RSoxNo1
Well-Known Member
Walk around World Showcase on a Friday or Saturday night during food and wine and you'll think otherwise.
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Cuts coming to every area of parks and resorts - thanks to Shanghai and Paris
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flynnibus
Premium Member
I think your comparisons are off..
Its hard to compare Disneyland.. because it was a concept that the world had never seen. That is no longer an issue with Disney's new parks. Disneyland also opened (and operated for decades) as a california attraction.
MK had *TEN MILLION GUESTS* in the first year. Even with the energy crisis, WDW hit 50 million guests by 1976
EPCOT had a weird reception, but it didn't hinder crowds checking it out. MGM couldn't keep up and had to expand very quickly. Animal Kingdom was really the only park that had a slow ramp up.
At this point, a Disney park that has had years of build up has no excuse but it's own actions (or economic events it can't control).
Bairstow
Well-Known Member
Lotta young professionals there more than college students.
Disney does card for drinks, after all.
prberk
Well-Known Member
I understand, and that perspective was partly on view in the older conversation I referenced; but the thing I thought most interesting is what he had heard recently in the news from China, the perspective that they were sharing. He was reporting what he had heard about it in the second conversation. I thought it was telling that he had heard about the cost overruns in the news and that most people were commenting that they had heard it was too expensive to consider visiting.
RSoxNo1
Well-Known Member
"professionals"
DDLand
Well-Known Member
I'll leave what Iger had to say about Shanghai recently, and yes, he is biased and selling the product. He's also vague, but he does give some profound hints about the park's performance:
We've had a fantastic opening for Shanghai starting with opening day. We're not updating specific numbers except I can say that had it not been for some typhoon-like weather there last week the first 100 days of Shanghai would have delivered more in attendance than any park that we've ever opened. And, in fact, it delivered more in the first 100 days than most parks that we've opened over the history of our theme parks.
What we do know is from guest satisfaction surveys that we take, and we are sticklers at that, we do that a lot, is that people love this park. They love the experience, that we have attractions and shows that are off the charts in terms of popularity.
We also see that because they are staying a lot longer per visit than we ever expected by a lot, almost two hours. So they are staying, they are coming to stay and clearly they are enjoying what they are doing because they are staying even longer than we ever expected. So I think it bodes really well.
...
In terms of what else it represents to growth-wise for the Company, we haven't really been that specific about timing to profitability or absolute numbers. I think we haven't even gotten to the point where we have decided what we will say when we announce earnings in the quarter. But so far so good.
Also of note:
And by the way, the other thing we found interesting in the 100 days or so that we have been open is we knew that Shanghai was a tourist destination for the rest of China. But our anticipation when we opened was that the attendance would be dominated by people from Shanghai and actually it was dominated by people from China but outside of Shanghai.
What that told us that was really interesting was that the marketing was really effective and we didn't even market that much outside of Shanghai. And word-of-mouth has been great. And the fact that we captured the Shanghai tourist during a peak tourist season, obviously Chinese New Year is the other peak season, that's a really good thing that local people in Shanghai can go any time because it's proximate to them.
The above would actually support what your friend had to say. He said people in Shanghai aren't going in large numbers which actually is apparently being borne out. That could change as the tourist season ends and pricing goes lower market. If everyone that goes loves it, Shanghai residents just have to give it a chance only once, to be successful.
Still it seems very successful, much more successful than any other new Disney Park at opening. Though comparing it to 1970s America is hardly appropriate, but interesting nonetheless. If it is essentially toe to toe with Tokyo DisneySea, that's great news. Tokyo DisneySea was the fastest theme park to reach 10 Million, in just 307 Days. That was a park in an established market that loves Disney and had great market anticipation. In addition it was already tied to the most successful theme park in the world at the time. Shanghai is practically starting from scratch. That would be huge reach 10 Million status year 1.
You can also take Micechat's word for it:
It helps immensely that Shanghai Disneyland has opened with a bang this summer and has had high attendance and strong visitor spending, lessening the possibility that the American parks will need to cut corners to make the Shanghai investment look good to Wall Street.
Also tellingly is this line from Iger:
We have ample expansion possibilities there. We are already building an expanded land which we broke ground on before we opened this park. We have not been specific about what it is or when it will open, and we have tons of land there to build even more and we are in design on a lot of it and discussion on a lot of it with our partners.
At this point I'm confident that they're in a pretty good place.
Nmoody1
Well-Known Member
And the fact that the Mayor of Shanghai turned around to Bob on opening day and said he expected work to begin on the second park!
ford91exploder
Resident Curmudgeon
I'm more confident that China has Disney by the short and curlies and Disney will do WHATEVER China tells them to.
prberk
Well-Known Member
Yeah, I think time will tell. And like I would say about parks here, a good investment pays off long term, not necessarily in the first -- or fifth -- quarter, but over time. So, we will see. I just thought it was interesting what my friend had said the Chinese media was reporting back in Shanghai, and what people were saying. He did not say, "I've heard that it's expensive but amazing." He said, "The news said that it is losing money and tourists are not really going. They say it is very expensive." And, as you say, this is somewhat consistent with Bob saying that Shanghai residents are not really going -- but this might also give some insight, even if only anecdotal, as to why. If they have a reputation among locals of being way too expensive and not really worth it, the ONLY thing that will turn that around is a truly good experience when locals actually try it. So, let's hope that is true. And if true, it translates back to stateside management. We can only hope.
But if they go the other route, and start to make the types of cuts they are making here, it will all only get worse, for all of us.
At the end of the day, like with EuroDisney, a/k/a, Disneyland Paris, they have made an investment that they have to make work. It is "too big to fail" -- at least without serious repercussions in the media and the company. And, in that regard at least, our friend above is probably correct -- that China (whether by contract or simply by the fact of this investment) has them now. It's a marriage that they have to make work, or we all suffer the consequences over time.
At the end of the day, in all of the parks -- the one constant should be that the exceptional themed experience and customer service that Walt Disney cultivated should be the bedrock and foundation of it. All the surveys and spreadsheets in the world cannot overcome the importance of that in the long run.
But if they go the other route, and start to make the types of cuts they are making here, it will all only get worse, for all of us.
At the end of the day, like with EuroDisney, a/k/a, Disneyland Paris, they have made an investment that they have to make work. It is "too big to fail" -- at least without serious repercussions in the media and the company. And, in that regard at least, our friend above is probably correct -- that China (whether by contract or simply by the fact of this investment) has them now. It's a marriage that they have to make work, or we all suffer the consequences over time.
At the end of the day, in all of the parks -- the one constant should be that the exceptional themed experience and customer service that Walt Disney cultivated should be the bedrock and foundation of it. All the surveys and spreadsheets in the world cannot overcome the importance of that in the long run.
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Im not exactly sure what Iger said in that quote that gives you confidence?
and...
Iger seems dodgy at best wen referencing anything in terms of profit. A lot of, "not being specific". When I see answers like that, crammed between a lot of gushing over how well everything is going, I cant help but think if everything is going as well as he says, wouldnt they just produce the results and numbers as proof, rather than vaguely speaking about what they may or may not let us know? And Im not saying the park is bombing. I hope things are as good as he says, but as I said prior, I dont see anything in what he said that gives me confidence.
DDLand
Well-Known Member
Here's the key.
Disney never breaks out detailed statistics or only does so rarely. They likely will at the end of the day because this is a government park, but Disney tries to avoid direct information.
Did we ever get detailed information on Cars Land? Was that a failure?
Ironically we know DCA is undercounted by millions of guests. Giving specifics doesn't denote anything except that they prefer to keep the numbers quiet either because they want to or because their partner wants to. The government of Shanghai is under no immediate pressure to release quarterly guidance.
We also knew that Shanghai Disney was not going to make money the first year. Or probably the second. The fact that we're talking about profitability so early in the game is actually good news. There's a clear path to profit.
What gives me confidence is:
1) They want to expand.
2) People love the park.
3) They're getting a varied and diverse geographical guest sourcing.
4) They're essentially on pace with Tokyo DisneySea which ended up welcoming 10 Million guests+ in the first year of operation. This is all with a new market that doesn't know Disney super well.
A counter, if you will, to each of those points you made.
1) key word is, "want" to expand. Of course they "want" to expand. What business doesnt?
2)Love does not = $$$. And we all now Disney sureys dont allow for much criticism
3)"Varied and geographical" could mean a variety of things
4)Doesnt Shanghai allow for a much larger crowd than Disney Seas? I have no idea, but I thought Shanghai was the largest of all the parks. If so, allowing more guests in would easily help it catch up to to other parks attendance wise
DDLand
Well-Known Member
I suppose as a counter to countering
1) Of course all businesses want to keep growing, but they have to prioritize. Choosing projects that will give them the best return is must for a company like Disney. They are now looking at expansion in Shanghai. Why? What would compel them to do that? Weak perfomance perhaps, because then they need to fix it. Yet usually those types of projects come after years of delay and kicking the can down the road. Remember DCA, DAK, and Hong Kong? Even parks like WDS still fester. It's hard to make the decision to sink billions into an expansion of a park that isn't performing well. They will do it eventually, but it's not always attractive or easy.
Now why add to Shanghai so quickly? Because it means they think it can grow dramatically. Because it's already off to a great start.
2) Though doesn't it? If guests don't love the park who's going to go to it? Who's going to be buying tickets 5, 10 , or even 20 years from now? Establishing a base of people who stay long hours and love the product is critical to its longterm success. We all love Disney right? That's why we're here. We're the result of a good product (some would argue a product that no longer exists). Shanghai needs to establish happy guests who will spend and come back.
3) Well we know they're from China. This means that the park is performing less like Tokyo or Anaheim and more like Walt Disney World. This actually signals good things for becoming a destination resort. They have expansion pads for thousands of hotel rooms. This bodes well for the park, future parks, and hotels.
4) It is a very very large park, but that's not the point right? It doesn't matter if a park can hold people if no one is showing up. If no one wants to go. People are showing up and coming in numbers that rival TDS. That's a lot of people. We'll see if the momentum holds (it could taper off). Still it will be from the start one of the foremost theme parks in the world. It could very well surpass DHS and IOA. We'll see. I saw an article that said it could be around 7+ Million, but that seems like a low ball. I wouldn't be shocked if it hits 10 Million. It just all depends on how slow the winter months are.
ParentsOf4
Well-Known Member
Please recall that Iger has already indicated that SDL will not be profitable in the short-term due to startup costs. Presumably these startup costs will go away eventually but, historically, some U.S. businesses have struggled with controlling "startup" cost when opening offices in China.
The immediate question is whether SDL is meeting attendance and PCGS goals, something I expect Iger to not answer directly during the next earnings call.
No matter what happens, he's sure to say "Shanghai Disneyland is doing great" and is "exceeding expectations", while cherry picking the metrics he mentions on the call.
This doesn't mean SDL is doing poorly; this simply means Iger is doing what a good CEO should do.
I suspect it will be years before we get a clear indication of which way the wind is blowing in Shanghai...
The immediate question is whether SDL is meeting attendance and PCGS goals, something I expect Iger to not answer directly during the next earnings call.
No matter what happens, he's sure to say "Shanghai Disneyland is doing great" and is "exceeding expectations", while cherry picking the metrics he mentions on the call.
This doesn't mean SDL is doing poorly; this simply means Iger is doing what a good CEO should do.
I suspect it will be years before we get a clear indication of which way the wind is blowing in Shanghai...
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All right, here goes a counter, to a counter of a counter, ....I suppose as a counter to countering
1) Of course all businesses want to keep growing, but they have to prioritize. Choosing projects that will give them the best return is must for a company like Disney. They are now looking at expansion in Shanghai. Why? What would compel them to do that? Weak perfomance perhaps, because then they need to fix it. Yet usually those types of projects come after years of delay and kicking the can down the road. Remember DCA, DAK, and Hong Kong? Even parks like WDS still fester. It's hard to make the decision to sink billions into an expansion of a park that isn't performing well. They will do it eventually, but it's not always attractive or easy.
Now why add to Shanghai so quickly? Because it means they think it can grow dramatically. Because it's already off to a great start.
2) Though doesn't it? If guests don't love the park who's going to go to it? Who's going to be buying tickets 5, 10 , or even 20 years from now? Establishing a base of people who stay long hours and love the product is critical to its longterm success. We all love Disney right? That's why we're here. We're the result of a good product (some would argue a product that no longer exists). Shanghai needs to establish happy guests who will spend and come back.
3) Well we know they're from China. This means that the park is performing less like Tokyo or Anaheim and more like Walt Disney World. This actually signals good things for becoming a destination resort. They have expansion pads for thousands of hotel rooms. This bodes well for the park, future parks, and hotels.
4) It is a very very large park, but that's not the point right? It doesn't matter if a park can hold people if no one is showing up. If no one wants to go. People are showing up and coming in numbers that rival TDS. That's a lot of people. We'll see if the momentum holds (it could taper off). Still it will be from the start one of the foremost theme parks in the world. It could very well surpass DHS and IOA. We'll see. I saw an article that said it could be around 7+ Million, but that seems like a low ball. I wouldn't be shocked if it hits 10 Million. It just all depends on how slow the winter months are.
1. I simply meant that Iger saying "we want to expand", is an extremely vague answer that doesnt give us much that we could not guess on our own.
2. The surveys do not allow for criticism. I think the most harsh answer you can give is "less magical", LOL. But if people are staying "longer hours", what are they comparing that too? Their (TWDC's) own expectations? Its an expensive and very large park. It takes more time to visit all the attractions/shops and get your moneys worth, hence your staying "longer". Which is great, its a big park, but that doesnt give us any information in terms of bottom line profit
3. My original point was that they could find out 15 people visited from more than 100 miles away and they can now claim "geographical". Give us a percentage. 20%, 40%, 3% ????? We just dont know.
4. I believe that the size of the park is very much the point. If it allows 5,000 more guests (im just using this number as an example) per day than Disney Sea, then that makes a big difference when comparing milestones of visitors and time frames.
ParentsOf4
Well-Known Member
This is a highly deceptive statement and is a prime example of how Iger (as a good CEO) spins data to paint SDL in the most positive light possible.
SDL opened on June 16 at the start of vacation season.
After the opening day debacle at the original DL (which opened on July 17), Disney has traditionally opened its theme parks during slower seasons to allow time to resolve problems before high volume crowds arrive. SDL is the first Disney theme park to open during the summer season since the original DL in 1955.
Consider the opening days of other parks:
- Magic Kingdom - October 1
- Epcot - October 1
- Disney-MGM Studios - May 1
- Euro Disney - April 12
- Disney's Animal Kingdom - April 22
- Walt Disney Studios - March 16
- Disney's California Adventure - February 8
- Hong Kong Disneyland - September 12
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the.dreamfinder
Well-Known Member
Posted this earlier in the day on Spirit's thread, but should be germane to the ongoing conversation here as well.
Disney still to find its magic in Shanghai, as early visitor numbers fall short of expectations
Experts say long queues and high prices mean many are holding off on a trip to the new $5.5 billion site
Fireworks light up Shanghai Disneyland as it opened on June 16. But visitor numbers are far from bright so far. Photo: Kyodo
Early visitor numbers to mainland China’s first Disneyland in Shanghai have been disappointing, according to experts, proving even the “happiest place on earth” isn’t immune to the whims of the tourism industry.
While not providing specific numbers, the company’s chairman and CEO Bob Iger insisted in August the US$5.5 billion park has been “well received by the Chinese consumer”, bringing in over a million visitors since its gates swung open with great fanfare in mid-June.
He Jianmin, director of the tourism management department at Shanghai University of Finance and Economics, estimates around 20,000 people are visiting daily.
But commentators say those healthy-sounding numbers – the equivalent of over 7.3 million annually – fall well short of expectations, and are blaming the less-than sparkling start on high prices and rumours of long queuing times.
Previous estimates had suggested around double that through the turnstiles.
Barclays Bank projected the “authentically Disney and distinctly Chinese” park would attract 12 million visitors in its first year, while Nomura said it would reach 15 million.
State-owned Shanghai Shendi Group, the park’s majority stakeholder, had predicted 10 to 12 million visitors in the first 12 months.
Fewer visitors will certainly leave its annual revenues well short of the targeted US$3.7 billion expected by Liu Zhaohui, co-founder of Beijing-based travel company TripVivid.
[These prices] are making it difficult to attract more visitors. Disneyland might need to readjust them
Ken Wong, Asia equity portfolio specialist, Eastspring Investments
An earlier report from Ctrip, the country’s largest online travel agency, had suggested annual spending at the site could reach 33 billion yuan ($4.95bn) based on its June to September bookings, and boldly trumpeted that Shanghai Disneyland “opened a new era of high-end holiday tourism in China”.
Last year that industry was worth US$610 billion at home and abroad, which the government is hoping to double by 2020 on rising spending by the middle classes.
Disney claims 330 million “income qualified” people live within three hours of the park, but Ken Wong, Asia equity portfolio specialist at Eastspring Investments, points to Shanghai Disneyland’s high ticket prices – 499 yuan for peak season or 370 yuan during the off-season – as the primary reason for many staying away.
“[These prices] are making it difficult to attract more visitors,” he told the South China Morning Post. “Disneyland might need to readjust them.”
Although prices are not high compared to other its parks – they are US$95 adult in Los Angeles and US$64 in Hong Kong – monthly per capita disposable income in China is less than 2,000 yuan a month, while Ctrip estimates per capita spending for a Shanghai Disneyland trip is 2,219 yuan including travel and hotel stay.
Visitor stories so far, widely aired on social media, have also focussed on the 3-4 hour wait for some rides, or attractions shut down early, due to maintenance or overcrowding.
Despite making the experience as Chinese as possible – including Mickey Mouse-shaped braised pig knuckle, Peking Duck pizza, and a Chinese zodiac-inspired garden of Disney characters – Shaun Rein, managing director of China Market Research Group said Disney made a “big mistake” in not better handling long queues, which generated negative word of mouth and have forced consumers to adopt a “wait-and-see attitude”.
“There’s still pretty good demand, but people [appear to] want to wait six months, 12 months, and even longer until the issues are ironed out,” he said.
A BNP Paribas report agrees that the negative press on long waits may be why foreigners, too, are have been hesitant to visit “for the time being”.
But this early performance of arguably China’s most high-profile tourist opening to-date could also prove an ominous reflection of just how hard the industry has reacted to a slowdown in income growth and weakened consumer confidence.
“Consumers are really double-checking, and triple-checking where they visit. They really want to get the best value,” said Rein.
He says outbound travel and tourism is 16 times the value compared with a decade ago, but Chinese buyers are now trending away from expensive places such as Europe, and towards “exotic and cheap” places in Southeast Asia, and domestic wilderness locations such as Yunan, Guilin, Qinghai, and Gansu.
“Domestic tourism is still hot, but Shanghai is not,” he said.
Wong underlines that to successfully attract more money to be spent at home, “services must be affordable and consumers must feel that there is value for their money”.
Caught in the Disney crossfire, meanwhile, are local retail industries which had anticipated wider consumption of at least 20 billion yuan, according to analysts from CITIC Securities.
Retail and hotel spending had been expected to be the biggest gainers from the opening, but Wong does not expect a huge knock-on effect in the country’s overall service industry in China.
“The slowdown ... is more of an isolated case,” he said. “That doesn't translate into any expected slowdown in China’s services sector.”
Shanghai-native Zhao Xiaotian was one of the early visitors to the new Disneyland. She said the park’s facilities were good, but huge crowds limited the number of rides she was able to go on.
“It took several hours to queue up for some rides, which affected the overall experience,” she told the Post. “So it doesn’t feel as if I got my money’s worth from the 500 yuan entrance fee.”
Rein said Chinese tourism will continue to grow, but people are changing where they want to go, so companies “need to be very agile in what they offer.”
“But Disney will bounce [back], Disney is fine,” he said.
SorcererMC
Well-Known Member
CNN writing it up as well:
http://money.cnn.com/2016/10/05/media/disney-shanghai-china-visitors/index.html
http://money.cnn.com/2016/10/05/media/disney-shanghai-china-visitors/index.html
SorcererMC
Well-Known Member
No surprise there. In general, the Chinese government is pushing tourism initiatives (ie consumer-based service sector) to alleviate other economic ills, eg constructing resorts and over-building hotels, which is having the effect of depressing room prices.
Brad Bishop
Well-Known Member
I think it's too early to tell.
You can gloom and doom it with, "They're not meeting expectations!," but that's a bit simplistic.
I think a number of things are at play:
- Were the original estimates realistic? Think about how often original expectations are dead on or they underestimate things (just in companies in general). Most of the time they've (suits / Wall St) talked themselves into a frenzy about how awesome everything will be.
- There are a crazy amount of people in China but don't have a fan base which will take a generation or two to cultivate
- New stuff / opening day issues - trying to get things "right". Adjusting marketing, merchandise, prices, etc.
- China's economy is still emerging, and they have their foot in the door. That's a good thing.
I'd bet that it'll take some time to catch on but then will be fine.
Of course, I look at Paris and see that things haven't been quite right across 25 years now (from everything I've read). I don't get that at all. It seems like Paris should have been a definite "win" for them.
I still think they're making a huge mistake with sacrificing their premier destination, WDW, for these "legacy" (CEO) parks.
You can gloom and doom it with, "They're not meeting expectations!," but that's a bit simplistic.
I think a number of things are at play:
- Were the original estimates realistic? Think about how often original expectations are dead on or they underestimate things (just in companies in general). Most of the time they've (suits / Wall St) talked themselves into a frenzy about how awesome everything will be.
- There are a crazy amount of people in China but don't have a fan base which will take a generation or two to cultivate
- New stuff / opening day issues - trying to get things "right". Adjusting marketing, merchandise, prices, etc.
- China's economy is still emerging, and they have their foot in the door. That's a good thing.
I'd bet that it'll take some time to catch on but then will be fine.
Of course, I look at Paris and see that things haven't been quite right across 25 years now (from everything I've read). I don't get that at all. It seems like Paris should have been a definite "win" for them.
I still think they're making a huge mistake with sacrificing their premier destination, WDW, for these "legacy" (CEO) parks.
