WDW during a Recession / Economic Downturn

[lentesta]

Well is a decline in international tourism possibly being offset by a rise in domestic tourism?

Yes. International tourism was essentially flat. And one of the parks said that whatever drop there was, was being covered by domestic guests. I'll see if I can find the quote.

 

[lentesta]

So cruise ship occupancy is an interesting figure. 100% of occupancy assumes that all cabins are sold with 2 guests occupying it. Ships can frequently go above that 100% number if cabins have more than 2 people in them. So for example if all the ships cabins are filled and 50% have 4 people per cabin, the occupancy for the ship is 150%.

For this I took the number of passengers reported by Port Canaveral, divided by the number of voyages, and then divided again by the ship's max capacity. So the scale goes to 100.

 

[lentesta]

What’s SNR?

My bad - it's STR. They're a company that benchmarks the hospitality industry in 172 markets around the country.

Here's their latest, for June:

• Weekly hotel room demand down for 3 straight weeks nationwide (-1.59MM room nights)
  
  
• But 61 of the markets saw growth (+0.55MM room nights)
  
  
• 5 of those account for 32% of the growth in all 61 markets:
  • Chicago
  • Nashville
  • Oklahoma
  • Saint Louis
  • Orlando

 

[Sirwalterraleigh]

May 2025 experience an almost 6% YOY increase in revenue generation. After 2024 reported slight decreases YOY. I agree that this is most likely due to EU, and that that everything costs more than it did a in previous years, and the increase in hotel inventory in central Florida.

Interestingly CF occupancy rates still seem to lag behind the rest of the state. 65% vs 69%. This does also come after contractions after the 2023 post covid surge year. It seems like these changes are more related to things trying to normalize.

The whole Canadian thing was overblown from the start. Their concern should be domestic tourists that are shunning the swamp first and foremost.

So cruise ship occupancy is an interesting figure. 100% of occupancy assumes that all cabins are sold with 2 guests occupying it. Ships can frequently go above that 100% number if cabins have more than 2 people in them. So for example if all the ships cabins are filled and 50% have 4 people per cabin, the occupancy for the ship is 150%.

Looking at historical numbers from 2023 Disney reported 98% average occupancy, Royal 105% and Carnival 109%.

DCL is a family cruise line meaning that there should be more cabins of with more than 2 people. Historical numbers (pre-covid) show them almost always sailing with occupancy rates well exceeding 100%.

August-October is not peak season for cruising which also motivate the substantial discounting.

I can't speak for the entire Central Florida region as a whole, but the boots on the ground (or lack there of) at the parks, restaurants, shops, and boats tell a different story within the bubble.

What's changed is the public perception of Disney. Never before have I seen the legacy media trash the Disney Experiences segment the way that they're doing now. Disney was always off limits to criticism by the legacy outlets, but now when something comes up, it's almost always negative and it's almost always as a result of something STUPID that management has done to tick off guests. Whether it's price increases, removing popular attractions, lowering quality, cutting offerings, forcing unpopular IP on guests, involving themselves into social/political issues etc. , it's almost alway self-inflicted.

Disney's strategy has seemingly been to get social media influencers to shill for them in exchange for access and swag, and that by a large part has backfired because normies now recognize their actual experiences will NEVER be similar to what the shill influencers get from the mouse. Disney can no longer relate to (what at least used to be) the average guest, and that's why it seems their parks are getting hit, the swamp particularly. But if they just cover it up with additional LL revenue and increased per guest spending, they can just scoot by another quarter, and that's the only thing that matters apparently.

Very well stated/detailed

All I got is: “I keep ending up in Disney parks and they are not crowded…less so that in decades and similar to documented economic hard periods”

Not at all scientific …but dammit it keeps happening.

I would caution travel “reporting groups” and especially those in Orlando…

They are there to market travel…not audit the books or look for failings.

They will be the last…the very last…to acknowledge that the prices are a turnoff. Bad for their paychecks. I think the Orlando hotel market may be going through a “cost shift” as well accounting for numbers. Occupancy may still be of equivalent level…but people cutting costs by selecting cheaper options and moving away from the bubbles.

Only really the big two operators won’t slash prices to fill rooms. Because it’s business 101 and common sense…except in Burbank

 

[Sirwalterraleigh]

For this I took the number of passengers reported by Port Canaveral, divided by the number of voyages, and then divided again by the ship's max capacity. So the scale goes to 100.

But he’s right that that is how cruiselines typically report their own numbers. They post 105% occupancy…which can’t equate to the Simple formula based on sailing capacity

That math ain’t mathin

 

[Nubs70]

I'm covering April through June.

Two of those months were solid to record-breaking in terms of tourist tax revenue, which Orange County attributes to Epic U opening. They haven't released June numbers yet.

SNR says Orlando hotels are bucking the nationwide trend by increasing occupancy in June.

The feds say overseas tourism is down a fraction of 1%. Canada's had a huge drop but it's almost entirely offset by Mexico's gains. And Florida is the #2 tourist destination behind New York.

DCL out of Port Canaveral is sailing at 90+% occupancy on the new ships, mid-80s on the Dream class, according to Port Canaveral. At premium prices.

How do you reconcile the Orange County tax numbers, SNR report, Port Canaveral numbers, and fed data? Those tourists are coming to Central Florida for the healing properties of Lake Nona's water?

On tax number being up...

Prices are generally up on everything. So as sales tax is a % of sales price, when the sales price increase so does the raw dollars in tax revenue.

Tax revenue can break records with more people buying at the original price or fewer people buying more expensive products.

My company set record revenue records during the post covid inflationary period on a lower volume of sales.

 

[lentesta]

But he’s right that that is how cruiselines typically report their own numbers. They post 105% occupancy…which can’t equate to the Simple formula based on sailing capacity

That math ain’t mathin

Oh, definitely. The Wonder of the Seas is at some ridiculous number like 145%.

It reminds me of the baseball player who once said "I'm giving 110%. You can't do more than that."

 

[Sirwalterraleigh]

Oh, definitely. The Wonder of the Seas is at some ridiculous number like 145%.

It reminds me of the baseball player who once said "I'm giving 110%. You can't do more than that."

It’s just the reality that business have, will and will always manipulate the numbers to their advantage. It’s of course good business…it gets headlines, maintains demand and therefore prices.

The cruiselines are very healthy right now. I think in a bizarre was they’re seen as “cost effective” options even though they cost a ton.

But what I always beef with is any suggestion the data isn’t dressed up for spin. Let’s be serious

 

[lentesta]

On tax number being up...

Prices are generally up on everything. So as sales tax is a % of sales price, when the sales price increase so does the raw dollars in tax revenue.

Tax revenue can break records with more people buying at the original price or fewer people buying more expensive products.

My company set record revenue records during the post covid inflationary period on a lower volume of sales.

Yep. The Orange County tax office provides additional context in their press releases. Here's May's:

Hotel Occupancy rose to 69.2%, up 0.6% year-over-year, while Hotel Demand increased 2.6%, primarily
driven by the addition of 2,500 hotel rooms to the market. The Average Daily Rate (ADR) climbed 4.7%
to $198.20, up from $189.30 in May 2024.

So occupancy, demand, and daily rates were all up and contributed to May's record.

 

[monothingie]

The cruiselines are very healthy right now. I think in a bizarre was they’re seen as “cost effective” options even though they cost a ton.

I think they’re about to fall off a cliff.

Keep in mind most of the bookings for 2025 were made a year ago, and for the past 2+ years cruise fares have been unbelievably inflated. It’s definitely reach the tipping point and you see this now with even the big boys not being able to fill ships the way they have been over the past two years.

 

[Sirwalterraleigh]

I think they’re about to fall off a cliff.

Keep in mind most of the bookings for 2025 were made a year ago, and for the past 2+ years cruise fares have been unbelievably inflated. It’s definitely reach the tipping point and you see this now with even the big boys not being able to fill ships the way they have been over the past two years.

They’re in a legit boom…and guess whose prices are a significant chunk of that boom?

 

[Ayla]

Well is a decline in international tourism possibly being offset by a rise in domestic tourism?

No.

 

[Chi84]

No.

“No” because you want it to be so or do you have any information to back it up?

 

[Sirwalterraleigh]

Well is a decline in international tourism possibly being offset by a rise in domestic tourism?

Just my opinion:

The decline in international tourism is very overstated

The “influx” of visitors to Orlando - particularly its theme parks - doesn’t exist at all

 

[Chi84]

Just my opinion:

The decline in international tourism is very overstated

The “influx” of visitors to Orlando - particularly its theme parks - doesn’t exist at all

Do you have any facts to back up your opinion? These subjects are capable of being quantified - maybe not consistently or definitively but numbers do exist. It’s not like whether or not you like TBA.

 

[Sirwalterraleigh]

@lentesta

Loved it. The whole lead in from the top of the hour about Netflix and the pivot into your interview was great. Very good info (not surprised at all)

 

[WoodyNBuzz]

Is there a clip we can go watch?

 

[Prince-1]

I think they’re about to fall off a cliff.

Keep in mind most of the bookings for 2025 were made a year ago, and for the past 2+ years cruise fares have been unbelievably inflated. It’s definitely reach the tipping point and you see this now with even the big boys not being able to fill ships the way they have been over the past two years.

The cruise industry is healthier now then they ever have been with all of the major cruises line currently building new ships as well as developing more of their private islands. They ain't falling anywhere.

 

[monothingie]

The cruise industry is healthier now then they ever have been with all of the major cruises line currently building new ships as well as developing more of their private islands. They ain't falling anywhere.

Then why is DCL offering unprecedented 30% discounts and flexibility options for deposits?

Why is Royal and Carnival offering promotional discounts not seen since Covid?

Cruise lines are doing great. Until they’re not.

 

[DCBaker]

Is there a clip we can go watch?

Here's a clip with @lentesta: