So why is Disney making so many cuts?

[raidermatt]

You know, Pixar was a publically traded company, and they had a very different way of making movies and a different overall business philosophy. No sequels, hight quality, innovation, etc.

True, they were bought by Disney, but now who is actually running Disney animation? Pixar, and they are running it the Pixar way, which of course was once the Disney way.

So don't tell me Disney has to do things the way they do because they are a publically traded company. All Wall Street cares about is that you make money. If Disney told them the best way to make money was to do some things differently than they currently do, Wall Street would give them the chance to prove it.

As for the ticket hike, etc.....just look at anything else that's popular. They will keep raising the prices until people stop coming. That's what I would do if I ran the business.

A reasonable philosophy, sure. But it doesn't account for one thing, which is how much it will cost you to get customers back if you go over that line and lose them.

Once they leave, you can't just go back to the old way and expect them to come back. You'll have to spend more in order to change their habits back. Walt knew that, but it's not like he invented the concept. It's a lesson many have learned the hard way.

The question is, will Disney cross that line with too many people?

Attendance wasn't exactly booming last quarter. Up 4% at WDW, flat at DLR.

 

[KMovies]

OLC is making cut backs too ...

Their 20th anniversary parade was continued until ... the 25th anniversary parade.

Disney Sea went years without a new attraction ... until attendance was dropping and they finally added 2 more attractions. Nothing is on the drawing board at this time.

Tokyo Disneyland itself had went years without new attractions as well.

Mind you, they run very good parks but that doesn't stop attractions being closed without replacements or several years without any new attractions.

 

[ChrisFL]

OLC is making cut backs too ...

Their 20th anniversary parade was continued until ... the 25th anniversary parade.

Disney Sea went years without a new attraction ... until attendance was dropping and they finally added 2 more attractions. Nothing is on the drawing board at this time.

Tokyo Disneyland itself had went years without new attractions as well.

Mind you, they run very good parks but that doesn't stop attractions being closed without replacements or several years without any new attractions.

DisneySea has only been open a few years overall (6?) and it was not a barren park to begin with (unlike MGM or AK when they opened)

 

[doubletrouble_vb]

Cutting the Dining Plan? This is the same Dining Plan that some complained had too much food. The same dining plan that some believed negatively impacted the selection at individual restaurants. Maybe just maybe it needed to be cut back a bit. Or even altogether. All they are doing is going back towards the good old days where these package plans didnt make as much sense as a la carte. Isnt the good old days what we all want?

Park prices going up? Apparently the market will bear it. Disney has a ton of tickets out there with a much lower market value than the current price tag. All those people will come back for a second or third trip and then they may just happily pay the new price for another set of lifetime tickets.

Outsourcing bell services...I don't have an opinion on that one except that it isn't quite the same as outsourcing mousekeeping.

 

[raidermatt]

Cutting the Dining Plan? This is the same Dining Plan that some complained had too much food. The same dining plan that some believed negatively impacted the selection at individual restaurants. Maybe just maybe it needed to be cut back a bit.

Yes the plan is a problem, but that doesn't mean that raising its price while reducing what you get is not a cut. The only "need" from Disney's pov was to try make more money off of it. That's their right of course, but asking why is still a valid question.

Park prices going up? Apparently the market will bear it.

It probably will bear it. The bigger question however, is how consistently increasing prices above the going rate of inflation will impact things over the long run. Generally speaking, "the market" is a point in time measure. The people who were planning to come in the next year will probably still come. But when the relative cost continues to rise, it's inevitable that there will be an impact eventually.

Outsourcing bell services...I don't have an opinion on that one except that it isn't quite the same as outsourcing mousekeeping.

Why? Mousekeeping touches each guest each day, true, but bell services has more face to face customer contact. Doesn't seem that one is really more or less significant than the other.

 

[ChrisFL]

I think the timing of the ticket price increase is bad, with nothing new right now and refurbs of top rides happening, they should have waited at least 6 months IMO

 

[Another Voice]

Park prices going up? Apparently the market will bear it.

" Go ahead, bring the next truck on the bridge. It seems to be holding up fine!"

That's the problem with pricing - by the time you've already gone too far, an awful lot of damage has already been done.

Look at California Adventure - it opened with a real bad "value for my money probelm". People decided it wasn't worth it and now after six years of additions, discounts and free tickets - people haven't changed their mind.

It doesn't take much for word to get around that a place is "bad value" for the money. Look at what happened to Six Flags.

 

[DancingBear]

Why? Mousekeeping touches each guest each day, true, but bell services has more face to face customer contact.

Plus bell services will be some of the first people you encounter at WDW, so they have a lot to do with first impressions.

 

[G8RFAN]

" Go ahead, bring the next truck on the bridge. It seems to be holding up fine!"

That's the problem with pricing - by the time you've already gone too far, an awful lot of damage has already been done.......

The marketing of perception and product positioning is very complicated. You can actually lower perceived value by pricing things too low or maintaining your prices while others around you try to position themselves up to yours. For example, if you price a Mercedes to compete head to head with a Lexus, in the minds of some consumers you've made the statement that the Mercedes is equal in prestige. The Mercedes "Star" is/was the pinnacle of mainstream luxury. They could and have made very average cars, yet people would still line up to own one. On the flip side, Toyota has made the statement that a rebranded Toyota is as prestigious as a Mercedes by product pricing their vehicles at the same target market.

Disney is not too far off in scenario. They have the premier theme park in the world. If they don't price it as such and try to keep it as affordable as a trip to your local Six Flags, the message is similarly clear. Also, keep in mind that WDW is a destination for world travelers. Many of whom look at America as a bargain destination due to favorable exchange rates.

 

[Another Voice]

They have the premier theme park in the world. If they don't price it as such and try to keep it as affordable as a trip to your local Six Flags, the message is similarly clear.

A message that's already been clearly sent by hotel discounts, free food programs, a national ad campiagn about how "affordable" WDW is...they've become the store that's always has a big "THIS WEEK'S BIG ANNUAL SALE" sign in the window.

Disney's big problem isn't price, it's value. People would gladly pay the prices they're asking IF they received something for it. They are beating down the gates to buy tickets for Disneyland, but the same-priced California Adventure just a hundred yards away is devoid of paying guests.

 

[toaster6.54]

Disney's big problem isn't price, it's value. People would gladly pay the prices they're asking IF they received something for it. They are beating down the gates to buy tickets for Disneyland, but the same-priced California Adventure just a hundred yards away is devoid of paying guests.

So has Disney set the pricing too low for DL ?

 

[G8RFAN]

A message that's already been clearly sent by hotel discounts, free food programs, a national ad campiagn about how "affordable" WDW is...they've become the store that's always has a big "THIS WEEK'S BIG ANNUAL SALE" sign in the window.

It is my understanding that these are promotions to stabilize the seasonal swings which has to my knowledge always impacted park operting hours and scheduled refurbishment. The 4 gates collectively make it the premier theme park destination that it is. I am first to admit there are plenty of faults with each of the parks and resorts. Is there equal value in each of the parks as they all have the same single day entry price? Absolutely not. But my best value park is certainly different from others. In fact my best value part has been largely influenced by what my DS who is now 6 likes the best. It has evolved from MK, to AK, to now Epcot.

Disney's big problem isn't price, it's value. People would gladly pay the prices they're asking IF they received something for it. They are beating down the gates to buy tickets for Disneyland, but the same-priced California Adventure just a hundred yards away is devoid of paying guests.

I've only been to DL and DCA once, so I don't think I am qualified to talk about value from the point of someone who has seen a lot of the positives or negatives. I thought the hopper tickets and the value of our mini vacation there was very good with the exception of the Sheraton Anaheim. Unfortunately the Disney hotels were fully booked. Let's just say that I came and left without a clue to the harsh position so manyhere have with DCA until I came here to read about it. Raising ticket prices at WDW always makes national news. We've been AP holders for some time, so our view of WDW's value proposition is a bit skewed. I don't feel like I need to get $75.62 of value each day at each park (not that a lot of people buy individual day tickets). On our last trip, we spent half the week at BB. It was one of our best trips yet. I find it an interesting balance between passion for something that so many here have and the distain for where the company appears to be heading. Few companies can evoke that sort of passion. That's why I look at many of here as "purists" as opposed to critics. Would I like WDW more if it were run according to what many of here in this section expects? Probably (However, don't take MS away from me). However, I think the vast majority of the Disney sheeple including myself still feel that it is one of the best vacation values we can spend our hard earned $$'s on.

 

[Another Voice]

It is interesting that you talk about being able to earn something and that it should be available to all in the same thought.

Traditionally Disney had dealt with the "off-seasons" by bringing in non-tourist audiences - conventions, trade shows, sporting events. That was one of the reason why EPCOT Center really changed the very nature of WDW. Family vacations, the traditional theme park crowd, are tied to school schedules. Adult travelers, the audience that EPCOT and conventions bring, are more year-round (and bigger spending). Disney attempted to make WDW a true "resort" - meaning lots of varied activities for a wide vareity of people.

But for the last decade and more, Disney has focused it's efforts on shortening the time between visits for the vacation set. Instead of appealing to different interests, Disney has narrowed its focus down to almost nothing but people that want all-Disney, all-the-time. Thus we get Donald in the Mexico ride, dancing Power Rangers at a defunct studio, and the Pixar-on-Sticks show at a zoo.

The pressure to get faster repeat visits has also changed who Disney markets a trip to WDW. In the past, a trip was considered a special event, one where a family would save up for. It was a vacation. Today, a growing percentage of people at WDW are there for little more than a weekend escape. It's no longer a special place to visit - it's a the convinent getaway when the kids want to get out of town.

That, in turn, puts huge pressure on prices. People traveling to WDW once every five years typically plan on spending lots of money; people who go five times a year look for ways to cut expenses. That was the tragic lession learned with the Moderate and then the Value resorts. Instead of drawing people off Interntional Drive, Disney's current customer based just down-sized their accomidations.

What WDW is now is basically a destination vacation resort cost structure but with the revenue structure of a beach cottage town. The two don't work together. Disney's response so far has been to slash the costs and they show no signs of stopping.

I thought the hopper tickets and the value of our mini vacation there was very good with the exception of the Sheraton Anaheim.

Again -the difference between "price" and "value". People have no problem paying "park-hopper" prices to get into Disneyland becasue that way DCA becomes "free". But almost no one buys a one-day ticket to California Adventure. No one feels it's worth the money. In some ways maybe Disneyland is underpriced - and there was a huge debate withing Disney about simply making DCA part of an enlarged Disneyland and dropping the whole second park concept.

WDW is run on the very premise that was behind the design of DCA - that the public will gladly pay a premium just to experience "Disney brand magic". That proved to be wrong. The more that Disney chips away at WDW, the more they come closer to the point where, like DCA, people decide it's a bad value and stop coming. Chances are it isn't going to be a gradual decline - like a once hot restauant, people will stop going overnight.

 

[TheRustyScupper]

So why is Disney making so many cuts?

Can you say Y-e-a-r-E-n-d-E-x-e-c-u-t-i-v-e-B-o-n-u-s ?

 

[mitros]

Can you say Y-e-a-r-E-n-d-E-x-e-c-u-t-i-v-e-B-o-n-u-s ?

Yes I can!

 

[Peter Pirate 2]

Hey Voice, can I finally get you to admit that Iger is WORSE than Eisner?

 

[raidermatt]

So has Disney set the pricing too low for DL ?

No.

In fact my best value part has been largely influenced by what my DS who is now 6 likes the best. It has evolved from MK, to AK, to now Epcot.

Let's just say that I came and left without a clue to the harsh position so manyhere have with DCA until I came here to read about it.

Your (and my) personal preferences are irrelevant to this discussion. Your 6 year-old may judge AK and Epcot to be better values than MK, but the attendace numbers show that's not what the majority think

You may also think DCA was a great value, but again, the majority of the public does not feel that way.

The fact is the public has judged AK and MGM to be of lesser value than Epcot and MK. Epcot to be of lesser value than MK.

In the public's opinion out west, DCA has been deemed to be far less of a value than DL, and far less of a value than Disney anticipated or wanted. Hence the various attempts to change that over the last 6 years, with rumors of much more to come. You don't make the kind of changes that have happened and are being thrown around (both in terms of the park and its marketing) if you have provided a good value in the eyes of the public.


There's no point in discussing relative value if we're going to focus on what any one individual likes instead of the what the public at large has deemed to be reality.

 

[G8RFAN]

The fact is the public has judged AK and MGM to be of lesser value than Epcot and MK. Epcot to be of lesser value than MK.......There's no point in discussing relative value if we're going to focus on what any one individual likes instead of the what the public at large has deemed to be reality.

Vast majority of the public thinks that WDW = MK. You can not equate "value" to recognition. They are different components of marketing. The popularity contest winner will always go to MK by default just because of the 30 year head start,similarity to the park in Anaheim that started it all, AND its got the castle. If attendance is your gauge of value, then WDW should have just stopped at EPCOT. I'm sure you realize that WDW doesn't want to sell a single day AK ticket and canabalize that sale from someone that might have gone to MK instead. They want someone to go to WDW and not make a trip to USO/IOA or SW after a couple of days at MK and EPCOT. That's their value proposition: a choice of 4 major parks, 2 great water parks, and a great shopping and entertainment center all accessible from your resort.

I could make the argument that DCA shouldn't be compared to DL but be compared to Knotts or to a lesser degree US:H. Of course I'll hear that it was the intent to make it into an equal park or that DL isn't a vacation destination and it was a mistake to try to make it into one or some other reason why its a lame attempt to compliment a classic park. But that's another topic for another thread.

 

[manning]

COSTCO

Wall Street complains they are not making enough money and are treating their employees too well. Pay is 10.00 to start, medical, vision, dental coverage.

COSTCO has told Wall Street we are doing it the right way and will not change. We believe in happy employees.

If only Disney had the guts to tell Wall Street that.

I enjoy shopping there and it is alway busy. Sometimes I think old CMs are working there, they are so pleasant.

Yes, if only Disney had the guts to tell Wall Street that.

 

[DancingBear]

Hey Voice, can I finally get you to admit that Iger is WORSE than Eisner?

To be fair, I don't know if I've every heard A-V say anything positive about Iger.