So What's Coming to the New Pleasure Island?

[mitros]

I have been off the boards for a few days so I was just catching up. You all bring good points and ideas as usual. One thing I want to add and I'd love to say to many many more people - the ONLY reason DISNEY has actually given is "based on guest feedback" there has been no statement about family friendly. Of course one can speculate what their survey said, but I doubt they stuck around during the night and asked people walking through with kids at midnight if they thought the area should be more kid friendly. We talked to a guy in line at Mannequins who used to be in charge of the research group that Disney uses and he said they always survey during the day when families are all over the place.

Either way it's all speculation. We don't know the financial numbers and we don't know the exact reason this came to fruition(other than the fact that EVERYTHING is about the bottom dollar in some way these days)

What we do know is what doesn't make sense
1. Close the clubs with obviously no immediate plans for construction
2. Close all the clubs at once rather than closing BET and Motion first
3. Why not wait until the new year? Why close before the holidays? It makes no sense.

We know no major announcement will be made until at least January. So the clubs are empty for essentially no reason.

If they don't have a buyer for mannequins, I'd be interested to see how much they want for it

Your point #3; I was under the impression they closed it when they did because it was the end of their {Disney"s} fiscal year. In a huge corporation I think that makes sense. {to the bean counters}

 

[KYMickey]

Your point #3; I was under the impression they closed it when they did because it was the end of their {Disney"s} fiscal year. In a huge corporation I think that makes sense. {to the bean counters}

I'm also sure that the bean counters were rather see some profits (even if lower than company targets) than no profits at all. PI had to be making a profit since I'm sure the buildings are fully depreciated so the only operating costs were staff, food and beverages. When PI was closed doesn't make any sense since the facilities are now just sitting vacant.

 

[doconeill]

Do we REALLY know that it was making a significant margin? Someone previously posted here or somewhere that they heard AC was LOSING $250k (don't know if that was annually, or quarterly, or what). I'd expect margins on AC to be lower because of the professional staff required.

Also, when they removed the gates, they made each club responsible for ticket sales. This had two effects - first, it allowed them to more directly attribute ticket sales to an individual club (and even passholder attendance so some level of pass sales could be accounted to the club), but second - it required more staff to handle ticket sales, and thus increased costs, which could also be directly charged to that club's bottom line.

At any rate, I don't think management are COMPLETE idiots. I'm sure there is some reason the clubs were closed - they either have SOME plan that is/will be put in place and we just don't see any outwards signs of it, or PI wasn't making the margins that they would have liked, and opted to close it now and close the fiscal books and deal with a plan later.

Just because PI or a particular club may have made a profit, if the margin didn't meet expectations, they may feel that the operating expenses might be better directed elsewhere in the meantime.

NOTE: I'm not saying I agree with any of this - its just appears that there is conflicting information out there and a lot of supposition.

I DO agree with that Disney needs to find a way to make DTD a destination for people. I think it has earned a bad reputation as of late and Disney needs to figure out a way to attract more people while repairing that reputation.

 

[mitros]

Do any of us REALLY know wht goes on behind closed doors at Disney? Of course not. All we can do is speculate and offer our thoughts on the matter.

 

[doconeill]

Do any of us REALLY know wht goes on behind closed doors at Disney? Of course not. All we can do is speculate and offer our thoughts on the matter.

Oh, I totally agree...it just seems the tenor of the discussion had taken supposition as fact, which I guess was the point my ramblings were trying to make (not feeling well tonight.... )

 

[asianway]

Let me preface this by saying that no one wants the club brought back more than me.

We cannot assume that PI as a whole, or even the Adventurers Club by itself was making a profit. There are a lot of hidden costs which I am sure no one is taking into account. For example, it took 20 people every night to bring the Club to life. Assuming 5 hours a day, 7 days a week, that is 17.5 full time positions. The average Health Insurance premium is going to run $350 a month per employee. Say 10 of them participate, thats $3500 in insurance premiums a month. If the average drink is $8(being generous as beer is cheaper), and the cost of the alcohol is 15%, you would need to sell 514 drinks a month just to cover the cost of insurance. We also forget that Disney is a large corporate behemoth in terms of overhead. They need to charge out accounting, IT, HR, engineering, marketing(as Otis would say, "Dont make me laugh"), a VP... to all of their profit centers. There is also real and personal property taxes in addition to general liability, liquor liability, and property insurance premiums to cover. I believe in 1989 buildings were depreciated over 31 years, but that is not what shows up in their analysis. They are most likely putting aside 5% into a reserve to replace the roof every 20 years, buy new furniture, new Kungaloosh machines when they break, etc.

If you start to actually put a pencil and paper to it, it was barely covering its costs, and if it was, it certainly wasnt returning a 6-10% return on the value of the lakefront property it sits on. Compare this to DVC which can turn a single hotel room into $1,000,000 and collect an ongoing management fee for 50 years, and you begin to see what the crunchers see.

Now, could they be innovative? Sell "seat licenses" or memberships like Club 33? Do a dinner show and get $60 a head or charge $25 to all people walking in the door and try to push the limits of what people will pay? Why not, they do it everywhere else on property. How much do they charge for a Bibbidi Bobbidi makeover? I dont like the Main Street barber shop's long term prospects...

That is what upsets me the most, they didnt even try.

 

[KYMickey]

Let me preface this by saying that no one wants the club brought back more than me.

We cannot assume that PI as a whole, or even the Adventurers Club by itself was making a profit. There are a lot of hidden costs which I am sure no one is taking into account. For example, it took 20 people every night to bring the Club to life. Assuming 5 hours a day, 7 days a week, that is 17.5 full time positions. The average Health Insurance premium is going to run $350 a month per employee. Say 10 of them participate, thats $3500 in insurance premiums a month. If the average drink is $8(being generous as beer is cheaper), and the cost of the alcohol is 15%, you would need to sell 514 drinks a month just to cover the cost of insurance. We also forget that Disney is a large corporate behemoth in terms of overhead. They need to charge out accounting, IT, HR, engineering, marketing(as Otis would say, "Dont make me laugh"), a VP... to all of their profit centers. There is also real and personal property taxes in addition to general liability, liquor liability, and property insurance premiums to cover. I believe in 1989 buildings were depreciated over 31 years, but that is not what shows up in their analysis. They are most likely putting aside 5% into a reserve to replace the roof every 20 years, buy new furniture, new Kungaloosh machines when they break, etc.

If you start to actually put a pencil and paper to it, it was barely covering its costs, and if it was, it certainly wasnt returning a 6-10% return on the value of the lakefront property it sits on.

The points you raise a very valid with one exception. All the costs you mention with the exception of salaries and benefits are continuing even though PI is closed. If they were doing something else with the property immediately closing possibly makes sense but just leaving the property vacant and nonproductive certainly doesn't! Disney certainly has ulterior motives for this move and only time will tell what it is.

 

[Another Voice]

We also forget that Disney is a large corporate behemoth in terms of overhead. They need to charge out accounting, IT, HR, engineering, marketing(as Otis would say, "Dont make me laugh"), a VP... to all of their profit centers.

So Disney closed the Adventurer's Club because Disney is a bloated inefficient company that would rather reduce the guest experience than lower the management annual bonsues?

That's basically about right


P.S. All the costs you're talking about are likely less than a month's rent on the swank Manhatten apartment that The Company leases for Bob Iger.

 

[angelmav]

Well a company like disney can manipulate the numbers to say anything they want to, but it had been reported in the past that PI was indeed turning a profit, with the AC doing the most business (alot of this was indeed offset by the much higher operating costs).

It still makes no sense to end when they did rather than letting the clubs ride it out through the holiday's.

I think there is also a major miscalculation in just how many tickets were purchased with the 'and more' option, whether those folks ever made it to PI or not (every vacation plans get scuttled, time flies!), that was money in the bank for Disney that PI had to be accounting for a sizeable chunk of.

Getting a ticket upgrade from folks upfront thats non-refundable if its not used so folks 'can' have the ability to go seems like a pretty sweet deal for disney.

 

[KINGBOBOFTHENORTH]

One thing I want to add and I'd love to say to many many more people - the ONLY reason DISNEY has actually given is "based on guest feedback" there has been no statement about family friendly.

Well if you read the very first paragraph of the very first announcement of the PI closure as stated in the Orlando Sentinel, I think you're incorrect:

http://www.orlandosentinel.com/business/tourism/orl-disney2808jun28,0,2367595.story

Later in the article Lansberry is quoted, "Truthfully, our guests have really gotten out of that in the last couple of years. They want things that are a lot more geared toward family entertainment."

So those of us who feel Disney has referred to their vision of PI as more "family friendly" do in fact have a basis for that statement. The AC was family friendly even if my beloved Mannequins and 8TRAX were not. The new South American restaurant/night club is not in any way family friendly.

BobK/Orlando

 

[zulemara]

Well if you read the very first paragraph of the very first announcement of the PI closure as stated in the Orlando Sentinel, I think you're incorrect:

http://www.orlandosentinel.com/business/tourism/orl-disney2808jun28,0,2367595.story

Later in the article Lansberry is quoted, "Truthfully, our guests have really gotten out of that in the last couple of years. They want things that are a lot more geared toward family entertainment."

So those of us who feel Disney has referred to their vision of PI as more "family friendly" do in fact have a basis for that statement. The AC was family friendly even if my beloved Mannequins and 8TRAX were not. The new South American restaurant/night club is not in any way family friendly.

BobK/Orlando

Very well, I stand corrected. Their guest feedback is still extremely skewed based on time of day and location. I'm sure the questions weren't exactly honest either.

To that end, to people who say the clubs were not profitable, Kevin "I'm a newb" lansberry stated the clubs are still profitable in one of the news articles. How profitable, we don't know, but he stated it himself. I used to work at 8-trax, we had a sales goal for alcohol and that club absolutely crushed it every night I worked, which was usually thurs-sunday after working 8 hrs at the golf course I can't speak for the other days, but even if they didn't smash it, I'm sure they weren't terribly under goal.

I did not realize the end of the corporate year is the end of September. On the one hand it makes sense, but on the other hand you're still leaving a LOT of revenue out there for the holiday season. They are cutting everything else in January, why not cut PI then too?

They still don't seem to have any idea what they are doing with the clubs. It just doesn't make sense for clubs to sit empty for months! Clubs open=profit. It doesn't matter if it's a dollar a day, it's still profit!

Disney is suppose to be about everyone, not just families. People have "gotten away from it" because YOU HAVEN'T PROMOTED IT!!!

I hope this effects their bottom dollar in the worst way possible and forces them to both realize their mistake and fire Kevin Lansberry for killing the island and making this stupid decision.

 

[Jason71]

I hope this effects their bottom dollar in the worst way possible and forces them to both realize their mistake and fire Kevin Lansberry for killing the island and making this stupid decision.

Lord knows I've taken shots at Lansberry on this forum and others, but latest word from the WDW groundlings is that while he ended up a "good soldier" following orders from the West Coast, he initially fought the closing--pure speculation on my part, but probably because he knew how profitable the clubs were. Especially since NOTHING has replaced or even been announced for the closed clubs--can't stress that enough. Everything "new" could have opened without closing the clubs, and probably would have benefited from the crowd the clubs brought.

The real people who need to be fired are the PR guys who came up with that "family-friendly" line. King Bob is right, it's laughable at this point.

 

[TDC Nala]

Although last time I went by the big sign outside the PI entrance it read "shopping, dining, family entertainment."

They're plugging the family thing because they think that is where the money is. They also think that is what the majority of their visitors want, and to the people running the show right now, the majority rules. They may be correct for now, which puts them into the screw the locals phase - you all don't spend as much as the once-in-a-lifetime extended family reunion crowd. That will rebound when the families can't afford to make the trip anymore.

Someone on another thread somewhere just put up the opinion that the get in free on your birthday thing is meant to cater to the locals. Close PI, leave empty buildings standing around DTD, make it practically impossible for you all to get into the restaurants without booking them months ahead of time, but you can have a free birthday.

 

[KINGBOBOFTHENORTH]

The odds of a tourist group/family being here on their birthday is overall rather slim. Sure, if you can plan a vacation around a free date, then great, but with 12 months in a year and really only a few summer tourism months, the odds are slim. If you want to be here for your spring break, you're going to be here that week. If you want to be here for Christmas or Labor Day or whatever, that's when you're coming. I don't see the FREE BIRTHDAY deal generating much business at all. As for locals, most of us who have any interest in visiting the parks already have multi-day tickets or annual passes and we come when we want. The FREE BIRTHDAY provides an incentive to go that day but is Disney really gaining much revenue? Of course official studies are no doubt going to show what a great success this program was. NOT!

In economics class I recall that a business that made $1.00 in profit stayed in that business and those that lost $1.00 got out of that business. I realize the real world doesn't quite work that way but surely PI made at least $1M in profit every year. The only reason to change is if they felt they could make more doing something else. Right now they're making nothing out there so they could have kept it going until they actually had something else to replace things with, as Jason pointed out.

BobK/Orlando

 

[CanadianGuy]

A lot of emphasis seems to be placed in the latter half of this thread on "nothing announced to replace them" and the lost revenue around that.

I'd just like to point out that not announcing something yet knowing exactly what it will be and just keeping yer yap shut until a predetermined time are pretty much standard operating procedure in a corporation with more than 10 employees.

What's unusual here is that most companies in this line of business would announce what's coming ... in theory because once you lose a customer (in this case to CityWalk) there is a real risk they may not come back.

Disney has always relied on their sheer size and brand strength to bring 'em back anyway. Whether that will hold true in this case ultimately will be decided by what goes in there and elsewhere on property... and the strength of their brand may do as it has always done ... 'bring em back'.

To suggest that because we common folk see 'nothing happening' with those buildings and spaces ... then that is the reality is downright silly. I think a plan is afoot and Disney will announce whatever that is when they and they alone are darned good and ready and it is in their best interest to do so.

Closing the business at the end of fiscal makes a LOT of sense from an accounting practice and helps keep the accounting for the employees who may have to change business units etc. nice and clean. And same goes for the buildings, taxes and other charges.


However, the buildings will need either renovation and work -- either to be used as something else .. or worst case scenario if they are to be torn down. Again, from an accounting perspective, it's nice and clean to do that in a new fiscal and/or new business operating unit etc.

Are those accounting reasons enough to close the clubs months and months ahead of the need? Not really.

But since we don't know how long they'll be closed before something is announced ... we can't say what the need is, nor can we say for certain they were closed prematurely.

For that matter, I wouldn't be the least bit surprised if Disney opened several clubs independently over Christmas and New Year's Eve and simply charged a cover for each bar, each night.

And earlier in this thread it was suggested the contents and leases for the buildings have been sold. If that's the case, the dance clubs at least may be open in some other form well before Christmas.

If not, I assure you Disney doesn't care because a lease is usually being paid while construction and renovation are being done - esp if it's leasee paid work.

We simply don't know, a press release could be forthcoming in the next 14 days.. or never... or tomorrow.

Nobody likes to wait - least of all me. But I do believe all will be come crystal clear in the light of time.



Knox

 

[Maistre Gracey]

But I do believe all will be come crystal clear in the light of time.



Knox

I certainly hope you are right, but you definitely have more faith than I do..

MG

 

[zulemara]

A lot of emphasis seems to be placed in the latter half of this thread on "nothing announced to replace them" and the lost revenue around that.

I'd just like to point out that not announcing something yet knowing exactly what it will be and just keeping yer yap shut until a predetermined time are pretty much standard operating procedure in a corporation with more than 10 employees.

What's unusual here is that most companies in this line of business would announce what's coming ... in theory because once you lose a customer (in this case to CityWalk) there is a real risk they may not come back.

Disney has always relied on their sheer size and brand strength to bring 'em back anyway. Whether that will hold true in this case ultimately will be decided by what goes in there and elsewhere on property... and the strength of their brand may do as it has always done ... 'bring em back'.

To suggest that because we common folk see 'nothing happening' with those buildings and spaces ... then that is the reality is downright silly. I think a plan is afoot and Disney will announce whatever that is when they and they alone are darned good and ready and it is in their best interest to do so.

Closing the business at the end of fiscal makes a LOT of sense from an accounting practice and helps keep the accounting for the employees who may have to change business units etc. nice and clean. And same goes for the buildings, taxes and other charges.


However, the buildings will need either renovation and work -- either to be used as something else .. or worst case scenario if they are to be torn down. Again, from an accounting perspective, it's nice and clean to do that in a new fiscal and/or new business operating unit etc.

Are those accounting reasons enough to close the clubs months and months ahead of the need? Not really.

But since we don't know how long they'll be closed before something is announced ... we can't say what the need is, nor can we say for certain they were closed prematurely.

For that matter, I wouldn't be the least bit surprised if Disney opened several clubs independently over Christmas and New Year's Eve and simply charged a cover for each bar, each night.

And earlier in this thread it was suggested the contents and leases for the buildings have been sold. If that's the case, the dance clubs at least may be open in some other form well before Christmas.

If not, I assure you Disney doesn't care because a lease is usually being paid while construction and renovation are being done - esp if it's leasee paid work.

We simply don't know, a press release could be forthcoming in the next 14 days.. or never... or tomorrow.

Nobody likes to wait - least of all me. But I do believe all will be come crystal clear in the light of time.



Knox

all very good points as usual. I can only hope there is a significant amount of truth to the buildings being sold or leased and that they will indeed reopen.

I'll tell ya one thing - unless the clubs are reopened with the same music selections, this CM is not giving one more dime to anything that goes in the PI area. I'll go to citywalk and give them my business. Brand strength can not match the anger I have for this decision. As I suggested before, perhaps Universal will LISTEN to their guests and consider having a 70s and 80s night or techno night at one of their clubs.

 

[jfinke]

I wonder how much money Disney CM's dropped straight back into their coffers by going to PI over the years? Now, how much of that money is going to a direct competitor?

 

[KINGBOBOFTHENORTH]

Are those accounting reasons enough to close the clubs months and months ahead of the need? Not really.

Well that's where I thought you were going with this and I'm glad you didn't. Because PI is still there, there are still employees out there, there is still security out there, there are still building expenses. So the accounting department still has a ledger for PI and computer-wise it doesn't matter how many line items are cost-attributed to PI every week, 200 or 2000. I can tell you the line items for revenue from PI are extremely low.

I do agree that Disney probably knows what its plans are and are keeping it under the hat. But if you look at the very first entry that I began this thread with, it was seeking that very information which supposedly top Disney managers got to view. Disney employees are not very good at keeping secrets, that's for sure. Yet there has not been ONE SINGLE LEAK of information about this. Thus, that's why I tend to believe that Disney has close to no plans for most of PI except to lease it out.

BobK/Orlando

 

[zulemara]

I wonder how much money Disney CM's dropped straight back into their coffers by going to PI over the years? Now, how much of that money is going to a direct competitor?

I'm certainly one of them! The other thing to think about are the 6-7 THOUSAND college program kids, PLUS international students who went to PI on a regular basis. Yes, admission was free, but I assure you they spent their hard earned 6.79/hr wages on those 8 dollar drinks! Imagine 1 hour of cleaning a protein spill because some guest can't read nausea warnings, or 1 hour of non stop quick service action all for one drink. It went right back into the company,.

These college program kids NEED a place to go to relax and chill out. I practically lived at PI my second semester and others did as well. You can't work kids 40-45 hrs a week all hours of the night and take away the things the kids who enjoy dancing, comedy, and a few drinks want. This is just one more group that seems to get left out of the equation. Luckily I have friends who are locals and a car that gets 45mpg. Not everyone on the CP is that lucky.