A Spirited 15 Rounds ...

[ford91exploder]

Another excellent post @ParentsOf4

While WDW hotel prices were always higher than the average going rate in other markets, the disparity was never as great as it is now. My family was the traditional middle class family growing up (2 kids, only Dad worked which was a shift work job at the PECO power plant) and we were able to afford a 7-10 day vacation every year with a park view room at the Contemporary on the Gold Key plan. Everything was included then in that plan..meals that included an adult beverage for mom and dad, boat rentals, etc. And my family was far from well off.

I get that the world has changed significantly since then in terms of pricing/cost, but the affordability of a WDW vacation has changed even more during that time.

And yet in those days the ROI of WDW was far better than the cost cutting WDW of today

 

[the.dreamfinder]

As someone who paid to see "The Book of Henry" in theaters three months ago, this is a positive development.
http://www.hollywoodreporter.com/he...rrow-as-director-star-wars-episode-ix-1035463

 

[flynnibus]

The Gold Key plan I was referring to was discontinued many years ago. This was available as early as the 1980s but I'm not sure when it met its demise. I'm guessing it ended sometime in the 90s as I remember having it on a trip in 90-91 as well. There were practically no limitations on what you could do or order for your meals and what was included as far as recreation, etc.

I don't remember Gold Key Club including Alcohol either. While the scope included all dimensions at WDW, it was not unlimited. Tho I loved doing all the boating, golfing, etc.

 

[bclane]

As someone who paid to see "The Book of Henry" in theaters three months ago, this is a positive development.
http://www.hollywoodreporter.com/he...rrow-as-director-star-wars-episode-ix-1035463

That's good news. I never liked him for IX.

 

[wannabeBelle]

And yet in those days the ROI of WDW was far better than the cost cutting WDW of today

Wouldnt that normally be the case?? Marie

 

[ford91exploder]

Wouldnt that normally be the case?? Marie

Yes considering that up to the 'Bad Eisner' days WDW was run as a single business as opposed to today where a bunch of competing business units share a chunk of real estate called WDW.

And the ROI i speak of was to Disney investors not the guests

 

[ford91exploder]

Some thoughts on subjects I know we have talked about, but not sure to what extent.

Disney (aka the state of Florida) is in the process of eminent domain proceedings that will force all businesses at the Crossroads of Lake Buena Vista to vacate their property as part of 'I-4 improvements' ... improvements that will also greater aid pushing people into the three parking structures of Disney Springs and eliminating much of the competition right on Disney's doorstep. Soon it will be time to say good-bye to everything from McDonald's to Chevy's to Taco Bell to Red Lobster to Uno's to Fuddrucker's to Sweet Tomatoes etc. But you can always visit Disney's lifestyle center as well.

And the timing of this is interesting considering Disney is now talking up adding urban sprawl to its failed Flamingo Crossing project with strip centers and the same dining locations that you can get on 192. I strongly suspect the companies that are being put out of business by Disney at 535 will be offered 'sweetheart' (if you are Georgie K) lease deals to open on the far side of Pandora or is it at Disney's Galaxy's Edge?

This is all combined with the movement of all CP and IP housing over there, so Disney can sell the valuable real estate that Vista Way and Little Lake Bryan sit on to outside developers (likely more hotels and timeshares and sprawl ...what Old Dead Guy Walt always wanted).

For those paying attention at home, Dakota got a last-minute visa and his SDL trip is on!!! Great. I can read his tweets as my roof gets torn off!

Been told that Disney Blogger to the Stars, Tom Bricker, is at WDW right now (he had to be the first blogger to write about how Disney handles hurricanes!) I think we should have a contest and the first person to spot him and post a picture here can win some piece of unneeded Disney crap picked up at the outlet stores by that dude @derekburgan (preferably Star Wars related!)

Lots here that I would like to comment on, but with a major storm eyeing the swamps, I need to focus on much more important things.

BTW, as I said in the Irma thread, if you have a WDW/UNI/FL trip planned in the next two weeks, my very educated opinion and strong advice would be to reschedule or cancel. You'll hear other opinions for certain. But they're generally based on the idea that a visit to WDW is as important as life and limb and it isn't.

Ah Disney the benevolent behemoth protecting its guests from low quality retailers and restaurants by having its wholly owned subsidiary The State if Florida take the land for I4 improvements to channel those people to Disneys safe and welcoming establishments at Disney Springs

 

[ParentsOf4]

And yet in those days the ROI of WDW was far better than the cost cutting WDW of today

Wouldnt that normally be the case?? Marie

@ford91exploder's point is that, as a percentage of revenue, Disney's Parks & Resorts (P&R) business segment was more financially successful back in the days when Disney was committed to providing its Guests with the highest level of service. In other words, back when Disney put its Guests first, Disney provided a better return on investment to its shareholders.

Until very recently.

Within the last 2 years, domestic P&R percent operating margin is starting to reach levels last seen in the 1980s and 1990s. It's now is higher than what it was in the 1970s. Again, this has happened only within the last couple of years. IMO, this would have started a year or two earlier except for MyMagic+, which incurred all sorts of startup costs that impacted profitability.

Disney's international theme parks continue to perform poorly, dragging down P&R as a whole.

 

[wannabeBelle]

Yes considering that up to the 'Bad Eisner' days WDW was run as a single business as opposed to today where a bunch of competing business units share a chunk of real estate called WDW.

And the ROI i speak of was to Disney investors not the guests

That was kind of what I was thinking as well, The return on investment for the business, not guest. Marie

 

[wannabeBelle]

@ford91exploder's point is that, as a percentage of revenue, Disney's Parks & Resorts (P&R) business segment was more financially successful back in the days when Disney was committed to providing its Guests with the highest level of service. In other words, back when Disney put its Guests first, Disney provided a better return on investment to its shareholders.

Until very recently.

Within the last 2 years, domestic P&R percent operating margin is starting to reach levels last seen in the 1980s and 1990s. It's now is higher than what it was in the 1970s. Again, this has happened only within the last couple of years. IMO, this would have started a year or two earlier except for MyMagic+, which incurred all sorts of startup costs that impacted profitability.

Disney's international theme parks continue to perform poorly, dragging down P&R as a whole.

So are you thinking that the profitability is due to cost cutting, better investments in the resort across the board or some combination of the two? Marie

 

[the.dreamfinder]

Murray Lerner, Director of "Magic Journeys" and documentarian of 60's and 70's music, has died.
http://variety.com/2017/music/news/...erner-60s-70s-music-dead-new-york-1202546989/
via @TomKMorris on twitter

 

[ParentsOf4]

So are you thinking that the profitability is due to cost cutting, better investments in the resort across the board or some combination of the two? Marie

Domestic Parks & Resorts' improved profitability is due to:

1. Higher volumes - Disney's theme park and hotel costs are not linear. They are relatively fixed. For example, when theme park daily attendance increases from 40,000 to 50,000, Disney's costs do not increase by 25%. Instead, costs might increase by, say, only 15%. But revenue is linear. These 25% more people are spending 25% more.
2. Higher prices compared to costs - Disney, for example, might raise the price of an item by 5% even though its cost to Disney went up by only 3%. Better yet, Disney might squeeze its supplier to drop the price, yet still raise the price you and I pay by 5%.
3. Cost cutting - Disney is constantly looking for ways to reduce costs. Find a cheaper napkin or lightbulb, stretch out scheduled maintenance, keep equipment after it's no longer being depreciated. For example, you and I might be riding buses that average 6 years old, whereas we were riding buses that averaged 5 years old in the past. You might notice more burned out light bulbs. Perhaps you might notice benches that seem a bit more worn than before. A corporate suit might tell the manager of (say) Port Orleans Riverside that she has to reduce hotel operating costs by 5%. She and her team are left to figure out how. In an operation the size of WDW, the pennies add up.

 

[the.dreamfinder]

In an operation the size of WDW, the pennies add up.

Yet dollars fly over their heads.

 

[solidyne]

The only thing insane, is the guests who keep willing to pay skyrocketing prices. Until guests STOP booking at ridiculous $$$, TDO will keep raising and raising and raising resort prices.

Exactamundo. One simply cannot blame Disney here.

.... For example, you and I might be riding buses that average 6 years old, whereas we were riding buses that averaged 5 years old in the past. You might notice more burned out light bulbs. Perhaps you might notice benches that seem a bit more worn than before.

Exactamundo again. WE notice, but the other thousands don't, and they fork over willingly.

 

[ford91exploder]

@ford91exploder's point is that, as a percentage of revenue, Disney's Parks & Resorts (P&R) business segment was more financially successful back in the days when Disney was committed to providing its Guests with the highest level of service. In other words, back when Disney put its Guests first, Disney provided a better return on investment to its shareholders.

Until very recently.

Within the last 2 years, domestic P&R percent operating margin is starting to reach levels last seen in the 1980s and 1990s. It's now is higher than what it was in the 1970s. Again, this has happened only within the last couple of years. IMO, this would have started a year or two earlier except for MyMagic+, which incurred all sorts of startup costs that impacted profitability.

Disney's international theme parks continue to perform poorly, dragging down P&R as a whole.

As usual you are correct but the recent financial results were achieved only by huge cuts ongoing (according to @WDW1974) in quality/entertainment/services and by no means are they 'organic' as they were in the 70-90's or as they are NOW at UNI who are investing in the business at the level Disney historically did pre-Iger.

 

[brb1006]

Tonight PBS or WHYY is doing a documentary on Tyrus Wong (Who was involved with the original Bambi) that will come on tonight at 9:00pm.

 

[AEfx]

Universal get far too much of a free ride. Their direction post Diagon has been atrocious....Universal Studios is a complete mess and Islands is dated in areas it really shouldn't be (J Park & Marvel). People don't think Doctor Doom Meet and Greet and a Storm spinner when they think of Marvel in 2017...nor do they think that pop up carnival games make the best use of Jurassic Park IP. Fast and Furious will be the tipping point for many

I really don't know how anyone can say that. The pace at which they add things is incredible. And what they add is of good quality or better - I mean, come on, look at the garbage that passes for "new" at WDW. Universal isn't adding sing-a-longs and or glorified fashion shows as content. Yes, they are too screen heavy for my personal tastes, but come on...when you look at what they have added since 2010 and what Disney has added, it's pathetic all the way until Avatar. Granted, it seems like things are changing for the better WDW - but Universal has done remarkably.

Let's not forget - and one can go back on this very board and read posts from five, ten years ago - when people laughed at the notion that Universal would ever even be considered in the same attendance league as any Disney park. Well, they have doubled their attendance since 2010 - somehow brought a whole new audience to this supposedly "saturated" market - at the same time all but the MK at WDW have had stagnant attendance.

They haven't been perfect (Jurrasic Park needs another E-ticket so badly it hurts) but they certainly have done very, very well - and the Potter lands are still the most themed and detailed lands in Orlando.

 

[AEfx]

So who else is looking forward to @marni1971's upcoming Imagination Tribute video that is coming this month?

I look forward to every single one!

 

[brb1006]

It's here!

 

[AEfx]

This is all my point is. A decent, clean motel room on property at one of the largest tourist attraction in the world can be expected to have a rack rate around $100 just based on comps in similar situations. I'm not saying the price is "worth it" or that you can't get it cheaper with discounts, but that the price is not some out of the ordinary number. It's quite in line with industry standards.

If someone wants to argue that all hotel rooms are overpriced and should be cheaper, be my guest. But I don't see Disney charging anything out of the ordinary for the product and proximity to a major draw for tourists. At least for values and moderates.

I understand this line of thinking, and I don't think it's completely wrong - but I do think it doesn't take into account the whole picture as it relates to WDW.

Sure, a motel during busy tourist season at some beachfront town will run you $100-150/night.

Yeah, a hot dog and beer at a sporting event will cost $20.

No doubt, you totally can spend $200-300 on a prime seat at a concert for the top artists in the world.

However...

...when you stay at the beach motel, the beach is free and you can pack a lunch from some local grocery store.

...you aren't eating three square meals a day at a sporting event (and if you are smart, you aren't even eating one).

...you aren't going to concerts every day for a week straight.

Most of the places that people can say "well of course it's spendy, it's a tourist trap!" are referring to one or two aspects where various businesses leverage a proximity advantage.

At WDW, it's a trifecta of inflated lodging, food, and admission prices that last from the moment you set foot on property until the moment you leave. I honestly cannot think of any place else that gets away with this. The closest I can think of is Manhattan - but even there, you have choices - you can grab a couple of dirty dogs or slices and a drink for lunch for $5. There are many free/cheap things to do to fill your day, even if you splurge on Broadway tickets for that night. And it's not a single company trying to milk every cent out of your bank account, either.

Not even Disneyland compares - at Disneyland, you can literally just walk across the street and go to Denny's for a decent priced meal, and just a block or two away there are places like a very well-kept and contemporary Motel 6, that is as good as a Disney Value resort in quality but far less walking, for $50/night.

Now, that's all before you even talk about the declining offerings and measurably less value that these ever increasing prices are buying - from reduced park hours, reduced benefits (FP vs. FP+), increased reliance on nearly slave-wage workers (CP) who largely have dragged down the service given by your average CM's, and all the little cost-cutting things from maintenance of rides and public areas and yes, even to things like unique park-branded paper products (I still have the napkins from my first MK and EPCOT visits in a scrapbook because I thought that was so neat and cool).

And it is measurable. Take DDP, for instance. A few years ago @ParentsOf4 did an extensive analysis of the DDP when it launched versus now. It's basically 1/4 of the value it once was. It costs twice as much and gives you half of what you used to get.

Eventually, this bubble is going to burst. It's already showing signs. People are having less kids, particularly those people with financial means, and Disney can't keep relying on them just forking out because it's a "right of passage" forever. Even five years ago, not a single week went by when I didn't know someone going to WDW, and now - even when they are going to FL, many skip it. When they say where they are going and I ask about Disney, they are like "yeah, we are skipping it - too expensive, and there is so much else to do in Orlando" because Disney has based their entire pricing model to make spending a few days there versus a full week nonsensical, and has engineered things as best they possibly could to discourage you from ever leaving the boundaries of the resort.

They are even losing "pixie dusters" - I know a "Disney Mom" type family who went to WDW at least twice yearly for a week each time, and know where they are as I type? Paris. And in a few days they are off to Spain. And it's not because they were bored with WDW. It is because they looked at how much they were spending at WDW to stay at a moderate for a week and were like, "Um, we could do a multi-city European tour for the same cost". Disney finally met their breaking point.

Star Wars land is going to be a huge litmus test. It will be very interesting to see how people treat it. On one hand, it seems obvious to say - this increased price/reduced value has only just begun. But here is the rub - there is definitely a cross-pollination of Disney/Star Wars fans. But by and large - when you read non-Disney boards that discuss Star Wars, you see that more often than not - Star Wars fans (rightly or wrongly) despise Disney for one reason or another - either as a company or the parks, and quite often both.

These people will be drawn to Star Wars land in epic, unprecedented numbers, no doubt in my mind - but the question is - are they going to do it as part of a week at WDW as the WDW business model is designed to extract from them? The new starship hotel is trying to hedge on this bet - that those folks will pay through the nose for a two-day experience. But unless they build a bunch of them, it's still not going to defer the amount of people who literally just care about SWL.

My guess is, the Studios are going to skyrocket in attendance - but it's not going to spill over to AK/Epcot, or get them to spend a week on property. It's probably even going to suck away some of the Teflon-coated MK attendance, replacing it as the "if you only spend one day at Disney..." park for many. When you boil it down, it's just going to be two rides in a single land, easily done in a single day. (That's why Universal was brilliant with connecting Potter and their two parks.) That's also why MK keeps increasing in attendance - the "Orlando" vacation with a few days at Disney that once was popular was replaced with a WDW-only vacation due to MYW, but because of Universal the tides have been shifting the other way for quite some time already.

Disney's goal in building SWL is to bring more people to spend a week at the resort itself - but I have a feeling it's going to benefit the greater Orlando area more than it's actually going to keep people spending at Disney for their entire trip, because spending a week on property is so outrageously expensive at this point and people are getting savvy enough to realize this. I honestly believe it's going to push people over that edge - the biggest increase (aside from merchandise) is going to be single day tickets more than anything else.


TL;DR? WDW can only maintain these practices for so long - outside of Disney fans, the general public perception of WDW has gone from "wow, it's not cheap but the quality of everything is worth it, I was amazed at the level of service and once you are there, all experiences are included" to "crazy overpriced crowded tourist trap nickel-and-diming you with upcharges" - and even Star Wars may not be able to sustain the resort business model that Disney is already pushed to it's upper limits. In terms of overall bringing people to Orlando, it's probably going to end up benefiting Universal and other non-Disney Orlando as much as Disney.