Not good newes for the parks from Jay Rasulo

[Bob O]

Disney sees outlays for parks down, attendance up
February 12, 2004 1:48:00 PM ET

LOS ANGELES, Feb 12 (Reuters) - Attendance at Walt Disney Co.'s (DIS) theme parks is improving and the company intends to limit investment in the destinations to improve profitability, the president of its parks and resorts division said on Thursday.

In a presentation to financial analysts at a company conference in Orlando, Florida, Jay Rasulo said travel trends were working in the company's favor.

"The strong growth in attendance we've seen in the fourth quarter of fiscal 2003 and the first quarter of fiscal year 2004 give us some confidence that volumes will continue to recover," Rasulo said.

Since cable operator Comcast Corp. (CMCSA) launched an unsolicited $50 billion takeover bid for Disney on Wednesday, speculation has swirled about whether Comcast would be interested in holding on to the parks on a long-term basis. Rasulo did not address the Comcast offer.

He did, however, address the economics of running the parks, noting that the company thought it could increase attendance while reining in development costs.

"We fundamentally believe that we can continue to drive and grow the business to our existing properties, which still (have) substantial growth opportunities ... with significantly below $1 billion a year in capital investment," he said. "We expect to keep capital spending in our domestic parks meaningfully below $1 billion a year for the foreseeable future."

Employee benefits, an area previously identified by the company as a source of increasing costs, remained an issue for the company, Rasulo said.

"The employee benefit challenge is significantly dampening our margins in the near-term," he said. REUTERS

© 2004 Reuters

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Looks like investments in the park will be going down, ,not good news at all!!
Your thoughts

 

[Peter Pirate]

Still...Using a billion per annum as a bench mark isn't peanuts.

 

[JDH]

fortune 500 CEO. Lets cut costs not improve our product thereby keeping our current customers while enticing new ones.

 

[KNWVIKING]

*** ... with significantly below $1 billion a year in capital investment," ***

I'd really like to know the definition of "significantly" .

 

[raidermatt]

I'll take a stab and say something more than a buck.

Seriously, the reason they aren't committing to a number is so they can't be held to one.

It was $636 million in fiscal '02.

$577 million in fiscal '03.

 

[raidermatt]

Those numbers are for the entire Parks and Resorts division.

 

[Peter Pirate]

And IMO, although I'll certainly take it on the chin again, that has been money pretty well spent. We've had a lot of new things open and some still on the way. If the trend, with the current quality (M:S, Soarin', etc...Not Dinorama) is continued I don't see this as necessarily gloomy news.

On a lighter note (and I do mean lighter), today marks the end of the 8th week of my excercise intense diet and I've lost 22lbs!!! - From 235 to 213. Not bad, eh?

 

[Mymatisse]

 

[SnackyStacky]

Congratulations Pirate! That's awesome!

No comment as to Jay's comments.

 

[raidermatt]

Nice job Pete!

 

[DVC-Landbaron]

WAY TO GO!!!!

My favorite Pirate!!! Congratulations!!

That's awesome!!

I'm trying to lose as well, doing Atkins!! So far so good!!

 

[OnWithTheShow]

Well Pirate sounds like you earned a trip to Disney World. Treat yourself to a few days in March when I will be in town. I also do not think this is absolutely small news. The large amounts of capital that Jay may be referring to is the cost to build whole new parks. 1 Billion for Animal Kingdom in 98. Over 1 Billion for DCA and Downtown Disney in California. 1 Billion for Disney Studios and Downtown Disney at Paris (estimate). And somewhere near that for Hong Kong too. You could build a new QUALITY attraction at almost every park for less than that since you are not spending money on infrastructure. You could build 5 150 million dollar attractions for significantly less than a billion.

 

[Peter Pirate]

Show, we are planning a trip in March, I'll let you know the dates when I have everything finalized.

Thanks for the kudo's guys...I know it was a shameless self promotion but I'm so pleased I had to tell you. My 'pie in the sky' goal was 210 (a 25lb loss) and it appears I'll easily make that so now I'm thinking 205...I'm not sure much lower will be practical, after all I am 6'3", and I haven't been below 200 in probably 20 years.

Back on subject, does anyone feel the gains in the Parks over the past two years are unacceptable?

 

[KNWVIKING]

***"Back on subject, does anyone feel the gains in the Parks over the past two years are unacceptable?"***

Not unacceptable, more a step in the right direction. My wish list would include developing the 20k lagoon into a modest C or D ride. AK could use a high quality dark ride- imagine a "duck tours" type vehicle used in a hybride KS/JC/PoC type dark ride. Do whatever it takes to encourage upgrades to the current pavilions at WS and make Spain a reality. Make nice with George Lucas and get a new Star Wars attraction. I love thrill rides and think there is a definite need to have them at WDW, but when I hear the word "Epcot" I don't think the first vision in my mind will ever be M:S.

 

[wtg2000]

Way to go Pete!

Hopefully, they will continue on with new attractions. Even if each park received a spanking new attraction every four years (thus, a new ride each year over the entire resort) that would be a pretty good pace. And an E-ticket costs about 60-100 million which doesn't seem out of line financially at all. We have been getting that pace recently with MGM, EPCOT and AK having E-tickets coming in the next couple of years.

They've spent a lot recently on new parks, hotels, DVCs and entertainment places. With the dust settled I think improving the existed parks will be their strategy.

 

[OnWithTheShow]

I will be in town March 14-19

 

[King Triton]

Let's cut some of the top corporate suit's salaries and put that money back into the parks!!

So many mega millions wasted on top executives making poor management decisions. Ever since Disney bought ABC, the stock has been going down. Focus on the MAGIC....Focus on the Parks!

WWW.SaveDisney.com

 

[raidermatt]

Back on subject, does anyone feel the gains in the Parks over the past two years are unacceptable?

I'm with Vike... better than what had been happening, but not the answer yet.

Remember thought that M:S was largely funded by a sponser... Great when you can get 'em.

Even if each park received a spanking new attraction every four years (thus, a new ride each year over the entire resort) that would be a pretty good pace. And an E-ticket costs about 60-100 million which doesn't seem out of line financially at all. We have been getting that pace recently with MGM, EPCOT and AK having E-tickets coming in the next couple of years.

The budget also includes DCA, DL and the water parks, and includes all rides, not just E tickets. It also includes many things other than rides. You'd be surprised what can be classified as a "capital improvement".

 

[wtg2000]

Back on subject, does anyone feel the gains in the Parks over the past two years are unacceptable?

I first visited WDW in 1986. How much have the parks really expanded since then?

MK - Splash mountain has been the major addition but other than that we've had a replacement of Mr. Toade, Mission to Mars, Dreamflight (or whatever it was before that), and Magic Journeys I believe. Timekeeper has essentially come and gone, CofP seems gone, the sub lagoon has sat silent. Oh yeah, Aladdin. Basically, over an 18 year period we've gained Splash. That's about it.

EPCOT - One new WS pavilion in 1988. That's it. As for Future World we gained one major pavilion in the early 90s. Everything since then has been a replacment, for better or worse depending on the attraction. So for EPCOT no real net gains since the early 90s.

D-MGM - Certainly here we've gained the entire Sunset Blvd. which is a major plus. However, I used to love Monster Sound Show and Superstar TV and we lost both of those with nothing worthwhile as a replacment. The Backlot tour has been scaled way back. We lost one musical. Overall we're ahead of 1989, or say 1992 after Star Tours and Muppets were added, but not by nearly as much as I would have thought.

AK - recently new of course but not expanding rapidly.

So overall, the gains, notwithstanding new parks, are not that much from an attraction viewpoint although there have been lots of replacments. I guess this isn't surprising since they want costs to remain constant and more attractions equals more operating costs.

 

[40plus]

More on the loss column. Mickey Finn Keel Boats, Tom Saywers Island unless they reopened it, Discovery Island ( and no AK does not make up for it), River Country, Many nights closing earlier, Many parts of Mk opening later, fewer night time parades fewer night time fireworks displayes, I forget the name of the resteurant near splash mountain, Cable cars (sorry about the loss of a cast member, we enjoyed the view) someone else care to keep the list going.Oh I forgot ticket prices that have kept going up. Sorry didn't mean to get all worked up.