What is going on?

[john7994]

Have you been to the Waldorf when something goes wrong and it's not taken care of?

When you sell yourself as a premium product and fail to deliver people are more inclined to act out

Have I been disappointed with premium hospitality, services, and products - absolutely. It happens - sometimes things just go wrong in a big way. Its a very "first-world" problem. Do I act out or feel the need to make an employee cry? No.

If unmet expectations become a reason or justification to act out, I am even more glad guests are screened for firearms before entering the parks.

 

[theMoreDisneytheBetter]

For those saying to just raise wages, here’s the reality:
Wages are up 50-100% since pre-pandemic
Labor is by far the most expensive part of most service industries like DIS (though I haven’t checked their financials to confirm)
The cost of pretty much everything else has gone up a lot as well.

To respond, they can either cut back on positions (like the person who said his budget was cut from 14 to 8) of raise more revenue (Genie+, higher ticket prices, no AP). There is no magic money tree here.

What about cutting mgt’s wages? It’s a drop in the bucket to redistribute to the rank and file. Make less profit? DIS is ultimately a publicly traded company. If they don’t satisfy the needs of the shareholders (the owners) their stock price goes down. We are living through a market correction. If they underperform their peers a lot it can go down so much that they go out of business. Or they won’t be able to fund new rides/experiences and people on the board will complain about how stale or worn it has become.

Someone is more than welcome to raise a bunch of money, take Disney private, and then operate it like a charity. But until then there are a lot of hard choices to be made and ultimately I’m glad they have chosen a path that keeps the parks open and functioning.

 

[New Mouse]

For those saying to just raise wages, here’s the reality:
Wages are up 50-100% since pre-pandemic
Labor is by far the most expensive part of most service industries like DIS (though I haven’t checked their financials to confirm)
The cost of pretty much everything else has gone up a lot as well.

To respond, they can either cut back on positions (like the person who said his budget was cut from 14 to 8) of raise more revenue (Genie+, higher ticket prices, no AP). There is no magic money tree here.

What about cutting mgt’s wages? It’s a drop in the bucket to redistribute to the rank and file. Make less profit? DIS is ultimately a publicly traded company. If they don’t satisfy the needs of the shareholders (the owners) their stock price goes down. We are living through a market correction. If they underperform their peers a lot it can go down so much that they go out of business. Or they won’t be able to fund new rides/experiences and people on the board will complain about how stale or worn it has become.

Someone is more than welcome to raise a bunch of money, take Disney private, and then operate it like a charity. But until then there are a lot of hard choices to be made and ultimately I’m glad they have chosen a path that keeps the parks open and functioning.

So it's better to run the company into the ground rather than cutting into profits?

 

[theMoreDisneytheBetter]

So it's better to run the company into the ground rather than cutting into profits?

They aren't running it into the ground. We may not like the changes but the point is that they are necessarily to NOT run it to the ground. Do you realistically think that wages can double and other prices increase 25-50% and nothing will change?

 

[theMoreDisneytheBetter]

Just to put some numbers in context, according to the annual reports, for the fiscal year ending 2019, the parks had $26bn in revenues, $17bn in 2020, and $16.5 in 2021 (fiscal year ends at the end of September). Operating income swung from a gain of $6.8bn in 2019 to less than $500mn in 2020 and 2021 - using 2021 numbers. Using the figures in the 2020 report they actually lost money on the parks. We should be getting Q2 2022 figures soon. I know we aren't supposed to post links to websites, but I'm happy to point people to the IR website if you want to look for yourself.

 

[john7994]

Just to put some numbers in context, according to the annual reports, for the fiscal year ending 2019, the parks had $26bn in revenues, $17bn in 2020, and $16.5 in 2021 (fiscal year ends at the end of September). Operating income swung from a gain of $6.8bn in 2019 to less than $500mn in 2020 and 2021 - using 2021 numbers. Using the figures in the 2020 report they actually lost money on the parks. We should be getting Q2 2022 figures soon. I know we aren't supposed to post links to websites, but I'm happy to point people to the IR website if you want to look for yourself.

Next Disney Earnings Call is May 11th

 

[Illinois76]

This is what happens when prices get too high wirhout the associated increase in value. Expectations go up, combined with less service being delivered = irate guests.

Disney prices were out of touch with reality before the pandemic. Now they are literally just drowning the companies reputation.

Quick fix - cap attendance and reduce prices and Increase pay.

The CEO and board doesn't have the guts or common sense to do it but that's what it would take to right the ship. I think we are witnessing the imminent collapse of Disney.

Imminent collapse of Disney is bats*it crazy.

 

[theMoreDisneytheBetter]

Imminent collapse of Disney is bats*it crazy.

As is the idea that they can:
cap attendance = reduce revenue
reduce prices = further reduce revenue
increase pay = increase costs

Something has to give...

 

[john7994]

As is the idea that they can:
cap attendance = reduce revenue
reduce prices = further reduce revenue
increase pay = increase costs

Something has to give...

In fairness, I will say, there is a value tipping point as well
Genie+ should have been free (or a much more nominal fee) until they proved out the technology and created a little more buzz on it- like - "I can't do without it".
Resort Surge pricing on rack-rate is a bit much these days (but people will pay what they will pay)
Park Reservation approach leaves a lot to be desired accompanied by the infamous 2P only Park Hop and cost
Ticket Prices have historically gone up over the years, but again, this could have been tempered a bit and the same could have been done with food as well.

To the point you are making, there is no "perfect" situation here.

 

[AnnaKristoff2013]

People are speaking with their dollars and attendance.

Disney has been having earth-shattering record-breaking attendance even during historically not busy times.

 

[theMoreDisneytheBetter]

In fairness, I will say, there is a value tipping point as well
Genie+ should have been free (or a much more nominal fee) until they proved out the technology and created a little more buzz on it- like - "I can't do without it".
Resort Surge pricing on rack-rate is a bit much these days (but people will pay what they will pay)
Park Reservation approach leaves a lot to be desired accompanied by the infamous 2P only Park Hop and cost
Ticket Prices have historically gone up over the years, but again, this could have been tempered a bit and the same could have been done with food as well.

To the point you are making, there is no "perfect" situation here.

Absolutely. That's a very good point about the value tipping point. But based on park attendance, do you think we are there yet? For as much as it pains me/our budget to say, I don't think we are.

I do wonder if Disney already thinks that Genie+ is being offered at a nominal fee. These kind of "skip the line" passes are much more expensive at other resorts. Also Genie+ is $5 more in Cali than it is in Florida. You had better believe that Disney has a team dedicated to trying to figure out how to maximize profits.

Maybe it's just a function of when we typically travel (not high season), but while I miss the spontaneity of going when we want/hopping at any time I can understand a desire to know how to staff. How often are parks completely booked during a visit? I.e. if I can't go to MK on Monday but I can go on Tuesday and I do HS on Monday instead, am I really *that* much worse off? I can understand being upset if I book 60 days out and can only get AK every day, but I don't *think* that's the situation most are finding themselves in.

What I do miss is having some kind of prioritization for staying on property beyond the ILL purchases and 30 min extra time in the AM, but I can kind of understand why Disney has done away with that. Maybe.

 

[john7994]

Absolutely. That's a very good point about the value tipping point. But based on park attendance, do you think we are there yet? For as much as it pains me/our budget to say, I don't think we are.

I do wonder if Disney already thinks that Genie+ is being offered at a nominal fee. These kind of "skip the line" passes are much more expensive at other resorts. Also Genie+ is $5 more in Cali than it is in Florida. You had better believe that Disney has a team dedicated to trying to figure out how to maximize profits.

Maybe it's just a function of when we typically travel (not high season), but while I miss the spontaneity of going when we want/hopping at any time I can understand a desire to know how to staff. How often are parks completely booked during a visit? I.e. if I can't go to MK on Monday but I can go on Tuesday and I do HS on Monday instead, am I really *that* much worse off? I can understand being upset if I book 60 days out and can only get AK every day, but I don't *think* that's the situation most are finding themselves in.

What I do miss is having some kind of prioritization for staying on property beyond the ILL purchases and 30 min extra time in the AM, but I can kind of understand why Disney has done away with that. Maybe.

For a lot of what you describe (very reasonable btw - thank you for the dialogue), this is why I tend to temper my reaction / responses - I don't have any real data to work with on many of these questions - too many variables and unknowns. I can react with an opinion (fact-based or not), or stay the course to see how it plays out a little more. Do I want to see Disney fail - absolutely not! Am I a fan off all their decisions - not at all.

However, I do feel strongly on the value question right now. Since I have trips already planned for May, September, and January 2023 (I am a DVC Owner - so that takes some of the bite out), I guess I haven't hit the tipping point yet. Maybe, my opinion changes in a few weeks, maybe it doesn't. I think we are still very much in the stages of recovery + revenge travel to really tell. This is what works for me, if others have hit their tipping-point based on their circumstances, I respect it and understand.

In the end, I would love to see things balance out and return to "normal" (whatever that is for me or anyone else), but we are in different times ...

 

[Boopuff]

correct me if I’m wrong: years ago, way back when, I thought part of the Disney management had to go work “in the trenches” to really understand what goes on at the “face” level of the company. I’m sure that’s no longer a “thing” . I know lack of employees is everywhere, my DH travels weekly, and at all the hotels he’s stayed, no place provided daily housekeeping. He was just at the Aria, in Vegas, and the service there was every 3rd day.

 

[RamblingMad]

In fairness, I will say, there is a value tipping point as well
Genie+ should have been free (or a much more nominal fee) until they proved out the technology and created a little more buzz on it- like - "I can't do without it".
Resort Surge pricing on rack-rate is a bit much these days (but people will pay what they will pay)
Park Reservation approach leaves a lot to be desired accompanied by the infamous 2P only Park Hop and cost
Ticket Prices have historically gone up over the years, but again, this could have been tempered a bit and the same could have been done with food as well.

To the point you are making, there is no "perfect" situation here.

Blame Uber for surge pricing. The reality is that the demand is there for the limited experience. Until that changes, I don't expect much to change.

 

[RamblingMad]

For a lot of what you describe (very reasonable btw - thank you for the dialogue), this is why I tend to temper my reaction / responses - I don't have any real data to work with on many of these questions - too many variables and unknowns. I can react with an opinion (fact-based or not), or stay the course to see how it plays out a little more. Do I want to see Disney fail - absolutely not! Am I a fan off all their decisions - not at all.

However, I do feel strongly on the value question right now. Since I have trips already planned for May, September, and January 2023 (I am a DVC Owner - so that takes some of the bite out), I guess I haven't hit the tipping point yet. Maybe, my opinion changes in a few weeks, maybe it doesn't. I think we are still very much in the stages of recovery + revenge travel to really tell. This is what works for me, if others have hit their tipping-point based on their circumstances, I respect it and understand.

In the end, I would love to see things balance out and return to "normal" (whatever that is for me or anyone else), but we are in different times ...

If you're DVC, then you're already locked in. Disney can make whatever changes they want knowing you'll bite the bullet. You'll pay maintenance fees whether you go or not. And you have already paid up for vacations in advance.

 

[john7994]

Blame Uber for surge pricing. The reality is that the demand is there for the limited experience. Until that changes, I don't expect much to change.

Absolutely hate surge pricing ... I use Uber all the time! But, its not just Disney and Uber, I was in Vegas last October ( a few months after their "re-opening") and rack-rates for one of the most popular Hotels was commanding $1,200 a night over a weekend stay. Vegas at $1,200 a night!

 

[theMoreDisneytheBetter]

My mom’s flight was just cancelled. I tried rebooking her online and the price jumped $200 between when I first found a reservation and when I actually paid for it. Way too many people chasing too many seats out of MCO. A lot of people aren’t flying until Tuesday.

 

[RamblingMad]

Absolutely hate surge pricing ... I use Uber all the time! But, its not just Disney and Uber, I was in Vegas last October ( a few months after their "re-opening") and rack-rates for one of the most popular Hotels was commanding $1,200 a night over a weekend stay. Vegas at $1,200 a night!

It's nuts.

But right now there is a shift back from goods to services. This should mean that stuff should go on sale with discounts as inventory doesn't move. But hotels, flights, and rental cars will be more expensive. Good time to start looking for deals. Bad time to travel.

 

[john7994]

If you're DVC, then you're already locked in. Disney can make whatever changes they want knowing you'll bite the bullet. You'll pay maintenance fees whether you go or not. And you have already paid up for vacations in advance.

Can't argue there and valid point of view, kind of goes with the territory of buying into DVC, that you likely plan to dedicate vacation time on property annually. However, I can rent the points points to cover some costs. If things get more out of control, I can gift them off to family or sell the contracts. All these things I walked into with "eyes-wide-open".

So definitely a reason not to want Disney to fail, but I am not held hostage by them either

 

[jade1]

correct me if I’m wrong: years ago, way back when, I thought part of the Disney management had to go work “in the trenches” to really understand what goes on at the “face” level of the company.