Bob Iger at WDW now ... BoD to Follow?

[stretchsje]

Everyone, including myself, is so focused on updates to Hollywood Studios and Epcot, and less so AK and MK, that perhaps another question is being unasked.

What about the water parks or Flamingo Crossings, or for that matter any other new resorts? Elsewhere in Orlando a substantial water theme park will soon open while another is being leveled to make way for something else. With Spirit's comment that TWDC is not responding directly to Universal, I'd bet Disney's water properties aren't going to see any extra love, but finding otherwise could signal a change in attitude. On the other hand, I'd be very surprised if Disney hasn't already approved the building of more rooms, both DVC and otherwise, in close proximity to the expansions.

 

[jakeman]

I wouldn't be surprised if the tipping point was a significant drop in revenue (merch and food) from DHS, especially relative to other parks. I wouldn't be surprised if the numbers there were quite low relatively, especially if you remove "special events" like SWW or the Villains party. And it's finally either reached a point where it's considered unacceptable or it's been stable but going on long enough that it was felt something needed to be done.

We all know they track per guest spending as a huge indicator. It's mentioned in almost every financial report I ever care to pay attention to.

It's very plausible that per guest spending at DHS lags significantly behind the other parks. I can't really remember the last time I actually bought something there. Wait...I did get a Starbucks mug but that was probably the first thing food or merch that I bought in years.

 

[gmajew]

Because its extremely capital intensive with very slow payoffs that are difficult to attach to direct causation.



Yeah... like attractions that cost tens to hundreds of millions of dollars to build... millions to maintain... collect no direct revenue themselves... and are tiny pushes trying to make a big mountain move (entire park patterns). Yeah, why would WS be skeptical of dumping money wildly at theme parks???

When you look at specific ROI - they are very hard to justify. They know you must invest to grow, and refresh to persist... but do you do that with a small investment or massive? Hence resistance and skepticism.

again according to my friends that are fund managers that is not the case. They don't want to see huge investments on a reg basis but they want to see a continued investment as they do not want to see an asset become stale and flat in growth. They don't want to see a company be stupid with these investments and do them non stop but they do expect growth and maint as it is part of the business model.

Measuring returns is actually really simple in these area more profit by the division means more success.

 

[truecoat]

Because its extremely capital intensive with very slow payoffs that are difficult to attach to direct causation.



Yeah... like attractions that cost tens to hundreds of millions of dollars to build... millions to maintain... collect no direct revenue themselves... and are tiny pushes trying to make a big mountain move (entire park patterns). Yeah, why would WS be skeptical of dumping money wildly at theme parks???

When you look at specific ROI - they are very hard to justify. They know you must invest to grow, and refresh to persist... but do you do that with a small investment or massive? Hence resistance and skepticism.

Unless you build an area with a boy wizard. My guess is Star Wars will do the same if not better being the 5 or so movies in theaters by then.

 

[seascape]

Everyone, including myself, is so focused on updates to Hollywood Studios and Epcot, and less so AK and MK, that perhaps another question is being unasked.

What about the water parks or Flamingo Crossings, or for that matter any other new resorts? Elsewhere in Orlando a substantial water theme park will soon open while another is being leveled to make way for something else. With Spirit's comment that TWDC is not responding directly to Universal, I'd bet Disney's water properties aren't going to see any extra love, but finding otherwise could signal a change in attitude. On the other hand, I'd be very surprised if Disney hasn't already approved the building of more rooms, both DVC and otherwise, in close proximity to the expansions.

Yes, they need to build more rooms. A moderate and value resort and a deluxe/DVC one for the soon to be renamed park with a Star Wars themed pool area. Over the next 10 years they will need 10,000 more rooms.

 

[WDWdream97]

The only time they have been ahead of schedule is when HKDL (that's in China to some of my friends here) opened in fall of 2005 instead of spring of 2006 as was scheduled. Of course Disney cutting out 60% of the park's planned menu might have had something to do with that.

Is there a list out there that describes what was supposed to open with HKDL before Disney cut 60% of the planned menu?

 

[lazyboy97o]

Wasn't he also responsible for buying back the Disney Store from the Children's Place? Serious question

Yes, but he was President and COO when they were sold. Iger wasn't an outsider brought in to be CEO. He was Eisner's #2 for several years.

 

[PhotoDave219]

We all know they track per guest spending as a huge indicator. It's mentioned in almost every financial report I ever care to pay attention to.

It's very plausible that per guest spending at DHS lags significantly behind the other parks. I can't really remember the last time I actually bought something there. Wait...I did get a Starbucks mug but that was probably the first thing food or merch that I bought in years.

That's one of the things I can't find. Best we have is Domestic per guest room spending in the 10Q reports and unfortunately it doesn't break it down far enough for our tastes.

Because you bring a valid point, it's all about revenue.

 

[PhotoDave219]

Everyone, including myself, is so focused on updates to Hollywood Studios and Epcot, and less so AK and MK, that perhaps another question is being unasked.

What about the water parks or Flamingo Crossings, or for that matter any other new resorts? Elsewhere in Orlando a substantial water theme park will soon open while another is being leveled to make way for something else. With Spirit's comment that TWDC is not responding directly to Universal, I'd bet Disney's water properties aren't going to see any extra love, but finding otherwise could signal a change in attitude. On the other hand, I'd be very surprised if Disney hasn't already approved the building of more rooms, both DVC and otherwise, in close proximity to the expansions.

I'm still waiting for the breakdowns to leak out....

... However this should be a primarily DHS event, assuming I'm understanding correctly. Anything else will be piecemeal.

The last I heard, Flamingo Crossing is dead beyond the two hotels being built there now. That could change but is unlikely, IMO.

 

[SYRIK2000]

The best move by Bob and the BOD was banning Selfie Sticks.

 

[dizneycrazy09]

I'm still waiting for the breakdowns to leak out....

... However this should be a primarily DHS event, assuming I'm understanding correctly. Anything else will be piecemeal.

The last I heard, Flamingo Crossing is dead beyond the two hotels being built there now. That could change but is unlikely, IMO.

Did the shift from Hyperion to Disney Springs have anything to do with the demise of Flamingo Crossing? It seems logical considering Disney Springs added much more retail and dining space than Hyperion would have allowed.

 

[CaptainAmerica]

I notice a lack of anything WDW specific in your list. Since this is a WDW focused site for the most part, well, you can do the math.

The post to which I specifically responded talked about Iger's legacy. Iger's legacy, for good or ill, will be as the CEO of The Walt Disney Company, not the creative steward of Walt Disney World.

 

[Mike S]

The post to which I specifically responded talked about Iger's legacy. Iger's legacy, for good or ill, will be as the CEO of The Walt Disney Company, not the creative steward of Walt Disney World.

And my post was an explanation of why there's hate for him on this board.

 

[gmajew]

That's one of the things I can't find. Best we have is Domestic per guest room spending in the 10Q reports and unfortunately it doesn't break it down far enough for our tastes.

Because you bring a valid point, it's all about revenue.

Any business it is always about revenues. We all know this and to increase revenue you have a few ways to do it. Increase guest experience and traffic counts. So guess either frequent more often or longer.

So I am sure this decision just like the work at AK was because both parks needed plus in their numbers. Epcot still need help but based on numbers I would bet it's guest average spent is way way higher then maybe all the parks.

 

[PhotoDave219]

Did the shift from Hyperion to Disney Springs have anything to do with the demise of Flamingo Crossing? It seems logical considering Disney Springs added much more retail and dining space than Hyperion would have allowed.

Nah, the burst of the housing bubble did more to kill Flamingo Crossing than anything. From 2008-2011, the resort as a whole showed 0.64% growth. MK was up 0.46% Ep was down -1%, DHS was up 1% and DAK was the most resilient, growing 2.5%. Thats pretty awful overall.

Since 2011, the resort is up 8.5% as a whole, MK up 13% while the rest of the parks are all around 6% growth. You could look at that a few ways.... mostly that the secondary parks really havent recovered from the 1-2 punch of 9/11 and the housing bubble. Or that those parks haven't been invested in either. MK has with the fantasyland expansion and you see its result.

You'd have to dig & compare tenant lists but I wouldnt be shocked to see some of the same names that were meant to go into Flamingo moved to Disney Springs.

 

[PhotoDave219]

Any business it is always about revenues. We all know this and to increase revenue you have a few ways to do it. Increase guest experience and traffic counts. So guess either frequent more often or longer.

So I am sure this decision just like the work at AK was because both parks needed plus in their numbers. Epcot still need help but based on numbers I would bet it's guest average spent is way way higher then maybe all the parks.

All I can do is look at attendance, as its the only independent dataset that seems available. And even that is crowd distribution and all that tells us is whether or not its busy and the associated trends.

 

[dizneycrazy09]

The post to which I specifically responded talked about Iger's legacy. Iger's legacy, for good or ill, will be as the CEO of The Walt Disney Company, not the creative steward of Walt Disney World.

His legacy is only as good as the person considering his legacy. What I mean by that is, his legacy in the mind of a shareholder will be much different than his legacy in the mind of a WDW junkie. It's really all about perspective. Legacy isn't exactly a tangible or measurable thing; it's more about how a certain person or group of people view(s) you.

 

[dizneycrazy09]

You'd have to dig & compare tenant lists but I wouldnt be shocked to see some of the same names that were meant to go into Flamingo moved to Disney Springs.

I venture that you're probably not far off in that assumption. It's been so long since Flamingo Crossing was announced, the only thing I can seem to remember about it was that it was basically an outdoor mall. But that's not exactly on topic...carry on.

 

[flynnibus]

again according to my friends that are fund managers that is not the case. They don't want to see huge investments on a reg basis but they want to see a continued investment as they do not want to see an asset become stale and flat in growth. They don't want to see a company be stupid with these investments and do them non stop but they do expect growth and maint as it is part of the business model.

Did you read my post where it said "They know you must invest to grow, and refresh to persist... but do you do that with a small investment or massive? Hence resistance and skepticism."

Of course they expect growth.. duh. Of course they expect maintenance.. duh. The challenge is as I stated, HOW you achieve those at what level of investment. To boil it down into Parks specific.. would running a promotion or temp entertainment be enough to create draw? (which I can do cheaply) Or do I need a 25 year investment? (100+million dollar E-ticket). What cadence should this happen at? What is the minimum level of quality that I can spend on that will not impact results? It's not about what outcomes are expected, its about THE STRATEGIES TO GET THERE and what level of spend is necessary to stay the course, or if you are preaching expansion of the business, will the spend generate sufficient return.

It breaks into strategy and what people are willing to invest to get predicted returns.. some are risk takers, some are not.

A theme park attraction may take a decade to realize it's return... a movie may take 3 years. Is there any question why people may be more skeptical about highly expensive things that don't actually directly generate revenue and the return is expected over a very grand slow scale?

Measuring returns is actually really simple in these area more profit by the division means more success.

Sorry, that's a load of crap. Anyone that just looks at bottom line and isn't critical of what drove that is a waste of space that can never form any insight into what will happen. They'll be the reaction guys instead of the forecast guys.

The bottom line is theme parks are incredibly expensive.. contrasted with other potential lines of investment they have a high cost of entry, high risk, and can take a long time to realize returns.

 

[SYRIK2000]

His legacy is only as good as the person considering his legacy. What I mean by that is, his legacy in the mind of a shareholder will be much different than his legacy in the mind of a WDW junkie. It's really all about perspective. Legacy isn't exactly a tangible or measurable thing; it's more about how a certain person or group of people view(s) you.

Perfect example, my wife thought Eisner was still CEO. She'd never heard of Iger before I said his name last night.