A Spirited Perfect Ten

spacemt354

Chili's

I'm not sure why PITA hasn't either.. o_O
I'm sure it's bread a lot of controversy ;)
 

wdidreamer

New Member
Spirited Thursday Night Quickees:

I'm sure you've all heard (or read) that Erin Wallace is gone from WDW Co., off to run the second-largest chain of early child education centers or some such place based in a state that only a Wolverine or a unionized auto worker could love.

Here's what you may not know: she's been quite unhappy, and vocal about it, in her last position and was told a while back that she was on her last contract with Disney. Unlike many who would be glad to retire in the sun and enjoy the millions of dollars in stock she has amassed working in the swamps at the resort her daddy helped build, Wallace wasn't ready for retirement.

Speaking of which, if you talk to folks in the business what you hear about Disney P&R execs is quite scary. A whole generation of execs from George Kalogridis to Karl Holz to Bill Ernest to Phil Holmes are at (or close) Disney's point of being shoved out due to age, on top of Wallace and Meg Crofton leaving. And there isn't a NEXTGEN program of talent below them. If Disney insists on simply moving chess pieces around the same board, then the company will be stuck with a group of middle managers elevated to positions that they aren't remotely capable of handling. Sounds about right.

Will Disney finally bring some new blood ... outside blood into the asylum of Pixie Dust and MAGIC Bands? Stay tuned.

Also stay tuned to see whether succession to the top spot at Disney is on the minds of the audience in San Francisco in March at Disney's annual shareholders gathering. While Wall Street may be enamored with Bob 'The Acquirer' Iger, neither Jay Rasulo nor Tom Staggs gets the analysts hot and bothered and Iger is acting like it doesn't matter and that he'll simply get to pick one. He really shouldn't jump to that conclusion.

OK, so is the Lifestyler debate/discussion over? I was really enjoying it. And actually agreeing with much of what both @flynnibus and @WDWFigment were saying. Far more interesting than talking about the pathetic state PotC is in or PPF's new queue that takes the part of @TalkingHead 's beloved quail tile restrooms and fanboi pickup locale.

So, DCL is getting all Frozen over? Now, really, did you guys/gals not see that one coming like a giant iceberg in the middle of a pond?

Had to run into my mall earlier tonight and stopped by the Disney outlet, for my semi-weekly 'what is WDW P&R retail trying to dump now?' Anything with the year 2014 on it (I still don't get why anyone would buy that stuff at half off ... maybe 75-90% off if you visited in '14 and wanted something) as well as all those nice dishes from Phil Holmes New Fantasyland Boutique and Shrine To His Own Amazing Teeth Whitening ... and the first of what likely will be a huge selection of Co-op stuff, namely some Kevin Kidney tiki bowl for $24.99 (I believe I heard a CM yell to another to put one on hold for this site's No. 1 poster of all time, my pal and yours, the @EPCOT Explorer.)

Seeing stuff like that wind up at the outlets so quickly tells you that it will only stay on shelves at WDW for a very limited time. They do not intend to keep selling it beyond a period of months when they can reasonably expect every crazy Lifestyler, fanboi blogger, OCDer will buy rather than wait.

Wasn't impressed by Soup and Salad Sandra's lame a-r-s-e piece on people dying at WDW. Sandy, baby, if you want to be hard-hitting why not focus on real safety issues that could affect guests and/or cast? Newsprint is pricey and wasting on people whose time sadly expired when they were at Dizzy World ain't newsworthy by any stretch.

Speaking of lame, the new(??) censorship filter on these boards is a bit much. Are we now going to censor any/every word that some special person finds offensive?

You know what I like most about the BAH coming down at The Park Soon To Be Renamed Something Else With Both Disney and Adventure in it? That it slowly will fade away as a discussion topic and will be relegated to the trash pile of Disney fandome/history where it should burn in hell.

Anyone excited to see Cinderella? Yeah, didn't think so.

Speaking of which, Into the Woods flamed out very quickly.

OK, so I was supposed to think Jason Surrell was talented and now I'm supposed to think Jason Grandt (who?) is too? I guess that's today's lesson from the Disney Twitverse.

I really like what I'm hearing about Disney's plans for sprucing up DLP and making it ''shine like new'' (a quote from someone high up the food chain) in time for its 25th Anniversary. Funny what playing hardball can get you ... in this case, exactly what the folks in Burbank wanted all along.

Oh, and HKDL ... nah, we'll leave that for another time as I need to fly.


Correction: The Kevin and Jody bowl was never designed for the co-op. That was actually design for Disneyland's tiki room 50th anniversary (2013?).
 
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lobelia

Well-Known Member
Seems like a lot of demonization of bars and alcohol here. Alcohol and bars are not the problem. It's the human behavior that happens due to lowered Inhibitions. I understand some of cursing because some toddler keeps whining and kicking the bar, getting up and down from the chair, and having to listen to mom and dad correct this kid. I've seen bad behavior everywhere. Exposure to alcohol and curse words does not necessarily mean the kids going to start drinking or cursing. I'm really ok with a well behaved child in a bar setting and I would be ok with my kid sitting with me so say hey look at that person who is drinking too much or acting that way. That's not what you are allowed to do. I'm not talking about dance bars or college bars but bars like the one in Port Orleans. There's plenty of drinking going on, I'm not buying alcohol for my child, but he's sitting in the bar so he can listen to the performer.
 

unkadug

Follower of "Saget"The Cult
Seems like a lot of demonization of bars and alcohol here. Alcohol and bars are not the problem. It's the human behavior that happens due to lowered Inhibitions. I understand some of cursing because some toddler keeps whining and kicking the bar, getting up and down from the chair, and having to listen to mom and dad correct this kid. I've seen bad behavior everywhere. Exposure to alcohol and curse words does not necessarily mean the kids going to start drinking or cursing. I'm really ok with a well behaved child in a bar setting and I would be ok with my kid sitting with me so say hey look at that person who is drinking too much or acting that way. That's not what you are allowed to do. I'm not talking about dance bars or college bars but bars like the one in Port Orleans. There's plenty of drinking going on, I'm not buying alcohol for my child, but he's sitting in the bar so he can listen to the performer.
There's a time and place for everything. Having a child in a bar is neither.
 

ParentsOf4

Well-Known Member
The "truth" I was referring to is that Disney is not at all what it used to be even from when I was a kid. Things have changed for the worse in some ways (maintenance, Frostrom, how long we've been waiting for a new major E Ticket, etc.) and it was a pretty tough pill to swallow.
We discuss Disney theme park maintenance a lot on these threads but most of what’s said is opinion. However, by looking at Disney’s budgets over the decades, it’s possible to get a sense of where maintenance is today compared to where it used to be. The 2 most interesting numbers to consider are capital expenditures (capex) and depreciation.

Capex represents spending on long-term physical assets, something that will provide a benefit for more than a year. Attractions, buildings, vehicles, roads, etc. are examples of capex.

Depreciation is how that capex is recorded as an expense. When Disney (for example) builds a new attraction, it doesn’t deduct the entire cost of that attraction as an expense in a single year. That attraction likely will be used for decades. Therefore, Disney expenses its cost over decades, typically 25 to 40 years.

Disney uses the straight-line method to depreciate its theme park assets. If an attraction costs $100M and is going to be used for 25 years, Disney records an expense against revenue of $4M ($100M/25) for 25 years. Each year for 25 years, profit is reduced by $4M.

Capex can be for either maintenance or growth. (See my post here for an explanation.) Maintenance capex is associated with repairing and replacing existing long-term physical assets. Let’s consider the example of a Disney bus.

WDW operates a large fleet of buses that age and eventually need to be replaced. For the sake of discussion, let’s assume Disney paid $300K for a bus and the recommended service life of that bus was 10 years.

When it purchased that bus, Disney didn’t record that $300K as an expense. Instead, they divided that price over 10 years and then deducted $30K each year as an expense in the form of depreciation. After 10 years, Disney recorded $300K of expense, the original price of the bus. Disney should then be ready to buy a new bus to replace the 10-year-old bus.

The amount spent above depreciation represents a theoretical investment to improve the parks. However, there are a few factors to consider suggesting that Disney should spend more than depreciation in order to maintain the same level of service and quality.

First is inflation. That $300K bus 10 years ago might cost $400K today. (At WDW’s average ticket price hike over the last decade, that bus would cost $517K. :eek:) Disney will try to offset the cost of a new bus by selling that 10-year-old bus to someone else. Still, Disney likely will have to spend more than $300K.

Second is attendance and hotel occupancy. As these increase, capacity needs to be increased in order to maintain a comparable level of service. Since 2005, theme park attendance is up 24% while the number of occupied rooms is up 9%. (It appears higher prices have caused a growing number of Guests to stay offset.) Theoretically, in order to maintain the same level of service, Disney should have at least 9% more buses than it did in 2005.

Third is what Walt Disney called “those sharp-pencil guys”.

Back in the old days, Disney might have kept that bus for only 5 years. Those who cut their teeth under Walt Disney inherited Walt’s philosophy that everything “must be kept clean and fresh”.

In the 1990s, those 5 years stretched to 10 years. Old-time Parks & Resorts (P&R) executives were mortified but, arguably, Disney management simply was following common practices.

In the 2000s, it got worse. Today, something that should be depreciated over 10 years might be stretched out a bit longer than it should. That 10 years might became 11 or 12. As senior management pressures middle management to improve profitability, middle management looks for these tricks to reduce costs.

Can someone tell the difference between a 10 year-old and an 11-year-old bus? Probably not. However, can someone who remembers the days of the 5-year-old bus recognize the difference? You bet.

It’s more obvious at the theme parks. At one time, broken animatronics would have been unacceptable. Now it’s the norm.

Theoretically, Disney needs to spend at least the amount it depreciates in order to maintain a comparable level of quality and service.

So what is the minimum amount to maintain the old Walt Disney standards?

I look at historical levels of P&R capex and depreciation for patterns. How low has it been?

In the 20th Century, the lowest domestic P&R capex has ever been was 15% above depreciation. In other words, Disney spent 15% more on capex than it wrote off on depreciation. That happened in 1977 when Disney wasn’t building much and was pooling its resources for the huge Epcot investment. (Two years later, this number ballooned to 278%!)

However, since Paul Pressler followed by Jay Rasulo were placed in charge of Parks & Resorts and started looking for alternative ways to improve financial performance, there’s only been 4 years where the number has exceeded 15%.

Since the opening of WDW, Disney’s domestic theme park capex expenditures above depreciation costs have been:

P&R Depreciation.jpg


Even with construction at SDMT, Disney Springs, and Pandora all happening in fiscal year 2014, that number was 6% last year.

As evidenced by the numbers, Disney isn’t maintaining its old standards at its domestic theme parks. Considering most think DLR is the best it's been in years, this suggests that WDW is bearing the brunt of these reduced standards.
 
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ford91exploder

Resident Curmudgeon
Seems like a lot of demonization of bars and alcohol here. Alcohol and bars are not the problem. It's the human behavior that happens due to lowered Inhibitions. I understand some of cursing because some toddler keeps whining and kicking the bar, getting up and down from the chair, and having to listen to mom and dad correct this kid. I've seen bad behavior everywhere. Exposure to alcohol and curse words does not necessarily mean the kids going to start drinking or cursing. I'm really ok with a well behaved child in a bar setting and I would be ok with my kid sitting with me so say hey look at that person who is drinking too much or acting that way. That's not what you are allowed to do. I'm not talking about dance bars or college bars but bars like the one in Port Orleans. There's plenty of drinking going on, I'm not buying alcohol for my child, but he's sitting in the bar so he can listen to the performer.

Actually not, At least what I am discussing is children at the BAR proper, NOT children in an establisment which serves alcohol big difference there.
 

Goofyernmost

Well-Known Member
Second is attendance and hotel occupancy. As these increase, capacity needs to be increased in order to maintain a comparable level of service. Since 2005, theme park attendance is up 24% while the number of occupied rooms is up 9%. (It appears higher prices have caused a growing number of Guests to stay offset.) Theoretically, in order to maintain the same level of service, Disney should have at least 9% more buses than it did in 2005.

Third is what Walt Disney called “those sharp-pencil guys”.

Back in the old days, Disney might have kept that bus for only 5 years. Those who cut their teeth under Walt Disney inherited Walt’s philosophy that everything “must be kept clean and fresh”.

In the 1990s, those 5 years stretched to 10 years. Old-time Parks & Resorts (P&R) executives were mortified but, arguably, Disney management simply was following common practices.

In the 2000s, it got worse. Today, something that should be depreciated over 10 years might be stretched out a bit longer than it should. That 10 years might became 11 or 12. As senior management pressures middle management to improve profitability, middle management looks for these tricks to reduce costs.

Can someone tell the difference between a 10 year-old and an 11-year-old bus? Probably not. However, can someone who remembers the days of the 5-year-old bus recognize the difference? You bet.
As usual Pof4, a clear and straight forward evaluation of how that system generally works, or at least should work. Two things that I might interject would be that the first thought that if the resort attendance rate that increased 9% it should mean a 9% increase in numbers of buses, would be true providing one assumes that the buses previously were being utilized to their maximum. If they were being underutilized then a growth like that can occur without having to increase the capex.

The second is that I don't believe that WDW has ever been on a 5 year cycle with them. Historically, as long as a bus continued to operate at a high enough level to not cost an arm and a leg to operate it was kept on. Being in central Florida, as opposed to the coast, the bodies of those vehicles have stayed pretty stable. It was much cheaper to replace the drive train as it wore out then to replace the entire bus. So, for many years at least, they only added to the fleet as necessary and almost never retired the older fleet. I haven't looked at it recently, but, maybe back in the 90's or early 2000's I researched the bus status because I had my eyes set on driving bus there after my retirement from full time work. They had buses, still on line, that were part of the originals, first put on line in 1972. I'm sure that not much of those buses were original in any way other then the frame and body, but, they were still on the road. Some with over a million miles on them. Even the design of the old buses lent itself to continued use. The basic body design didn't change for decades. Everything below the passenger line was made up of removable panels so if one got damaged it was easily replaced. Now bus manufacturers have finally figured out that they were shooting themselves in the foot by not changing so that the style was easily recognizable as new or old.

So, there was a lot of grey area in the life of those items and were depreciated away long before they were replaced. I do, however, realize that the buses are a minor part of what you are saying, but, it does illustrate how that can be manipulated to cut costs without necessarily negatively affecting the services provided.
 

ParentsOf4

Well-Known Member
As usual Pof4, a clear and straight forward evaluation of how that system generally works, or at least should work. Two things that I might interject would be that the first thought that if the resort attendance rate that increased 9% it should mean a 9% increase in numbers of buses, would be true providing one assumes that the buses previously were being utilized to their maximum. If they were being underutilized then a growth like that can occur without having to increase the capex..
Please note that my post centers around providing an equivalent level of quality or service.

At peak times of day (i.e. theme park opening & closing), having Guests wait longer for buses back to resorts is not the same level of service as when there were fewer Guests.

During less crowded times of day, having Guests stand is not the same level of service as having seats for everyone.

In order to provide a comparable level of service (e.g. similar wait times or seating), Disney needs to increase the number of buses in its fleet as the number of people at the hotels and theme parks increase.

The problem is that Disney is applying concepts of Lean manufacturing to human beings, treating 'Guests' like raw material.

People are not raw material to be optimized on the factory floor.
The second is that I don't believe that WDW has ever been on a 5 year cycle with them.
5 or 10 years, $300K, etc. were just numbers for the sake of discussion in order to make the concepts clearer.

It's why I wrote: "For the sake of discussion ..." :)

Disney used to repair or replace its physical assets much more frequently than recommended by the manufacturer. That was part of the once fabled "Disney Difference". :)
 

71jason

Well-Known Member
Actually not, At least what I am discussing is children at the BAR proper, NOT children in an establisment which serves alcohol big difference there.

This exactly. Legally there is a huge difference between sitting at the bar in River Roost, and sitting at a table at River Roost.

Although rumor has it Trader Sam's is going to make this difference more cloudy, kicking kids out after 8 pm. No word if other WDW bars will follow suit. But even then, it's the difference between state law (or regulation, today I'm too hungover to look) and corporate policy.
 

MerlinTheGoat

Well-Known Member
That isn't what the issue will be. Soon someone is going to insist that the "animals in question" need to accompany them on the ride, because without them their personal life is in danger. Then there will be an issue that will include PITA (the organization, not the condition) vs. ADA. I'm not sure why PITA hasn't jumped on the cruelty of forcing animals to be walking around on 100 degree pavement in 100 degree heat so that someone can get a few minutes of giggles riding a ride in a theme park.
At the rate they're going, PETA will get more backlash than the ADA or people exploiting service animals. PETA's done a pretty A-class job trashing their name and those also against animal cruelty. I've only even seen two instances of PETA media attention in the recent past, both negatively reflecting their organization. One was protesting Super Mario (a fictional video game character) wearing a raccoon-like costume. The other was PETA killing thousands of their "saved" animals per year (tens of thousands since the late 90's)-
http://www.nytimes.com/2013/07/07/u...iving-end-of-others-anger.html?pagewanted=all

Animal activism did help tarnish Seaworld's reputation in recent years, but PETA had little to nothing to do with it (Blackfish was the motivator there). There was a general public and media backlash against Seaworld, anything PETA said on the matter was largely drowned out.

I am myself (ironically) a vegetarian of almost a decade now (vegan for most of it, as I am currently) with no desire to go back to meat. Health benefits aside, ethics do factor into it substantially (though I won't attack someone for enjoying a steak). Yet despite my deep distaste for animal cruelty, PETA's way of protesting it accomplishes little to nothing. It also causes more problems for their side in the long run. No one on either side appreciates being attacked. Particularly in the extremist, comical and hypocritical manner that PETA goes about it. Their reputation is poop as a result. And because they're basically the biggest name in animal activism out there, their poor reputation often compromises legitimate attempts to help fix animal exploitation.

I don't feel comfortable with PETA being the primary representative of (and the name generally associate with) animal ethics. Their hate fueled methods remind me of the Westboro Baptist Church. I feel PETA has harmed animal activism more than helped it.
 
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spacemt354

Chili's
We discuss Disney theme park maintenance a lot on these threads but most of what’s said is opinion. However, by looking at Disney’s budgets over the decades, it’s possible to get a sense of where maintenance is today compared to where it used to be. The 2 most interesting numbers to consider are capital expenditures (capex) and depreciation.

Excellent analysis. There are a few inquiries I have about your theoretical propositions and how it relates to your graph.

Let’s consider the example of a Disney bus.

WDW operates a large fleet of buses that age and eventually need to be replaced. For the sake of discussion, let’s assume Disney paid $300K for a bus and the recommended service life of that bus was 10 years.
When it purchased that bus, Disney didn’t record that $300K as an expense. Instead, they divided that price over 10 years and then deducted $30K each year as an expense in the form of depreciation. After 10 years, Disney recorded $300K of expense, the original price of the bus. Disney should then be ready to buy a new bus to replace the 10-year-old bus.

The amount spent above depreciation represents a theoretical investment to improve the parks. However, there are a few factors to consider suggesting that Disney should spend more than depreciation in order to maintain the same level of service and quality.

First is inflation. That $300K bus 10 years ago might cost $400K today. (At WDW’s average ticket price hike over the last decade, that bus would cost $517K. :eek:) Disney will try to offset the cost of a new bus by selling that 10-year-old bus to someone else. Still, Disney likely will have to spend more than $300K.

Second is attendance and hotel occupancy. As these increase, capacity needs to be increased in order to maintain a comparable level of service. Since 2005, theme park attendance is up 24% while the number of occupied rooms is up 9%. (It appears higher prices have caused a growing number of Guests to stay offset.) Theoretically, in order to maintain the same level of service, Disney should have at least 9% more buses than it did in 2005.

If you purchase a bus in 2005 for $300K and use straight-line depreciation for 10 years, you had said that Disney doesn't record the $300K as an expense when it makes the purchase. Instead over the next 10 years, Disney will deduct $30K from its profits.

The theoretical jargon is where I think we need to separate fact from opinion. Statistics are tricky because sometimes numbers and figures can simply tell you what you want to see. Since there are 2 forms of capex (maintenance and growth) using the example of a bus expense compared to an attraction expense shouldn't be shared in the same graph since they are two different styles of investment. In the example, a bus will be completely replaced after 10 years, since that is its theoretical lifespan. A theme park or attraction however, doesn't have a set end date. Historically, the years in your graph that have the highest value of capex/depreciation derive from 1971 (Magic Kingdom resort area opens), 1981/1982 (Epcot and monorail expansion), and 1987-1990 (roughly when TL and DHS opened).


Since the opening of WDW, Disney’s domestic theme park capex expenditures above depreciation costs have been:

View attachment 80277

Even with construction at SDMT, Disney Springs, and Pandora all happening in fiscal year 2014, that number was 6% last year.

As evidenced by the numbers, Disney isn’t maintaining its old standards at its domestic theme parks. Considering most think DLR is the best it's been in years, this suggests that WDW is bearing the brunt of these reduced standards.
I'm completely on board with Disney cutting costs maintenance over the last 10 years but I don't think you need this graph to explain that. I think the numbers in the graph persuade the reader to think "wow, look at what Disney used to invest, why can't they do that now?"

Well, could a possible explanation be that the resort has simply expanded so far as it cannot invest at the same rate and ferocity that it did with Epcot? According to your figures and adjusting for inflation, (in 1979 a $1.4B investment into Epcot would be $3.39B in 2015), it seems like Disney would need to spend billions and billions of dollars to compete with the standards set in the 80s/90s. Epcot basically doubled the size of entire resort. To compete with those figures, Disney would need to build 5th/6th gates and tons of hotels.

Your final point about SDMT, Disney Springs, and Pandora speaks to what I'm trying to get at.

In 1971, there's going to be a huge percentage of capex/depreciation compared to the years prior when there was no MK. As well as the other boosts in capex/depreciation over the years.

1998 was a huge year for Disney in terms of attractions and property expansions, yet its percentage of capex/depreciation was 7.6x less than the percentage in 1982. So I think we have to consider the size of the resort more when determining what the actual old standards were.

Your final inference makes it seem like the WDW standards in 1982 were 252x better than they are in 2013 because of the graph. I know some Disney fans (perhaps even myself) would like to agree with that, however that's where fact morphs with opinion and I think we should be careful to consider the influence of other variables.
 
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