NextGen Deep Impact

[nytimez]

Staffing levels are certainly up at the Magic Kingdom. They have just had to open a new parking lot to handle the additional cast for FL, and they are about to start expanding the original cast lot.

Of course. They need more warm bodies for the "largest expansion in Magic Kingdom history" (ha). But
I don't believe staffing levels at WDW on the whole are anything close to what they were a few years ago.

 

[JungleTrekFan]

Staffing levels are certainly up at the Magic Kingdom. They have just had to open a new parking lot to handle the additional cast for FL, and they are about to start expanding the original cast lot.

Really? I know about pluto lot being cleaned up so regular cast can use it too, but I’m waiting for the day that West Clock gets the security gates that all the other parks have in their backstage cast entrances. Ohh and do you have any knowledge of why they destroyed the solid waste management plant that was back there, I'm assuming they opened a new one at the facility behind AK and the nursery?

 

[MichWolv]

I have irrefutable proof that NextGen will cause sinus congestion, watery eyes, male pattern baldness and uneven tire wear.

But in the spirit of all posters who make claims like this, you do not believe it would wise to share with us that proof.

 

[TalkingHead]

One thing the company does realize about NextGen, is that it is going to take some (many) guests a while to adapt to the new culture of how things are done in the park.

Ten years after FP was unveiled you still had guests who didn't understand how it worked. Hope management is planning to hold guests' hands for the next ten years while they "adapt to the new culture of how things are done" with NextGen.

 

[Master Yoda]

But in the spirit of all posters who make claims like this, you do not believe it would wise to share with us that proof.

Of course not. You just have to take my word for it because of reasons.

 

[Skibum1970]

I won't pretend to understand the long-term impact of NextGen and in which ways it will benefit/fall apart. However, a company doesn't spend $1.5 billion without expecting a return on investment. A new land and overall park update in DCA was made to push ticket sales. Publicly-traded companies do not spend that much money on feel-good stuff because the stockholders would crucify them. As you said, this could produce a benefit to guests but Disney isn't spending this much without expecting a return (ie Profit) on investment. So, this won't be provided for free to guests.

I see it as either an upcharge or something similar. The data-mining will be used to get guests to spend more money. FastPass+ will definitely be linked to a form of upcharge (through a separate cost or through offering it to resort guests only to drive up the number of guests staying at the resort).

 

[MichWolv]

I won't pretend to understand the long-term impact of NextGen and in which ways it will benefit/fall apart. However, a company doesn't spend $1.5 billion without expecting a return on investment. A new land and overall park update in DCA was made to push ticket sales. Publicly-traded companies do not spend that much money on feel-good stuff because the stockholders would crucify them. As you said, this could produce a benefit to guests but Disney isn't spending this much without expecting a return (ie Profit) on investment. So, this won't be provided for free to guests.

I see it as either an upcharge or something similar. The data-mining will be used to get guests to spend more money. FastPass+ will definitely be linked to a form of upcharge (through a separate cost or through offering it to resort guests only to drive up the number of guests staying at the resort).

Actually, I don't think upcharge is the way for Disney to make money on this, because if it takes an upcharge, I doubt enough money will be generated by the charge to offset the decreased satisfaction by other guests. Rather, this makes a return through a combination of 1) data mining and the money it can produce, 2) less guest time standing in line leading to higher sales of food, drinks, and souvineers, 3) higher guest satisfaction leading to higher attendance and/or higher general ticket prices, and 4) efficiencies in operation. If those things don't generate the needed ROI, perhaps Disney will tweak it one more time to give added benefits to those staying on site, hoping to goose hotel/food revenues by using the increased benefits as a carrot. But I think if they have to go to a straight up-charge for use, NextGen will have failed to meet expectations.

 

[djlaosc]

I get to go on Toy Story mania AND sleep in on my 'vacation'. How does that put more control of my vacation into Disney's hands. Just the opposite in my case.

Not saying this to get at you, but it's going to be annoying for those of us who are happy to get up at 6am to get to a park for opening if something goes wrong with our computers/internet when the day comes to start reserving fastpasses, and by the time it's fixed, then all of the TSMM fastpasses are gone for when you want to visit. I guess this is the same as reserving dining ADRs v walking to a restaurant at park opening like Shark's Underwater Grill at SeaWorld to get a table for that day.

It could also get annoying for foreigners who will possibly be at work when the fastpass reservation time starts (which is also a problem with ADRs)

 

[Skibum1970]

Actually, I don't think upcharge is the way for Disney to make money on this, because if it takes an upcharge, I doubt enough money will be generated by the charge to offset the decreased satisfaction by other guests. Rather, this makes a return through a combination of 1) data mining and the money it can produce, 2) less guest time standing in line leading to higher sales of food, drinks, and souvineers, 3) higher guest satisfaction leading to higher attendance and/or higher general ticket prices, and 4) efficiencies in operation. If those things don't generate the needed ROI, perhaps Disney will tweak it one more time to give added benefits to those staying on site, hoping to goose hotel/food revenues by using the increased benefits as a carrot. But I think if they have to go to a straight up-charge for use, NextGen will have failed to meet expectations.

I hope that you're right. It's expensive enough as it is to visit WDW. I have worried a little that Disney would push this stuff via Smart Phones and other electronic media, which I don't currently possess.

 

[Buried20KLeague]

The whole thing doesn't make sense? Consolidating multiple features onto your room key/RFID to improve productivity doesn't make sense? Your key to the world card currently is used as a room key, a charge card at every location on property, and used to obtain FP. What will your new card/bracelet do that the current system does not (other than have Brer Frog say Hi to little Billy as you go up the first lift at Splash... Sure, Frog's mouth won't move, and one leg will be stuck still... But he said Billy's name!!!!)??

What doesn't make sense is that with all the problems WDW has that this is their answer? How do you know that NextGEN was meant to be their answers to the problems you are referencing? Who said NextGen is their answer to the problems? Everyone is complaining that they're not ADDRESSING the problems... Not that they're addressing them improperly.

Its a data mining program to help seperate you from your money. To call it anything else is factually wrong? Do you seriously suggest that they're spending a reported $1.5 billion on the project with the focus being anything other than ROI? Seriously. Ask yourself that question. A publicly traded company, that has to answer to shareholders, and show constant growth and increased dividends. Do you think their reason is "to let awilliams4 sleep in so they don't have to get up early and get a FP for TSMM!"??

So to suggest that NextGEN is a productivity enhancement to many transactions that take place on property and not completely a data mining tool is factually wrong? See above

How does it cost you more to micro manage your visit?

In my case, this puts more control into my own vacation. I get to get a preferred location in front of the Castle without fighting anyone or waiting 60-90 minutes before hand. I get to go on Toy Story mania AND sleep in on my 'vacation'. How does that put more control of my vacation into Disney's hands. Just the opposite in my case.

And finally, how will I pay more? I don't know how many people have to make this point before you (and others) understand. You won't have to hand them a $20 bill to use this system. That's not what people are suggesting. Instead, you will have to stay onsite in order to get the maximum benefit of the system. If you stay off site, you'll get 3 FP per day. If you stay onsite, you'll get 6. If you're a DVC member, AND ONLY IF YOU BOUGHT DIRECTLY FROM DISNEY AND NOT THE RESALE MARKET, you'll get 8. And so forth. And it could be worse than that. If you're in a Value, you might get one extra a day. A mod, 2. A deluxe, 3. Conceirge level? 4. This system WILL BE USED to create multiple class levels for guests. There will be the "haves" and the "have nots". And I hope you always stay on site, in a deluxe... Or you'll be a "have not". And I would hate for you to come back here and complain about it, because then I'd have to say "I told you so". [/quote]

I love how oblivious some people are about all this.

 

[Funmeister]

Couple of thoughts: My understanding is staffing levels in the park are not what they were even a few years ago and most departments are spread pretty thin already. So... where will this influx of CMs come from? What are they being taken away from to deal with this? In a time when about a zillion things little and big and going undone and undealt-with because of low staffing levels and lower budgets, what else will go un-done and un-dealt with so CMs can stare at people staring at screens that neither of them fully understand?

I 'believe' that NextGen will be considered a huge success within just a couple of years.

I also believe that there are way too many people prone to calling everything in regards FP+/NextGen a failure or a mess so early on in the game.

I 'believe' that NextGen will be considered a huge success within just a couple of years.

I also believe that there are way too many people prone to calling everything in regards FP+/NextGen a failure or a mess so early on in the game.

The reason people are saying it is a failure or a mess is because at this stage in the game it is already a logistics nightmare that no one was truly prepared for. Not an opinion...not a feeling...a true fact!

 

[MichWolv]

I hope that you're right. It's expensive enough as it is to visit WDW. I have worried a little that Disney would push this stuff via Smart Phones and other electronic media, which I don't currently possess.

It will be interesting to see how this actually works for people without a smart phone. I have no doubt that Disney will have a way for such folks to take advantage, even in park, but how cumbersome will it be?

 

[Funmeister]

Couple of thoughts: My understanding is staffing levels in the park are not what they were even a few years ago and most departments are spread pretty thin already. So... where will this influx of CMs come from? What are they being taken away from to deal with this? In a time when about a zillion things little and big and going undone and undealt-with because of low staffing levels and lower budgets, what else will go un-done and un-dealt with so CMs can stare at people staring at screens that neither of them fully understand?

The head counts are already swelling. They are non-union positions (O and T) and are the most resourceful Cast Members on property.

 

[ParentsOf4]

Actually, I don't think upcharge is the way for Disney to make money on this, because if it takes an upcharge, I doubt enough money will be generated by the charge to offset the decreased satisfaction by other guests. Rather, this makes a return through a combination of 1) data mining and the money it can produce, 2) less guest time standing in line leading to higher sales of food, drinks, and souvineers, 3) higher guest satisfaction leading to higher attendance and/or higher general ticket prices, and 4) efficiencies in operation. If those things don't generate the needed ROI, perhaps Disney will tweak it one more time to give added benefits to those staying on site, hoping to goose hotel/food revenues by using the increased benefits as a carrot. But I think if they have to go to a straight up-charge for use, NextGen will have failed to meet expectations.

Below is my theory on how Next Gen improves WDW financials (assuming FP+ remains "free" as we've been told):

• Improve hotel occupancy rates – If guests staying at Deluxe Resorts (for example) get 4 extra FP+ per day, Moderate Resorts get 2 extra FP+ per day, and Value Resorts get 1 extra FP+ per day that they can book in advance, this encourages offsite guests to stay onsite and encourages onsite guests to upgrade their hotel. There's only a finite number of desirable FP+ for (for example) TSM. Use these "good" FP+ to lure guests onsite. Tie in ADRs to FP+. Either set aside some prime ADRs for onsite guests or allow onsite guests to book their FP+ or ADRs sooner. (Think Deluxe Resort guests booking 6 months in advance, Moderate 5 months, Value 4 months, and everyone else 3 months.) As a result of these initiatives, WDW hotel occupancy rates should improve, with more people staying at the very expensive (and very profitable) Deluxe Resorts. Operating expenses for hotels with 90% occupancy are not much more than hotels with 70% occupancy. Filling unoccupied rooms in existing hotels has a tremendous profit margin.
• Eliminate Extra Magic Hours – EMHs are an enormous operating expense. Considerable money could be saved by getting rid of these. With a multi-tiered FP+ system for onsite guests during regular park hours, EMHs are no longer needed. Hugh savings for WDW.
• Improve theme park attendance - It seems possible more onsite guests will visit WDW theme parks for more days during their vacations, knowing they have FP+ experiences reserved for each day.
• Reduce or eliminate "Free Dining" and "Room Only" discounts - Bob Iger has stated that the public needs to be weaned off “Free Dining” and “Room Only” discounts. A multi-tiered perks system built around Next Gen might be a way to do this. Onsite guests get more FP+, better ADRs, and preferred viewing. Deluxe Resort guests get more than Moderate or Value Resort guests. As a result, WDW no longer needs to offer as many discounts if guests have stronger incentives to stay onsite, especially since these incentives require minimal opex. Possibly offer "bonus" FP+ during slower seasons as a way to increase onsite and/or offsite attendance.
• Increase guest spending - Spend $200 at the Emporium; get rewarded with a "bonus" FP+. Book a Keys To the Kingdom Tour; get a "bonus" FP+. The possibilities are endless. FP+ is "free" but it's "more free" for those who spend more. And it's possible because Next Gen is an integrated system, unifying guest spending with more traditional WDW "experiences". Disney can use FP+ as a sort of Pavlov's Dog experiment to produce the behavior they want (i.e. more spending).
• Price increases – Of course. Just like they did when they switched to the Magic Your Way ticket system, WDW almost certainly has plans to repackage some things and then charge more for essentially the same service.

None of these have to do with hoping guests spend more money with all their "free time" (something that didn't work with FP), using the data mined information for targeted advertising (although this will happen), or expecting improved operational efficiency (which should occur). Instead, if it works, what I postulate gets consumers to spend more before they arrive, encourages them to spend more after they arrive, and reduces cost in obvious ways.

The beauty of the FP+/NextGen system is that its benefits can be tweaked by changing a few input variables. Not enough guests staying at Deluxe Resorts? Increase their number of FP+ while reducing the numbers allocated to everyone else. Tweaking this model is essentially free, which means TDO can experiment with all sorts of combinations before settling on one that generates the most revenue.

By adding attractions, dining, viewing areas, and meet & greets to FP+, TDO has taken absolute control over everyone's WDW experience.

I just hope I'm wrong.

 

[Master Yoda]

It will be interesting to see how this actually works for people without a smart phone. I have no doubt that Disney will have a way for such folks to take advantage, even in park, but how cumbersome will it be?

I can not imagine it being any more difficult than one of the touch ordering screens found in Pecos Bills.

 

[awilliams4]

I won't pretend to understand the long-term impact of NextGen and in which ways it will benefit/fall apart. However, a company doesn't spend $1.5 billion without expecting a return on investment. A new land and overall park update in DCA was made to push ticket sales. Publicly-traded companies do not spend that much money on feel-good stuff because the stockholders would crucify them. As you said, this could produce a benefit to guests but Disney isn't spending this much without expecting a return (ie Profit) on investment. So, this won't be provided for free to guests.

I see it as either an upcharge or something similar. The data-mining will be used to get guests to spend more money. FastPass+ will definitely be linked to a form of upcharge (through a separate cost or through offering it to resort guests only to drive up the number of guests staying at the resort).

I believe the expectation in regards to return on investment will be mostly cost savings and productivity/efficiency gains. I believe there will be more revenue but I don't believe that is where they will get most of their returns. I believe it will be mostly corporate overhead reductions, including eliminating bodies, etc. For example, the turnstiles. It will be more efficient and will require less CMs to manage. There are many other areas of their business where NextGEN will eventual make certain transactions less costly to Disney.

 

[MichWolv]

I can not imagine it being any more difficult than one of the touch ordering screens found in Pecos Bills.

That brings to mind two things. First is the issue of how many locations they'll have for those without smartphones to access this stuff. If it's only a few machines at Guest Services, that could be a problem. On the other hand, if there's kiosks in each land/area, not too bad. Second, my experience watching people ahead of me try to use those machines at Pecos Bill's was not pleasant at all.

 

[Buried20KLeague]

Below is my theory on how Next Gen improves WDW financials (assuming FP+ remains "free" as we've been told):

• Improve hotel occupancy rates – If guests staying at Deluxe Resorts (for example) get 4 extra FP+ per day, Moderate Resorts get 2 extra FP+ per day, and Value Resorts get 1 extra FP+ per day, this encourages offsite guests to stay onsite and encourages onsite guests to upgrade their hotel. There's only a finite number of desirable FP+ for (for example) TSM. Use these "good" FP+ to lure guests onsite. Tie in FP+ to ADRs. Either set aside some prime ADRs for onsite guests or allow these guests to book their ADRs sooner. (Think Deluxe Resort guests booking ADRs 6 months in advance, Moderate 5 months, Value 4 months, and everyone else 3 months.) As a result of these initiatives, WDW hotel occupancy rates should improve, with more people staying at the very expensive (and very profitable) Deluxe Resorts. Operating expenses for hotels with 90% occupancy are not much more than hotels with 70% occupancy. Filling unoccupied rooms in existing hotels has a tremendous profit margin.
• Eliminate Extra Magic Hours – EMHs are an enormous operating expense. Considerable money could be saved by getting rid of these. With a multi-tiered FP+ system for onsite guests during regular park hours, EMHs are no longer needed. Hugh savings for WDW.
• Reduce or eliminate "Free Dining" and "Room Only" discounts - Bob Iger has stated that the public needs to be weaned off “Free Dining” and “Room Only” discounts. A multi-tiered perks system built around Next Gen might be a way to do this. Onsite guests get more FP+, better ADRs, and preferred viewing. Deluxe Resort guests get more than Moderate or Value Resort guests. As a result, WDW no longer needs to offer as many discounts if guests have stronger incentives to stay onsite, especially since these incentives require minimal opex. Possibly offer "bonus" FP+ during slower seasons as a way to increase onsite and/or offsite attendance.
• Price increases – Of course. Just like they did when they switched to the Magic Your Way ticket system, WDW almost certainly has plans to repackage some things and then charge more for essentially the same service.

None of these have to do with hoping guests spend more money with all their "free time" (something that didn't work with FP) or using the data mined information for targeted advertising (although this might happen). Instead, if it works, what I postulate gets the consumer to spend more before they ever arrive while reducing cost in obvious ways.


The beauty of the FP+/NextGen system is that its benefits can be tweaked by changing a few input variables. Not enough guests staying at Deluxe Resorts? Increase their number of FP+ while reducing the numbers allocated to everyone else. Tweaking this model is essentially free, which means TDO can experiment with all sorts of combinations before settling on one that generates the most revenue.

By adding attractions, dining, viewing areas, and meet & greets to FP+, TDO has taken absolute control over everyone's WDW experience.

I just hope I'm wrong.

If I could like this post 10 times, I would.

These things are coming, people. Pay attention.

 

[Master Yoda]

That brings to mind two things. First is the issue of how many locations they'll have for those without smartphones to access this stuff. If it's only a few machines at Guest Services, that could be a problem. On the other hand, if there's kiosks in each land/area, not too bad. Second, my experience watching people ahead of me try to use those machines at Pecos Bill's was not pleasant at all.

I am not too worried as I just can't see them just putting a few at guest services. It would not surprise me to see them at every resort and nearly every current fastpass location.

I'll agree that watching some of these dolts use a computer is maddening, but you eventually have to let the electronically illiterate get swept away to move forward.

 

[Buried20KLeague]

I believe the expectation in regards to return on investment will be mostly cost savings and productivity/efficiency gains. I believe there will be more revenue but I don't believe that is where they will get most of their returns. I believe it will be mostly corporate overhead reductions, including eliminating bodies, etc. For example, the turnstiles. It will be more efficient and will require less CMs to manage. There are many other areas of their business where NextGEN will eventual make certain transactions less costly to Disney.

Witnessed, obviously, by the report today from multiple sources (including basic agreement from this site's owner) that CM numbers are going to be going way up to manage the logistics of this system with no end date reported... Or if there will even be an end date of that management.

Good theory.