On layoffs, very bad attendance, and Iger's legacy being one of disgrace

[FutureCEO]

Wonder how attendance is at the other parks?

Non Disney parks

 

[Sirwalterraleigh]

I read an article about that today. Very sad. Our “local” airport has been a bloodbath over the last year - Thomas Cook, FlyBe and all Virgins 747s littered the apron.

I have no scenario in mind where US airlines can survive/operate as before without a federal blank check.

This statement above about Disney is a real and recently internally acknowledged problem going forward....they built their rev models on the high rev numbers on overpriced everything and perfect scenarios . The no cash reserve strategy could render Disney very vulnerable to a very bad take over.

Gotta call B on this one...
An internal acknowledgment of this would indicate they are considering trying to provide more value for their prices...

Iger...Chappie...Wall Street?

Nope:..not buying it. That era is gone.

 

[Sirwalterraleigh]

Wonder how attendance is at the other parks?

Non Disney parks

Not well

 

[lewisc]

I don't think that's actually stopping people. Those restrictions aren't easily enforced (in most states) and most people (especially among the people willing to travel right now) will just ignore them.

Some employers insist emoyees who travel to those areas quarantine. A few with pay, some can work at home and others without pay. Trip posts and pictures posted on social media inform employers

 

[FullSailDan]

People will QUICKLY forget and pent up demand to get the *** out of their houses will rule 2021 and beyond. Disney Parks will be packed again, mark it up. Disney will also get every cent back over time. This is temporary, even if it lasts 18 months.

I think it all depends on a few things:

1. How long the economic downturn lasts and how bad it is. Yeah, people want to go out and do things, but the basics will take priority over a trip to WDW. If people are out of work, and jobs are slow to return, people wont be saving for a trip, they'll be scraping by until they land comfortably again. Layoffs are coming, Americans aren't coming to WDW for a multitude of reasons, but a large one is people are in survivor mode. Not just from the virus but from potential job losses and economic uncertainty.

2. How aggressively TWDC prices themselves. Many are dipping into savings at the moment, they wont have the cash to go at today's prices. The premium customer that Disney wants is generally being conservative with cash right now. With hotels seeing a downturn in business, TWDC will need to reconsider its pricing structure. Hell, the entire hospitality industry is trying to figure that out right now. Business travel is going to be gutted for the foreseeable future. As the backbone of many large hotels business, expect to see some hotels trend consumer rates up to offset the losses, while others re-baseline their business and price aggressively to fill rooms consistently. Contrary to popular belief, your average Marriott isn't super profitable. Expect them evaluate where they can save such as less frequent housekeeping, scrapping planned renovations, keeping furniture longer, removing free shuttles, etc.

3. How much of the experience returns. Disney parks are great, but when you shave off entertainment, meet and greets, nighttime spectaculars, etc., you have a product that isn't as different from something you can receive elsewhere. Many of us absolutely say the quality is still higher and see value, but for many it becomes a lot harder to justify $120+ a day when $60-80 is still a fun experience at a local Kings, Busch, or Six Flags.

4. Travel availability - double edged sword here. If Americans can't travel abroad, they will look closer at US destinations obviously. International travel has been over-hyped in these forums for the contributing factor. Last I heard it was between 15 to 20% of WDWs crowd levels? (insiders please correct me!) While not insignificant, there's no doubt the bulk of guests are domestic. However, air travel is about to be really different. Flight capacity and availability will be finicky while airlines adjust to the loss of business travel. The consulting firm I work for has been in the top 5 customers of every airline for a while because we fly so much. Our clients aren't just expecting us to not travel right now, they are demanding we adjust our MSAs to be remote first, and help them develop virtual workplace strategies. Everyone agrees business travel is forever changed, which will reduce flights, raise costs, etc. Consumers used to be what filled in excess capacity from those of us flying for a living. Airlines were on razor thin margins before, sure they will look to cut costs where possible, but they have a lot of fixed costs that aren't easy to renegotiate like long term fuel price contracts.

 

[esskay]

It is absolutely false that companies are at full production in the US.

Not going to argue with you, I know what I know and I know what I've seen.

People forget that production is more than a camera pointing at someone. JW set building restarted a month ago at Pinewood for example and theres no shoot plans for a while yet.

 

[Sirwalterraleigh]

It comes even sooner than that. Once interstate travel restrictions are rolled back and you can once again come and go with out self quarantining. That was the unexpected fly in the ointment to many reopening plans.

There are absolutely no signs of a travel recovery...and the larger economic pain hasn’t even started yet.

It’s a recession...as much as people want to shout “NO!!!”...it is. Recessions will trigger the same moves by business they always do: instead of Those at the top increasing their fortunes selling things...they will do so by slashing things.

Nothing is different...nothing.

You and the chef aren’t gonna be sitting next to each at the dwarf buffet getting ready to go to after hours magic in a packed park anytime soon.

Have to look at the whole picture and the bad stuff is just beginning.

 

[disneygeek90]

Myself and many local AP's who are emerging from summer block out should help a tick with attendence in August and beyond. We booked our alotted 3 days and we're hoping Disney provides a few more. Park hopping should be an easy fix even with their reservation system. If we're at Epcot and decide to ride the skyliner to the Studios, we should just be able to check the app, see if there's capacity and book a reservation immediately if available. If not, check out the availability for one of the other parks. Doesn't seem like it's rocket science.

The AP availability once again is... not great. Silver blockout release is definitely affecting August. Welcome to the AP struggle where you can maybe go to MK one weekend if you book it 30 days in advance. Otherwise, Epcot it is.

 

[disneygeek90]

It will help somewhat but it won’t fix the unsustainable and nearly unprofitable attendance limits. There are issues with the distribution of park pass inventory and bigger issues with the amount of no-shows but the primary issue is that even had full Covid capacity the numbers are two low to be sustainable. Even at full capacity the parks are dead.

The problem with park hopping is that in your scenario you would now be taking a reservation slot in two parks while only being able to physically be in one. Plus the added strain on transportation

Except at HS. And sometimes MK.

 

[larryz]

Not to be disagreeable to the pile on here, but...prior to the virus, Parks were the best part of Disney’s business, posting growth nearly every quarter since the recession of 2008-2009. The data is there and irrefutable.

Call me a Pollyanna, but you’re all going to be mistaken if you think this persists much after a vaccine comes, which will happen, possibly by end of 2020.

People will QUICKLY forget and pent up demand to get the *** out of their houses will rule 2021 and beyond. Disney Parks will be packed again, mark it up. Disney will also get every cent back over time. This is temporary, even if it lasts 18 months.

Disney will have an awful quarter, but it’s only been about 4 months of hell with signs of recovery already. Parks are open, sports are coming back, and things will pick up again.

Love your optimism.

 

[TJJohn12]

...The no cash reserve strategy could render Disney very vulnerable to a very bad take over.

I'm not sure there's any corporate raiders with their own assets in a good state who could attempt a takeover at the moment. Stock price is down about $40 since its high in November 2019 - and it will likely sink on Monday and Tuesday - but I'm not seeing it plummet low enough for someone to amass 51% share. The low trough was $86 in March. There's something like 1.8 billion shares on the market.

With a cratering like March, that'd mean an outlay of $77 Billion to make the move outright if the buyer holds no shares at the moment. I just don't see that kind of liquidity ANYWHERE in the market at the moment, save Bezos or Apple.

 

[peter11435]

Except at HS.

Even at HS. Certain parts of the park may feel busy. But the park as a whole is still dead. The issue is insufficient crowd distribution.

 

[HongKongFooy]

But oranges to lemons?

Yes, well done with the commonality of both being citrus

 

[larryz]

Taco Bell

Love me some Taco Bell! And note: they don't do fish tacos.

 

[Higginbotham587]

It is a horror movie. We’ll endure and somehow get thru it.... somehow.

my gosh has it been years since PhotoDave posted?!

 

[Disorbust]

US economy contracted 32.9% in Q2. Not doom and gloom just a fact.

 

[larryz]

Several years ago (like 2005 era?) the sea world shows were really top notch. blue horizons, odysea, Clyde & Seymour, and Beleive were really well done.

Thanks, Mr Ross.

 

[Sirwalterraleigh]

Yes, well done with the commonality of both being citrus

...you see what I did there?

 

[Sirwalterraleigh]

US economy contracted 32.9% in Q2. Not doom and gloom just a fact.

I’m shocked I saw predictions that were dead on.

I figured 40%

 

[larryz]

Cedar Point had 3.7 million visitors last year

Disney's least popular park California Adventure had 9.8 million visitors

Magic Kingdom had almost 21 million visitors

I don't think I need to say anything else in regards to popularity.

Don't go to Disney if you want rollercoasters, just like you don't go to a theater for a Pixar movie expecting jump scares.

Location, Location, Location.

California Adventure is just south of Los Angeles, California. Magic Kingdom is in Orlando, Florida.

Cedar Point is in Sandusky, Ohio.

Spoiler