Say it ain't so Al; BK delayed?

[larworth]

From Al's latest update.

At Walt Disney World, which has been able to pull in locals to bolster numbers a bit, the real hit has been taken in loss of hotel stays. They have now put all plans for the new attraction in Animal Kingdom on hold - and they may delay the new Space attraction too

If this is true I fear a Pirate uprising may be in the offing.

Other rumors have implied announcements are forthcoming. However, given the uncertainty that exists I'm not surprised they are leary of committing to any major new spends at this time.

If true, let's hope the holding pattern is a short one.

 

[airlarry!]

Yuck.

Will the #2 Entertainment/Media company in the world, behind AOL TW, realize that this company can only *make* money in the future by investing its profits back into its product? The Microsofts and GMs of the world plug millions of dollars in R&D to develop bigger and better products, supposedly , to get people to shop with them again.

Disney must do the same thing..and by cutting back on new attractions, new shows, new animated features, new everything, what will they sell the public in the future?

 

[YoHo]

I'm not a particular fan of Lutz, I like Jim Hill better.

I don't see how Delaying space would save money, it would only make it cost more. That alone makes me think he doesn't know what he's talking about.

We shall see in December. At this point, I think that building is the way they are going, but again I have no proof.

 

[Josiah Harper]

Not to mention that having something truly newsworthy at the December press event with no new announcements will be difficult, at best. I think Mouseplanet is talking out of its a-- this time. It makes no sense that a Compaq-sponsored attraction whose construction is shaping up quite nicely will be delayed when it's well on its way to being a much-needed draw into one of Disney's parks.

BTW, have you noticed that when Mouseplanet speculates about business at WDW, it has no sources listed? When it's talking about DL, it references names and dates right and left. To my mind, that's a clue right there that its knowledge of Florida happenings is tenuous, at best.

JMHO!!!

Joe

 

[hopemax]

Jim Disney, webmaster of westcoaster.net mentioned on a Laughing Place message board that the Disneyland Resort has been spared the project delays and that ToT, Bugs Town and Pooh will be progressing but that "other resorts" have not been so lucky. Not definative either way, but not exactly inspiring either, IMO.

 

[gary]

Great idea! Why don't we wait for an "up" market to build these attractions instead, so by the time they're finished, we're in another "down" cycle and they'll sit idle instead of attracting visitors to the parks! The inmates are running the asylum!

 

[wdwguide]

Al Lutz doesn't know crap about Walt Disney World (nor does he seem to know about much else). What kind of sense would delaying Mission: Space make, for instance? Broken contracts would have to be paid off, a sponsor would be lost, and a half-finished building would have to be maintained for nothing in return. At this point, it'll be much cheaper to finish the attraction than to cancel or delay it.

Think about what you read, especially when it comes from the tabloid of Disney web sites, Mouseplanet.

 

[hopemax]

What's the liklihood of some mixed messages floating around. Like could Mission: Space be delayed, not because of $$ but unanticipated constuction delays, and it's taking longer to work out the bugs ( like what happened with Test Track). But since every other decision seems to be fall-out from 9/11, that wires got crossed?

 

[Another Voice]

Scream, bellowing, curse, rationalize and denounce all you want – Al has this one right.

There have been a lot of people around here that have justified every reduction in hours, every attraction closer, every layoff, and every cheap attraction as “business”. You are all about to a really good dose of business at Walt Disney World.

The choice is between trying to build more attraction to lure visitors back and simply just hunkering down to wait out the storms. WDW grew fat on cheap, convenient airfares and large numbers of happy upper middle class families with disposable income. Those days ended a month ago.

There’s also a growing sense that plans made in the past just aren’t up to the task these days. Face it – the plans for the “100th Anniversary” where based on the fact that a blitz of marketing could convince millions of people to drop thousands of dollars to spend fifteen minutes watching a guy dressed like Mickey Mouse prance about in a plastic bubble. Yea, that’s a harsh comment and maybe even a bit unfair, but it’s the truth of the matter. By all accounts, the “celebration” was not a draw before the war. And these days, the chance of something along those lines getting people to spend money is very, very small.

Right now, the company is asking itself if it is wise to spend all that money on expansion when no one is going to show up. Perhaps it's time to rethink priorities and business plans.

 

[larworth]

I too wouldn't think that it would make a lot of sense to delay SPACE. However, if the hardware cost is only $25MM (ETC's figures) than they must be spending some serious bucks somewhere and a lot of this must be coming in the next year. I assume Disney would be pretty hardline with Compaq if they came crying.

I agree MP is pretty weak on WDW events. However, the recount of the DL/DCA focused meeting sounded convincing. Could it be possible this particular DL VP actually made such a comment, but really doesn't know what he is talking about. It doesn't sound like DL and WDW managment always know what is happening outside their own parks. It was almost a side comment in the story.

No reason it can't be on hold until December, right.

 

[YoHo]

So I take it AV that a direction has been chosen? Or is this just the latest spin?

I realize they all have short memories, but WDW and DL grew buisness in the past by investing in infrastructuer. Why not now?

 

[hopemax]

Over the last 5 or so years I've been online, concerns about the lack of new attractions were brushed aside by, "Why invest, people are coming in droves, attendance has never been better!"

Then this year, attendance is down, and after 9/11 the industry is *really* hurting and the response is "Why invest, when the people aren't coming?"

Is there ever a good time?

 

[Peter Pirate]

Except that over the last five years or so they HAVE invested a lot. Not enough to satisfy the "I want a new e-ticket attraction every damn year crowd", but still a lot!

As for today, I wouldn't put Lutz's opinion on the high alter anymore than Hill...Oh no, thats right, I like Hill now, don't I. As for me, I'll wait until the December announcements to see what really shakes out but even if things don't go our way, who can honestly squak with the current world situation? Any squakers out there???

 

[YoHo]

Again, I have this sense of Deja Vu.


From the year 1999, 1 BL (before Landbaron)
When the mantra was wait for the press event.

Well, we shall see if they are correct this time. If I remember correctly (lrodk maybe you can remember) The big things like Mission Space were NOT announced at that time.

 

[Another Voice]

There are a lot of people trying to direct the future course of Attractions right now, so expect several sharp turns and a couple of reversals in the immediate future. The management of each coast do not get involved in the workings of the other coast (California and Florida have NEVER played nice with each other); only Paul Pressler’s office services as a connection point.

The truth is that right now, Disneyland proper is expected to do very well in attendance as millions of Californians stay home. California Adventure is a leech that will suck the life from Disneyland for at least the next decade unless one of the Plan X alternatives is put into place. Burbank isn’t willing to invest another billion at the moment so it’s budget cuts a-go-go while Anaheim figures out what to do.

Walt Disney World’s future is extremely uncertain right now. The theory was that WDW had hit market saturation: everyone who wanted to see WDW had already made a visit. There were no more vast untapped markets as when WDW opened up the west coast and the newly affluent crowd. “Investments” in parades, giant hats and minor rides were thought to be just enough to keep people coming back to the resort in reasonable numbers.

Now that leisure travel is much more difficult (physically, economically and psychologically), it is felt that “just enough” really isn’t enough anymore. You need to give people a real reason to visit and you can’t count on people coming back every year out of habit. If your past policy was to spend a little bit of money every year so there’s something “new”, do you change that to a policy of spending a lot of money infrequently so that you have something “NEW!!!”. That’s the business question the company is trying to figure out.

As for ‘Mission:Space’, let’s have a pop quiz. You’re the CEO of a giant, but struggling, technology company. Your solution to your company’s problems is to buy an even bigger, even more troubled technology company. Late one night, your new partner tells you, “By the way, we’ve just committed to spend $150 million hard-earned dollars on an amusement park ride that will give us nothing tangible but a nice lounge and a couple of parking spaces in Florida”.

Do you: A) issue a press release and tell the world about this when most of Wall Street thinks the merger stinks anyway and this could just be the icing on the cake? B) secretly pray that everyone in the country runs out of magenta at the same time so that ink cartridge sales soar and you can afford the deal? C) Follow the lead of Snoopy, the grape guys and that funny man with the pizzas and have your lawyers give The Mouse a call?

Your answers please, and the world does not grade on a curve.

P.S. Ms. Hopemax, people who really didn’t want to spend the money in the first place will always find a reason to keep the wallet closed. Especially when you look at the ratings for ABC’s new season….

 

[WDWJunkie]

ahh that guy from mouseplanet.com dont know what he's talkin about.

 

[lrodk]

The softness in the travel industry, particularly in Orlando, has all but guaranteed that Disney will expand in some sort of aggressive manner. It's the only recourse they have right now given the uncertainty that surrounds our economy and the fear that exists among prospective travelers. It really is the only viable option for them at this point in time. The "if you build it they will come" mind set that they abandoned about 2 years ago is the single most effective tool that has historically helped to ensure repeat visitors outside of the local market. Unlike Disneyland, WDW's reliance on out-of-staters(which includes europeans/south americans/canadians) is much more stated(no pun intended). Unless they give that demographic something significant, be it some sort of innovative ride or new themed land addition, many of those guests will simply delay their next visit or shorten current plans in favor of another new experience. In light of that, I am fairly certain that they will make significant additions in the years to come, some of which we'll hear about officially fairly soon. Signs of softness at the parks were recently reflected in their quarterly earnings, something that I know they do not want to become a trend. Keeping in mind that the parks make up 40% of the company's cash revenue, and knowing how Disney's prime directive under current management has always been to meet earnings above all else, you can rest assured that they will do whatever they must to turn things around at their flagship property in Orlando. The time to invest in the future of the parks is now. And if you bear in mind that any new project takes at least 2 years to build out, it stands to reason that they would have to start very soon. About the only hitch I see is that construction could be slowed while they wait for signs of an economic financial recovery. That would be the conservative approach, and quite possibly the most prudent course of action given all of the uncertainty. But other than that, I think we'll all be very happy with what's in store for WDW in the not too distant future. This one is in the bag folks.

 

[larworth]

I do believe they know they need to add as well. However, poor immediate financial results and high market uncertainty have been known to disrupt the best layed plans of mouse and men before.

Fortunately, capital expenses don't hit the old income statement right away so as long as they are in a decent cash position they should be able to spend away. Probably not the best of times to have the Fox purchase draining the coffers, though.

The sad part is that if the recovery does happen as early as the middle of next year they will have nothing new to capitalize on (sorry, I don't think Dino-rama makes a PR campaign). This is why during those boom days of the last few years they should have been reinvesting for that rainy day that has surely come.

"In the bag"

Now, see what you've done Lordk you've got my hopes back up.

 

[Peter Pirate]

But larworth, you're talking like the "rainy day" is going to be short lived. Is it your opinion that the economy will be turning around in the next year, in the midst of a war? (Not meant sarcastically, just curious).

Regarding Dino-Rama as a PR tool, if, as Scoop & I believe, Dino-Rama becomes somewhat of a surprise hit, then I would think that coupled with the announcement of BK, this would do wonders for PR & attendance at AK.

Lastly, although times are rough and they will have trouble with the quarterlies, they are still cash strong and even with the Fox Family purchase (which I would doubt right now), I still think it will be a hugely leveraged buyout that won't affect other plans to any great extent. Also, look at how cheap money is. I would bet Staggs will be watching the economy very closely & when indications of a turnaround occur, watch for some low rate borrowing...JMO...

 

[larworth]

I don't have a crystal ball on when things will rebound I was just playing off comments Eisner/Iger have been making lately to the financial community. Essentially, they have been preaching how strongly the parks come back from these setbacks and how they are poised (?) to capitalize. They talk about how attendance has already started to rebound and THEY have been implying things will be much better next year, but it is probably just optimisitic analyst speak.

It is because of all this uncertainty that I wouldn't surprise me if they waited out the quarter hoping to get a better picture of the future before going public with anything. This does not mean that they couldn't be chugging along internally.

Also, they may not get much of a PR bang from any news this quarter with all of the other events taking the headlines. Why not hope the new year is a little quieter and start the buzz than for the summer season.