CNBC Article - Theme park economy on a great ride

[Captain Neo]

It's funny that Disney's 2 major competitors are run by people that Disney has ed off. Matt Ouimet who was forced out by Jay Rasolu for caring too much about showmanship and maintenance is now at Cedar Parks and Comcast who tried to acquire Disney and clean it up and was insulted by Michael Eisner runs Universal Parks.

 

[Ignohippo]

People shouldn't ignore ST2, or Test Track 2.0... or even the HM Update. They were much needed updates. But reality is the first was about 10 years late... the second one is more about extending the usable life of the existing attraction by giving it a reskin. They were the type of updates that Disney is EXPECTED TO DO if you plan on keeping attractions around for 10-30 years. You're treating them as bonuses or surprises.. when they are things the company is expected to do.. and had dragged their feet on for a decade.

Same story with Space Mountain.. Splash Mountain.. etc. The 'haters' don't give Disney a lot of credit for this work because ITS THE CRAP THEY SHOULD BE DOING REGULARLY ANYWAY! Giving Disney a high five for finally getting off their tail and doing the periodic refreshes is like giving your kid a present for brushing his teeth. It's what they are EXPECTED to be doing regularly on THEIR OWN.

If you want people to be behind you and support Disney for their great attraction updates... Disney would start by doing them BEFORE the attraction feels like a lame duck for 5-10 years.. (I'm looking at you UoE..).. and when they do it, not just fix the attraction (like Splash) but get those pluses in (like they did with HM).

If Disney actually kept their long running attractions actually up to spec.. and then periodically refreshed them.. and did that on a consistent basis like they used to. Then people would start giving Disney a lot more credit for keeping things fresh. Sadly, updates like the HM stand out among of field of disappointments.. and all of them come 5-10 years later than they should have.

Updates like Space Ship Earth, and HM have come with their own set of 'disappointments' for some - but at the core they were dramatic updates. Disney doesn't get full admiration for them because of some of their choices, and the fact they ran attractions like HM into the ground before doing so.

Flynn: you're right on the money as usual. Where's a "love" button when you need one?

 

[matt9112]

Maybe I've been staying out of the threads more recently that discuss UNI vs. Disney, the discussion tends to be more (at least my feeling) that UNI is stealing "days" from Disney. Cutting into Disney's guest population not by taking away 100% of someone's vacation, but when Disney historically could count on a family spending 7 days at their park and 0 days at UNI, they now might spend 6 days at Disney and 1 at UNI (or 5 and 2). The more days UNI can steal, the more it cuts into the bottom line. I know that I'm currently deciding if UNI is taking only 1 day or 2 days from my upcoming vacation. For the first time in nearly 20 years I'm going away from Disney for a part of my vacation.
At least that is the way I read most of the discussions. I could be very wrong though, as there are a few threads that I tend to avoid these days.

Both uni parks can be done in one day in the off season....and leaves you with a meh....uni simply isn't enveloping you in a world. WWHP is nice but its a tiny slice of the parks....and ten feet away (exaggeration) is I-drive and all that stuff. There's no bubble to be soaked in. The only thing I really like about uni is the two park layout with the entrances. Much like DL....yes I enjoy it but like you stated it might suck a day or at MOST two....WDW exists nowhere else on earth....

 

[lazyboy97o]

Both uni parks can be done in one day in the off season....and leaves you with a meh....uni simply isn't enveloping you in a world. WWHP is nice but its a tiny slice of the parks....and ten feet away (exaggeration) is I-drive and all that stuff. There's no bubble to be soaked in. The only thing I really like about uni is the two park layout with the entrances. Much like DL....yes I enjoy it but like you stated it might suck a day or at MOST two....WDW exists nowhere else on earth....

There is a lot of time at Walt Disney World that is consumed with travel. That is a bubble in that there is nothing. There is a lack of depth and layering that creates a sense of place and substance.

 

[matt9112]

There is a lot of time at Walt Disney World that is consumed with travel. That is a bubble in that there is nothing. There is a lack of depth and layering that creates a sense of place and substance.

Amen....we drove and having our own car was cool but we did use buses too and travel can suck. There simply needs to be more and DTDs awkward locale makes it just...universals entry is amazing and I'm sure profitable...imagine if even if it were just the TTC as a shopping/dining hub...another world you walk through that let's you know you have arrived.

 

[rd805]

Just did my research on some pending Universal projects - New Jurassic Park/Lorax at Islands of Adventure, on top of Harry Potter expansion, Springfield. Orlando is continuing to grow. I also found a Willy Wonka rumor at Islands of Adventure - it seems like Uni is all in, and these #'s only prove it is working

 

[lazyboy97o]

Amen....we drove and having our own car was cool but we did use buses too and travel can suck. There simply needs to be more and DTDs awkward locale makes it just...universals entry is amazing and I'm sure profitable...imagine if even if it were just the TTC as a shopping/dining hub...another world you walk through that let's you know you have arrived.

Funny thing is, the entry through retail/dining was considered by Disney. In the 70s World Showcase was supposed to be located next to the Transportation and Ticket Center.

 

[PeterAlt]

I have lost track of how many thousands of negative posts I have found on this board (some may be suprised to find many other boards discussing the same topics except the tone not negative) over the last few years insisting that Disney is ruining everything and their attendance will show that.

Well, how come it keeps going up?

Luck and because of previous investments. Luck always eventually runs out and the previous investments will eventually get stale.

Let me reverse the question. How come USO is raking up accelerated growing attendence, while WDW growth attendence is slowing?

 

[PeterAlt]

It's so so sad what EPCOT is becoming. Soon, there will be a ride called Tyme Masheen and the predictions of Idiocracy will come true!

 

[PeterAlt]

Right on, my friend.

It's now leaking that Uni will be adding to Jurassic Park and adding a Lorax ride as well over the next two years.

In the time it's taken TDO to build the FLE and the SWMT, Uni will have added:
• WWoHP
• Harry Potter's London
• The Transformers
• The Simpsons' Springfield
• Despicable Me
• a JP addition
• The Lorax
and they only have 2 parks!!!

Oh, and by the way, Avatar may still not happen.


I absolutely love WDW's new commercials that they've begun running. They aren't advertising anything new, just promoting "do it again".

Stale and stagnant are perfect words to describe WDW right now.

This post made me cry!

 

[PeterAlt]

I'm starting a Draft Breck Eisner campaign for CEO or President. He has his father to teach him things. He's already a great movie director. Unlike his father, his "young blood" can sure stir things up. And his biggest qualification

 

[radiohost]

He was Disney for nearly 17 years... he was the one who saved the 50th celebration for Disneyland and brought DLR out of it's nightmare from being under Pressler/Harris. Then Disney ran him out by passing him over with 'Yes Men' and stick figures like Ed Grier.

He was under the Eisner reign, when Eisner got the boot Oumet went down with him when Iger took the reigns.

Oumet is great though...

 

[lazyboy97o]

He was under the Eisner reign, when Eisner got the boot Oumet went down with him when Iger took the reigns.

Oumet is great though...

That makes no sense. Iger, Rasulo and Staggs were all Eisner men.

 

[Oddysey]

I absolutely love WDW's new commercials that they've begun running. They aren't advertising anything new, just promoting "do it again".

Yeah because there new "been there haven't done that" slogan, and the screenshots of New Fantasyland and TT2.0 clearly indicate that Disney is saying there is nothing new at the parks.(sarcasm)

 

[Ignohippo]

Yeah because there new "been there haven't done that" slogan, and the screenshots of New Fantasyland and TT2.0 clearly indicate that Disney is saying there is nothing new at the parks.(sarcasm)

Both things flash by in a instant and are hardly the focus of the commercial. The main focus of the commercial is come back and do the things you missed. Not "come and see all of the fantastic things we've added." it's a great way to promote...nothing.

Do you think that will be Uni's campaign. This year? Next year? The year after that? The year after that?
Nope. Why? Because Uni actually has new things to promote.

And why isn't Disney still promoting New Fantasyland? Because it has missed the mark. Terribly. The idea that someone would plan an entire vacation to come and see it is just plain sad.

It should have been that good. It could have been that good. It isn't.

 

[ParentsOf4]

And why isn't Disney still promoting New Fantasyland? Because it has missed the mark. Terribly. The idea that someone would plan an entire vacation to come and see it is just plain sad.

As you allude to, New Fantasyland (NFL) is not attracting new guests. However, NFL is successful in all the wrong ways for corporate Disney.

Disney's problem is they no longer can control the message in the Information Age. It's too easy to search the Internet and uncover that NFL is, for many, simply a fancy name for one new ride and a couple of restaurants. It doesn't inspire families to plop down several thousand for an unscheduled WDW vacation.

Instead, rather than attracting new guests to WDW, NFL is pulling guests away from Disney's other theme parks, especially DHS and DAK.

Consider that Fantasyland now is one big kiddie park. Any parent of small children knows that most children like to do their favorite things again and again rather than try something new. NFL is no different. Rather than spend an entire day at (for example) DHS, those children would rather spend more time at NFL riding (for example) Dumbo for the 5th time.

Some think NFL was simply a capacity enhancement. Ironically, seeing the masses that now are treating DHS and DAK as half-day parks, the added capacity at NFL is needed. However, from corporate Disney's perspective, NFL is not netting much additional revenue. Instead, it's cannibalizing revenue from WDW's other theme parks.

NFL was one of corporate Disney's more questionable business decisions in recent years. Spend $450M to improve WDW's most popular land at WDW's most popular park. NFL succeeded but not in the way corporate Disney wanted.

 

[Oddysey]

Both things flash by in a instant and are hardly the focus of the commercial. The main focus of the commercial is come back and do the things you missed. Not "come and see all of the fantastic things we've added." it's a great way to promote...nothing.

Do you think that will be Uni's campaign. This year? Next year? The year after that? The year after that?
Nope. Why? Because Uni actually has new things to promote.

And why isn't Disney still promoting New Fantasyland? Because it has missed the mark. Terribly. The idea that someone would plan an entire vacation to come and see it is just plain sad.

It should have been that good. It could have been that good. It isn't.

While I disagree with you on the message promoted in the commercial, I agree with you on your feelings of New Fantasyland. It should have been so much more, and spending excessive funds on the promotion of NFL will only serve to raise the expectations of new guest before setting them up for a huge disappointment. Simply stated it would be a case of over promising and under delivering.

 

[Ignohippo]

As you allude to, New Fantasyland (NFL) is not attracting new guests. However, NFL is successful in all the wrong ways for corporate Disney.

Disney's problem is they no longer can control the message in the Information Age. It's too easy to search the Internet and uncover that NFL is, for many, simply a fancy name for one new ride and a couple of restaurants. It doesn't inspire families to plop down several thousand for an unscheduled WDW vacation.

Instead, rather than attracting new guests to WDW, NFL is pulling guests away from Disney's other theme parks, especially DHS and DAK.

Consider that Fantasyland now is one big kiddie park. Any parent of small children knows that most children like to do their favorite things again and again rather than try something new. NFL is no different. Rather than spend an entire day at (for example) DHS, those children would rather spend more time at NFL riding (for example) Dumbo for the 5th time.

Some think NFL was simply a capacity enhancement. Ironically, seeing the masses that now are treating DHS and DAK as half-day parks, the added capacity at NFL is needed. However, from corporate Disney's perspective, NFL is not netting much additional revenue. Instead, it's cannibalizing revenue from WDW's other theme parks.

NFL was one of corporate Disney's more questionable business decisions in recent years. Spend $450M to improve WDW's most popular land at WDW's most popular park. NFL succeeded but not in the way corporate Disney wanted.

I don't agree that families on vacation would rather spend multiple days at the FLE than visit other parks. There isn't enough in the FLE to warrant spending more time there instead of the other parks - you can see everything at the FLE in a couple of hours (even if you do some things twice).

I think the more likely cannabalism is coming from passholders, locals and frequent guests who have no reason to go to the other parks anymore. They'll go to check out the FLE and then head home. There just isn't enough of a compelling reason to visit the other parks repeatedly anymore.

I can only speak for my family, but we've been passholders for 5 years and are sick to death of WDW. They haven't added enough to keep us interested, and the things we do want to ride have entirely too long of lines to deal with. My wife hasn't renewed her pass and the only reason I re-upped for my son and I was Star Wars Weekends.

 

[Ignohippo]

The scenario you describe applies to you personally. As I interpret what you wrote, New Fantasyland (NFL) is not compelling enough to make you want to visit the Magic Kingdom (MK) any more than you have in the past while other parks give you no reason to visit at all. If true on a large scale, this would lead to a decline in overall WDW attendance. That is not what is happening.

The MK has record attendance while overall WDW attendance is flat. That means guests are changing what parks they are visiting, not how often they visit in total. More guests at MK along with flat total attendance means lower attendance at WDW's other theme parks.

Conversely, if you are suggesting that locals are visiting MK more than in the past while visiting the other WDW theme parks less, well, that's exactly what I wrote. I simply prescribe that to the opening of New Fantasyland which has turned what used to be two mid-size kiddie lands into one gigantic kiddie land, making MK more appealing to WDW guests with small children.

I understand your personal situation but respectfully suggest it might not be representative of what's happening at the macro level.

And I understand your viewpoint, but believe that that what I stated is exactly what's happening. Yes, I was speaking for myself (and was very clear on that) but I'm also a Disney fanatic. If I'm bored with the parks, how do you think the general public feels?

If I'm to understand you correctly, the reason you think the other 3 parks attendance is flat is because people are choosing to spend their time at the FLE. That's insane. It's actually laughable.

MK is going to get a day of the average tourist's vacation regardless. To say that they are now choosing to spend 2 days at MK at the expense of one of the other parks is absolutely ludicrous. If attendance at the other parks is flat, it has absolutely nothing to do with the FLE. If anything, the other parks just aren't compelling enough anymore and people see them as expendable.

More likely, they're now spending time doing other things - either at another Orlando park, be it Uni, Sea World, Legoland, or spending the day shopping at the outlets. There's more competition than ever in Orlando, and there isn't as many "must-do's" at WDW as there used to be or there should be.

Adding an E-ticket (like TSMM or EE) changes that. Unfortunately, there simply haven't been any in the last few years to drive attendance to the other parks. In the last 10 years, the only major additions to the parks (besides the FLE at MK) have been TSMM and EE. That just isn't enough.

The "one resort" mindset (add something to one park and it will drive attendance to all the others) has run out of gas.

 

[ParentsOf4]

If I'm to understand you correctly, the reason you think the other 3 parks attendance is flat is because people are choosing to spend their time at the FLE. That's insane. It's actually laughable.

Please consider what's been stated regarding at The Walt Disney Company's (TWDC) last 3 earnings calls, covering the period since the soft opening of the New Fantasyland (NFL) on October 12.

Q1 (Sept. 30 - Dec. 29, 2012)

• "For the quarter, attendance at our domestic parks was up 4% and per capita spending was up 6% on higher ticket prices, food and beverage, and merchandise spending."
• "In Orlando, Fantasyland has already been a success, although it is far from complete. We are doubling the size of Fantasyland. And, in fact, the current improvements in the current expansion will not be completed until sometime in 2014, but it's already starting to work."
• "Attendance at Disney World was down at hair, I would say, and that -- oh, I'm sorry -- it was up a hair, but it wasn't the driver for the quarter. As Bob just said, everything that's going on at the Disneyland Resort is really what's driving the attendance trends for domestic parks."

Q1 domestic theme park attendance was up 4% but driven pretty much exclusively by Carsland. WDW total attendance was essentially flat even though NFL is "already starting to work."

Q2 (Dec. 30 - Mar. 30, 2013)

• "In Q2, Walt Disney World and the Disneyland Resort both set new attendance records for the quarter."
• "For the quarter, attendance at our domestic parks was up 8% and per capita spending was up 10% on higher ticket prices, food and beverage, and merchandise spending."
• "While operating income in the second quarter was aided by a portion of the New Year and Easter holidays falling in Q2 relative to when those holiday periods fell last year, the results also reflected improved attendance and spending throughout the period and the growth investments we’ve made over the past couple of years are performing well."
• "So yes, we think that of the 400 basis points, about 2% was due to the shift in the front end and the back end of that quarter in terms of impact on margins."
• "The only thing I can tell you that may give you some sense is that the Magic Kingdom broke an all-time single-day record for attendance during the Easter holiday, and we believe that was a direct result of the investment that we made in Fantasyland."

Q2 domestic theme park attendance up 8% sounds great but 2% at both parks of that is credited to the holiday schedule while we saw in Q1 that attendance was up 4% even with the shortened quarter (ending Dec. 29) and that pretty much all of that 4% was driven by Carsland. Taken together, it suggests that WDW's total attendance was up no more than 1-2% while, for the second quarter in a row, TWDC management discusses the success of NFL.

Factually, WDW did "set new attendance records" but this seems to have been a single-day record at the Magic Kingdom (MK). Financial calls are all about painting results in the absolutely most positive light possible. Trust me, if WDW as a whole or if the Magic Kingdom individually set an attendance record for the quarter, a CEO or CFO will say this. Again, conference calls are all about "selling" the results to Wall Street. A slight slip of the tongue represents millions of dollars of potential shareholder equity. These calls are taken very seriously.

Q3 (Mar. 31 - June 29, 2013)

• "During the quarter, attendance at our domestic parks was up 3%, with Walt Disney World and the Disneyland Resort each setting new Q3 attendance records."
• "Magic Kingdom in Florida had record numbers, as Jay mentioned, in the third quarter."

Again, "attendance records" at WDW but we saw in Q1 that a 4% growth in domestic attendance led to essentially flat attendance at WDW. In Q3, domestic attendance was up only 3% while we learned that WDW's "attendance records" was "Magic Kingdom in Florida had record numbers". Is that a WDW "record"? Sure it is. Does it mean the other parks are doing well? Heck no. If you are CEO and CFO on a quarterly call and they are having a great quarter, you say they are. In fact, you go out of your way to say they are. It's your job to sell the company without factually lying. Millions of dollars of shareholder equity are riding on you selling results to Wall Street. Instead, all discussion regarding WDW's great attendance was limited to MK.

Thus, we see a pattern of phenomenal attendance gains at DLR, a direct result of Carsland, improved attendance at MK, the result of NFL, yet relatively flat attendance at WDW as a whole. Increased attendance at MK along with flat total WDW attendance means attendance as a whole at the other 3 theme parks is down. At WDW, the only significant change for the last 12 months has been NFL. Please feel free to draw your own conclusions regarding cause and effect.

Respectfully, it's difficult to see what you think is "insane" or "laughable" but perhaps you are basing your analysis on something more than your opinion.