Cuts coming to every area of parks and resorts - thanks to Shanghai and Paris

[Goofyernmost]

Not disagreeing with you there, but you made a good point. -"Cost cutting in the short term could be a strategic decision if it helps the company remain profitable and in business for the long term" . Disney would remain profitable and very much in business for the long term even without these cuts.

My problem is more that they prefer to claim these 'cuts' as profits towards the bottom line when presenting numbers to the BOD. To me, thats a good way to hinder growth. It would not be so bad if this were a rare occurrence, but theyve been doing it since NGE's inception and now theyre creating somewhat of a bubble with continuing to bleed in Shanghai and cutting service in the profitable domestic parks.

Because it is easier to display panic on a discussion board then to make the effort to express their concerns directly to the BOD. Those fake "good numbers" will mean nothing to a good businessperson when they know that a decline in customer care is the reason for it. They didn't get where they got in the corporate world by being stupid. Yet, we always seem to think that is the case. It was the BOD that insisted that a huge amount of money be spent to make WDW a better place to be. It is going to require a lot of talking to get them to cut that budget since it was their insistence that it be what it is.

 

[wdwmagic]

An easy way to compare hours and parade times from this year and last year
http://www.wdwmagic.com/calendar.htm

 

[wannabeBelle]

I don't get it. Certainly getting money from one profitable sector of a company to help another become more profitable is reasonable to a point but WDW has enough stuff to carry on it's own. Also cuts to the cash cow, depending on what and where, will do nothing but create a bad taste in people's mouths and not encourage people to spend money or return for additional visits, which will drive down profits in WDW!!! There is a fine line between saving money and making so many cuts that what makes Disney special and unique is gone and done. I have said it before, you can take the nicest hotel at Disney and put it in the middle of the country, away from the parks and it would fail miserably. People want the Magic of the Disney parks and are willing to spend the money to do that, provided it is of value to them. Take away the value to the people ( And that will differ person to person, in terms of what that means to each) and that audience will no longer see the point of spending that money and will go to other vacation destinations. Once they are gone, that idea of nostalgia of being in the parks with your family and wanting to recreate that with your kids will erode and will be near impossible to get back. I hope that someone puts a line in the sand that will not be crossed so as not to run this into the ground!! Marie

 

[rael ramone]

Since a few have mentioned theme park investments, it's time to trot out the following chart, which shows Parks & Resorts growth capex (i.e. capital expenditures above depreciation) as a function of Parks & Resorts revenue:

View attachment 130857

I've not yet updated it for 2015, when growth capex finished at 12.9%, roughly the same level as when the Dream and Fantasy were launched in 2011 and 2012.

Despite talk of SDL overruns and the troubles at DLP & HKDL, Parks & Resorts is swimming in cash. Even with SDL, theme park investment is far below past levels.

Of course, all that talk about SDL cost overruns didn't stop Disney from spending $2.352 billion in stock repurchases in just the last quarter, more than the reported total investment in SDL.

But hey, Mouse Gear needs to open 1 hour later to save some cash.

P.S. And yes, I've made purchases at Mouse Gear before 10 AM. It's a nice way to kill some time waiting for my 9:50 AM Test Track FP return time.

But that extra hour of 'closed' time will give them enough savings to add an extra single share to it's next buyback authorization...

 

[KDM31091]

I just don't see why Disney acts like they can't afford to keep Future World open the same hours as World Showcase. I get that it's not as popular at night but come on, take the lost profit which is probably pennies to them and keep the park open all night. Like I said, it's the front half of the park. It would be different if the park were flipped and you entered into World Showcase. If that were the case, then sure, close Future World early. But being "greeted" by a closed, desolate Future World at 7pm just feels like a budget cut gone too far, whether it was the case in the past or not it needs to be fixed, IMO.

At the very least it should be 8pm or 9pm if Showcase is open til 10.

 

[prberk]

Hey, @wdwmagic , I am just curious about your take on Disneyland Paris' near-constant problems. Since you are based in England, and also a WDW fan enough to create this website, I thought I would like to have your perspective on what you might think keeps DL Paris from ever seeming to work. It always seems to struggle, even before the Paris attacks.

What attracts you to WDW that is not found at DL Paris (besides size and sunny Florida)? Or is it really that simple -- bad location, bad weather, etc. And do Europeans still support it overall, or did they ever?

Just would like your personal perspective on it.

Same questions for any of our other Europeans on here.

 

[rael ramone]

What kind of cuts are going to happen when profits and/or revenue goes flat for a quarter?

Well if this is what happens when you have growth and the company as a whole had it's best quarter ever....

It will get ugly, real ugly...

 

[Buried20KLeague]

On a more positive note with these cuts, they're killing off DCA's Mad T Party at the end of March despite the Burtonland sequel that's coming out.

I'm actually quite surprised by this. These parties are revenue GENERATORS, not detractors. Makes me wonder if there's not a different motivation on this specific cancelation.

 

[ToTBellHop]

This is largely indefensible, but one thing I will say--I don't fault Disney for having only one Fantasmic! if Symphony in the Stars is intended to continue into the summer.

 

[marni1971]

Same questions for any of our other Europeans on here.

Paris gets a bad rap. It's a beautiful resort and can have amazing weather. Many areas and attractions are better than WDW and DL. It also opened in a perfect storm of poor management, questionable choices with no easy answers and economic disaster.

Location was perfect for a business point of view (and an available land point of view). But it's not floridain weather. It's not cheap - but nothing of quality in Europe is. There's no Universal, no Seaworld, no Denny's.

But it isn't Florida and it's not WDW. It is a European version. It is a culturally different take on what we know. It's great for 4 or 5 days. But not 2 or 3 weeks. And 2 weeks in Florida is very affordable for a lot of Brits.

 

[Next Big Thing]

So if HKDL lost 700,000 visitors year-to-year (supposedly), doesn't that cause a decent amount of concern for SHDL?

 

[Buried20KLeague]

I have many friends in the UK from when I used to work a contract job there and they, surprisingly to me, all said the same thing. "Florida is where it's at." I thought that Disneyland Paris would be the natural place for them but each of them said they'd just save up their money and head to Florida.

If I was flying that far for every Disney trip, you can bet your bottom dollar I'd be a season pass holder at Tokyo Disney. You wouldn't catch me near central Florida if the flights were similar.

 

[Zummi Gummi]

Wow. Lots of hostility on this. Ok, perspective. Paris is a factor, but not as large a factor as Shanghai. Hopefully once they get that open, the financial pressure will be relieved a bit. But there is a third pressure point that so far has not been mentioned on here. The Parks and Resort are one piece of a much larger puzzle, and right now ESPN has caused enough concern that stock has been going down for months now. Shame really, while ESPN is the larger revenue generator, Wall Street has failed to look at what the entirety of the company can produce even when it's largest piece is producing less of the profit.

That said, the cuts so far have not be "Deal Killers" in my mind. Closing most of Future World at 7pm? Have you been there at 7:30pm? Folks it's a ghost town. I prefer it NOT to happen, I get that, but this cut is ok. I am less okay with the reduced water park hours for this coming up summer. But again thats because I have always enjoy that last hour or two when you feel like you have then entire water park to yourself. Again, while not has ghost town like as Future World can be, definitely understandable that they are choose to cost save there.

I have yet to hear of specific cuts to operations of the attractions while they are operating. I have also been eyeing MK's scheduled operating hours and so far.... no cuts, at least for the few months you can see in advance.

There is a lot of doom and gloom here, but I am just not sure it's time to panic. All this time of cost cutting has happened before, and it will all happen again. I have not seen a cut yet that I feel was an example of Disney Cutting off its nose in spite of its face.

Curbside greeters at the resorts are disappearing after this week.

Fantasmic and DEP will be one time nightly, including during the spring break period.

Popular meet and greets are getting the ax on an almost daily basis.

If I was paying well over $400 a night to stay at the Grand, I'd be damn annoyed that someone wasn't greeting me when I pulled up. Is it absolutely necessary to the operation of the resort? No. Is it one of those things that made staying at Disney "different" than anywhere else? Yes. The phrase "declining by degrees" comes to mind.

 

[Buried20KLeague]

There's no Universal, no Seaworld, no Denny's.

Martin, we need to talk.

 

[ToTBellHop]

So if HKDL lost 700,000 visitors year-to-year (supposedly), doesn't that cause a decent amount of concern for SHDL?

Yes. Yes it does.

But, Iger must save face. It must open, (on-time, dammit!) and the quarterly numbers must not fluctuate much.

 

[Buried20KLeague]

https://www.washingtonpost.com/news...ke-disney-world-left-the-middle-class-behind/

Though I agree with most of the precepts put forth in this article, I think it's important to note that the trend I see first hand is that of the people who CAN afford it that are slowly siphoning off to spend their money elsewhere.

"Slowly siphoning off" doesn't lead to record quarterly profits while at the same time major CAPEX projects are going on.

You may see folks spending their money elsewhere (as they should!), but the problem is there's a constant flow of mommies and daddies that want to give their kiddos the Disney vacation they either didn't get as a kid, or to keep family tradition going (nostalgia).

There's a reason Forbes (I think it was?) last week voted Disney the strongest brand in the world.

 

[Buried20KLeague]

I don't get it. Certainly getting money from one profitable sector of a company to help another become more profitable is reasonable to a point but WDW has enough stuff to carry on it's own. Also cuts to the cash cow, depending on what and where, will do nothing but create a bad taste in people's mouths and not encourage people to spend money or return for additional visits, which will drive down profits in WDW!!! There is a fine line between saving money and making so many cuts that what makes Disney special and unique is gone and done. I have said it before, you can take the nicest hotel at Disney and put it in the middle of the country, away from the parks and it would fail miserably. People want the Magic of the Disney parks and are willing to spend the money to do that, provided it is of value to them. Take away the value to the people ( And that will differ person to person, in terms of what that means to each) and that audience will no longer see the point of spending that money and will go to other vacation destinations. Once they are gone, that idea of nostalgia of being in the parks with your family and wanting to recreate that with your kids will erode and will be near impossible to get back. I hope that someone puts a line in the sand that will not be crossed so as not to run this into the ground!! Marie

 

[dreamscometrue]

Avatar land blowing its budget, mymagic blowing its budget, Shanghai blowing its budget.

But who's really to blame? And should blame lie in unrealistic budgets or budgets that are syphoned off into the historic hierarchy?

Have the budgets been unrealistic from the outset simply because of the way WDI has been run? It seems like this has been the case for awhile, and Weis was put there to fix that. Yes?

 

[tissandtully]

This also explains why DHS closed at 8:30PM instead of the usual 9PM on Valentine's Day.

 

[Buried20KLeague]

So if HKDL lost 700,000 visitors year-to-year (supposedly), doesn't that cause a decent amount of concern for SHDL?

I don't think it does.

In my opinion, the whole point of HKDL was for Disney to get their foot in the door with the Chinese government. To get an initial resort built on a shoestring budget, run it for a bit, and then negotiate with them for a larger and more elaborate resort (Shanghai). It was just to get the blood going between the two parties. It wasn't meant to innovate or jaw-drop... It was to introduce the Disney style park to the culture, learn from it for a while, and determine what to change for the real goal of Shanghai.

HKDL is a quaint, attractive resort. But it's simply one park that until fairly recently was extremely tiny. @WDW1974 and I disagree on this topic (it's one of the few!), but for me HK was by far my least favorite Disney resort on the planet. Now, I'll admit I haven't been since the expansion. But when I could walk from the exit of Autopia in Tomorrowland to the opposite corner of the park in Adventureland near the treehouse and Jungle Cruise in well under a minute... That's a problem. When the park guide is listing ridiculous stuff as "attractions" just to pad the numbers, that's a problem. When I was there, I got there at rope drop, and sometime shortly after lunch was already repeating attractions because I had done it all.

I'm sure the Chinese economy played a bit of a role in the lost visitors, but I'm also quite sure that just the size of the park and lack of a large roster of rides and attractions effects it too. And don't forget... Chinese Disney Parks fans are well aware Shanghai is close to opening. It makes good sense that some portion of those people are waiting to visit there rather than another visit to HKDL.

By all accounts, Shanghai looks to be innovative, new, impressive, and DIFFERENT. I'd venture to say there's more discussions going on about how to fix HKDL than there are about worry about Shanghai.