ME...Why? Why would Disney give you FREE transportation?

[OLT2004]

We started going in 1996....

Why would Disney give you FREE Transportation?

Just to keep you onsite?

This must be killing the rental car business.
This must be killing the shuttle business.

 

[MouseyMin]

Yup - it's brilliant actually. Can't easily get to the "other" park (or anywhere else for that matter). And I'm sure they included the price for DME when they published their hotel rates.

 

[Horace Horsecollar]

Why would Disney give you FREE Transportation?

Just to keep you onsite?

Sure it's costing Disney a fortune. The DME and RAC baggage transfers are probably costing Disney even more than the DME transportation. But Disney is smart enough to focus on their overall profit at WDW.

Consider the many positive business advantages of DME to Disney, including:

• Discourages car rentals, so most DME guests spend all of their dining, shopping, and entertainment dollars on site at WDW, instead of going off site part of the time -- essentially, Disney owns your wallet from the time you step off the plane in Orlando;
• Increases the perceived value of staying at an on-site WDW resort, so WDW room rates can be raised (over time);
• Increases demand for WDW resort rooms, leading to fewer discounts and fewer unfilled rooms;
• Increases WDW guest satisfaction through a great first impression and last impression, leading to more return business and positive word of mouth.

Guests who don't use DME pay the same as guests who do. Of course, DME is not really free. We pay for it indirectly. But that works out to be good deal for Disney and for guests.

This must be killing the rental car business.
This must be killing the shuttle business.

The car rental companies have undoubtedly seen a drop in business. However, most arriving passengers at Orlando International aren't headed to on-site Disney resorts, and the car rental companies are still renting cars to those passengers.

The Mears Transportation company, which previously operated the paid shuttles to WDW resorts, now operates the DME motorcoaches (but does not run the overall DME service). So Mears is probably doing just fine.

I imagine that the livery services (limos and towncars) have been hurt the most. These services were primarily of value to WDW resort guests because of WDW's excellent transportation system -- and it's likely that most former livery service users are now using DME.

 

[CarolA]

There annual report shows spending per on site guest is up since DME.... Guess it's working!

 

[bavaria]

Horace, I agree, but I would add that rental car rates have increased significantly at MCO. MCO used to be the lowest fees of any major airport in the US, and most posters are shocked at the 2007 rate increases.

Of course, I have seen rental car rate climb significantly across North America (prices in New Orleans are just shocking...) but I suspect that the MCO increase is in part an attempt to make up revenue shortfalls from previous renters who now use DME (or rent for only part of their vacation)

 

[KINGBOBOFTHENORTH]

The taxi and shuttle companies have been quite vocal over their displeasure with Disney and Magical Express. They are hurting big time. They did get the airport to force DME reception people to remain in the baggage claim area like they have to do; for awhile there I believe they were roaming the airport terminal.

BobK/Orlando

 

[CarolA]

Horace, I agree, but I would add that rental car rates have increased significantly at MCO. MCO used to be the lowest fees of any major airport in the US, and most posters are shocked at the 2007 rate increases.

Of course, I have seen rental car rate climb significantly across North America (prices in New Orleans are just shocking...) but I suspect that the MCO increase is in part an attempt to make up revenue shortfalls from previous renters who now use DME (or rent for only part of their vacation)

But could that be beause the rental car companies have adjusted thier fleet sizes after DME. Fewer cars to rent means that they can charge more (supply and demand at work)

 

[bavaria]

Carol, I have also heard anecdotally that they struggled at first to determine what that fleet size should be after DME started. They couldn't forecast as well, and as we see here, many many people book and rebook and double book car rentals.

All of that means that the rental car agencies had to readjust their business model at MCO and are charging rates more in line with other cities.

 

[OLT2004]

Random Reponces(sp)
* Hotel Rates @ Value Resorts do not seem to have increased.
I will need to check rates from 2004 and 2000 to confirm...But POP and AS seem the same or cheaper....
* DME Staff "forced" to stay in Baggage Area - What is up with that?
* DME keeps you on site - Heck, our last 3 trips were All Disney Anyway...
We rented cars just because it was cheaper than round trip shuttles for 4
guests...
* This trip - VLT 2007- was going to be All Disney Anyway...So we saved $250
Car Rental...

 

[Lewisc]

My guess is the combination of "informed consumers", quick rental programs and credit card waivers is greatly reducing the number of customers that purchase the expensive add ons. The agencies at MCO now have to make their profit on the base rental charges.

Carol, I have also heard anecdotally that they struggled at first to determine what that fleet size should be after DME started. They couldn't forecast as well, and as we see here, many many people book and rebook and double book car rentals.

All of that means that the rental car agencies had to readjust their business model at MCO and are charging rates more in line with other cities.

 

[KINGBOBOFTHENORTH]

Well Disboard readers are obviously very loyal Disney customers and many of you would do 100% Disney anyway. So DME can represent some good savings on your transfer expenses. But the majority of people stay offsite and DME might shift them on-site because the transportation savings might allow them to do that.

But you see a lot of people post on here questions like "How do I get to Universal?, "How do I get to Sea World?", "How do I get to the Outlets?", "How do I get to a grocery store?" ,etc, etc. And the answer to all of those questions is, "With Great Difficulty". If you don't have a car, it's not easy without incurring large taxi expenses. And that's the chilling-effect that keeps most people on-property during their stay using DME. And that's what Disney wants. Very clever, that Mouse.

BobK/Orlando

 

[DebbieB]

I'm sure it hasn't hurt the largest shuttle provider - Mears. They are running the busses for DME.

I always rent a car and rates have definitely increased lately. I used to be able to get an intermediate car for between $100 to $120 for a week, incl tax. Last June I paid $105 for National. My October trip was $180 with Alamo. I have a reservation for April for $143 with Dollar.

 

[Edd]

The company that got hurt the most was Mears Transportation. Disney has just about destroyed the shuttle service. Mears is now a step child of Disney and has lost their independence. Disney says do it, Mears says, yes sir. Mears is losing influence they may have had at the airport and has lost respect from all corners of the local area.

I think you will see Mears absorbed by Disney, like Sprint took over nextel, as they try to monopolize transportation to their parks. They have almost successfully done that with the cruise line transportation. When they feel they have gained control than you will see them tack on transfer charges to the WDW vacation program, like they already do the cruise line transfers. The price change will be significant.

P.S. Disney is in control of the Mears purse strings!

 

[DC7800]

And I'm sure they included the price for DME when they published their hotel rates.

Guests who don't use DME pay the same as guests who do. Of course, DME is not really free. We pay for it indirectly.

It's not really a big deal, because at most any hotel services or faciliites you may not personally use (pool, business center, etc.) are still indirectly reflected in your room charge. But while it's my choice not to use the pool, DME isn't even offered. Not quite everyone arrives in Orlando by plane or car.

Again, that's not at all a complaint - DME is a service for MCO guests, and that's fine. But its not available to everyone who pays for it and might have use of the service (anyone arriving without a car).

 

[spiceycat]

I don't know where this amount came from - but it cost Disney $7.50 to transfer you from MCO to your hotel. they own the buses and I am pretty sure this does not include the gas for the bus. just what disney must pay to Mears (for the driver) and the airport to park there.

so they can do it. Since the luggage is also done in mass - I don't remember what that is per guest. If I got told. but this is out sourced too. So I bit Disney got another wonderful rate.

now that price has probably gone up this last year - because DME is used by more guests.

but yea it is definitely a win win for WDW. and not as expensive as you would think - they are using WDW buses - just Mears driver.

 

[Lewisc]

It was posted on another website that Disney pays Mears $25 for every DME passenger that takes DME. The retail price is around $31. Remember Mears used to wait until a bus was full and DME buses are sent out half empty.

We know Mears, not Disney, owns the buses, I don't think your information is accurate. My figure may be old it's possible Mears is now paid a smaller fee with Disney paying most of the expenses (cost plus contract).

I don't know where this amount came from - but it cost Disney $7.50 to transfer you from MCO to your hotel. they own the buses and I am pretty sure this does not include the gas for the bus. just what disney must pay to Mears (for the driver) and the airport to park there.

so they can do it. Since the luggage is also done in mass - I don't remember what that is per guest. If I got told. but this is out sourced too. So I bit Disney got another wonderful rate.

now that price has probably gone up this last year - because DME is used by more guests.

but yea it is definitely a win win for WDW. and not as expensive as you would think - they are using WDW buses - just Mears driver.

 

[Horace Horsecollar]

I don't know where this amount came from - but it cost Disney $7.50 to transfer you from MCO to your hotel. they own the buses and I am pretty sure this does not include the gas for the bus. just what disney must pay to Mears (for the driver) and the airport to park there.

Disney is currently paying 75 cents per passenger to the airport. I really doubt that Disney is paying $6.75 per passenger (for a total of $7.50) for the services of a Mears driver.

From Disney, airport reach deal on shuttle by Beth Kassab, Orlando Sentinel, March 16, 2006:

Disney's per-passenger fee will increase from 50 cents to 75 cents beginning next year. From May through December of 2005, Disney paid the airport more than $500,000 and carried more than 1.1 million passengers. The fee could reach $1.50 in 2010.​

The motorcoaches are licensed by and maintained by Mears Transpotation, in addition to being driven by Mears employees. As far as I know, Mears Transpotation either owns or leases the motorcoaches -- but, of course, money from Disney ultimately makes this possible.

There is no reason for Disney to disclose the business arrangements between Disney and Mears, BAGS, and other contractors and suppliers that are part of the Disney's Magical Express service -- or how much Disney pays their bell services cast members to deliver the bags to guests' rooms, for that matter. So, as far as I'm concerned everything except for the per-passenger fee to the airport is a secret.

With the millions of guests who use Magical Express, I think it's safe to say that Disney is paying many millions of dollars to generate many more millions of dollars.

 

[dopeyprincesses]

Do I understand this correctly, sorry I'm new to DIS

So when you arrive at Orlando Airport, Disney has a FREE shuttle called ME that will take you to certain resorts? (we're staying at POP) and then when you are departing they will return you to the airport? WOW that's great and like pp said the Mouse is smart

 

[Servants of Evan]

The company that got hurt the most was Mears Transportation. Disney has just about destroyed the shuttle service. Mears is now a step child of Disney and has lost their independence. Disney says do it, Mears says, yes sir. Mears is losing influence they may have had at the airport and has lost respect from all corners of the local area.

I think you will see Mears absorbed by Disney ... Disney is in control of the Mears purse strings!

I find this an interesting idea. Their options would have been: 1 -- Accept the Disney contract and remain one of the larger transportation companies in Orlando, remaining in business and making far more on volume than individual pricing with fewer administrative headaches - or: 2 -- Not get the Disney contract and lose a huge percentage of business to someone else who will offer the service at the client's price point. Just like any company that has a single entity as it's primary customer, their business is controlled directly or indirectly by the purchaser. Talk to any auto parts supplier who deals with a single manufacturer. They set the price, you can agree or they can go elsewhere -- there is no such thing as independence. For Mears, it was pretty obvious -- they could keep the wheels turning, moving more people than they ever had, or they could lay off 75% of their people and start selling equipment to counter-balance their soon-to-be diminished role.

Personally, I don't think you will see Mears absorbed by Disney. It makes far more sense to keep them as an outsourced contractor, eliminating a huge liability should a tragedy happen. There are times when you want to onboard things, and other times when it's in the companies overall best interest to keep them seperate. To me, this would fall under the latter. Disney already has the QC in place with the newer buses and by setting the schedules and routes, there wouldn't be a benefit to physically absorbing Mears...

 

[Lewisc]

I agree the exact financial arrangements aren't publicly known. The retail Mears price is $31. Mears used to wait until the buses were full, DME sends them out half empty.

It's not realistic to think the $31 price has more than a 100% mark up. We may not know the exact numbers but I suspect something like $25, 20% discount, is probably a lot closer to the actual cost Disney pays than $7.50.

BAGS is now bundling their valet, coat check and and RAC services at the convention center. I wouldn't be surprised if that's one of the reasons Disney is now using BAGS for valet services.

Disney is currently paying 75 cents per passenger to the airport. I really doubt that Disney is paying $6.75 per passenger (for a total of $7.50) for the services of a Mears driver.
......
The motorcoaches are licensed by and maintained by Mears Transpotation, in addition to being driven by Mears employees. As far as I know, Mears Transpotation either owns or leases the motorcoaches -- but, of course, money from Disney ultimately makes this possible.

There is no reason for Disney to disclose the business arrangements between Disney and Mears, BAGS, and other contractors and suppliers that are part of the Disney's Magical Express service -- or how much Disney pays their bell services cast members to deliver the bags to guests' rooms, for that matter. So, as far as I'm concerned everything except for the per-passenger fee to the airport is a secret.

With the millions of guests who use Magical Express, I think it's safe to say that Disney is paying many millions of dollars to generate many more millions of dollars.