpad11B]

The cake is a lie.

 

[DVCsince02]

The cake is a lie.

Them is fighting words......

 

[cocowum]

The cake is a lie.

But the pie is the truth.



I only know this because of my nutty 15yo DD.

 

[wdwowner]

I'm not offended I just think Pete is wrong.

And Kevin, if the price was out of line you guys wouldn't be paying it, but you are.

Correct.

If they wanted to Disney could decide not to do business with The DIS and just say No to the request for a private party.

 

[Mike2023]

Correct.

If they wanted to Disney could decide not to do business with The DIS and just say No to the request for a private party.

if they wanted to disney could shut there doors.

Disney will do business with anyone that has the money.

 

[pittsburghmarc]

Good points lugnut.

I take Pete's point to be - steady raising of prices in this travel climate will eventually catch up with Disney and force them to continue to reduce services...

But her biggest revenue stream is the parks. Of course Disney is going to want to maximize park revenue.

A lot less families are traveling now, that only means Disney has to get aggressive with packaging to try to fill rooms.

But your right, the $ spend per guest in the park is a huge barometer. She increases that, she does well in the companies eyes.Still funny.

 

[MM32830]

Walt Disney World and the surrounding tourust area are hurting.

Hotel occupancy is at 54%

I read the very same article about hotel occupancy in the Orlando Sentinel last week. While the numbers being quoted here are accurate, the article mentioned that the hotel occupancy rate for Lake Buena Vista DID NOT include Walt Disney World.

There was no occupancy rate stated for Walt Disney World hotels.



___________________
Armand

 

[k5jm]

Say it together.....Megonomics, Megonomics, Megonomics.

Megonomics -Noun-The economic belief that high supply + low demand = Higher Prices

This thread = dead horse

 

[WDWtraveler27]

I like cake, pie, and horses!

 

[DaParkers]

 

[cxcelica]

I read the very same article about hotel occupancy in the Orlando Sentinel last week. While the numbers being quoted here are accurate, the article mentioned that the hotel occupancy rate for Lake Buena Vista DID NOT include Walt Disney World.

There was no occupancy rate stated for Walt Disney World hotels.Armand

You are correct that article does not include Disney.

In their earnings report in July disney stated that their Occupancy rate had fallen one percent to 91% while their park attendance was the same as it was in 2008.

Their park revenue fell slightly and per person revenue had fallen about 4% based on the fact they were discounting the rooms to get people into the Resort.

It's not a secret that Disney's strategy has been to get people to the resort and then get them to stay longer and spend more money while they are there. This has been going on for some time now.

These numbers are found in regulatory filings. They aren't fudging the numbers or making stuff up for press releases. From a business perspective, with the US suffering one of the worst recessions/depressions in 80 years, I don't see how anyone can say that they have not done a very good job of keeping the parks and resorts strong.

If you want more info on the the actual numbers a simple google for Disney Earnings Report will provide you with tons of it!
___________________

 

[DisneyKevin]

From the Disney Investors Report (1st Quarter 2/3/09) which can be found here:

http://corporate.disney.go.com/investors/quarterly_earnings/2009_q1.pdf

"We faced a challenging first quarter with many of our businesses impacted to various degrees by the economic downturn," said Robert A. Iger, Disney's president and CEO.

From the Disney Investors Report (2nd Quarter 5/5/2009) which can be found here:

http://www.dreamsunlimitedtravel.com/cruise/faq.htm#top

"We had a difficult second quarter due to the weak economy and other factors," said Robert A. Iger, president and CEO, The Walt Disney Company.

From the article "Walt Disney Earnings Preview: Fiscal Third Quarter 2009" which can be found here:

http://www.earningspreviews.com/2009/07/walt-disney-earnings-preview-fiscal-third-quarter-2009/

"The last three quarters have been particularly difficult for Disney with the weak economy weighing on their results. While last quarter’s 7% decline was slightly better than the 8% decline in the prior quarter we expect the same cyclical themes this quarter. The decline in consumer spending has significantly impacted their theme park segment, while a weak advertising environment has impacted their media segment"

 

[lugnut33]

Kevin, would you atleast admit that Disney has NOT been effected as severely as other attractions in the Orlando area?

I've heard Pete mention that he has yet to see a slowdown at Dreams Unlimited. That tells me that DU is a well ran company that has great management and awesome employees. The fact that DU has sustained its business through this economic downturn while other companies similar to DU have seen a big fall-off in business is fantastic (and a lot of that success can be attributed directly to the incentives Disney is offering guests). Sure, maybe things aren't exactly the same as when the economy was chugging along, but DU is still doing well.

And that's how I see Disney, or in this case WDW. Sure there are challenges and perhaps things aren't as great as a year ago, but WDW has done a good job of keeping people coming and generating revenue. When upper management looks at what Meg has done they will evaluate her on how well revenues and profits have heldup during this economic recession. And if you look at the quarterly reports you'll see that the parks are still generating a lot of profits (they are not significantly off previous quarters).

I can't wait to see the 4th quarter results coming out very soon. It'll be interesting and yes my opinion could change, though from what I've seen on the boards about attendance levels I don't think it'll be bad. I suspect Disney to lose much more on the film side.

 

[cxcelica]

"We faced a challenging first quarter with many of our businesses impacted to various degrees by the economic downturn," said Robert A. Iger, Disney's president and CEO.

From the Disney Investors Report (2nd Quarter 5/5/2009) which can be found here:

To be fair, here is the rest of a similar quote from Bob Iger.

While the challenging global economy impacted our performance in the quarter, we remain encouraged by the relative strength of our businesses. The Disney brand continues to differentiate us in the global marketplace. Our business strategy, with its emphasis on creativity, technology and international expansion to grow shareholder value, is working. And we’ve proven our commitment to making our operations more efficient while preserving quality.

http://corporate.disney.go.com/investors/presentations/2009_07_30_q3-fy09-earnings-transcript.pdf

It would be foolish to believe that Disney has not been impacted by the downturn in the economy. However, that doesn't mean that they have failed. Of course the Disney Company has suffered. What company hasn't.....what travel/leisure company hasn't?

You quoted an article which said that Hotel Occupancy was down 54%. However, Disney has managed to maintain the same Hotel occupancy as they did last year. That itself you have to admit is an achievement.

Here is a quote from Tom Staggs which basically explains their approach

"Overall, per capita guest spending at our domestic parks came in 6 percent lower than Q3 last year. Hotel occupancy in Orlando was 91%, which is actually within about a half a percentage point of last year’s Q3, driven partly by the “Buy 4, Get 3 Free” promotion. In Anaheim, occupancy came in at 83%, down by 8 percentage points. Per room spending at our domestic resorts decreased by 9%.
Our Parks operating team has continued to do a good job of offsetting a portion of our revenue declines by reducing costs. There is a limit to those opportunities, given the relatively high volume of business we’ve been achieving."



Essentially their attendance is the same and Hotel Occupancy is the same since they have lowered their rates, yet their revenue decreased. So either they have to charge more for the rooms or charge guests more once they arrive.

Their occupancy is at 91%, lowering prices is not going to bring in more people.

 

[cxcelica]

I can't wait to see the 4th quarter results coming out very soon. It'll be interesting and yes my opinion could change, though from what I've seen on the boards about attendance levels I don't think it'll be bad. I suspect Disney to lose much more on the film side.

I agree, 4th quarter earnings should be interesting. The film side of the company is in much greater need of attention than the parks. It will be interesting to see if Rich Ross can revive that division.

 

[jcb]

. . . Disney has managed to maintain the same Hotel occupancy as they did last year. . . Their occupancy is at 91%, lowering prices is not going to bring in more people.

To keep hotel occupancy the same as last year, WDW had to institute a buy 4 get 3 free. Now we have 7 for 4 part 2. Under anyone's definition, that is "lowering prices." WDW just chooses to "lower prices" through what it hopes are temporary incentives rather than overall lower fees.

And at what point, as I think Kevin pointed out, does the "temporary" lowering of prices (buy 4 get 3, "free" DDP) becomes a customer expectation rather than an incentive? I think we have already reached that point with "free" DDP.

But more to the point, even with these incentives WDW has still priced themselves too high because folks are not spending as much while in the theme parks.

True, the Theme Park business may not be losing money (though I'll be quite interested to see the November earnings report) but the market wants to see continued growth over last year's figures. That isn't happening despite 7 for 4 and "free" DDP.

 

[DisneyKevin]

To be fair, here is the rest of a similar quote from Bob Iger.

While the challenging global economy impacted our performance in the quarter, we remain encouraged by the relative strength of our businesses. The Disney brand continues to differentiate us in the global marketplace. Our business strategy, with its emphasis on creativity, technology and international expansion to grow shareholder value, is working. And we’ve proven our commitment to making our operations more efficient while preserving quality.

http://corporate.disney.go.com/investors/presentations/2009_07_30_q3-fy09-earnings-transcript.pdf

It would be foolish to believe that Disney has not been impacted by the downturn in the economy. However, that doesn't mean that they have failed. Of course the Disney Company has suffered. What company hasn't.....what travel/leisure company hasn't?

You quoted an article which said that Hotel Occupancy was down 54%. However, Disney has managed to maintain the same Hotel occupancy as they did last year. That itself you have to admit is an achievement.

Here is a quote from Tom Staggs which basically explains their approach

"Overall, per capita guest spending at our domestic parks came in 6 percent lower than Q3 last year. Hotel occupancy in Orlando was 91%, which is actually within about a half a percentage point of last year’s Q3, driven partly by the “Buy 4, Get 3 Free” promotion. In Anaheim, occupancy came in at 83%, down by 8 percentage points. Per room spending at our domestic resorts decreased by 9%.
Our Parks operating team has continued to do a good job of offsetting a portion of our revenue declines by reducing costs. There is a limit to those opportunities, given the relatively high volume of business we’ve been achieving."



Essentially their attendance is the same and Hotel Occupancy is the same since they have lowered their rates, yet their revenue decreased. So either they have to charge more for the rooms or charge guests more once they arive.

Their occupancy is at 91%, lowering prices is not going to bring in more people.

I guess I dont see the disconnect between what I have posted and what you have posted.

Nowhere have I suggested that Disney has failed.

Disney is offering promotions in virtually every area and at times of the year that are typically the busiest.

Have you ever lnown Disney to offer free dining or "7 for 4" during the holiday season? Have you ever seen Disney offer discounts during Spring break.
Have you ever seen Disney offer "kids sail free" on 7 might cruises? Have you ever seen Disney offer Annual Passhiolders extensions or offer a weekday annual pass?

My answer to all of the questions above would be no. I see these moves as unprecendented.

My point in all of this is that I see Disney scrambling to fill rooms and to get bodies in the parks while offering less value, less services and raising prices.

As a consumer of almost all things Disney, I see this as a bad move. I am a die hard Disney fan and this leaves a bad taste in my mouth.

I could even forgive Disney if they came out and said that in order to maintain their exceedingly high standards, prices would have to increase.

No one likes paying higher prices, but according to the old expression, you get what you pay for.

But sadly, that is not what Disney is doing. Disney is releasing staff, cutting performances, loweing food quality and taking away the perks and pixie dust that make Disney magical.

I see Disney as charging more for less and in my opinion that is a very sad state of affairs.

I think even worse than a bad economy is the fact that Disney is pushing guests to the point of seeing Disney as a poor value. I think that will be far more difficult to overcome and have a much longer effect than Disney is projecting.

Disney has always trained their guests to expect prices to be higher and parks to be more crowded during peak times of the year. That model has worked for Disney for a very long time and the Disney guest has agreed to it.

In a similar vein, Disney Cruise Line has always let guests know that the lowest prices are available when dates are first released. The bigger the crowd on the ship....the higher the price. This model has had folks lining up to book the very best prices on the day the dates are released.

DCL has recently put out 2011 sail dates and they are much higher rate than the previous year. I understand that as prices continue to increase, but in the meantime DCl is offering incredible promtions for sail dates that are not full. To the snart guest, this says "wait and see" instead of "do it now"

As DCL releases these incredible promtions, they are doing it for new bookings only. If you were a good customer and booked your dates when DCL first released them, you kinda get the shaft and get stuck paying a much higher price as there is a penalty associated with canceling after a certain date.

The byproduct of this business model is that loyal guests that were normally clamoring for DCL to release dates so that they could book at the lowest prices are waiting longer for DCL to offer price slashing promotions.

Disney has spent many years doing something they refer to as "maintaining their brand integrity."

In my opinion, the business model Disney is now using is having the opposite effect. I believe it's shiort sighted. Disney is re-training their guests to wait and see if a better deal comes along.

I believe this, along with the feeling that guests are seeing less of a value and being charged more for it are going to have long term effects that Disney is going to regret.