Originally Posted By EPCOT Explorer >>>I don't think they will be able to do it. We have seen nearly a full decade of mass discounting now - folks come to expect it. If WDW Co. doesn't offer it then it will drive folks off--property or not to come at all.<<< So...why not try the IoA method and build us SOMETHING huge and nice?
Originally Posted By leemac ^^ They are. Fantasyland Expansion. It is sooooooo magical! <------ runs and hides.
Originally Posted By leemac <<So...why not try the IoA method and build us SOMETHING huge and nice? >> WDW Co. is stuck between a rock and a hard place - and both are of their own creation. Every project needs to demonstrate an ability to generate profit - the issue is that folks are spending less and less thanks to the discounting. There is no reason to believe that even HP would have alleviated the discounting and been profitable. MYW has destroyed the ability of WDW Co. to spend inside the berm. When folks can pay less than $30 per day to play inside the parks you have diminishing returns.
Originally Posted By EPCOT Explorer >>>^^ They are. Fantasyland Expansion. It is sooooooo magical!<<< GAG!!!! Sure, if it had more than one ride, now... officially. ;-)
Originally Posted By EPCOT Explorer >>>Every project needs to demonstrate an ability to generate profit - the issue is that folks are spending less and less thanks to the discounting. There is no reason to believe that even HP would have alleviated the discounting and been profitable. MYW has destroyed the ability of WDW Co. to spend inside the berm. When folks can pay less than $30 per day to play inside the parks you have diminishing returns.<<< Don't disagree AT ALL. It's going to be terribly hard, however, to correct this. How are you going to get people to stay for more than a week if they don't discount those extra days? However...Rides.... they can generate a draw, too. No excuse, right? I mean, DCA has Carsland, AT LEAST...
Originally Posted By Christi22222 The "captured audience" effect doesn't alleviate the diminishing returns of MYW? So why not ditch MYW, magical express, etc. and go back to offering a premium product at a premium price? Is that a money loser in the end, too? Or do they fear a revolt and collapsed attendance? Or are other factors involved?
Originally Posted By HokieSkipper <<strikes an emotional chord with people that ensures that they can rely on repeat business>> Please. If you're going to bring up a point aganist Universal, at least bring up one that makes sense. No brands that strike an emotional cord with people? Spider-man is second to only Batman when it comes to comic book characters. The Grinch, Cat in the Hat, etc are all cherished childhood stories. The Simpsons has just been renewed for a 23rd season. E.T. is a classic that is one of the most popular coming of age stories ever. If you're going to rip the resort, rip it for some of its actual faults such as lacking hotels that cater to lower price points, lack of transportation from the airport, lack of transportation to surrounding attractions, etc. Not something like they don't elicit emotions in their customers.
Originally Posted By HokieSkipper <<I don't think they will be able to do it. We have seen nearly a full decade of mass discounting now - folks come to expect it. If WDW Co. doesn't offer it then it will drive folks off--property or not to come at all.>> Unfortunately I don't think they'll be able to do it either. <<The real issue is DVC - points prices are increasing but the take-up is shrinking. WDW Co. will need to spend a lot more on marketing off-property (like the expensive Gateway showrooms in key markets like Chicago and NJ) to get folks to buy in.>> But hey! Let's build more!
Originally Posted By HokieSkipper <<Every project needs to demonstrate an ability to generate profit - the issue is that folks are spending less and less thanks to the discounting. There is no reason to believe that even HP would have alleviated the discounting and been profitable. MYW has destroyed the ability of WDW Co. to spend inside the berm. When folks can pay less than $30 per day to play inside the parks you have diminishing returns.>> I've long said MYW is killing the parks. Along with the dining plan to a lesser extent.
Originally Posted By Spirit of 74 <<And what will the response to this be? (This is an actual serious question!)>> <<They have to get guests off the crack monkey that is discounting - discounted rack rates and free dining have to cease or be dialed back significantly. However that will be a very risky strategy - I suspect attendance would collapse if that was to happen. So then you have your target RevPAR and guest spend but don't have the revenue or attendance numbers you've had previously. It is a vicious circle - they need to ditch the discounting and keep WDP&R revenue up. I don't think they will be able to do it. We have seen nearly a full decade of mass discounting now - folks come to expect it. If WDW Co. doesn't offer it then it will drive folks off--property or not to come at all.>> Hmm ... wonder what Spirit has been beating this drum until his invisible hands bleed pixie dust? Great business minds at TWDC, gotta hand it to them. Keep Walmarting. Make many bad creative decisions. Take no risks. And hope you can live on your ... no, scratch that ... live on OTHERS amazing legacy... all the while only really being interested in being a hotel/timeshare/real estate company. TWDC needs an enema worse than someone who hasn't had a BM in weeks! <<The real issue is DVC - points prices are increasing but the take-up is shrinking. WDW Co. will need to spend a lot more on marketing off-property (like the expensive Gateway showrooms in key markets like Chicago and NJ) to get folks to buy in.>> I think the 'secret' is out. You can get better deals on timeshares in O-Town by far than what the Mouse offers ... or you can just rent them from desperate owners who can't afford to use their points. Friends recently stayed five nights in a one bedroom at SS for about $100 a night by doing so. They loved the place. They are smart, though, and will never buy because they know they can do likewise for years to come. And not to lose the thread here, but let's face it, Lee, we both know how Disney reacts to results like this: by cutting further quality (so expect food prices to increase, portions to shrink, more staggered hours in parks, less CMs at times ... anything to show Wall Street they're 'lean and mean' and utterly effing clueless. I can't say I care as I am likely out of the country for the rest of 2010 ... besides, I'm headed to some parks that I've heard are run right in Tokyo ... owned by some company ... oh yeah, the Oriental Land Co ... heard they run a first class operation that would rival anything Disney does. And I hear they have some brand new holiday entertainment with no $59 extra charge too. Rasulo and Iger need to go, as do probably half the execs at the company. Staggs jury is still out. But it really is that bad. Been told some stories here in Asia that I so wish I could put online ... wonder how much they cut from HKDL's expansion today ... or was that MK's? Oh ... both!
Originally Posted By Christi22222 Okay, so I've also been following a thread in the DL area that is talking about Disney possibly making Christmas (parade/fireworks) a hard ticket event. This has some AP folks completely up in arms and mad, while it has some folks glad that it will finally thin the crowds. The theme for these folks seems to be I will pay more for a better experience. That seems to flesh out with the new AK safari experience as well. More folks are choosing to pay more for a better experience. My point to all of this, is why doesn't Disney shift their entire business model this way? Wouldn't it be better to just not offer a zillion AP's at a super cheap price so that tons of locals use Disney as a weekly hang out for a few hours? Wouldn't it be better to just not have MYW where you can go for under $30 a day but the parks are that much more crowded because folks are staying twice as long? I'm just not sure that this pursuit of market share sounds like it is working out. So why not shift away from it? Go back to quality for a price rather than discounted quantity? I will admit that I have visited far more than usual because of the discounts. And I would have to scale back if it was pricier. But I almost think I'd be happier with less Disney, better! Is this the gist of what is going on? Strangely, it is the gist of so many things in our country right now. The divide between the "masses" and "elite" is monstrous and goes against the Disney we know and love. But outrageous attendance is exactly what results in those appalling "front of the line" passes that folks pay for. And then the can't pay folks are mad at the can pay folks and there you have it. Are we actually just testing the supply/demand/cost curve for Disney vacationers?
Originally Posted By Spirit of 74 <<WDW Co. is stuck between a rock and a hard place - and both are of their own creation.>> And all the MBAs and consultants who told them that dumbing down the product and discounting to get margins up short-term was smart. <<Every project needs to demonstrate an ability to generate profit - the issue is that folks are spending less and less thanks to the discounting. There is no reason to believe that even HP would have alleviated the discounting and been profitable.>> It certainly has helped UNI's bottom line. And UNI is a disaster at marketing. Potter at WDW would have been marketing magic. <<MYW has destroyed the ability of WDW Co. to spend inside the berm. When folks can pay less than $30 per day to play inside the parks you have diminishing returns.>> And what happens when you are behind MYW? You ply temporary positive reults, which would have happened anyway as WDW was bound to recover from the 2001-03 travel slump, into the No. 2 position at DLP and then the presidency of DLR. And you gotta love Georgie's new FB pic ... must have been ordered by Burbank.
Originally Posted By leemac <<It certainly has helped UNI's bottom line. And UNI is a disaster at marketing. Potter at WDW would have been marketing magic.>> When you are at rock-bottom there is only one way up. IoA was a basket-case. The park's performance looks great when you see the double-digit percentage increase in attendance but the base is so low that in real terms it still isn't a game changer in central Florida. IoA has never hit the heights that Uni wanted, needed or expected. Same with DCA - attendance up 20% in Q4 solely because of WoC is a phenomenal jump but it is off a small base. The true measure of success is on guest spend anyhow.
Originally Posted By leemac <<My point to all of this, is why doesn't Disney shift their entire business model this way?>> You raise a very interesting option Christi. I'll try to explain my POV on the subject. Guests will fall into one of three buckets: 1) Repeat out-of-state visitors; 2) New out-of-state visitors; and 3) Locals The majority of the first two buckets can only travel during vacation periods. So you need to make sure that the third bucket can support you in the off-season. You can ignore the third bucket if the economy and travel market is strong - those folks that come from out-of-state will stay longer and spend more. The problem was that the travel market collapsed in '01 after 09/11. To recover you can do one of two things: 1) Reduce prices across the board to get numbers through the gates (hugely important when your cost base is huge - like WDW - it takes a lot just to open the gates - however once you have reach the profitability mark then everything else is pure gravy); and 2) Target locals by reducing AP pricing. Take DLR - the premium AP was $299 in '01. The double whammy of DCA under-performing and the collapse in confidence in travel post 09/11 left DLR management with a huge conundrum. Stomach the reduced admissions (i.e. reduced revenue) and keep the minimum staffing and take the hit to profitability or immediately reduce pricing to get folks through the gates. Take the reduced RevPAR and guest spend just to keep ticking over. Fast forward nearly a decade and the top APs continue to move skywards but the base SoCal APs remain cheap as that guest base remains huge - and they support your off-season numbers. However you can't wean folks off the discounting. So the hotel pricing is comparable to '01 once you factor in the discounts just to keep the occupancy rate in the low-mid 80s. WDW is even worse - it relied on air travel tourism. 09/11 sent attendance spiralling so they needed to find a way to keep folks coming - so reduce the prices. MYW gave guests a massive incentive to stay longer than a week. It also has four parks and countless other facilities to keep going - those overheads are massive - especially with FT labor costs. It would take a brave executive to start dailing this all back in - I suspect you would need an entire clear-out of the c-suites to get that to happen. I doubt WDW will ever be the premium product it once was. You can't blame it all on the economy either - the issue is that they have so many hotel rooms to fill and expectations on Wall Street over the division's performance are high (don't forget it is the second largest after Media Networks). My view? Let's consider shuttering a park a day during the off-season. Focus on delivery of a premium product and folks will come. Focus on getting the middle classes back to WDW rather than pitching at the bottom. And ditch MYW - get back to a reasonable pricing policy for the parks. $30 per person per day is ludicrious.
Originally Posted By Spirit of 74 Running out of play time here ... so briefly ... first a correction, Lee, DLR PAPs were $199 in 2001 ... they basically threw DCA in for free. And they have risen quite a bit ... the supposed 'cheap' SoCal pass is now $184 and the next one is over the $200 mark. The PAP is closing in on $500 and you can bet George and Andy's new designer furniture that the date for the rise to $499 is already been set in stone in 2011. And you can't solve the hotel problem by BUILDING MORE HOTELS. That is exactly what the morons are doing as you know. The Animation Resort and the next DVC ... absurd. They should be contracting resort inventory, not adding. And the middle class coming back? What middle class? The upper class has largely left WDW behind because they can see it isn't what it once was. And the USA's middle class has largely been replaced by China's middle class, which isn't coming to FLA. I get the feeling WDW is being suppported largely by UKers, the rising middle classes in South America and DVCers as well as military families in the USA (they can afford WDW, even if most come from working class or lower middle class backgrounds). Disney has totally screwed over locals with everything from extorting Christmas to charging for food and wine fest samples to making on-site dining a near impossibility due to the DDP and its absurd price points (you shouldn't pay more to dine at the Brown Derby, a freaking theme park restaurant, then a fine dining experience at a Ritz Carlton in Asia ... yet that is the reality). As for shuttering parks a day a week ... been all for that for years ... but if Disney ever did it they would use it to simply cut more labor costs and not improve the product. You seem to finally (how many eons did it take?) to realize that many of your employers need to be ex-employers or the spiral of stagnation and decline will continue.
Originally Posted By leemac <<Running out of play time here ... so briefly ... first a correction, Lee, DLR PAPs were $199 in 2001 ... they basically threw DCA in for free. >> It's late and I've had a few martinis but I'm sure it was $299 when DCA opened - the reduction happened post-Feb '01 when it went back down to $199.
Originally Posted By Spirit of 74 ^^I appreciate that. Been drinking some myself But I think it was always $199 for a one-park ... then they added DCA when they totally screwed over their locals APers when DCA opened and they were afraid it would be so popular they wouldn't sell the two-parkers for a while. I very much doubt Disney ever lowered the price of an AP by $100. Go back and check. After you have a drink or two for me! ;-)
Originally Posted By leemac <<And the USA's middle class has largely been replaced by China's middle class, which isn't coming to FLA.>> A tad too much hyperbole - you may believe that the American middle class is shrinking but it is still there. And it is still a large consumer of Disney-branded products across all business units. They are still the engine for TWDC. <<You seem to finally (how many eons did it take?) to realize that many of your employers need to be ex-employers or the spiral of stagnation and decline will continue.>> Thankfully I'm not under the domestic WDP&R umbrella anymore but I've been talking about the decline in recent years. By the time I make it back to WDW in January for the Dream launch it will have been nearly two years since my last visit (when we opened up AIE). I haven't gone that long without a WDW visit since my first trip in '81. I don't really have any desire to go in January either but we have various events for the DCL launch.
Originally Posted By leemac <<Go back and check. After you have a drink or two for me! ;-)>> Fridays in Hong Kong are dangerous. I'm only back to get changed and head out again! Back to Shanghai on Sunday. )
Originally Posted By Spirit of 74 <<And the USA's middle class has largely been replaced by China's middle class, which isn't coming to FLA.>> <<A tad too much hyperbole - you may believe that the American middle class is shrinking but it is still there. And it is still a large consumer of Disney-branded products across all business units. They are still the engine for TWDC.>> Maybe a tad, but not much more ... the USA is moving toward a country where you have abject poverty, working poor, upper middle class and uber wealthy. You don't spent enough time there I believe to see just how bad it is. As soon as I leave the States, I realize how it's all just a house of cards run by the biggest Ponzi scheme of them all: Wall Street. <<You seem to finally (how many eons did it take?) to realize that many of your employers need to be ex-employers or the spiral of stagnation and decline will continue.>> <<Thankfully I'm not under the domestic WDP&R umbrella anymore but I've been talking about the decline in recent years.>> I know. But don't rewrite history either. You often supported the people and the decisions made when plenty of us SPirits were yelling that these things were destroying WDW. We were right. It's a nice place now. Very nice in certain locations. But it isn't the special place it was from the 70s-90s. They aren't fooling the discerning guests ... or the ones who do recall how things used to be. <<By the time I make it back to WDW in January for the Dream launch it will have been nearly two years since my last visit (when we opened up AIE). I haven't gone that long without a WDW visit since my first trip in '81. I don't really have any desire to go in January either but we have various events for the DCL launch.>> I don't recall a year when I've spent so little time at WDW (and I live three hours away) ... I don't blame you. Absolutely nothing has been added since 2008. And quality continues to go down across the board. Although the meal costs won't bother you as much with that company Visa! ;-) As to the Dream, it looks wonderful. But just like the Oasis of the Seas, which I took on a preview cruise, I wouldn't tell anyone to book it. Not at those premiums. Best DCL value for 2011: Transatlantic repos again ... and yes, I'll be very happy on the good 'old' Disney Magic. I don't need the new bells and whistles, yet alone Nassau!
