Tony Perkis
Well-Known Member
Anecdotal evidence. That, and the fact that I'm discounting children because they haven't developed the attribute known as taste.
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Comcast CEO: "Universal will compete aggressively with Disney"
- Thread starter AndyMagic
- Start date
RSoxNo1
Well-Known Member
At what point was MyMagic+ considered a "can't miss strategy"? It seems that people were questioning it from day one. Maybe it wasn't being questioned in the halls of Disney corporate, but they probably should have been.
ParentsOf4
Well-Known Member
Don't underestimate MyMagic+'s potential to make money, especially when compared with Disney's other investment options.
NextGen was approved before WWOHP or Cars Land. Travel back to that time and amusement parks really had a spotty track record on tying revenue gains to new rides and theme parks.
Places like Six Flags that depend heavily on repeat local customers almost have to build something every year to keep them coming back. That means building quickly and cheaply.
WDW is not like that. WDW is much more of a tourist destination with typical customers visiting much less frequently. Atlantis on Paradise Island doesn't build a new beach every year.
In many ways, WDW is much more like Atlantis. That somewhat explains WDW's hit-or-miss track record on adding attractions. Their success really depends on where potential customers are at that stage in their lives and how exciting that new addition is perceived.
Frankly, Disney was right to think that. Recent financial numbers show corporate that WDW doesn't have to build much of anything to keep guests coming back. Recent numbers show that people keep coming to WDW despite attraction stagnation and much higher prices.
However, what WWOHP and Cars Land demonstrate is that the right investment can have a transformational impact on a theme park. So, the new model is not an expensive theme park (e.g. DAK) and or just an attraction but a new land based on a popular IP with some exciting new attractions. Going forward, that will be a popular model to adopt.
Again, NextGen was approved before WWOHP and Cars Land happened. NextGen started moving forward when corporate Disney wasn't sure what to do and was looking for a way to leverage its existing investment in Orlando.
People recognize that WDW's theme parks already are crowded for much of the year. However, most nights, WDW has over 5,000 empty hotel rooms. Multiple the number of empty rooms by last year's Per Room Guest Spending (PRGS) of $267 and that's $700M in untapped revenue every year. They don't need more theme park guests. All they need to do is convince a few hundred thousand families to switch to onsite hotels in order to realize that windfall.
Recall that Disney CEO Bob Iger has stated publically that MyMagic+ is intended to encourage onsite stays. ("I think it will also encourage them to stay more in our hotels.”)
Now that's just in hotel revenue. Disney certainly intends to pursue other revenue streams with MyMagic+.
Meanwhile, MyMagic+'s original budget was closer to $800M.
When you consider the numbers involved, it's easy to understand why MyMagic+ at one point was considered a "can't miss" proposition.
However, budget overruns, schedule delays, and product deficiencies can put a damper on the best laid plans of mice (or at least one Mouse
) and men.
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Jimmy Thick
Well-Known Member
Universal parks in Florida and California also should be in this statement, as its completely accurate.
Jimmy Thick- Once they stop building, the place goes back to 5 million per park?
danlb_2000
Premium Member
You have proof that Uni relies more on local visitors then Disney does?
Universal will never pass disney when it comes to most attendance or most attended park. Disney will always hold that but honestly, I do not think that is the deep down goal of comcast. I think the point is to be come more profitable as a ratio compared to disney. I think the goal is to do whatever they can to hurt disneys profits. Look how big disney world as a whole is compared to that of universal as a whole. If you think about just shear size of the parks, disney as a whole needs to bring so many more guest then universal to make the percentages of profitability higher then comcast. Look how many more employees disney has in orlando then universal has. The point of comcast is not to out attend the magic kingdom, it will never happen, its unrealistic. There are too many people that love the disney mystique, and you find that in the magic kingdom. The point for comcast is to eventually become the 2nd and 3rd most attended parks in the area. This is a much more realistic possibility when you compare how little love disney has thrown at the other three parks.
The goal is for every 7 to 10 days a family comes into orlando is to get them to spend a couple less days then before at disney. Every person that spends one less day at disney for the vast size of the upkeep and the vast size of the payroll takes chunks out of disneys bottom line. For every person universal gains for an extra day at their parks, helps their profitability. Universal will never make more money, but remember you can make less money overall and still be more profitable as a percentage after all your expenses are taken into consideration. The added hotel rooms at universal will hurt disney some, as will just the amount of great hotel venues you have already in the city. The advantage disney had before was, well universal sucks, so I might as just pay the extra money and stay on disneys property. This way if i am going for 10 days and I decide I am doing 8 days at disney well at least I will already be on the property and I can get whatever perks come with that. The problem now is that universal does not suck like it once did and they are still adding to it, so do I really want to stay at disney. I can go for 8 days and spend a less money at one of the nice marriots or hilton or whatever. I still will always want to go to the magic kingdom, because its the magic kingdom. However what is there really to see in the other 3 that I have not seen the last time I went, granted I still want to go to them and all but I think 6 days at wdw is better then my previous 8. Universal has added a bunch of new cool rides, so i think I want to do 2 there. Now I am not staying on the disney property, I am going two less days before, and I am adding a day or 2 to venture over to universal.....this is how disney gets hurt in orlando. I am not saying knocked out, I am not even saying losing but hurt long term. Hurt as in now people lose jobs because they are just not needed anymore, hurt as in people think the upkeep is bad now it will be worse then.
Basically disney needs to stop being so reactive and more proactive. There are issues still with the magic kingdom mainly in tomorrowland and they could use more in adventureland but further expansions needs to be addressed in the other three parks before anything major additional happens in magic kingdom. They need to get the resort to the point as a whole where they can spread more people out throughout all the parks better. It does not help them when during their busy seasons that MK gets so packed because the options at the other three have become stale. The other 3 only has a few rides that are crowd consumers compared to MK which has several options. I know people are going to say well we are getting an imagination upgrade at epcot and big expansion at HS, but nothing is concrete on either. Universal did not announce potter right away but they were building it when it was still a "secret". Epcot also needs much more love then just a soaring redo and imagination update, future world needs to become future world again, its present world now....and in some cases past land. Would I have rather of seen beastly kingdom at AK, yes but I think pandora will be a great addition as long as disney does not tone down it anymore then what they have already done for cost reasons. I do not believe avatar as a lasting appeal as a movie, but I have always felt a great theme park land can still sell even if the movies can not. There is also no excuse how ling pandora is taking from announcment to the finished product. When you compare all the detail and design and building the potter lands have taken as well, it has basically taken universal overnight to put those lands up in comparison to what we are getting out of disney. Give the other three parks the love they deserve, or people will stop spending less time at those and more at universals two, and thats what going to really hurt disneys pocketbook.
The goal is for every 7 to 10 days a family comes into orlando is to get them to spend a couple less days then before at disney. Every person that spends one less day at disney for the vast size of the upkeep and the vast size of the payroll takes chunks out of disneys bottom line. For every person universal gains for an extra day at their parks, helps their profitability. Universal will never make more money, but remember you can make less money overall and still be more profitable as a percentage after all your expenses are taken into consideration. The added hotel rooms at universal will hurt disney some, as will just the amount of great hotel venues you have already in the city. The advantage disney had before was, well universal sucks, so I might as just pay the extra money and stay on disneys property. This way if i am going for 10 days and I decide I am doing 8 days at disney well at least I will already be on the property and I can get whatever perks come with that. The problem now is that universal does not suck like it once did and they are still adding to it, so do I really want to stay at disney. I can go for 8 days and spend a less money at one of the nice marriots or hilton or whatever. I still will always want to go to the magic kingdom, because its the magic kingdom. However what is there really to see in the other 3 that I have not seen the last time I went, granted I still want to go to them and all but I think 6 days at wdw is better then my previous 8. Universal has added a bunch of new cool rides, so i think I want to do 2 there. Now I am not staying on the disney property, I am going two less days before, and I am adding a day or 2 to venture over to universal.....this is how disney gets hurt in orlando. I am not saying knocked out, I am not even saying losing but hurt long term. Hurt as in now people lose jobs because they are just not needed anymore, hurt as in people think the upkeep is bad now it will be worse then.
Basically disney needs to stop being so reactive and more proactive. There are issues still with the magic kingdom mainly in tomorrowland and they could use more in adventureland but further expansions needs to be addressed in the other three parks before anything major additional happens in magic kingdom. They need to get the resort to the point as a whole where they can spread more people out throughout all the parks better. It does not help them when during their busy seasons that MK gets so packed because the options at the other three have become stale. The other 3 only has a few rides that are crowd consumers compared to MK which has several options. I know people are going to say well we are getting an imagination upgrade at epcot and big expansion at HS, but nothing is concrete on either. Universal did not announce potter right away but they were building it when it was still a "secret". Epcot also needs much more love then just a soaring redo and imagination update, future world needs to become future world again, its present world now....and in some cases past land. Would I have rather of seen beastly kingdom at AK, yes but I think pandora will be a great addition as long as disney does not tone down it anymore then what they have already done for cost reasons. I do not believe avatar as a lasting appeal as a movie, but I have always felt a great theme park land can still sell even if the movies can not. There is also no excuse how ling pandora is taking from announcment to the finished product. When you compare all the detail and design and building the potter lands have taken as well, it has basically taken universal overnight to put those lands up in comparison to what we are getting out of disney. Give the other three parks the love they deserve, or people will stop spending less time at those and more at universals two, and thats what going to really hurt disneys pocketbook.
ParentsOf4
Well-Known Member
Regardless of what they might have done in the past, Uni's 1800-room value Cabana Bay plus another on the way clearly shows Uni is not thinking like that in the future.
What Uni wants to achieve is vacationers treating Uni hotels as their bases of operations for their entire Orlando vacations, which is what a lot of WDW hotel guests do today.
Thick prognostications aside, Disney will be very concerned if Uni succeeds.
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Jimmy Thick
Well-Known Member
Disney is the de facto vacation destination in Florida. If someone is planning a trip, their first thought no doubt, based on attendance figures, is they are going to choose Disney World to stay at.
For example.
10 families want to go to Florida.
7 of them stay at WDW.
1 stays at Universal.
2 stay off site.
Based on that math, which may or may not be true exactly but I wouldn't put the percentages off by much, Universal would have to depend a lot on locals, like a Six Flags. That's not to say Disney don't, but I wouldn't think they would have to, to the same extent as Universal. Universal has more in common with Six Flags then anything Disney, this thought process is completely absolute, so much so the CEO of Comcast has to continuously let the public, and stockholders, know they, as an amusement park, even exists.
Jimmy Thick- Disney=1... Universal=3.
SirLink
Well-Known Member
@ParentsOf4 Something that you keep missing the mark so to speak of is the international guest, both Uni and Disney know they can't tempt the vast majority of these tourists into staying at the resorts which is why Universal + Disney offers both 14 day tickets. They also know timeshares/villas/companies with pre-existing loyalty schemes are where the foreign guest will holiday from.
Thus it is foreigners market that will break MM+ and will be glorious ...
Thus it is foreigners market that will break MM+ and will be glorious ...
Jimmy Thick
Well-Known Member
How many rooms does Disney have that are unoccupied?
How many does Universal have?
Just because Universal is building a value resort, with value second class perks, does not mean people are going to fill the new resort. It will have guests, but to think its going to run at 100% occupancy is absurd, especially if Disney values resorts don't run 100% occupied all year long.
Another example.
Universal 1800 value rooms. 200 of them are filled. 175 of them also have tickets to WDW because how many people are going to go to Florida and not go to Disney World?
Disney has what 14 thousand value rooms? if 7k of them are filled, how many have tickets to Universal? A few hundred?
Until there is substantial proof people are leaving Disney property and spending significant amounts of cash elsewhere, which everyone wants to believe is happening, I have to safely assume Disney knows things the general public does not. That information by itself, could be nicely stored in a magic band.
Jimmy Thick- Clarifying the obvious, that no one will believe.
ParentsOf4
Well-Known Member
The International market makes up approximately 20% of WDW's business, with a growing percentage of that business in recent years coming from Brazil and Argentina. Sorry but Europe's share is shrinking. It's not like the mid-2000s when the U.K. was a main staple for WDW business.
This doesn't mean that Europe is unimportant, only that (as is obvious by the different offerings) Disney targets the EU differently.
Frankly, those of us in the States are mighty jealous of some of the discounts you folks are offered.
However, we in the U.S. still make up 80% of the market.
SirLink
Well-Known Member
The International market makes up approximately 20% of WDW's business, with a growing percentage of that business in recent years coming from Brazil and Argentina. Sorry but Europe's share is shrinking. It's not like the mid-2000s when the U.K. was a main staple for WDW business.
This doesn't mean that Europe is unimportant, only that (as is obvious by the different offerings) Disney targets the EU differently.
Frankly, those of us in the States are mighty jealous of some of the discounts you folks are offered.
However, we in the U.S. still make up 80% of the market.
The point is if you can't convince 20% of your userbase to stay onsite - you have a malfunction - the quality/value proposition is simply not there - MM+ does little to enhance guest stays.
ParentsOf4
Well-Known Member
I think you keep missing the point that the big money is not in gate clicks; it's in hotel stays.
Universal building more attractions and pulling more vacationers into Orlando is actually a good thing for Disney, as long as they stay at WDW hotels.
However, Universal building hotels is bad for WDW. There's no upside to it for Disney.
A family of 4 visiting Universal for a couple of days represents $588 for hopper theme park tickets at Universal.
But them staying 7 nights in a WDW hotel and spending another 4 days at WDW theme parks is just awesome for Disney. Disney reports PRGS of $267/night. That's $1869 for 7 nights plus another 4 days of WDW hopper tickets at $1352.
Remember, WDW charges only $10/day for theme park days 5 and beyond. That family heading up to Universal for 2 days only costs Disney $80 in lost theme park ticket revenue. But if an exciting new attraction at Universal got them to schedule an Orlando vacation in the first place, then it's Disney that actually comes out ahead financially.
Disney is not afraid of losing theme park days. They are afraid of losing the $1869 at the hotel.
The battle is not for theme park attendance; it's for hotel stays.
71jason
Well-Known Member
I think this is conventional wisdom. Mardi Gras and HHN, for instance, are clearly targeted at a local market. Admittedly Uni is in a transitional phase, but locals/APs are still very critical to their success (which is probably why they do far more for APs than WDW does for even TiW members).
danlb_2000
Premium Member
Sorry, I don't see your logic. These numbers don't say anything about the percentages of locals/travelers.
71jason
Well-Known Member
Realistically, I can't offer you an accounting of every business in the greater WDW area. But anyone can see the explosive growth in the area over the past three years--e.g. over a dozen new restaurants on west 192 alone. Similar development on I-Drive and 535. Those are clearly aimed at tourists--tourists who by definition aren't eating on property, and most likely aren't staying on property, either.
71 Jason - Only place without new restaurants is Flamingo Crossing
SirLink
Well-Known Member
I even think your missing the point slightly @ParentsOf4 it is a combination of merchandise sales, hotel sales, F&B - any two of those is good for your resort. Disney's problem is merch sales are down, hotel sales are down and F&B is down. Disney can only pull people in when they give discounts on hotel stays and food away for free.
Whilst Universal has merch sales are up, F&B are up and hotel stays are good to satisfactory - which has the healthier business.
ParentsOf4
Well-Known Member
Per Disney's 10K filings, Per Capita Guests Spending (PCGS) (that's the amount spent per guest at the theme parks):
- 2011: up 8%
- 2012: up 7%
- 2013: up 8%
Those are the 3 highest percent increases this century.
Disney has maintained aggressive PCGS growth in recent years. Some might suggest too aggressive growth since median household income has trailed far behind.
Similarly, Per Room Guest Spending (PRGS) (the amount spent at the hotels):
- 2011: up 8%
- 2012: up 7%
- 2013: up 4%
People only have so much to spend on their vacations and WDW's hotels are so damned expensive.
What Disney wants to do with MyMagic+ is to bring "value" into Disney's hotels in order to bridge the growing gap between the price of onsite and offsite hotels. Increase the perceived value of WDW's hotels enough and more guests will shift from offsite to onsite stays.
