Staying offsite and just booked advance FP+ for next week!

[JimmyV]

Two things, don't look at the avg occ rate as a specific percentage. Why? because the 79% makes it look better than it is. Assume they're above 90% during the busy times(well above, much of it). If that's the case, interpret how bad it is in the slow times.

We are on the same page here. To me, 79% means nothing. As you point out, it is rarely actually 79%. Instead, it is well above 90% in high seasons (at which point, no gimmicks in the world are going to help you. You can't squeeze more people into rooms that are already filled), and well below 79% at other times (at which point the only way to fill those rooms is by lowering the price.) The overall average of 79% is a relatively meaningless statistic from a hotel management perspective. They look at much smaller slices and do what they can to address those slices (like rate promotions, or Free Dining). They don't look at 79% to see how they can raise it to 90%. They look at 60% (in slow season) and see how they can raise it to 75%.

Also, it's been flat to declining- ...

What is the "it" in this sentence. The occupancy rate in high season, the occupancy rate is slower seasons, or the total number of rooms rented and beds filled? Disney wants warm bodies in the beds to pay for room and board, buy park tickets, hats, clothes and souveniers. I don't think that the number of warm bodies in beds is flat to declining. It can't be after they opened up AoA.

Disney is a complex beast. The parks division is separate from food and beverage which is separate from merchandise which is separate from hotel management. The occupancy rate as measured in a percentage is only meaningful to the latter. To all of the former, what they care about are the bodies who are at the resort. That number, by all empirical measure, is not in decline.

 

[FlipHipster]

I totally understand. I'm not happy about it either, but the kids didn't seem to notice as much as I did.

The other thing is the crowds in the parks. It's nuts. I just think there has been a huge increase in guests and it's taxing everything and everybody.

Do you think its really more crowded or just longer lines for everything? We had a few sets of friends that went early Feb. and they all came back complaining about how crowded it was this year. After quizzing them a little it seems like the parks weren't really crowded but the lines for everything were really long making it seem crowded.

 

[JimmyV]

20% of your hotel rooms empty per night on average is a lost opportunity. When you take into account per-guest-spending, onsite provides a way higher percentage of Disney's profit than the simple onsite/offsite ratio would suggest.

We have to be careful here. A family of 4 that books at $90 room at a Value is adding, on a per person basis, $22.50 per day more in room rental fee. Barely enough to cover the overhead of running that resort. It may even be at a loss. Park admission is a constant. The off site family pays for parking. They probably both have lunch and most dinners at WDW and probably buy similar snacks and souveniers. Now, when you move up to Moderates and Deluxes, you certainly start to see far greater spreads. But the number of Value beds cannot be ignored. There isn't much revenue gap there.

I believe Disney used to be at 90% occupancy, and yes, they have built more, but I think we can assume they would like to get back to 90%.

Sure, when there was just the Contemporary, Poly and Golf resort, I am sure that 90% was pretty standard. As soon as they built the All Star Resorts, that all changed. No rational hotel manager with 25,000 rooms to fill would expect to fill 90% of them 100% of the time. Not at the rates being charged. There seems to be a sense that "This is Disney, so they can do it" mentality. But they can't. Unless they lower rates to a more competitive level. But Disney would rather have an 80% occupancy rate at current room rates than a 100% occupancy rate by cutting prices by 25%. 100% occupancy, in and of itself, is not the goal. Revenue is. And 100% occupancy in September, October, early November, mid-January, February (less President's Day), and early March will never happen. Unless rates are cut drastically. Can they bring 79% up to 82-83%? Maybe even 85%? Probably. But shooting for 90% in the dead off season is not going to happen.

I think the question is...now that they have limited FP numbers per person with FP+, why stay onsite if you aren't getting an advantage? If you feel you are getting a lesser experience now, you might as well spend less on it. Or perhaps spread your vacation dollars to other places in Orlando

You stay on site to reap the exact same advantages that you had with FP-. Since Disney's occupancy rate was better before than it is now, I presume that people must have found more incentive to stay on site with FP-, though I cannot figure out what that could be. Or else... FP has nothing whatsoever to do with percentages and room rates do.

 

[FlipHipster]

Ummm, YES IT IS!!

This is a joke right?

-Jason

Hey, HoP isn't that bad. If they would extend that show to an hour, its easily the best nap in WDW.

 

[lugnut33]

I know you cannot extrapolate this over the entire property, but just as an interesting factoid, the CM checking us in at All Star Music said that as an entire resort the All Stars have been running at 95% capacity for months.

 

[JimmyV]

So you're looking at your vacation budget, looking at what you are going to get for it now, and all of a sudden it looks less appealing. Paying more for less.

As soon as people start thinking that, they start thinking of ways to make it feel better. Like someone said on this thread above, why stay at a Disney Deluxe now? Might as well stay at the Four Seasons, go do your prebooked rides, and then enjoy that resort. Or someone else might think, eh, I'll still come, but I'll stay offsite. At least it will cost me less. Or maybe I'll split my stay with Universal now.

This is it exactly. With the Swan, Dolphin, Bonnet Creek and the Four Seasons breathing down Disney's neck, it has to react. $225 gets you one heck of a nice room at these places (though I haven't seen the Four Seasons rates yet, but I'm betting they will be under $450.) When you compare those rates to the Deluxes, it is real hard to choose Disney. So Disney can react in one of two ways:

• Promotions
• Discounts

or a combination of the two. Will and extra FP per day move you from the Dolphin at $200 to a room at the Boardwalk for $550? It won't move me. I'll save my $$$ and hit Rope Drop for my extra fun. If the Boardwalk were $275, it would still be a close call, but at least I'd give it serious thought.

 

[clsteve]

We are on the same page here. To me, 79% means nothing. As you point out, it is rarely actually 79%. Instead, it is well above 90% in high seasons (at which point, no gimmicks in the world are going to help you. You can't squeeze more people into rooms that are already filled), and well below 79% at other times (at which point the only way to fill those rooms is by lowering the price.) The overall average of 79% is a relatively meaningless statistic from a hotel management perspective. They look at much smaller slices and do what they can to address those slices (like rate promotions, or Free Dining). They don't look at 79% to see how they can raise it to 90%. They look at 60% (in slow season) and see how they can raise it to 75%.


What is the "it" in this sentence. The occupancy rate in high season, the occupancy rate is slower seasons, or the total number of rooms rented and beds filled? Disney wants warm bodies in the beds to pay for room and board, buy park tickets, hats, clothes and souveniers. I don't think that the number of warm bodies in beds is flat to declining. It can't be after they opened up AoA.

Disney is a complex beast. The parks division is separate from food and beverage which is separate from merchandise which is separate from hotel management. The occupancy rate as measured in a percentage is only meaningful to the latter. To all of the former, what they care about are the bodies who are at the resort. That number, by all empirical measure, is not in decline.

I have to disagree on this one. It's no secret that the avg guest spend for on-site is much higher than off-site. That's why any increase in number of on-site guests directly correlates to increase in profitability for the multiple divisions within TDO. Couple that with any ability to decrease expensive promotions such as free dining and seasonal rate deals, it's easy to see why some tiering of on-site/off-site FP+ access would be very tempting to them and probably expected from the street at some point.

Editdarn smart Device!)

The it is the reported number (79%)r- which the street mainly looks at as a trend number and a lost opportunity number- especially with the recent heavy investment it rooms/timeshares

 

[JimmyV]

I know you cannot extrapolate this over the entire property, but just as an interesting factoid, the CM checking us in at All Star Music said that as an entire resort the All Stars have been running at 95% capacity for months.

Thanks for that. I'm not sure where the 79% comes from. I'm adopting someone elses statement. I'm certain that the Deluxes are not running at 95%, but can their occupancies be so low as to drive the entire number down to 79%? I don't know. But the point is, there isn't as much headroom for occupancy as people seem to think. I don't think that Disney is aiming at higher occupancy as their sole goal here. I think instead they are trying to condition people into believing that the rates being charged by Disney are "worth it" for all the extras that you get. If you were in charge, how much money would you spend on an ad campaign to bring 95% up to 98%?

 

[JimmyV]

It's no secret that the avg guest spend for on-site is much higher than off-site. That's why any increase in number of on-site guests directly correlates to increase in profitability for the multiple divisions within TDO.

I don't doubt that. But I have never seen any data on how great "much" is. And I haven't seen it broken down by resort level. A family at a Value cannot be spending thousands more than a family staying at Marriott World.

 

[Nabas]

20% of your hotel rooms empty per night on average is a lost opportunity. When you take into account per-guest-spending, onsite provides a way higher percentage of Disney's profit than the simple onsite/offsite ratio would suggest. So even if they lose some offsiters, but gain onsiters, the math can still work out. I believe Disney used to be at 90% occupancy, and yes, they have built more, but I think we can assume they would like to get back to 90%.

I agree though, Disney can't ignore offsiters. If they could, they would have made WDW an all-inclusive a long time ago.

I guess the question is what balance are they going to strike. I'm happy that they are bringing offsiters on prebooking, if only for selfish reasons and because those kiosks were a mess. But I still can't see how they don't try to use this system to increase occupancy in some way.

I think the question is...now that they have limited FP numbers per person with FP+, why stay onsite if you aren't getting an advantage? If you feel you are getting a lesser experience now, you might as well spend less on it. Or perhaps spread your vacation dollars to other places in Orlando

This is why I think that onsite is going to get bonus FPs.

Exactly.

In recent years, WDW has added AOA and DVC. Traditionally, WDW's Value Resorts and timeshares run at higher occupancy rates. Instead, occupancy went down from 81% to 79% in AOA's first year of operation.

5-6 years ago, WDW's hotel occupancy rate was about 90%. It was even higher in the 1970s to 1990s. Historically, 90% is very achievable for WDW.

For reference, it was at 76% in the 12 months following 9/11.

Now that occupancy is down to 79%, what does Disney do to get that number back up?

With FP+, it's a balancing act between encouraging more onsite stays without driving away too many non-resort guests.

 

[Nabas]

Thanks for that. I'm not sure where the 79% comes from. I'm adopting someone elses statement. I'm certain that the Deluxes are not running at 95%, but can their occupancies be so low as to drive the entire number down to 79%? I don't know. But the point is, there isn't as much headroom for occupancy as people seem to think. I don't think that Disney is aiming at higher occupancy as their sole goal here. I think instead they are trying to condition people into believing that the rates being charged by Disney are "worth it" for all the extras that you get. If you were in charge, how much money would you spend on an ad campaign to bring 95% up to 98%?

The 79% comes from Disney's 10K form. This is filed with the Security and Exchange Commission and should be taken seriously.

Traditionally, WDW's Value Resorts run at higher occupancies than their Moderate or Deluxe resorts.

Value Resorts contain about 10,600 of WDW's 27,000 rooms.

If Value Resorts are running above 90%, then imagine what's happening at the Moderate and Deluxe Resorts.

 

[Nabas]

There was no advantage to staying on-site with paper FPs, why did guest choose to stay on-site before? All of those other reasons are still there.

Guests stayed onsite more often before it was more affordable.

Ticket and food prices are up 25% in the last 3 years. Median House Income is flat.

As WDW charges more, theme park attendance has remained steady, even increased slightly, but hotel occupancy has declined.

People still vacation at WDW but, in increasing numbers, they are no longer able to afford WDW's hotels along with WDW's much higher ticket & food prices.

 

[FlipHipster]

Disney looks at trends and you can't rule out the competition. If occupancy is trending down and its trending up for the other guys that's a problem. The guy across the street just said they plan to add several thousand more rooms and they believe they can fill them and now a 4 seasons. All that in addition to the existing offsite options. Disney brings them in and everyone else sucks them away. This is the reason behind MM+ they have been very clear about it from the get go. Get guests on property and keep them there.

The problem I have is that I can't understand the business case anymore. They obviously have no problem selling park tickets. If you're not trying to drive occupancy up, where's the sell? Touch to pay? Data mining?

I can't believe anyone at Disney resorts likes the perpetual resort incentives which are just seasonal rate reductions. At least we won't see those going away anytime soon and may see some news ones or returning favorites like buy 3 get 5.

 

[mom2mickeyfan]

I know! Seems illogical.

Here's why I think this...Before, you were in control of your day. So if you know how to work paper FPs, make rope drop, had a touring plan, all of those things, you could do well.

Now that option is taken away.

So now, you're left with 3 prebooked FPs per day (2 or 1 in Epcot and DHS). Now you're not in control of your day anymore. You will probably never have a day like you used to have when you were the master of paper FP.

So you're looking at your vacation budget, looking at what you are going to get for it now, and all of a sudden it looks less appealing. Paying more for less.

As soon as people start thinking that, they start thinking of ways to make it feel better. Like someone said on this thread above, why stay at a Disney Deluxe now? Might as well stay at the Four Seasons, go do your prebooked rides, and then enjoy that resort. Or someone else might think, eh, I'll still come, but I'll stay offsite. At least it will cost me less. Or maybe I'll split my stay with Universal now.

I think the thing is that once you sow dissatisfaction, people start thinking of ways to get rid of that feeling. It doesn't mean they are going to give up entirely.

That's why I think bonus FPs for onsite are coming.

But those that seem to like FP+ have been saying that most guest aren't in the know when it came to paper FPs and will be happy to take their 3 FP+s and call it a day. These guest will still be on-site and be none the wiser. If most guest were only using 3 or less FPs a day, why would a huge number be disappointed with only being able to get 3 pre-booked and move off-site?

 

[Nabas]

I don't doubt that. But I have never seen any data on how great "much" is. And I haven't seen it broken down by resort level. A family at a Value cannot be spending thousands more than a family staying at Marriott World.

Domestic Per Room Guest Spending was $267 last year. This number was skewed upward a bit by DLR's 3 hotels but with WDW having about 90% of domestic hotels, the number closely matches spending at WDW, probably within about $10.

So, on average, how much more was a family staying onsite spending than a family staying offsite?

At least $257 per day more.

Then there's the whole "captive audience" thing. An onsite family is less likely to have their own transportation and so will spend more of their vacation dollars at WDW.

Then there's the "family income" thing. A family able to afford a WDW hotel, even a WDW Value Resort, is more likely able to spend more than the average family staying offsite. (Sorry but even WDW's Value Resorts are pretty expensive, more expensive than a lot of really night offsite hotels.)

Add it all together and the typical onsite family is spending a lot more than the typical offsite family.

 

[Nabas]

Disney looks at trends and you can't rule out the competition. If occupancy is trending down and its trending up for the other guys that's a problem.

Interesting you should mention that. According to Visit Orlando, non-WDW Orlando area hotel occupancies ticked up a couple of percent to 71%.

According to Disney's 10K, domestic occupancy ticked down 2% to 79%.

Since there are many more non-WDW hotel rooms than WDW hotel rooms, it suggests that more people are vacationing in Orlando (including at WDW's theme parks) but fewer are willing to pay WDW's hotel prices.

WDW's theme parks are crowded. WDW's hotels are not, especially their Deluxe Resorts.

 

[clsteve]

Domestic Per Room Guest Spending was $267 last year. This number was skewed upward a bit by DLR's 3 hotels but with WDW having about 90% of domestic hotels, the number closely matches spending at WDW, probably within about $10.

So, on average, how much more was a family staying onsite spending than a family staying offsite?

At least $257 per day more.

Then there's the whole "captive audience" thing. An onsite family is less likely to have their own transportation and so will spend more of their vacation dollars at WDW.

Then there's the "family income" thing. A family able to afford a WDW hotel, even a WDW Value Resort, is more likely able to spend more than the average family staying offsite. (Sorry but even WDW's Value Resorts are pretty expensive, more expensive than a lot of really night offsite hotels.)

Add it all together and the typical onsite family is spending a lot more than the typical offsite family.

Exactly.

Add in that much of a Hotel/Resort's expense line is fixed and not variable past a certain occ level- profitability increases dramatically by each percentage increase in occupancy. This is especially true for Mods and Deluxe.

Also, profitability increases even with flat occupancy if you can increase the length of stay. The highest guest costs are check-in/check out days (cleaning a room is twice as expensive as making up a room, etc.) and guests spend less on these days since they're travel days.

It's no surprise every Exec comment has been focused mostly on locking in guests and extending or increasing on-site time.

 

[JimmyV]

In recent years, WDW has added AOA yes and DVC no-most of these have been around for quite a while.

Instead, occupancy went down from 81% to 79% in AOA's first year of operation. So you add 2000 rooms and see a decline of 2%. That is not material. What it really means is that 1,120 more rooms are now filled than before. That is 4,000-5000 more on site people. That will make the food and beverage and park divisions very happy.

5-6 years ago, WDW's hotel occupancy rate was about 90%. It was even higher in the 1970s to 1990s. It wasn't that hard to fill three hotels. Look at the market share that Coke use to have in the soft drink market. Now compare that to how many more gallons of soda they sell today. Which do you think they care more about: market share or total sales?

Historically, 90% is very achievable for WDW. But history changed. It was historically possible to run at 90% of 7,500 rooms. Maybe even 15,000. Do you think it would be possible to run at 90% of 1,000,000 rooms? If the answer to that is no, then there is some whole number between 1,000,000 and 10,000 at which 90% is no longer achievable. Perhaps that number is 20,000.


Now that occupancy is down to 79%, what does Disney do to get that number back up? Lower the rates of the Deluxes and Moderates that you note are running at occupancy percentages lower than expectations. Moderates cannot sell out at $250-$275.

With FP+, it's a balancing act between encouraging more onsite stays without driving away too many non-resort guests.

It is a balancing act, but Disney is likely a victim of its own success here. If 90% of guests are using FP+, and the number of usable FPs is finite, it is going to get squeezed. Think about how much easier this problem would have been to solve if Disney had kept the old system that only 50% of the guests used, and then it advertised that upon check in at a Deluxe or Moderate, the front desk clerk will hand you your room keys and a stack of "use any time on any ride FPs". They simply cannot do that now.

 

[ArwenMarie]

We have to be careful here. A family of 4 that books at $90 room at a Value is adding, on a per person basis, $22.50 per day more in room rental fee. Barely enough to cover the overhead of running that resort. It may even be at a loss. Park admission is a constant. The off site family pays for parking. They probably both have lunch and most dinners at WDW and probably buy similar snacks and souveniers. Now, when you move up to Moderates and Deluxes, you certainly start to see far greater spreads. But the number of Value beds cannot be ignored. There isn't much revenue gap there.

The family even at a Value is still probably spending more than an offsite visitor (whether local or a tourist), even if only on food. But yes, the mods and deluxes would add more.

Sure, when there was just the Contemporary, Poly and Golf resort, I am sure that 90% was pretty standard. As soon as they built the All Star Resorts, that all changed. No rational hotel manager with 25,000 rooms to fill would expect to fill 90% of them 100% of the time. Not at the rates being charged. There seems to be a sense that "This is Disney, so they can do it" mentality. But they can't. Unless they lower rates to a more competitive level. But Disney would rather have an 80% occupancy rate at current room rates than a 100% occupancy rate by cutting prices by 25%. 100% occupancy, in and of itself, is not the goal. Revenue is. And 100% occupancy in September, October, early November, mid-January, February (less President's Day), and early March will never happen. Unless rates are cut drastically. Can they bring 79% up to 82-83%? Maybe even 85%? Probably. But shooting for 90% in the dead off season is not going to happen.

I remember reading occupancy was an average of 90% not that long ago, like within 10 years or so. Pre-AoA, but still. Regardless of the exact numbers, I know that the number has dropped. A lot.

You stay on site to reap the exact same advantages that you had with FP-. Since Disney's occupancy rate was better before than it is now, I presume that people must have found more incentive to stay on site with FP-, though I cannot figure out what that could be. Or else... FP has nothing whatsoever to do with percentages and room rates do.

That's true. And that's why I said it doesn't seem logical. But I think once you stir the hornet's nest, people start thinking, and Disney doesn't want people thinking. Look at my experience on our last trip. We were supposed to take an offsite Disney-only trip. Universal wasn't even on our radar. Then with all of this ruckus with FP, I got spooked and we switched it to an onsite Uni-only trip. Now I like staying at Uni better. My point is that when you rock the boat, sometimes you get some unintended consequences. Even without that factor, Disney is still going to want to make their onsite guests more satisfied than offsite. Bonus FPs are a way to do that. Obviously, I don't know that will happen, just speculating with this new change.

 

[bdb23]

Like most offsite FP+ threads, this one has devolved into chaos and quickly gone off point.