Originally Posted By SuperDry <<< For that matter, take a look at almost any parking lot, access road on property (beyond main ones such as World Drive etc) and see how they haven't been touched in many years. >>> One has to make the distinction between the resort and park roads owned/maintained by Disney itself, and the cross-property thoroughfares owned/maintained by Reedy Creek Improvement District (RCID). Although RCID is somewhat fairly tagged as "Disney's government" by some, it is an independent entity. Disney's WDW is responsible for contributing to the ever-present drive to Increase Shareholder Value for TWDC shareholders. RCID on the other hand at least on paper has a primary purpose of serving the public. Even to the extent that it serves Disney's needs, it still has an independent budget and policy-setting management. To the extent it can afford to do so based on its tax collections from (mostly) Disney, it has every incentive to maintain the WDW road system in optimal condition. More to the point, any cost-cutting by RCID doesn't directly contribute to Increasing Shareholder Value by Disney, and thus there isn't the ever-present downward pressure on costs like there is in the parks and resorts themselves.
Originally Posted By Mr X Appreciate the excellent posts, SD, particularly the way you offer up a good method for looking at these things objectively, and with the proper perspective.
Originally Posted By Christi22222 I agree, SuperDry, thanks for some excellent points and information. The only thing I'd take issue with is that RCID is independent enough to relieve Disney from some responsibility for bad roads. I have no extra knowledge about RCID, but I do know that my 800 home development only fixes roads when we call and complain and ask and beg the city. Sometimes it takes a special assessment; sometimes it just takes demanding the tax dollars get spent the right way. But if Disney is the "citizen," then they still have responsibility for getting decent roads. If RCID is neglecting it, the only folks to call them out are Disney. And if Disney knows it will take more "tax" dollars from them to fix it, then I don't see how that isn't still Disney being cheap. Or am I missing how this all works somehow?
Originally Posted By SuperDry <<< I really can't fathom how anyone would like [the new castle night show] - it is a real head-scratcher for me. The projection technology is great but the "story-telling" here is awful - truly awful. I guess folks are easily pleased. I expected a whole lot more - particularly with the music which I found to be instantly forgettable. >>> If we didn't have the context of this thread, your description of the show above could be mistaken for what many say about WoC. I happen to like it, but many folks criticize it for exactly the reasons you state above.
Originally Posted By leemac <<If we didn't have the context of this thread, your description of the show above could be mistaken for what many say about WoC. I happen to like it, but many folks criticize it for exactly the reasons you state above.>> You know I can't bite on that one. )
Originally Posted By leemac <<But at the Royal Pacific, I had a true deluxe resort experience from top to bottom, operated by a real hotelier that understands what that means.>> Loews operate all three hotels on-site at Uni. <<They were perfectly adequate for what I'd expect at All Stars or other value resorts on site, but not at a deluxe resort for the price they charge.>> This past trip I had to wait to see what inventory was available at the last minute - all of the deluxes were sold out so I ended up staying in Pop Century for the first time. I was VERY pleasantly surprised - the room, fixtures and fittings were clean and comfortable. I talked to someone that was paying over $200 per night for DAKL (always the cheapest deluxe) but the values were available for $55 per night and the moderates for $119 per night at the same time. I just can't fathom how the deluxes are worth more than twice as much as the moderates and over five times as much as the values. The gulf between the values/moderates and deluxes seems to be getting bigger and bigger in terms of price point.
Originally Posted By leemac <<Looking closer, what do you think the average revenue for each of those extra 2 million clicks is? I suspect it's far larger than what an Epcot click is worth.>> It is very difficult to make any sort of comparison. Uni added a lot of AP-ers last year - and their AP is very cheap in comparison to WDW - so if a significant number of those 2m new clicks were AP-ers (and I'd bet they are) then the revenue won't be quite so impressive. Revenue only tells part of the story anyhow - Uni's deal with WB/Rowling means that the lion's share of F&B and merch passes to them - the reason why Disney balked in the first place was that too much of the pie was going to the licensors. You also need to factor in the cost base to understand the EBITDA number which is the real measure of success.
Originally Posted By davewasbaloo Shame it is not regarding service and ameneties. Because there should be. That said, at least AKL has the animal views. My arguement is there is no way a value should have better transport and equal quality linens etc. That is why we will be unlikely to stay on site again. But we all know, pricing is set by what the market will bare.
Originally Posted By davewasbaloo >>>Revenue only tells part of the story anyhow - Uni's deal with WB/Rowling means that the lion's share of F&B and merch passes to them - the reason why Disney balked in the first place was that too much of the pie was going to the licensors. You also need to factor in the cost base to understand the EBITDA number which is the real measure of success<<< Is this not in itself a business case to say that Disney would be better off creating quality content and new IP rather than becoming a channel or aquiring IP?
Originally Posted By leemac <<Is this not in itself a business case to say that Disney would be better off creating quality content and new IP rather than becoming a channel or aquiring IP?>> Nope. You need to balance out the risks and rewards. Being a licensee is minimal risk (someone else has developed the IPR) but minimal reward. Creating successful content is very expensive - people talk about the surprising success of the first POTC movie but it was still a big blockbuster budget (although not even close to that spent on POTC 2,3 and now 4). There needs to be a balance - you need to ensure that you always have IPR to play with - Disney in the '80s was creatively barren so bought IPR from Lucas for Indy and Star Wars. Disney in the early '90s was quick to capitalize on the rebirth of WDFA. Disney in the '00s had to rely on Pixar properties to leverage in the parks. I was firmly in the "yes" camp to making a deal with Rowling - I couldn't see how it could fail but ultimately management decided to pass. I'm no Potter fan but I knew that it would have been a phenomenal addition to D/MGM - and the proposed attractions were awesome. It is still saddening that it didn't happen.
Originally Posted By davewasbaloo Agreed, though what I think saddens me about society is how little risk is taken. In my sector especially, they wonder why they struggle to make changes and efficiencies, the answer is they are too risk adverse. And yet the popular myth is that corporations take risks, but really, most product are incremental changes and that is indeed lamentable. The question is this, which is the better busines model - small margins of many products, or large margins of fewer. We know the former is the less risky, and could yield a lower ROI, but the later is far more enticing, exciting and culturally enriching. If we look at the parks, the failures like Light Magic was trying to cash in on fads without it's own creativity, yet Illuminations, which has been a huge success, was an attempt at something new. I know what text books and case studies tell us is to play it safe, but it really sucks living out of life.
Originally Posted By Dr Hans Reinhardt "Revenue only tells part of the story anyhow - Uni's deal with WB/Rowling means that the lion's share of F&B and merch passes to them - the reason why Disney balked in the first place was that too much of the pie was going to the licensors. You also need to factor in the cost base to understand the EBITDA number which is the real measure of success." Just goes to show how little people really understand the terms of how these things work. Based on this I'd be curious to know how much of its investment Uni has recouped on the HP investment.
Originally Posted By HokieSkipper <<Just goes to show how little people really understand the terms of how these things work. Based on this I'd be curious to know how much of its investment Uni has recouped on the HP investment.>> According to the reports they've recouped everything. If not that, the vast majority. They wouldn't be pushing forward with the second phase if it wasn't a runaway success for them
Originally Posted By leemac <<According to the reports they've recouped everything.>> Bull crap I'm afraid. There is no way that Uni have recouped their cash investment in 6 months or so. That would mean that IoA was generating a higher cash inflow than the whole of WDW Co. and that isn't even close to the case. Don't believe all of the hyperbole about Potter. There is little doubt that the development is a success but these projects can take years to pay off their investment costs.
Originally Posted By Spirit of 74 <<Obviously, folks with inside knowledge at either company will have more specific information than I do about their company's clicks, but let's do some armchair accountanteering. What is the average click at Epcot worth in terms of revenue? I think it's fair to say that the vast majority of revenue guests are there on a multi-day ticket of some sort, or an AP. For me, I visit WDW infrequently enough in terms of days per year that the cheapest ticket for me is a 10-day non-expiring park hopper, which was $42/day the last time I purchased it. Compare this to the 2m extra IOA clicks last year due to HP: I suspect the average value of those clicks is a lot more than $42. For me, I recently had one day in Orlando to go to a park. But for HP, I would have used one of my $42 Disney clicks. Instead, I forked over $82 for a click into IOA. Although my exact situation is atypical, I think it points to a larger trend: I suspect there are a great many families that have visited Orlando in the past 6 months, and will continue to do so going forward, that typically have spent their entire visit at WDW parks (whether or not they stay on property). With HP coming online, I suspect that in many cases, they peel away 1 or 2 days from their WDW vacations in order to visit USO/IOA, rather than extend their vacations. Looking that the pricing models of the two resorts, the extra 2m clicks at IOA are probably worth MUCH more in terms of revenue than what 2m average WDW clicks are worth to Disney.>> Very good point, SD. I'd also add that what is the value (in terms of revenue and profit) per click say at EPCOT in the last half of 2010 vs. IOA over the same period? How much is the Epcot guest spending on merchandise vs. the IOA guest? And what company has given away gift cards worth as much as $750 for free stuff? What about F&B? On the surface, this should be a slam dunk with Epcot (with revenue it sure has to be) ... but when you look closer, what company is propping its numbers up by consantly raising prices and then giving the product away? I've said it many times, but if you torture numbers enough they'll tell any tale you wish ... and Disney is great at that.
Originally Posted By Spirit of 74 <<Uh, not quite my dear spirit. I assume you just had a brain-fart, because I'm sure that you know that TWDC has 0% ownership in anything at TDR, and contributes 0% to any capex that goes on there. Any costs related to anything at TDR are entirely OLC's responsibility. All TWDC does is provide WDI and management oversight services to TDR at profitable rates, and collect royalties off of gate, hotel, F&B, and merchandise revenue without respect to earnings and with no capital invested.>> Nope. Just made a statement without the above qualifier. I've never stated that Disney pours its money (any of it) into TDR. That would be obvious to anyone who walks in the place ;-) But, yeah, I should have added that.
Originally Posted By Spirit of 74 <<That's a great point. On my recent Orlando visit, I only had two nights and one park day in town, and because of HP, I chose to stay at Universal, and more specifically, and the Royal Pacific. I have to say, that once I wiped the pixie dust out of my eyes from previous stays at Disney Deluxe resorts, the Royal Pacific blew anything Disney has on offer right out of the water. And, I've stayed at the Portofino before, and that resort makes my point even more so. Getting to my room at the Royal Pacific, I could not help but notice how it was far superior than anything that Disney has on offer, even in its "deluxe" resorts.>> I have stayed at RP numerous times, although not in years now, and I would agree completely. And that resort is considered the clear #3 of the three there. But Disney is dumbing itself down for a clientele that either doesn't know any better or thinks its perfectly fine to put shoes on the tables at the GF lobby and to change their children's wardrobes in said lobby etc. While watching people there last week, I couldn't help but think that so many of these people wouldn't have dared set foot in the place 20 years ago because they would have felt 'out of place' (and rightfully so) ... but in order to buy into the whole One Disney deal, you simply dumb the entire product down, but offer higher price points at deluxes with more services (although still not equal to the typical 4-star chain hotel in anytown USA). Again, this is a company that hasn't bothered to fix a broken door at the Beach Club in over a decade.
Originally Posted By leemac <<And that resort is considered the clear #3 of the three there.>> Didn't know that - I always presumed that Hard Rock was the third (although never stayed at any of them).
Originally Posted By Spirit of 74 <<The only thing I'd take issue with is that RCID is independent enough to relieve Disney from some responsibility for bad roads.>> I don't think SD was trying to give Disney a pass on the roads. And my original point wasn't talking about the roads really (now, if you want to talk about ghetto like maintaining of roads then we can go take a drive to Celebration, which of course isn't Disney's problem after they made their quick bucks and left). I'm talking about access roads inside resorts ... I'm talking about parking lots that haven't been repaved in a DECADE or more ... from say the BC to EPCOT. That is Disney's responsibility and one in which they simply don't really care about spending to keep things up.
Originally Posted By Spirit of 74 <<They were perfectly adequate for what I'd expect at All Stars or other value resorts on site, but not at a deluxe resort for the price they charge.>> <<This past trip I had to wait to see what inventory was available at the last minute - all of the deluxes were sold out so I ended up staying in Pop Century for the first time. I was VERY pleasantly surprised - the room, fixtures and fittings were clean and comfortable.>> Sounds like either the Mouse ain't taking care of you very well any longer or you were just plain lied to (not unusual by anyone at Disney on any level). Because I tried to get a discounted room for the very period before I wisely opted for a $35 suite about two miles off-property and was offered many resorts. I would have thought that Disney (they did know you were coming, right?) would have opened up some of the rooms they always hold back anyway. Poor Lee, slumming at the POP ;-) Oh, and to be fair, all the rooms at the POP Motel were recently renovated for the first time. I am not sure you would have found the rooms as acceptable just prior to being redone. <<I talked to someone that was paying over $200 per night for DAKL (always the cheapest deluxe) but the values were available for $55 per night and the moderates for $119 per night at the same time. I just can't fathom how the deluxes are worth more than twice as much as the moderates and over five times as much as the values. The gulf between the values/moderates and deluxes seems to be getting bigger and bigger in terms of price point.>> It's so hard to tell because of the discounting. AFter all, Disney is the ONLY hotel chain I am aware of that has prices increases annually ... every year, no matter what ... they raise rooms rates ... sometimes as little as $5 a night, but they do. Other chains keep prices stable or even lower them based on certain metrics. I would have loved a room at the WL (although I've been warned they are in bad shape again and Disney is neglecting them because it is due for a total -- first time where they strip the room entirely down and even put in new bathrooms -- rehab very soon) ... but I've spent about 140 nights there in my life and never paid more than about $165 a night for a standard room (even courtyard views, even getting concierge lounge). I simply won't pay what Disney demands. Oh, and with Iger continuing the lies about less discounting, I'll just point out that 60% CM room discounts (almost unheard of) are running yet again, including over holiday times ... and the 50% friends and family room rates have been in effect since 1/1 and run thru 4/16 (start of Easter) and I just got an AP offer for 42% various dates etc. Perhaps, if they just lived in the real depression world era of the 21st century, their money guys would come up with legit prices for their resorts because if they weren't worth full price before they were Walmarted, they sure as hell aren't worth what Disney wants now.
