Hmmm... obfuscate much?
You speak like a tenured professor of literature trying fill in for the calculus class. I'm really trying hard to fight through the PR - those absolutes you identify in your number list. The ones touting Disney as the best at some things that, quite frankly and objectively and from experience - they're far from even being considered middle of the pack.
I made no argument in the post you responded to. Check it again. I was making an experienced-based observation based on numbers and identifiable trends.
Countering with Pixie Dust absolutes that Disney is the best at *** insert whatever****, depending on which thread you are posting in..... DDL, we need more quantification than that
So, here's your chance, straight from your response: "They're sacrificing profit. It's okay to add on additional employees if the profit grows with it"
I'm having real trouble putting that absolute from you into a real world scenario where profit (a now thing) and payroll/pension liabilities (a now and future thing) can both live, grow, and be measured and managed on a 2 dimensional fiscal YTY reality while also managing long term liability.
Have at it.....
My father always said I could bloviate.
I submit that Disney's singular approach on shedding headcount is exactly why they are best suited for building new hotels. Other hotel operators would find their operations dragged down by a labor force Disney is already moving to eliminate. These savings in the millions of dollars are key incentive for Disney to construct these new properties. While it's true Disney would just receive licensing or lease payments on the hotels operating on property, the negative results would trickle down the line ultimately resulting in lost profit. Why would Disney outsource a process that they could do better themselves (here's the key) without effecting their other businesses? If Disney was going to have to choose to operate hotels or theme parks, their cost benefit would obviously be theme parks. However with this efficiency improvements in place, combined with their large workforce deployment it would not effect theme parks at all.
The only real negative effect on Parks I can think of that is compelling would be loss in Cap Ex. I'm one to believe that the theme parks likely have higher margins then hotels, meaning they'd be subsidizing the expensive capital heavy process of building new hotels. This effect could be offset by increased synergies of suppliers, contractors, and increased in foot traffic to Parks due to the Resort opening.
This brings me to your white collar arguments. My feelings are there's a critical mass point for those hotel operations staff. IT, accounting, and HR positions would have to be added, however many of the current employees work could undercut the necessity for those increases. For example if they needed 10 accountants after opening hotel A, with the opening of hotel B they only needed to add on an additional 8 for a total of 18. This is another reason why Disney would likely be more efficient at building out hotel operations. Whereas outsourced hotel would need 10 additional accountants, Disney would only need to add 8. Also, this positive effect falls down the line raising margins on the other properties as well.
Disney is big. Really big. They have the ability to negotiate down prices of food, shampoos, cleaning supplies, etc. saving millions. Another example of the home field advantage. This could be countered by enlisting a company such as Marriott that is specially optimized to handle flexible hotel operations. I'm just not convinced they have the Orlando local clout to make demands on suppliers and contractors in the same magnitude as Disney.
For all the reasons above, I feel like Disney is a more efficient hotel operator on property.
You could vehemently argue there's inherent risk owning real estate like hotels. Allowing 3rd parties to have access means you lower exposure to economic contractions. There's also the most compelling argument that you've made which is they'll not receive a high enough return on investment to justify the heavy up front costs/labor. However several different brands have jumped at the chance of building on property. This indicates there's significant upside potential. Disney's operations structure, technologies, and supply chain make it the most compelling to deploy additional rooms.
Finally, one other argument that could be made is Disney isn't much of a hotel operator. They're first and foremost a theme park/large venue management company. Disney can't do everything themselves, and the operations side is better left to 3rd parties who specialize in their role. This to me seems increasingly hard to accept. Disney is not the best "traditional" hotel operator. If you wanted to stay your last night at Grand Floridian or the best Hilton, I think most would (or should. full disclosure I'm on the line) choose Hilton. Why? Because they're an amazing hotel operator. Disney however is a great Resort operator. Taking the complete picture in. DME, My Magic, Disney Transport, Disney Springs,
Disney Cruise Line, Water Parks, and PhotoPass coupled with the theme parks and hotels make a great package.
Something only Disney can do. This arrangement also makes for the greatest profit maximization...
