Things not going well with the DDP changes

I think this thread confirms the heat and passion surrounding the changes in the DDP as a result of the latest union contract. I guess for some it is easier to blame big business, Disney in this case, than to spread it around. We've had this thread going quite a while....don't blow it! Take a deep breath....let's all hold hands and sing......Kumbaya.
 
I have to agree with you here. I own 2 stores (gas stations) and I just can not compete price wise with some of the larger ones. While we do have higher prices, we compensate by better customer service and cleaner stores. I just can not lower my prices in anticipation of more than double sales to make it up so that I make the same amount of gross dollars. It makes my expenses go up with the increased handling of product. The only person who really benefits is the supplier who gets more volume.

Obviously the DDP needed to be revamped to give Disney more money. I know that over the last several years everything has gone up. I don't see how Disney kept the pricing as low as they did for so long. Each person will now just have to figure out what is in the best interest of their family when they plan vacations and not just assume that the DDP will be beneficial to them. We only used the plan 1 time for a 4 night stay--and we did save $$. The price of the plan per day was less or about even to what our bill for dinner would have been--so basically our CS and snack were free. No company no matter how profitable they are can continue to operate like that for an extended period of time.

I hate that it has made so many guests unhappy, but things do change.
agree with you completely. on slow days I run specials to keep bartenders and servers happy as long as the special doesn't cut too deep - but you are right - usually only the customer and supplier benefit. in my experience value specials never generate loyalty - a large part of the problem we are seeing here. I absolutely think customer service wins the day.
 
having differring points of view is one thing - "waiting for Tlofts indignant heated reply" is clearly not constructive and is intended only to provoke.

good for you for not backing down. I would love to know why you think they were still making money - IN THE RESTAURANTS - when they were offering a dining plan equal to 40% off. I already wrote, long before this got so heated that the plan obviously helped increase revenue for the company as a whole. Speaking specifically in the restaurants themselves how do you think that they were able to offer such large discounts and not have it affect profitability?

I don't think you are a bully for disagreeing with me. I think the people that personalize things and throw insults around - a half dozen or so are quoted further up - are bullies and usually drown out people with something to contribute.

Just some good natured fun intended to point out the fact that each time someone has agreed with a point that you have not, you have gone into attack mode on that poster. Relax. You successfully proved 'that' point.
The fact of the matter is, we are not talking about actual costs. taking the tip out of the equation, $35 buys alot of food at wholesale. With restaurants full, even subtracting labor, a reasonable person could conclude that on a whole (figuring total output of All restaurants) that there is no way they were losing money at that price point.
Which is not to say they dont want to make alot more, hence the new 08' plan.
 

gosh no, just poking with a stick and watching the implosion for my own amusement :)

:lmao:

No offense intended towards anyone, but I love this thread! It is good that there are so many different opinions and that we can all express them. Good natured debate is always stimulating :idea:
 
:lmao:

No offense intended towards anyone, but I love this thread! It is good that there are so many different opinions and that we can all express them. Good natured debate is always stimulating :idea:

I've also been enjoying reading this thread.

It's a REALLY interesting discussion.

I happen to think that with all the costs factored in -- including costs charged off to the restaurants for the facilities and property taxes -- I don't think Disney was making very much - if anything - on the old DDP plan.

For what it's worth : there's a world of expenses that just don't get thought about in these discussions. I've seen labor and the cost of food listed so far.

But, for each restaurant, there's also the facilities charge (similar to rent), perhaps a share of property taxes (not sure how Disney does their accounting), permits, licenses, probably a portion of the costs of running WDW-DINE is charged back to each participating location, electricity, telecommunications etc.. not to mention the stuff like silverware, plates, glasses etc that need replacing on a regular basis, the constant updating and replacing of specialized cookware and cooking appliances/tools and of course - employee benefits - which for Disney are NOT cheap.... and to top it all off.. Disney probably charges the costs of accounting for all that to each restaurant too!

Of course, if Disney does accounting for the parks ANYTHING like they do motion pictures, I can guarantee that they can show you that the parks and resorts in Florida haven't made a dime since 1971! :lmao:

Knox
 
Great point Canadianguy! Lets also not forget, even if the plan was basically charged off at cost, it had the intended consequence of improving the bottom line and filling the parks.
While costs of operations are certainly a factor, thats true for all aspects of their business, and they are still making money, but like any business, there is a line that consumers just wont cross, and Disney can only go so far (resort, ticket, food) before it turns around on them. Getting the buying public to ignore two out of three of those things the past couple of years may have been the single most successful aspect of the old dining plan.
 
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Getting the buying public to ignore two out of three of those things the past couple of years may have been the single most successful aspect of the old dining plan.

Angel:

I couldn't agree with you more.. Clearly Disney feels they can achieve those same levels of park and resort 'fullness' via other means (travellers paying full price, resort discount codes, potential free dining offer, international guests from Canada & UK who suddenly have much stronger currency .. etc) I have to believe that bookings from Canada are WAY up.

Time will tell if they are right -- but based on bookings so far (ie: number of resort periods between now and March 30 with very low availability). It would appear their gamble will pay off.

As a complete side note - I explained the dining plan to a co-worker traveling for the first time ever in April .. three adults and two children. I explained the 2008 program in detail and his response was "Well after looking at the menus, that's a no brainer." Mainly, he was sold on the convenience factor.. of knowing the price up front. AND he will save money on this program... just not as much as he would have saved last year.

How many more future guests are out there just like his family.. who've never heard of the DDP before 2008 and still see the value?

Knox
 
I would definitely think that for many people, but not all, if they looked at the 2008 plan (either never seeing an earlier plan or not comparing), then looked at the menus for the restaurants they want to visit, they would see a good value (PLUS the convenience factor). Especially if they are a family with kids (child age in Disney eyes) - that price is a REALLY good deal! And especially if they want to eat at any but the LOWEST cost Disney TS restaurants. I've done a complete computation for our family. Even once adding in tip prices paid OOP plus an appetizer or 2 we would still really want and pay OOP for, we still would stand to save about $150 with the DDP. A good deal and again, PLUS the convenience factor.

Now - to compare to the 2007 plan - we saved over $300 when we went. That was a GREAT deal. But, I understand there are obviously no guarantees that Disney would provide that same level of savings again. I'll just be grateful that I saved that much once!!! And also grateful that I can still save about $150, eat very well, have a convenient plan and not have to worry about $$ when ordering all week!!! Some might say "Hey, I'm losing $150 or so in savings" But, that's never guaranteed, just be grateful for any savings!! Or don't use the plan if it isn't right for you!!

(All this said - I would still prefer the old plan at a higher cost - I just REALLY liked not paying OOP at all for the week!)
 
I would definitely think that for many people, but not all, if they looked at the 2008 plan (either never seeing an earlier plan or not comparing), then looked at the menus for the restaurants they want to visit, they would see a good value (PLUS the convenience factor). Especially if they are a family with kids (child age in Disney eyes) - that price is a REALLY good deal! And especially if they want to eat at any but the LOWEST cost Disney TS restaurants. I've done a complete computation for our family. Even once adding in tip prices paid OOP plus an appetizer or 2 we would still really want and pay OOP for, we still would stand to save about $150 with the DDP. A good deal and again, PLUS the convenience factor.

I agree, kids are a great deal on the DDP. We ran the numbers like you did, and for us dining at Tony's, Crystal Palace, LeCellier, Jiko and Beaches and Cream (for TS's) on our trip, we end up saving about $450 by not doing the plan. However, we have the DDE card so that is a factor, and we also we aren't doing TS's every night we're there, some nights we're going off site. Even if we'd done TS's every night though I figure we'd have saved $330.

I think that every family has to run the numbers for themselves, factors for us were 5 adults who graze and don't like huge meals and also just one child on the plan (our other DS is an infant)
 
For what it's worth : there's a world of expenses that just don't get thought about in these discussions. I've seen labor and the cost of food listed so far.

But, for each restaurant, there's also the facilities charge (similar to rent), perhaps a share of property taxes (not sure how Disney does their accounting), permits, licenses, probably a portion of the costs of running WDW-DINE is charged back to each participating location, electricity, telecommunications etc.. not to mention the stuff like silverware, plates, glasses etc that need replacing on a regular basis, the constant updating and replacing of specialized cookware and cooking appliances/tools and of course - employee benefits - which for Disney are NOT cheap.... and to top it all off.. Disney probably charges the costs of accounting for all that to each restaurant too!

Of course, if Disney does accounting for the parks ANYTHING like they do motion pictures, I can guarantee that they can show you that the parks and resorts in Florida haven't made a dime since 1971! :lmao:

Knox

:lmao: ain't that the truth!

to address your other points, they are accounted for in there.
Here is a very (and I can't stress the very enough) basic breakdown of a food service operation
total revenue = 100%
of that,
25% food cost (everything that restaurant buys as food, from spices to garnish to the actual food)
25% labor (everything to do with labor - not only wages but also benefits, incentives, training etc. from kitchen staff to cleaning crew)
25% overhead (the obvious like rent, utilities, and equipment, but also credit card processing fees, advertising, licensing, etc...if it isn't something else, it is overhead)
25% profit

Each establishment is going to have slightly different %'s, but that is a very basic breakdown. a steak house has a lower profit %, a turkey leg cart has much higher. I would guess it is pretty accurate for the whole of all disney dining together.

The executive chef and restaurant managers are running these #'s at least once a week, some daily. Monthly, they are doing a full inventory of every.single.item. in the place and getting accurate %'s. (Ironically, you work your life to be an exec chef, and when you get there you do very little cooking - it is mostly paperwork) You want to stay in whatever % it has been deemed is appropriate - you don't want to be too high or too low.
There are specialized computer programs to do this - so that they can see immediately that something is out of whack...for an example lets say food cost is running high. He looks and sees that the tenderloin cost contributed to this - why? Is the purveyor charging more? Is a prep cook cutting each steak an ounce too big, getting less yield? Is someone on the line cooking them improperly, causing them to get sent back and have to be redone?

Point is, they see problems very quickly and react. There is no way disney was losing money on the old plan, they would have seen it and reacted, not left it virtually intact for years...in some cases they did see an issue and it was corrected (see the post about the "glass slipper" dessert being taken off the menu)

Problem is, eventually revenue wasn't increasing at a brisk shareholder approved rate, so they started tweaking...hear the recent Le cellier podcast? Servings got smaller - someone noticed "hey, if I take one tomato and one mozz. off each stack, not only do i save 5 cents off each plate food cost (may not seem like a lot, but multiply by the hundreds they put out a week) but people can't share and now they order a second app. Got a nice bump from that. No one even noticed! Lets take off one more tomato slice..and so on and so on. But what happens when you have done all the tweaking, people are starting to complain, but the bosses want to see revenue keep rising? Time for a plan overhaul.

And as I have previously predicted, I have no doubt there will be another one in 3 years or so...because after the initial revenue gain, and the second year tweaking, 3rd year leveling off, they have to rinse and repeat.
 
Hipchickie:

Of course.. all that planning goes out the window if they have to once again - begin using the food angle as a 'loss leader / less profitable leader' of sorts to get bodies into the resorts and parks again..

Let's say.. in the case of a real recession.. when luxuries like travel and vacations start being lower priority.

:)

Knox
 
:lmao: ain't that the truth!

to address your other points, they are accounted for in there.
Here is a very (and I can't stress the very enough) basic breakdown of a food service operation
total revenue = 100%
of that,
25% food cost (everything that restaurant buys as food, from spices to garnish to the actual food)
25% labor (everything to do with labor - not only wages but also benefits, incentives, training etc. from kitchen staff to cleaning crew)
25% overhead (the obvious like rent, utilities, and equipment, but also credit card processing fees, advertising, licensing, etc...if it isn't something else, it is overhead)
25% profit

I think you and I have butted heads so sharply because your idea of the net profitability of restaurants in general is so much higher than mine. At a 25% net profitability I could easily believe that the ddp still made money. But I don't think many restaurants make that kind of profit.

Just because the numbers can be easily accessed I pulled up the financials for the Outback Steakhouse chain. Certainly we could agree that they do all the cost analyzing and have all the volume discount opportunities that disney restaurants would. In a single quarter the company did $811 million in sales. They have a gross profit of $74 million dollars and a net profit of $48 million dollars. This is a company exclusively engaged in the restaurant business. That is a net profitability of 5.9% of sales. This information is from SEC filings and is readily available on google.

Maybe you think Outback isn't comparable. Howabout the Landry's Restaurant Group. They are probably very comparable financially to Disney restaurants since their dining/entertainment concept so closely mimics Disneys. For those that don't know they run the Rainforest Cafe concept and soon to open T-Rex concept. For fiscal year 2006 they did 1.134 billion in sales. They ran an astounding low 22.9% food cost ($258 million in food). They had a gross profit of $87 million (7.7% profitability) but had a net LOSS for the year of $21.7 million.

Which also begs the question. If Disney restaurants are so profitable why have all the newest ones to open been outsourced to other companies?
 
We used the DDP for our trip this past week. It was my first time using it, and it was both good & bad.

Good: knowing costs up front, being able to order whatever we wanted entree-wise, and it encouraged us to try more Disney restaurants.

Bad: there was a lot of waste, and dinners cost me an average of 40 over each night between tips, appetizers and drinks.

OK - I don't expect them to include alcohol in the program (unless you sign up for the one with the wine credit) and I didn't mind paying for DS's scotch, but I would much rather have had them include an appetizer than the desserts. We would have given up all the desserts for one appetizer for the table! At the end of the week we had a refrigerator full of desserts that we were encouraged to order by the wait staff. Friends would come to OKW to visit and we tried desperately to get them to take the cakes home with them! :lmao:

Would I sign up for it again? Maybe. It's debatable. My DS didn't use many of his counter service credits, nor did my MIL, since they didn't go to the parks every day. The night before we left we had 19 credits left so we used them for multiple items at the Pepper Market and fed everyone.

I think that some servers need better training. We had one woman at ESPN who couldn't figure it out at all, and when we were at the Pepper Market they didn't tell us until after we ate that the desserts some people chose weren't on the plan.

We didn't use the double credits for CRT, and instead paid for that outright so that we would have the dinner available to us that night.

All in all, though, it was a good deal.
 
They had a gross profit of $87 million (7.7% profitability) but had a net LOSS for the year of $21.7 million.
That's overall. Cash (money taken in) from operating (i.e. the restaurants) was $125.6 million. The losses are (were, given that we're working with CY 2006 figures) from investing and financing.

At any rate, hipchickie's figures are for example - afaik, she doesn't have inside information on Disney foodservice actual numbers... although I've been wrong before.
 
Well I'm glad to see I'm not the only one totally annoyed....

For years I've dreamed about going to WDW and actually being on the dining plan:cloud9: . We've never done it. For us it's a special luxury as we usually try to eat very frugal. So FINALLY after 10 years, we're going back to Disney, and FINALLY I've talked DH into the DDP. I call, make arrangements thru CR and get the magic your way package with dining. Not until after all is said and done does the CM say to me, "You do realize that there's been a change to the dining plan and tip is no longer included". Well of course I had no idea, but at this point I say "No I didn't, but ok whatever". I'm annoyed, but what can I do other than cancel the dining part. (which I didn't do because I've been dying to get it).

Anyways, a few months pass and I just happen to pull up the DDP details off the Disney site on my own and notice that there's no mention of an appetizer for adults. I thought I was reading a misprint until I called and then, only then, was I told the appetizer was taken away also. NOW I'm mad! :mad: :mad: :mad:
I didn't take it out on the CM since it wasn't her fault, but CR really needs to be more informative. These changes should be the first thing out of their mouth when the basic dining plan is mentioned. It's almost as if Disney is trying to slide it by hoping no one will notice!

(We decided to keep it, but I'm feeling a bit disgruntled).
 
We did the dining plan for the very first time last May. We have been going to Disney for some 16 years, and never added a plan before..so I share the previous posters pain. I am so glad we did it..LOVED it! With the ages of my kids now it was really worth it. I was very dissapointed to learn there is no appetizer and the tip isn't inlcuded. Frankly, why the didn't just raise the price and leave the plan the way it was..is beyond me..that's for sure!
If we go again with the family this year, I will have to really think about wheter it's worth it..not just the price, but the hassle involved in paying out of pocket for the appetizers and adding the gratuity. The convenience of the plan was a big plus as far as we were concerned. That's sort of gone now..so makes you think twice.:rolleyes:

Oh..and if I didn't check in here so much..I never would have known about the additional charges either..didn't mention in the new DVD.
 
tloft and canadian guy, i wouldent think disney lost on the old plan(imho they didnt make as much as they thought they would).I wouldent think they have opperated it as long as they did if they were.
Food plans have always changed and always will,disney are trying to find the one that brings them the most profit
Paul
 
We used the DDP for our trip this past week. It was my first time using it, and it was both good & bad.

Good: knowing costs up front, being able to order whatever we wanted entree-wise, and it encouraged us to try more Disney restaurants.

Bad: there was a lot of waste, and dinners cost me an average of 40 over each night between tips, appetizers and drinks.

OK - I don't expect them to include alcohol in the program (unless you sign up for the one with the wine credit) and I didn't mind paying for DS's scotch, but I would much rather have had them include an appetizer than the desserts. We would have given up all the desserts for one appetizer for the table! At the end of the week we had a refrigerator full of desserts that we were encouraged to order by the wait staff. Friends would come to OKW to visit and we tried desperately to get them to take the cakes home with them! :lmao:

Would I sign up for it again? Maybe. It's debatable. My DS didn't use many of his counter service credits, nor did my MIL, since they didn't go to the parks every day. The night before we left we had 19 credits left so we used them for multiple items at the Pepper Market and fed everyone.

I think that some servers need better training. We had one woman at ESPN who couldn't figure it out at all, and when we were at the Pepper Market they didn't tell us until after we ate that the desserts some people chose weren't on the plan.

We didn't use the double credits for CRT, and instead paid for that outright so that we would have the dinner available to us that night.

All in all, though, it was a good deal.


Of course you're encouragesd to order all you're entitled to and many will max that out not thinking that in the end you have to tip on that amount. As waitstaff they lost the appetizer to help bring up that total they don't want to lose the dessert as well!
 
Are you saying that when they added dining to their Magic Your Way package they were told that it included appetizer and gratuities, and then it was changed after they purchased it without any notification?


When I bought my package w/dining, the details of the 2008 plan were not posted on Disney's site yet. They were still listing the 2007 one. I based my purchase on a plan that has been in place for quite sometime, so assumed I knew what I was getting. The CM did tell me about the tipping thing on the phone when I booked, but not the appetizer. So I made my decision based on that. Granted, they have the right to change their prices, packages, etc..every year, but they really blindsided a lot of people because they basically slipped it by.
 














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