A lower attendance future for WDW?

[Sirwalterraleigh]

Huh?? So nobody ever stays at the deluxe hotels??
Last I checked, there are plenty of people who book the deluxe hotels. No major overhaul necessary.

I can say unequivocally that’s false. The biggest Disney diehards I know are successful Wall Street execs, lawyers, doctors, in the top 2-3% of earners. They may look down on Pop Century, but they don’t look down at the Roy Disney suite or Victoria and Alberts. They don’t even look down at the Riviera or California Grill, because they are used to spending $5,000 per month for a 800 sf apartment on Central Park West.

So what if I told you - hypothetically - that they took rooms they couldn’t sell out of no fewer than 4 “deluxe” hotels where bookings had fallen and converted them to timeshares? Hypothetical.

The last paragraph...boy...you believe there are tons of really high wealth pounding the annual passes??

Yikes.

 

[UNCgolf]

And yes, visiting WDW, I feel very lucky. I realize how fortunate I am... that most people can’t afford the deluxe hotels, signature meals, etc. I certainly wouldn’t personally use the word “elite,” but I certainly appreciate it’s more than 80-90% of Americans can afford. So I guess it is pretty elite.

This is, I think, your main misconception. People staying at deluxe hotels and eating signature meals aren't only the top 10-15% of Americans. It's easy to look at the numbers and say "well they are the only people who can afford it!" but you're missing the fact that people either save up for a couple of years to make the trip, or (and this likely happens far more than the former) just throw it all on a credit card, pay the minimums, and think it will be fine. There's a reason a huge number of Americans are in significant credit card debt.

Raising prices won't stop people from racking up credit card debt to go, but if you raise them too high, it may be more than they can even put on a credit card.

 

[havoc315]

I don’t think anyone was claiming it wasn’t. Jiko used to be as well imho but it appears they have fallen a bit.

Yes, that was the point of contention. Sirwalterraleigh claimed Disney didn’t have any truly premium dining. When I pointed out V&A, his initial response was that “it’s just overpriced.”
That’s what prompted my response that there are only a dozen restaurants of that level in all of NYC.


I don’t think AAA rates theme park located restaurants. (V&A and Jiko are both located at resorts, not in-park). But I would suspect that Takumi-Tei would earn 4 stars.

 

[havoc315]

This is, I think, your main misconception. People staying at deluxe hotels and eating signature meals aren't only the top 10-15% of Americans. It's easy to look at the numbers and say "well they are the only people who can afford it!" but you're missing the fact that people either save up for a couple of years to make the trip, or (and this likely happens far more than the former) just throw it all on a credit card, pay the minimums, and think it will be fine. There's a reason a huge number of Americans are in significant credit card debt.

Raising prices won't stop people from racking up credit card debt to go, but if you raise them too high, it may be more than they can even put on a credit card.

Disney doesn’t care if they can afford it. (I tend to believe most can afford it, few are declaring bankruptcy when they arrive home).

But I never meant to suggest Disney wants people who are in the 10-15% of earners. They want guests who will spend like 10-15% earners. They’ve already been moving in that direction, and I have every reason to believe it will continue.

And going back to the original post — Disney may be willing to price out the cheaper spenders in favor of the big spenders. You only want to pay $160 for a value hotel, and price of basic day ticket? Then don’t expect fastpasses, long night hours, etc. those are for the bigger spenders.

 

[Sirwalterraleigh]

Not talking about a “luxury enclave”...

Such an enclave would only serve about 50 guests per day.

Talking about WDW pushing more towards guests willing to spend extra on a night party ticket, towards guests willing to spend extra for a maxpass, guests willing to spend on a $60 dessert party instead of bagging Oreos from home. Guests willing to spend $500 on a deluxe hotel over the guest who spends $60 on a cheap offsite motel.

And yes, visiting WDW, I feel very lucky. I realize how fortunate I am... that most people can’t afford the deluxe hotels, signature meals, etc. I certainly wouldn’t personally use the word “elite,” but I certainly appreciate it’s more than 80-90% of Americans can afford. So I guess it is pretty elite.

Ok...I got the angle

 

[Sirwalterraleigh]

Yes, that was the point of contention. Sirwalterraleigh claimed Disney didn’t have any truly premium dining. When I pointed out V&A, his initial response was that “it’s just overpriced.”
That’s what prompted my response that there are only a dozen restaurants of that level in all of NYC.


I don’t think AAA rates theme park located restaurants. (V&A and Jiko are both located at resorts, not in-park). But I would suspect that Takumi-Tei would earn 4 stars.

I made no such claim...I said wdw is not an “elite” or “luxury” travel destination.

That doesn’t mean some
Very wealthy don’t go there...people are drawn to it for a variety of reasons...conventions for corporate America being a big component in good times...but it’s not what turns the wheels on the Operation.

I have many strong opinions...very few of them however meet the definition of “stupid”...

So it’s just a waste of the Internet to get into a back and forth “gotcha” game.

We disagree. That’s ok.

 

[UNCgolf]

Disney doesn’t care if they can afford it. (I tend to believe most can afford it, few are declaring bankruptcy when they arrive home).

But I never meant to suggest Disney wants people who are in the 10-15% of earners. They want guests who will spend like 10-15% earners. They’ve already been moving in that direction, and I have every reason to believe it will continue.

And going back to the original post — Disney may be willing to price out the cheaper spenders in favor of the big spenders. You only want to pay $160 for a value hotel, and price of basic day ticket? Then don’t expect fastpasses, long night hours, etc. those are for the bigger spenders.

Oh okay. In that case I agree with you, at least to an extent. Disney absolutely wants people who will spend big, and they couldn't care less how they are doing it. Their big profits are on hotel rooms and merchandise (and probably dining too, especially since the prices have increased while the quality has decreased in the vast majority of on-site options), not on selling you a ticket. Someone who stays off-site and doesn't buy any merch isn't moving the needle for the corporation. They probably don't even really care about me as a guest because even though I do stay on site and eat on property, I never buy any merchandise at all.

I disagree that most can easily afford it. There are a lot of people who put thousands on a credit card to go to Disney who would never have been able to afford it if they had to pay cash, and there are a huge number of Americans who operate that way on a regular basis on all kinds of things. I know multiple people who have staggering amounts of credit card debt because they just spend whatever they want and figure that as long as they can make a monthly payment it doesn't matter. They don't have to declare bankruptcy as long as they can pay their minimums. I would personally never operate that way, but it seems to be a common American mindset.

Regardless, the above paragraph doesn't really matter for Disney's purposes (and is basically just academic debate) as long as there are people who are spending the money.

 

[havoc315]

I made no such claim...I said wdw is not an “elite” or “luxury” travel destination.

That doesn’t mean some
Very wealthy don’t go there...people are drawn to it for a variety of reasons...conventions for corporate America being a big component in good times...but it’s not what turns the wheels on the Operation.

I have many strong opinions...very few of them however meet the definition of “stupid”...

So it’s just a waste of the Internet to get into a back and forth “gotcha” game.

We disagree. That’s ok.

Never said you’re stupid. I’ve conversed with you often. You’re an insightful poster.
Nor was I trying to play gotcha. Seems we went down a rabbit hole tangent together. You claimed WDW had no premium dining. I simply pointed out V&A. And down the rabbit hole we went.

 

[Animaniac93-98]

There is a miniscule number of people with the resources and interests in owning gold plated yachts and eating caviar at every meal.

There is a wide spectrum, the market for extreme luxury is small. And by its nature, luxury is exclusive. You aren't going to have a Victoria & Alberts restaurant that serves thousands of guests.

But as I said -- It's a wide spectrum of "luxury." There are many more upscale experiences that many people would scoff at. Your purely working class guest doesn't often pay $60+ per person for dinner someplace like California Grill.
While you can debate whether The Contemporary or Beach Club are "luxurious," it's unquestionable that the pricing is upper-class pricing. (I'd say they are indeed luxurious -- by way of their location. Being located a brief stroll from the Most Magical Place on Earth is a luxury that people are willing to pay $500+ per night for).

Nobody is suggesting Disney is trying to cater to "Lifestyles of the Rich and Famous" -- that's a very very small market.
But Disney may be concentrating more on catering to the guest who shops at Bloomingdales over the guest who shops at Walmart.
Concentrating on guests who are lawyers, doctors, professionals, with 6 figure incomes (and a 6 figure income doesn't translate to gold plated yacht), and moving focus away from the guests who pack peanut butter and jelly sandwiches because the QS at Disney is so expensive.

What Disney is really selling is the veneer of luxury, not true high end quality.

The result is that the market they're actually attracting is Walmart customers with extra credit cards. A less discerning market, but more likely to be susceptible to recessions and make a scene if they don't get their way because the spent x to get in.

 

[GimpYancIent]

Disney doesn’t care if they can afford it. (I tend to believe most can afford it, few are declaring bankruptcy when they arrive home).

But I never meant to suggest Disney wants people who are in the 10-15% of earners. They want guests who will spend like 10-15% earners. They’ve already been moving in that direction, and I have every reason to believe it will continue.

And going back to the original post — Disney may be willing to price out the cheaper spenders in favor of the big spenders. You only want to pay $160 for a value hotel, and price of basic day ticket? Then don’t expect fastpasses, long night hours, etc. those are for the bigger spenders.

True Disney does not care about affordability. As long as guests are willing to pay the prices those prices will remain high. Where, how easy or hard it may be for the guests to make the money to finance a Disney trip is, well its not Disney's problem. As a business and corporate bottom line oriented organization of course the more affluent will be catered to. Until the experience deteriorates to a level the turn styles barely turn and the properties have a lack of guests (not because of COVID) with the affluent finding more satisfying entertainment things will continue as they are.

 

[Sirwalterraleigh]

Never said you’re stupid. I’ve conversed with you often. You’re an insightful poster.
Nor was I trying to play gotcha. Seems we went down a rabbit hole tangent together. You claimed WDW had no premium dining. I simply pointed out V&A. And down the rabbit hole we went.

Ok...we can retreat...but what I did was respond to the “have you ever been to Victoria and Alberts?”

Many of us here have...and it is very good, but doesn’t prove the larger point wrong...as I pointed out. It just wasn’t a flex/bazinga! Moment.

It’s good to converse as always. For the record: when any thread asks “what the best?” Or “if you had to pick one place...”

My answer is always V&As. Why wouldn’t it be?

But you also get dozens of le cellier and be our guest and sci-fi and cape may stinking buffet...

...which kinda makes my case. It’s not the right side of town for robin leach to do commentary. Like Iger and his $50,000,000 Malibu cliff house or the $15,000,000 houses on the Biscayne Bay.

 

[Animaniac93-98]

Disney needs lower and middle class guests or the whole system falls apart. They're not going to have 50,000 daily visitors who all make 150k+ a year. I don't think they could even attract half that many.

Putting things in perspective, while there may be more Deluxe hotels at WDW, there are more Value and Moderate rooms total. Add in those staying off site and you can see that most of the people coming to the parks are not the super big spenders.

 

[DisneyHead123]

I made no such claim...I said wdw is not an “elite” or “luxury” travel destination.

That doesn’t mean some
Very wealthy don’t go there...people are drawn to it for a variety of reasons...conventions for corporate America being a big component in good times...but it’s not what turns the wheels on the Operation.

I think the problem is that the numbers being cited as "elite" here are more like "upper middle class", especially depending on what area of the country you live in. $250K a year goes a lot farther in some areas than others. And upper middle class culture and truly "elite" culture (although I'm sure there are gradations and echelons within elite culture as well) are very different. Upper middle class? (Which may well be a family living off of, say, 300K a year, again, depending on the cost of living in the area). In my experience - Disneyfied to the extreme. Inject it right into their bloodstream. Grab the Mickey ears and let's go. Uber wealthy? It probably depends. And, in the case of Disney, it probably depends on what country they're from, as they attract wealthy travelers from many countries around the globe, where cultures differ. I think that it's not always about income, either - an upper middle class type could make more than an elite type, but the cultural mores they identify with will be different. And it's not always that "elite" institutions have more draw and glitz to everyone - sometimes the upper middle class studiously avoid those types of places because they are weirded out by the culture. They actually want a less 'elite' experience.

As to Disney trying, again, to trim their ever-growing crowds with pricing - maybe I am just hopelessly naive on the idea of "But the free market works!", but I still say it will, ha ha! This is only a dynamic you see when there is almost nothing in the way of meaningful competition. Surely, at some point, said competition will emerge, and the market will correct itself.

 

[havoc315]

Ok...we can retreat...but what I did was respond to the “have you ever been to Victoria and Alberts?”

Many of us here have...and it is very good, but doesn’t prove the larger point wrong...as I pointed out. It just wasn’t a flex/bazinga! Moment.

It’s good to converse as always. For the record: when any thread asks “what the best?” Or “is you had to pick one place...”

My answer is always V&As. Why wouldn’t it be?

But you also get dozens of le cellier and be our guest and sci-fi and cape may stinking buffet...

...which kinda makes my case. It’s not the right side of town for robin leach to do commentary. Like Iger and his $50,000,000 Malibu cliff house or the $15,000,000 houses on the Biscayne Bay.

even in NYC, there will be more demand for Applebee’s than Per Se and Daniel. It’s not just a question of right side of town — there just will always be limited demand for a $200 meal.

The demand for a $200 meal at a place like WDW... I think there are factors both ways.
I haven’t yet done V&A myself. I’ve wanted to, but I haven’t been to WDW in 4 years. When I last went, I had a 12 yo and 10 yo. Too young for V&A, and too young for a night on their own at WDW.
And I can see that for a lot of families: even if they are billionaires, they are at WDW to spend time with their young kids, not go to a 5-star meal.

But WDW isn’t just young families. It’s also couples on their honeymoon, retirees, older families. For those adult guests, a chance to eat a 5-star meal is a draw itself.
I have a trip with another family coming in August. The kids on the trip will now range between 14 and 16. My friend is celebrating his 50th birthday on the trip.
If V&A or Tekumi-Tei open up by then, I likely will book 1 of them.

But getting back to the original post... I was never saying WDW is striving to become an elite luxury destination. I was saying they might rather have 90,000 daily guests spending $250 each on average, over 100,000 guests spending $150 average. (Between tickets, food, resort, etc).

 

[Animaniac93-98]

But getting back to the original post... I was never saying WDW is striving to become an elite luxury destination. I was saying they might rather have 90,000 daily guests spending $250 each on average, over 100,000 guests spending $150 average. (Between tickets, food, resort, etc).

Certainly they would prefer that, but having that be the case consistently might be a problem. We've seen for the last few years that there have been periods (notably summer) when attendance and occupancy was not what Disney expected, even before the pandemic. The response then was to offer discounts, either for Florida residents or the general public, to make up those gaps. It works because there are many WDW visitors who are price sensitive, and more often than not, these are the guests who make up a larger % of park attendance than the big spenders. I don't see Disney easily changing a sizeable chunk of their core market anytime soon even with a shift in marketing or product.

 

[havoc315]

Certainly they would prefer that, but having that be the case consistently might be a problem. We've seen for the last few years that there have been periods (notably summer) when attendance and occupancy was not what Disney expected, even before the pandemic. The response then was to offer discounts, either for Florida residents or the general public, to make up those gaps. It works because there are many WDW visitors who are price sensitive, and more often than not, these are the guests who make up a larger % of park attendance than the big spenders. I don't see Disney easily changing a sizeable chunk of their core market anytime soon even with a shift in marketing or product.

And that goes back to my original post. Are they using the Covid period to make that shift happen.
I see Early Theme Park Entry as part of that shift — a major detriment to offsite guests, basically taking rope drop away from offsite guests.

By “sizable chunk”... we are talking subtle ongoing shifts, not a massive overnight change. If Early Theme Park Entry pushes up demand for on-site bookings by 2%... that’s less empty rooms, that’s higher nightly rates.
If they monetize fastpasses, if they monetize nightly entertainment — that’s all about increasing the average guest spending, even if it drives away some other guests.

 

[Sirwalterraleigh]

even in NYC, there will be more demand for Applebee’s than Per Se and Daniel. It’s not just a question of right side of town — there just will always be limited demand for a $200 meal.

The demand for a $200 meal at a place like WDW... I think there are factors both ways.
I haven’t yet done V&A myself. I’ve wanted to, but I haven’t been to WDW in 4 years. When I last went, I had a 12 yo and 10 yo. Too young for V&A, and too young for a night on their own at WDW.
And I can see that for a lot of families: even if they are billionaires, they are at WDW to spend time with their young kids, not go to a 5-star meal.

But WDW isn’t just young families. It’s also couples on their honeymoon, retirees, older families. For those adult guests, a chance to eat a 5-star meal is a draw itself.
I have a trip with another family coming in August. The kids on the trip will now range between 14 and 16. My friend is celebrating his 50th birthday on the trip.
If V&A or Tekumi-Tei open up by then, I likely will book 1 of them.

But getting back to the original post... I was never saying WDW is striving to become an elite luxury destination. I was saying they might rather have 90,000 daily guests spending $250 each on average, over 100,000 guests spending $150 average. (Between tickets, food, resort, etc).

The problem is the 2019 numbers meant that there were 165,000 average each day...and that’s just the gates. There are many more not entering a park.

Even with a significant “luxury reduction”
For profits...they won’t get close.

They won’t be happy with half that...the math doesn’t work for the number of high end they could ever hope to attract.

Middle class

just because Walt and Roy are dead...doesn’t mean they were wrong. Neither was Eisner.

 

[CastAStone]

There is no fifth gate. There’s nobody to staff it and people don’t take enough vacation to fill it. This was learned on data in 1998-99

Absolutely. Summer is becoming dead at WDW. They need to think of a way to pull people back. October shouldn’t be busier than July but it is now.

The answer to both of these problems is to build another US vacation destination somewhere that global warming will make nicer, not worse. Everyone will still take their WDW trips but they’ll also have to see Disney’s Frozen Kingdom in Niagara Falls. Make the snow a feature not a bug, and give people somewhere to go in the summer.

Disney at some point is going to realize that Summers in Orlando are a lost cause and they are foolish to continue to invest billions there when people would rather have their kids miss school than take the time they actually get off and go to the worlds most picturesque hellscape. There’s no fixing that. They need to diversify the division to ameliorate risk.

 

[havoc315]

The problem is the 2019 numbers meant that there were 165,000 average each day...and that’s just the gates. There are many more not entering a park.

Even with a significant “luxury reduction”
For profits...they won’t get close.

They won’t be happy with half that...the math doesn’t work for the number of high end they could ever hope to attract.

Middle class

just because Walt and Roy are dead...doesn’t mean they were wrong. Neither was Eisner.

Who said anything about half?

I’m thinking more like they would be perfectly happy with 160,000 instead of 165,000, if it was at a higher level of spending.

 

[UNCgolf]

The answer to both of these problems is to build another US vacation destination somewhere that global warming will make nicer, not worse. Everyone will still take their WDW trips but they’ll also have to see Disney’s Frozen Kingdom in Niagara Falls. Make the snow a feature not a bug, and give people somewhere to go in the summer.

Disney at some point is going to realize that Summers in Orlando are a lost cause and they are foolish to continue to invest billions there when people would rather have their kids miss school than take the time they actually get off and go to the worlds most picturesque hellscape. There’s no fixing that. They need to diversify the division to ameliorate risk.

I'd put the chances of Disney ever opening another park in the US at just slightly above 0%.

I'm very certain they don't want to build a park somewhere that's below freezing for a significant part of the year.