Originally Posted By RoadTrip Information on profit margins... From the article: Financial Ratios of the Restaurant Industry by Types of Operations Before and After the Recent Recession by Zheng Gu, Ph.D., assistant professor at the William F. Harrah College of Hotel Administration at the University of Nevada Las Vegas. Net Profit Margin (post-recession) Full service upper scale: 4.9% Full service family: 5.9% Economy buffet/family: 2.7% Fast food chains: 4.2% As you can see, the type of table service restaurant that dominates at Disney, the "Full service family" restaurant has the HIGHEST profit margin of the four types. "Economy buffet/family" which would represent the food courts had the LOWEST profit margin. The article was published in 1996, but I would guess the overall ratios remain much the same today. Complete article at: <a href="http://www.hftp.org/members/bottomline/backissues/1996/apr-may/financia.htm" target="_blank">http://www.hftp.org/members/bo ttomline/backissues/1996/apr-may/financia.htm</a>
Originally Posted By Daddy Servo I don't know that a moderate resort necessarily suffers all that much when a new value resort opens. I've heard a lot of people in the past complain that "we just stay in Orlando because it's too expensive to stay on the Disney property" -- and that's who I see the Value Resorts going after. Of course, if the moderate resorts are indeed gone a decade from now we'll know that your 'Bah Humbugging' in this regard was spot on...
Originally Posted By rasvar Note "Economy Buffet/family" I think it is safe to say that the buffets at Disney are not economy. Economy buffets are about half the price of what Disney charges. Golden Corral is economy. Usually about $8.00-$9.00 per adult at dinner. Disney is closer to $18-20 per adult. The food and service cost is probably only a few dollars more per person. Therefore, a much higher margin. What Disney charges at a food court, most people would never pay off property. Usually about 33%-50% more then what you pay off property. The food courts actually equate with the fast food model. The markup on a Disney sit down restuarant is only around 20% based on my own budgeting. Take the Florida Disney Discount and it brings the prices in line with many local restuarants. In Disney's model, a full service family resturant would be the lowest return. I have only been talking about Disney's restuarants model which is way out of whack from a real world model. The full service upper scale is probably in line with Disney's full service upper scale, though.
Originally Posted By rasvar "I've heard a lot of people in the past complain that "we just stay in Orlando because it's too expensive to stay on the Disney property" -- and that's who I see the Value Resorts going after." True; but there is a bit of a parasitic effect. I would say that about one third of the folks who use to stay at the moderates will now choose to stay at the value in order to save some money. I don't blame them. Budgets can be tight for a family. However, it is a hotel room on property. If you are only in the room for short periods or just back to use the pool a bit, there is not a whole lot to justify the price to spend on a moderate. Disney has let the difference slip, IMHO.
Originally Posted By Daddy Servo Is there some place on the web where one can compare occupancy rates at moderate resorts before and after Pop Century opened? It would be interesting to see what the numbers might reveal. I can see your point about the 'parasitic effect' comment... but I wonder how much of that would be offset by people saying "okay, we've stayed at a value resort -- let's upgrade next time."
Originally Posted By rasvar I don't think those numbers are anywhere. I con only go by the fact that they closed a whole moderate resort[well what use to be a whole before they merged services] for a good year and were able to close CBR for a few months without missing a beat. That tells me that there was a lot of excess capacity or that the moderates did not have a lot of occupancy.
Originally Posted By vbdad55 <<What Disney charges at a food court, most people would never pay off property<< At home I would agree -- but at a sporting event ( typical pro sports arena let alone at U.S.Open) / Masters etc- concert - or oh my - the Circus --- the prices are very similar if not higher-- anywhere you are a captive audience you will pay significantly more....order a large diet Soda at the Hyatt in Maui (then get your bank card out to pay for it ) -- this is not a Disney only anomoly for sure.
Originally Posted By RoadTrip My daughter and I went to our local Cedarfair park about a month ago. We each had a cheeseburger, fries and a coke. The total came to over $20. I agree that Disney prices aren't at all out of line for food at an entertainment venue.
Originally Posted By rasvar Absolutely true. It is the captive audience that creates that. Gives it a whole different life from the normal world. Although, I have to give Disney credit for lowering the prices on the fountain drinks in MK. I have not bought a bottle since they did that. Cheaper for me and more profit for them. A win-win.
Originally Posted By vbdad55 <<The markup on a Disney sit down restuarant is only around 20% based on my own budgeting. Take the Florida Disney Discount and it brings the prices in line with many local restuarants. << Congratulations on this comment -- I was so tired to reading how overpriced the Disney restaurants are --- compared to ones' hometown - neighborhood establishments maybe -- but compared to restaurants in major cities where land costs are high ( L.A. / S.F. / N.Y. / Chicago etc -- really no different. Now before someone says that the quality is different - it just depends what you want to compare-- this last trip down we dropped $175( for 4) on lunch at Emerils' in Miami Beach on a side trip from our Vero Beach side trip) -- and it wasn't any better than California Grill in my opinion - in fact I think CG is superior, and more reasonable.
Originally Posted By rasvar Never said the were out of line with entertainment venues. They just skew the margins versus "real world" restuarants.
Originally Posted By vbdad55 <<Net Profit Margin (post-recession) Full service upper scale: 4.9% Full service family: 5.9% Economy buffet/family: 2.7% Fast food chains: 4.2% As you can see, the type of table service restaurant that dominates at Disney, the "Full service family" restaurant has the HIGHEST profit margin of the four types. "Economy buffet/family" which would represent the food courts had the LOWEST profit margin.<< Great factoids there Roadtrip -- and I would agree with Rasvar that certainly the buffets at WDW are not economy buffett - so I would imagine those margins grow also - throw in a character or two and voila ! a goldmine
Originally Posted By rasvar Now probably the best deal on property is a family buffet at a reasonable price. The Trails End in Fort Wilderness. Probably the best buffet bargin on property. There are good values. I find ESPN Club is a good value too.
Originally Posted By rasvar One question here, I know this is not a big deal to a lot of folks; but, I do like a little glass of wine with my dinner or a mixed drink. Can I get that in a glass without having to go to the pool bar? I'm not sure the pool bar would sell it in a glass anyways. Call me snobby; but I hate wine in plastic glasses.
Originally Posted By vbdad55 <<Never said the were out of line with entertainment venues. They just skew the margins versus "real world" restuarants<< I know you didn't- I was complimenting you ( maybe my writing was bad) - in that you did not see it out of line-- sooo many comments on the board keep saying how out of line everyting is... you have it right !
Originally Posted By Daddy Servo As for the whole pricing discussion... I have worked concessions at concerts, stock car races, football games, and other events. I'd much rather buy a meal at WDW than I would at any one of those venues I mentioned.
Originally Posted By ChiMike I'm simply sick of the repetitiveness of the hotel designs. How hard is it to build a aesthetically pleasing, with whimsy, value resort - without it being of the all-star "Super Size" mold? It really is a little bit dim. Not up to Disney's unique nature. On the same hand, I would be really disappointed if I saw another Lodge be built at WDW. One of the reasons I at least enjoy Portofino Bay and Hard Rock Hotel is that they at least go for a different look, even if their layouts are similar. The Wilderness Lodge was the last hotel built on property that brought something fresh to the hotel offerings. I would hope their next hotel take on another dimension and not simply be a carbon-copy of the Yacht Club, a Lodge, or a mod/value. --- Also, IMO, the moderates are the hotels that have the highest demand. I don't think their closure had anything to do with specific demand, but overall resort occupancy being down. It seems that the moderates are booked the most, especially with discounts, because they really are the most for the $. Funny, I have never actually slept in one, just visited and observed prices. I think Disney doesn't go down the moderate path any longer because the money (relative revenue:relative expenses) is in the extreme accommodations, the values or the deluxes.
Originally Posted By WDW1974 There's plenty of money in all the categories. Disney is just intent on milking two huge markets -- the 'value' end where they lose out to off-property places. And the timeshare market -- where Hilton, Marriott, Starwood, Fairfield and Westgate have huge presences in Orlando. But I wouldn't expect to see another moderate resort built at WDW at all.
Originally Posted By leemac <<The Wilderness Lodge was the last hotel built on property that brought something fresh to the hotel offerings.>> I'm not sure I could agree with that. I still think that WDW has built some awesome hotels since Wilderness. Animal Kingdom Lodge is simply spectacular on all fronts from its exquisite dining at Jiku and Boma to the wonderful architecture. It isn't just a Wilderness clone. I'd also add Coronado Springs to the mix as it is a lovely moderate facility. Even as a DVC member myself, I hope that they don't take over the entire property as seems to be the case right now. We don't always stay at a DVC resort and like to visit new hotels and I'm sure there are plenty of others who agree.
Originally Posted By ChiMike >>But I wouldn't expect to see another moderate resort built at WDW at all.<< I agree. That is the point I was trying to make, but my reasoning wasn't as succinct as yours.
