The DCL "company line" = predictable

[Rogillio]

Well, a business plan is not necessarily always a "reach exceeds grasp" thing per se, but fair enough. Perhaps "overreaching" is the term I should use instead. And I admit that's a wholly subjective term.

Supply and demand, free-market capitalism, maximize profit, deliver value to shareholders, etc. I don't think anyone here disputes where Disney is coming from, or its right to price however it wants. No one is entitled to an affordable Disney cruise, and when demand far outpaces supply, DCL should get while the gettin's good. We all understand.

But again, there is plenty of precedent for pricing strategies like this going kablooey in a company's face. I'm not saying it will happen with DCL, but if it does, I guess only then will they know if they made enough money in the meantime to offset the crash. Granted, that's DCL's prerogative, and maybe it will work out to be a net positive in the long run.

I was really just trying to be funny as I thought you were intentionally quoting Browning.

“Ah, but a man's reach should exceed his grasp, Or what's a heaven for?”

― Robert Browning, Men and Women and Other Poems

 

[squirk]

Ah, yes. I missed the ref. One does not see poetry quoted around here very often.

 

[eskimoinparadise]

I was really just trying to be funny as I thought you were intentionally quoting Browning.

“Ah, but a man's reach should exceed his grasp, Or what's a heaven for?”

― Robert Browning, Men and Women and Other Poems

Well, as long as we're quoting, "When the dawn fades, all that's left is the harsh light of reality". Fanatics can disagree, but IMO Disney's dawn has faded.

 

[Rogillio]

Well, as long as we're quoting, "When the dawn fades, all that's left is the harsh light of reality". Fanatics can disagree, but IMO Disney's dawn has faded.

http://www.bing.com/search?q=disney+stock&src=ie9tr


Perhaps in your mind the Disney lights have begun to fade....but on Wall Street, Disney continues to shine brighter.

I find the term 'fanatic' to be derisive and think it is way over used here. People enjoy the Disney atmosphere and love the Disney cruise experience. That does not make them fanatics.

We usually stay in Hilton family hotels, Hilton, Garden Inn, Hampton, etc. Why? Because we trust them and know what we are buying. Same is true with Disney.

 

[squirk]

You know, I worked for Merrill Lynch back in '06 when the stock price was approaching $100/share and everyone was talking about strong fundamentals, record revenues, stock splits, etc. I think after the Bank of America buyout a few years later, MER delisted at $19. The gallows humor in the company (where a lot of guys had a lot of deferred comp in the form of Merrill stock) was that your 401(k) was now a 101(k).

 

[bats]

I read your post and wished I could write correspondence half as well as you! It was so well written, I have writers envy.

Regarding DCL offering discounts, they did back in 2010 for the Dover, Kent (England) to Barcelona repo. We live just 1 hour from Dover and about 2 months before the cruise was due to depart, DCL dropped the prices by around 1/3 for European guests. We managed to get the annual leave very quickly from work and booked up. Travelling was a breeze .. 1 hour train journey to Dover, 2 hour flight from Barcelona.

Anyway, the ship was still not full by any measure. I wish they had more discounts though, we have started looking at ABD now and although I know that's more money, I'm looking at the aspect of what you get for your money. I can't bring myself to cruise with someone else yet so DCL have me for the time being.

 

[squirk]

I read your post and wished I could write correspondence half as well as you! It was so well written, I have writers envy.

Regarding DCL offering discounts, they did back in 2010 for the Dover, Kent (England) to Barcelona repo. We live just 1 hour from Dover and about 2 months before the cruise was due to depart, DCL dropped the prices by around 1/3 for European guests. We managed to get the annual leave very quickly from work and booked up. Travelling was a breeze .. 1 hour train journey to Dover, 2 hour flight from Barcelona.

Anyway, the ship was still not full by any measure. I wish they had more discounts though, we have started looking at ABD now and although I know that's more money, I'm looking at the aspect of what you get for your money. I can't bring myself to cruise with someone else yet so DCL have me for the time being.

Thank you! I appreciate the compliment.

The thing with the discounts is that we all know why the discounts are usually offered - inconvenient itineraries. Either weird ports or weird times of the year where families with school-age children can't take advantage of them. While any discounts are better than no discounts, I don't think they are nearly as useful as the guy who responded to my email claims.

It reminds me of this:

 

[jahber]

Thank you! I appreciate the compliment.

The thing with the discounts is that we all know why the discounts are usually offered - inconvenient itineraries. Either weird ports or weird times of the year where families with school-age children can't take advantage of them. While any discounts are better than no discounts, I don't think they are nearly as useful as the guy who responded to my email claims.

It reminds me of this:

Exactly! And the problem we are having is that DCL lured us in with "coupon days," or Fl resident deals that brought them in line with "industry standard" prices (oh how I love that term--thanks, DCL!!). For the prices we paid, it was 100% worth it! But now that they are asking us to pay more, sometimes thousands more, for Fl resident "deals" on cruises we have sailed in the past, it's no longer worth it. Personally I'm going to be fine because I discovered the big secret that DCL doesn't want us to know: other cruise lines can offer our family just as much or more for LESS money.

It IS still upsetting that they continue to spew their party line, but what do we expect, really. They won't admit they raised prices by too much (when they hit that point). They will just quietly resume "coupon days." And I'll be right there to book if they price falls back into what I consider worth it. Oh well. Other cruise lines happily take my money. I'll go where I'm appreciated.

 

[eskimoinparadise]

http://www.bing.com/search?q=disney+stock&src=ie9tr


Perhaps in your mind the Disney lights have begun to fade....but on Wall Street, Disney continues to shine brighter.

I find the term 'fanatic' to be derisive and think it is way over used here. People enjoy the Disney atmosphere and love the Disney cruise experience. That does not make them fanatics.

We usually stay in Hilton family hotels, Hilton, Garden Inn, Hampton, etc. Why? Because we trust them and know what we are buying. Same is true with Disney.

Not in the harsh light of Reality: Disney stock is down ~14% from its 52-week high; the overall market is down only ~6%. Disney is underperforming the market Edited to add, RCL stock is performing exactly as the overall market ~6%, so Disney is also underperforming relative to its major competition in the mainstream cruise market.

 

[squirk]

But with all due credit to Rogillo, look at the five-year chart vs the 52-week. It's impressive. Intra-year dips or spikes in stock price can be the result of a wide array of factors, particularly for a company as diverse as Disney, and it may have nothing to do with Parks & Resorts (including DCL).

Still, I stand by my point that strong financials do not preclude the possibility of a leaky ship. My Merrill experience taught me that.

 

[eskimoinparadise]

But with all due credit to Rogillo, look at the five-year chart vs the 52-week. It's impressive. Intra-year dips or spikes in stock price can be the result of a wide array of factors, particularly for a company as diverse as Disney, and it may have nothing to do with Parks & Resorts (including DCL).

Still, I stand by my point that strong financials do not preclude the possibility of a leaky ship. My Merrill experience taught me that.

Agree. The reality is that over that five year period virtually every sector in the broader market had equally (if not more) impressive gains (we made enough in those five years off of a diversified portfolio to pay off the mortgage ) "A rising tide lifts all boats" - Disney's are just sitting about 8% lower in the water as the rest of them.

 

[squirk]

True, from a relative measure. One might argue that the overall market is overvalued, though.

And back to the thread's raison d'être, the 52-week lag could have nothing to do with Parks & Resorts pricing. For example, I think in the 10-K, it was mentioned that ESPN was an area of noticeable weakness.

 

[eskimoinparadise]

True, from a relative measure. One might argue that the overall market is overvalued, though.

And back to the thread's raison d'être, the 52-week lag could have nothing to do with Parks & Resorts pricing. For example, I think in the 10-K, it was mentioned that ESPN was an area of noticeable weakness.

That's why we cashed out when we did The real issue with Disney is that its main revenue drivers (if they truly are P&R) are not really scalable, the DCL subsidiary shows no inclination to scale its fleet (if you consider four ships a fleet), the price for an AP in California just topped $1,000, and the price of an AP in Florida has more than doubled in the last five years. Cash cows only give so much milk before they're turned into hamburgers. and "sacred cows make the best burgers"

 

[tinkerone]

if your going to talk stock, disney is going to blossom over the next few years. with the acquisition of star wars and marvel their profits will far exceed anything were talking now. they will rise above their past performance. they are expected to make one billion dollars just from the next star wars movie with all sales in.

but that has nothing to do with dcl. while it is owned by disney, its its own corporation. if it slides and doesn't bring in the expected profits changes will be made. the company will never say 'well, we made a billion on a movie so its okay that dcl increased their profit line by 3%'. time will tell what will happen. i think i read above about 2 people leaving disney but two hundred coming on. those numbers are not realistic. the boat is sinking a little bit more than that. true, they may have people lining up to take those spots but its costing the company money. have you noticed how many dcl commercials there are now? saw one just this morning, saw 4 last night. that tells me dcl is looking to get people to fill the ships, not that clients are pounding down the doors. occasionally i see an rcl commercial or a river boat commercial but they are few and far between.

we can pound this subject to death but only time will tell what is going to happen. my thought is they are expecting a lose of customers and are working very hard to see what they can do to fix the problem without dropping the price. may or may not work.

now if you will excuse me, i have to go get ready for my disney cruise…...

 

[squirk]

I don't think we're beating the original dead horse anymore. I think we beat that horse to death, it decomposed into the soil, came back as hay to feed another horse, and we beat that horse to death.

But in the interest of perpetrating the circle-jerk, I wonder if DCL nerds would find the price hikes more palatable if we saw more capital reinvestment in the fleet.

DCL is going to line its pockets either way, but would we be grousing as much if we thought the higher fares were going to fund more ships or a second island? Who knows? Maybe they are, at least in part.

I mean, the Avengers club and Millennium Falcon in the kids clubs are cool, but from a relative measure, I don't think they cost a whole lot of money. Star Wars Day at Sea? I will reserve judgment until I see for myself, but again, I am guessing it is not a major capital outlay. Vannelope's? That cost money to implement, but they're going to charge a premium for it.

 

[Ofinn]

It will be interesting to see what happens with their Summer 2016 cruises. I think that will give us a good indication if they have over reached. The price increases from 2015 to 2016 were pretty substantial. I'm really interested to see how the European cruises sell considering there prices are double their competitors.

 

[tinkerone]

I don't think we're beating the original dead horse anymore. I think we beat that horse to death, it decomposed into the soil, came back as hay to feed another horse, and we beat that horse to death.

But in the interest of perpetrating the circle-jerk, I wonder if DCL nerds would find the price hikes more palatable if we saw more capital reinvestment in the fleet.

DCL is going to line its pockets either way, but would we be grousing as much if we thought the higher fares were going to fund more ships or a second island? Who knows? Maybe they are, at least in part.

I mean, the Avengers club and Millennium Falcon in the kids clubs are cool, but from a relative measure, I don't think they cost a whole lot of money. Star Wars Day at Sea? I will reserve judgment until I see for myself, but again, I am guessing it is not a major capital outlay. Vannelope's? That cost money to implement, but they're going to charge a premium for it.

now i have to clean the liquid that flew out of my mouth, sprinkler style, when i read this. i only hope i can use this line a some point in my life. lol

 

[Rogillio]

Quite so, but to be fair, there have been plenty of companies - companies filled with smart people and with extensive marketing data and research - who nonetheless got "too big for their britches" and priced themselves out of their target market.

As I type this, I am watching my son play our Xbox One, and I think about how Microsoft - one of the largest tech companies in the world - totally screwed up the launch of that console with what many considered arrogant marketing and greedy pricing. Now, almost two years later, they've sold only about half as many units as the PS4, and have admitted that they will likely never catch up to Sony. Maybe not a perfect example, but still.

So, yeah, Disney has the strength and leverage right now to price however they feel like it without fear of bookings going down. I just wonder if and when their reach will exceed their grasp.

It's easy to play arm-chair DCL executive and opine based on our observations and perceptions. But they have data and the analysts and the market research and business models. We are not privy to ANY of this data. We don't see their business models and what factors, groundrules and assumptions went into their analysis. All we is the price went up and a few people on an internet forum complaining about the price inceases. Setting the price of a product in the single most important things any business does!

The price incease will not effect my decisions at all. If we want to cruise, DCL we will and we will pay whatever the website says it costs for the options we want.

 

[gumbypee]

It's easy to play arm-chair DCL executive and opine based on our observations and perceptions. But they have data and the analysts and the market research and business models. We are not privy to ANY of this data. We don't see their business models and what factors, groundrules and assumptions went into their analysis. All we is the price went up and a few people on an internet forum complaining about the price inceases. Setting the price of a product in the single most important things any business does!

The price incease will not effect my decisions at all. If we want to cruise, DCL we will and we will pay whatever the website says it costs for the options we want.

That is nice for you that you can pay the increase, unfortunately I actually cannot and that makes me very sad. Meaning, I literally do not have the money to pay for it. bills wouldn't get paid etc. I have no money to pay for it.

 

[Rogillio]

if your going to talk stock, disney is going to blossom over the next few years. with the acquisition of star wars and marvel their profits will far exceed anything were talking now. they will rise above their past performance. they are expected to make one billion dollars just from the next star wars movie with all sales in.

but that has nothing to do with dcl. while it is owned by disney, its its own corporation. if it slides and doesn't bring in the expected profits changes will be made. the company will never say 'well, we made a billion on a movie so its okay that dcl increased their profit line by 3%'. time will tell what will happen. i think i read above about 2 people leaving disney but two hundred coming on. those numbers are not realistic. the boat is sinking a little bit more than that. true, they may have people lining up to take those spots but its costing the company money. have you noticed how many dcl commercials there are now? saw one just this morning, saw 4 last night. that tells me dcl is looking to get people to fill the ships, not that clients are pounding down the doors. occasionally i see an rcl commercial or a river boat commercial but they are few and far between.

we can pound this subject to death but only time will tell what is going to happen. my thought is they are expecting a lose of customers and are working very hard to see what they can do to fix the problem without dropping the price. may or may not work.

now if you will excuse me, i have to go get ready for my disney cruise…...

I haven't see a DCL commercial in months! About the only time we see them is whatching AFV on Sunday nights. I guess you watch more channels directed at families. We watch a lot of news channels, history, Discovery, etc.

I would not read to much into your perception of the number of commerials. I see a lot of Coke commercials but that does not mean Coca-Cola is foundering.

I still think, in the most simplistic terms, if you can get 10% more per passenger you can sail with 5% fewer people and and still make 5% more than would have made. And if you don't lose 5% of the passengers on any given cruise then you make 10% more money.