Analysts project 10 pct attendance decline at Disney's U.S. parks

[jmvd20]

I don't know, I'm not a lawyer, but maybe one could claim it's false advertising. Advertising something as ending in 2 days and then all of a sudden extending it (when Disney already knew it was going to be extended) seems shady at this point with what's been happening in the economy.

I still do not see anything wrong with them advertising it like they have been. No one is being forced to to jump at the discounted offer. I lumo this in the same category that allows the same car dealerhship to advertise the worlds largest one week car sale every week for 16 years...

Say you are a person watching on TV and never been to Disney. You see this amazing ad on TV telling you this offer expires on this date and to book now. You decide, hey this is a great deal, lets overextend our credit cards, borrow too much money and go on this vacation when you shouldn't (or at least wait until you actually have the money).

This is what got us into this mess in the first place. if you cant afford a vacation you shouldn't take it... period. That being said this is a free country and people have the choice of what to do with their money. The fact is that Disney needs to offer incentives right now in order to fill the parks and that is what they are doing. Again, if they choose to extend the offer it is their choice and they can do it.

I still am not seeing how this affects the situation you describe above. If they bought the discounted trip and they get it at the rate as advertised how does it adeversley effect them if the deal is extended. They have already gotten their trip for a deal they liked. How does that basic principal change when the deal is extended?

Am I the only one that could draw a comparison to all the adjustable rate mortgages that people really shouldn't be in or couldn't afford that got in them just because of the great advertising?

I cant make that comparission. Disney is offering a specific vacation package for a greatly reduced rate that must be paid for - in full - prior to services being rendered. Now, if someone chooses to get a loan or use a credit card to pay for it that is up to them. Either way Disney is paid up front.

The ARM's were being pushed by many banks and loan companies because they knew rates were at or near lows and would of course go up. However, in the end the prospective homeowner is the one that makes the final decision to sign on the dotted line.

The world would be much better off if everyone was actually held accountable for their own decisions. But when you can blame Disney for "making" you take a trip due to a coupon, or banks can loan money to someone whom they know cannot pay it off but can rely on the government to bail them out - problems await.

 

[Computer Magic]

Yep - I was there mid march. Rock N RC was indeed 2.5 hours, along with many other rides being 1.5 hours and longer. I felt it was just as crowded as last July was when I was there. Every restaurant we tried to get into was booked. I didn't find there to be any drop in attendance, and I visit 2-3 times a year. However, it could be true that the latter half of this year is when attendance will drop. I don't know much about analysts to say whether or not I agree - I just know what I experienced myself.

How many attractions were closed for refurb or park hours? That could be the reason other rides were so crowded.

It seems the 4/3 got people into the parks. I wonder how much was spent once inside? Was it a strict budget or loose?

 

[NX2I85]

Down 10%, huh? So does that mean Obama can fire Iger? :king:

 

[Missing20K]

I don't believe this for a second. What about all those guests pouring through the gates everyday?? The company and parks are absolutely fine. I think the executives should get bonuses this quarter.

:animwink:

Where are all of the "the parks are fine" people?

 

[TP2000]

And since almost everyone is staying for 40% off to begin with, well those are the numbers that the analysts will jump on.

But that is not what these analysts jumped on, or are referring to. The Goldman Sachs analysts, who are also "experts" as well I'm sure, very clearly are speaking about a 10% decline in park attendance this summer at American theme parks owned by Disney.

"Goldman estimates that year-over-year attendance fell 4 percent during Disney’s second fiscal quarter, which ended Saturday, and that it will fall 5 percent in the third quarter and then 10 percent in the fourth, which runs from July through September."

 

[KeithVH]

When does Disney post their quarterlies? And what guidance will they be giving at that time? I would think, based on data probably only available to them, they have fairly good algorithms to project what visitation will be like for the next 6-9 months.

 

[Duckberg]

10% down

Don't be surprised if WDW lowers gate prices to counteract this IF it happens Duckberg

 

[WishIwasThere]

It also depends on when people book their vacations. I know I usually plan WDW vacations about a year out, so if about 1/2 the people booked their vacations before things really went sour in late summer into fall, then more people jumped at the 7/4 deal, then the attendance would have not be that affected.

It will be interesting to see the 2nd quarter attendance levels. We have also seen year after year attendance increases, so if we have a 10% decrease this year, it will put us where...at 2005 or 2006 attendance levels?

From what I have read in the posts, it seems that the weekends have been the busiest this year, probably from locals coming in for a weekend.

 

[disneychic71]

I don't know, I'm not a lawyer, but maybe one could claim it's false advertising. Advertising something as ending in 2 days and then all of a sudden extending it (when Disney already knew it was going to be extended) seems shady at this point with what's been happening in the economy.


Say you are a person watching on TV and never been to Disney. You see this amazing ad on TV telling you this offer expires on this date and to book now. You decide, hey this is a great deal, lets overextend our credit cards, borrow too much money and go on this vacation when you shouldn't (or at least wait until you actually have the money).


Am I the only one that could draw a comparison to all the adjustable rate mortgages that people really shouldn't be in or couldn't afford that got in them just because of the great advertising?

Actually, it would only be a problem if Disney advertised that the deal ended on a specific date, and then ended it EARLY. Extending a good deal cannot hurt anyone. In fact, there are probably many who benefited from the extension.

And I have to agree that if anyone felt pressured to spend money they don't have based on a TV ad/special offer, they probably should sell their TV and crawl into a hole to avoid any type of advertising in the future. Making a product/service seem like a good and attractive deal is the whole point of advertising--otherwise why do it at all? And if companies couldn't advertise their products in an attempt to solicit business, think of how THAT could affect the economy! The jobs lost in the advertising industry and those businesses it supports (TV/radio/magazines/newspapers, etc) would be incalcuable.

I don't think anyone can blame Disney for extending an offer that clearly worked and that harmed no one. And I don't think anyone can blame the government for cautioning people about saving more and giving up some luxuries, like travel, to get out of debt. I personally think that Disney did an amazing job with that offer, not only keeping its attendance figures up, but also offering a chance of travel to those who may have skipped it this year. I only wish I could have taken advantage.

 

[sknydave]

Down 10%, huh? So does that mean Obama can fire Iger? :king:

If the government gives Disney 13 billion, yes.

 

[MousDad]

I agree w/ 74 that per guest spending is the real kicker.

I also am confident that Sachs' projections (while possibly accurate), can be nothing more than educated guesses.

Like Disney's annual attendance numbers are even accurate to begin with.

 

[sbkline]

It seems that each August, people start threads whining and moaning about WDW raising its rates, and how it's becoming a playground for the rich, yada yada. In those debates is always the point that the laws of supply and demand come into play and that eventually, Disney will reach a point where they have overpriced their product and will start losing money because people will stop coming, and that, as a result, they will be forced to lower their prices or offer some good deals to keep people coming.

Yet now, when that seems to be happening, people act like it's a horrible thing. Myself, I don't know what's so horrible about WDW's attendance dropping. If true, not only does it mean less people in front of me at the rides while I'm there, but it also means that they are probably getting to that point where there prices have to go back down in order for people to feel like they can afford to go. So bring on the decreased attendance! I welcome it. We have a trip hope for/planned for next year and I would love it if attendance is still down and WDW has to offer a 4/3 deal, or something similar, for the time frame we are there. Now granted, on the flip side, I don't want the economy to be in the crapper and for people to be out of work, so in that sense I hope the economy improves. But speaking strictly in terms of WDW, I would love to see demand go down for their product, which would cause Disney to have to be the one seeking out guests, rather than guests all seeking out Disney, and Disney being able to price their product at whatever price they want, knowing people will buy it.

 

[ryguy]

If the government gives Disney 13 billion, yes.

The government "loaned" GM the money, they "Gave" the banks and AIG the money free and clear, no questions asked. Big difference. Shouldn't any company asking for money go through the same process? It all seems a little shady to me. :lookaroun

One thing to keep in mind that Disney Parks have going for them is location. They are relatively close by unlike Hawaii or Europe. Airfare is pretty cheap right now and gas prices are low. Add a good deal like the 4/3 and people can make it work. I know it pushed two families I know who weren't planning on going to Disney this year, to go,because it was such a great deal. Don't underestimate the influence of children. I know every time a Disney World commercial comes on my kids ask when are we going back. It does put the thought in your head.

 

[VillanovaBlue]

Right, WDW attendance numbers are now the governments fault too....

Hey, if you want Government to be the answer for everything, then it stands to reason that they would be to blame for everything too!!

(Not projecting that as your personal viewpoint jm...just sayin')

I personally feel that things aren't as bad as they are being portrayed...and, if attendance is down this year, what better time for Disney to get to work rehabbing and plussing whatever they can...less folks to complain about closed attractions!!

 

[MadMax11]

I'm part of a group that buys distressed assets.

I can tell you we're looking at hotels around the country and seeing occupancy rates in the toilet...and as people stay unemployed longer those numbers will continue to nose-dive. I know guys in hotel management who are scared to death because of what they're already seeing.

I'm not a pessimist. We'll pull out of this lull and be just fine. But the hotel business isn't going to be pretty in 2009.

 

[Erika]

Be careful not to let this get too political

We're hoping for a DL trip this year, but we'll see. I have a couple of friends who took Disney trips only to foreclose on their homes months later. I guess they're bigger Disney fans than we are

We went a few months ago- crowds were higher than I had expected- and we want to go again in the fall. DH's pay varies from week to week which makes budgeting really hard. And we have a family wedding across the country this summer. I guess after we know we have enough for bills, investments, etc ( :snore: )we'll be able to make a decision for sure. I'll be so disappointed if we can't go.

 

[DisneyMusician2]

FINALLY!! I am not the only one saying this... Every time a company cuts 8000, 10000, maybe 20000 employees only ADDS to the economic downturn... These companies STILL aren't profitable enough even with large layoffs... Get the picture already.. geez...

So all employees should be retained with dropping revenues and no money to pay them?

I'm not sure what the solution is, but other than every employee agreeing to pay cuts, I don't see how some of these companies have options. This isn't just Disney, it's everyone.

Less spending = less revenue = less money to pay employees = bankruptcy.

Then ALL the employees will be out of jobs.

Sorry, just don't see the logic.

 

[sknydave]

The government "loaned" GM the money, they "Gave" the banks and AIG the money free and clear, no questions asked. Big difference. Shouldn't any company asking for money go through the same process? It all seems a little shady to me. :lookaroun

You expect the auto manufacturers to pay back the "loans?"


lol

 

[Lucky]

There's no way "experts" can predict a 10% attendance decline without predicting accurately what discounts Disney will offer. Disney can produce whatever attendance it wants by adjusting prices and discounts accordingly. Profits might tank, but that's a separate question.

 

[fosse76]

As usual, people take liberties with facts in order to make their point. First, Obama NEVER said people shoudn't travel or take vacations. He was castigating Wells Fargo for offering employees a lavish Vegas trip after it had received $25 Billion in taxpayer funds after absorbing Wachovia (it is specualted that the only reason Wells Fargo purchased Wachovia was so it could receive the bailout money). Obama said nothing about people taking vacations on their own dime.

Secondly, the parks are crowded, yes. But Disney isn't making any money off them. I mentioned it in another thread, but some people think too highly of gate admission. Most parks could probably operate without charging gate admission...they make the real money from in park spending by guests...how do you think seasonal parks could continue to operate year after year when they have no income for half the year! And none of them charge Disney's rates. It's also why after a four day pass that add-on days are really cheap at Disney. The resorts are packed...but most people are only paying 57% of what Disney actually charges. Not to mention the resorts aren't using all the rooms they have. With so few rides at DHS and DAK, naturally the rides are going to have long waits when it has never been so cheap to visit Disney. As the old saying goes: "appearances can be deceiving." Go to any Broadway show on opening night. I assure you, the performance that night is not making any money. When people aren't paying, there's no money to be had!

It is true that not everyone is affected by the economy. But that was true of the Depression. The hardest-hit industries were manufacturing. There aren't anywhere near as many manufacturing jobs in the U.S. anymore. Banks collapsed. I think at it's height unemployment was at around 15%. So you had 85% of the country still working. Since we actually learned something from history, bank depsoits were insured, so we won't see that level of disaster again (unless Japan calls it loans to the US...which would destroy the economy). We are a much more white-collar country now, so the effects of a afailing eonomy take longer to become obvious. But to pretend as if people are overstating the state of the economic crisis is absolutely ignorant.