Disney Management LIES?! How Management cheated to kill an Epcot Attraction!

[mkt]

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Brad, when you make the comment about Tokyo Disneyland being in one of the most heavily populated areas on earth, you also fail to mention that the majority of visitors to WDW come from 2 of the most heavily populated areas on earth (London/NYC), and you fail to factor in the cheaper cost of admission in a country with a much higher cost of living/region with higher income. WDW COULD lower prices to attract more visitors without losing much revenue, but I doubt they ever will

 

[speck76]

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Brad, when you make the comment about Tokyo Disneyland being in one of the most heavily populated areas on earth, you also fail to mention that the majority of visitors to WDW come from 2 of the most heavily populated areas on earth (London/NYC), and you fail to factor in the cheaper cost of admission in a country with a much higher cost of living/region with higher income. WDW COULD lower prices to attract more visitors without losing much revenue, but I doubt they ever will

The metro Tokyo area is the heaviest populated area on earth with 33 million people. If you put the majority of the population of California in Orange County....then the parks could be apples to apples. Also, what I did mention was that the majority of visitors to TDL access the park through local transportation, not through airfare (and needing hotel stays).

Finally, the biggest lie in the world is "lowering prices will generate demand". It does not happen, you may get a few more customers, but it is rarely if ever enough to replace the profit that would have been made with the higher prices. All lowering prices will do is potentially capture more demand that already exists. If WDW was cheaper than Universal, people that had planned to go to Universal may go to WDW instead, but how many people visit Orlando to only attend Universal?....

 

[Computer Magic]

The metro Tokyo area is the heaviest populated area on earth with 33 million people. If you put the majority of the population of California in Orange County....then the parks could be apples to apples. Also, what I did mention was that the majority of visitors to TDL access the park through local transportation, not through airfare (and needing hotel stays).

Finally, the biggest lie in the world is "lowering prices will generate demand". It does not happen, you may get a few more customers, but it is rarely if ever enough to replace the profit that would have been made with the higher prices. All lowering prices will do is potentially capture more demand that already exists. If WDW was cheaper than Universal, people that had planned to go to Universal may go to WDW instead, but how many people visit Orlando to only attend Universal?....

There is some truth to "lowering prices will generate demand". Without getting too much into Economics, there is a equilibrium price. This occurs at the point where the quantity sold equals what people will pay.

If the price is too much higher then the equilibrium, people won't travel and thus hurt profit. If the price is too much lower then the equilibrium the profits are affected. This is what I call a fair price. Enough to make the shareholder happy while keeping the customers happy.

Wouldn't you contribute the upswing in attendance to Disney offering all these discounts? Supply and demand drives the price. Disney is reducing the price and getting higher attendance. They are making a profit by doing this. The question is Disney at the equilibrium point?

 

[speck76]

There is some truth to "lowering prices will generate demand". Without getting too much into Economics, there is a equilibrium price. This occurs at the point where the quantity sold equals what people will pay.

If the price is too much higher then the equilibrium, people won't travel and thus hurt profit. If the price is too much lower then the equilibrium the profits are affected. This is what I call a fair price. Enough to make the shareholder happy while keeping the customers happy.

Wouldn't you contribute the upswing in attendance to Disney offering all these discounts? Supply and demand drives the price. Disney is reducing the price and getting higher attendance. They are making a profit by doing this. The question is Disney at the equilibrium point?

It would be nice if Economics 101 actually worked outside of the classroom. From my experience (and this is actually what I do for a career in the lodging industry) it is not so much the price, but the promotion that will generate demand. Throwing out a lower price without promotion will not generate demand. The numbers might go up slowly, as you may capture a larger percentage of guests who were sensitive to the higher price. The combination of a fair price, along with promotion will generate demand, but the amount of demand that would need to be captured at the lower, promoted price to give you a same bottom line profit grows exponentially. Massive, untargeted discounting is the worst way to grow or maintain profits. How many guests that recieved the discounted packages would have paid the higher prices anyway...how much was simply tradedown? Unfortunately, the revenue management of the Dinsey lodging establishments is stuck in 1991....they price by season, with the same seasons every year, and the rates may go up a buck here or there. This was never an issue before, because the hotels ran a consistantly high occupancy. With the hotels no longer running such an occupancy, WDW is doing what they know how to do to get heads in beds.....but from what I see, they are pushing all of the wrong buttons.

 

[bork]

DAK brough in almost that many new visitors, yet cost a fraction of what TDS cost)

Not quite the whole story (Based on Amusement Business numbers). In 1997, the 3 WDW parks drew 39.2 million. In 1999, AK did draw 8.6 million in its first full year, but total WDW attendance only increased to 42.6 million. That's a net increase of 3.4 million. It mainly just stole guests from the other parks.

Tokyo DL drew 16.5 million in 2000. In 2002 Tokyo DL drew 13 million and DisneySea drew 12. That's a net gain of 8.5 million.

I'd say Tokyo got a little better bang for their buck.

 

[speck76]

Not quite the whole story (Based on Amusement Business numbers). In 1997, the 3 WDW parks drew 39.2 million. In 1999, AK did draw 8.6 million in its first full year, but total WDW attendance only increased to 42.6 million. That's a net increase of 3.4 million. It mainly just stole guests from the other parks.

Tokyo DL drew 16.5 million in 2000. In 2002 Tokyo DL drew 13 million and DisneySea drew 12. That's a net gain of 8.5 million.

I'd say Tokyo got a little better bang for their buck.

Yes, but as I said, TDS cost was over $3.5billionUSD...DAK was what, $600-$800million.....who really got the bang for their buck?

 

[Computer Magic]

It would be nice if Economics 101 actually worked outside of the classroom. From my experience (and this is actually what I do for a career in the lodging industry) it is not so much the price, but the promotion that will generate demand. Throwing out a lower price without promotion will not generate demand. The numbers might go up slowly, as you may capture a larger percentage of guests who were sensitive to the higher price. The combination of a fair price, along with promotion will generate demand, but the amount of demand that would need to be captured at the lower, promoted price to give you a same bottom line profit grows exponentially. Massive, untargeted discounting is the worst way to grow or maintain profits. How many guests that recieved the discounted packages would have paid the higher prices anyway...how much was simply tradedown? Unfortunately, the revenue management of the Dinsey lodging establishments is stuck in 1991....they price by season, with the same seasons every year, and the rates may go up a buck here or there. This was never an issue before, because the hotels ran a consistantly high occupancy. With the hotels no longer running such an occupancy, WDW is doing what they know how to do to get heads in beds.....but from what I see, they are pushing all of the wrong buttons.

I can tell we are both seasoned businesspersons. There is much more that goes into the equation that makes this much more complicated. The concept still works outside the classroom with some variance. The statement "the biggest lie in the world is lowering prices will generate demand", caught my eye and I thought was a little vague. I kept my response simple i.e. Economics 101 so not to drift too far off topic. We both agree Disney is pushing the wrong buttons.

Good Dialogue

 

[Kopp8699]

Yes, but as I said, TDS cost was over $3.5billionUSD...DAK was what, $600-$800million.....who really got the bang for their buck?

I would say TDS only because they did not open as a half park, because the lack of rides (even today) is still a huge factor. If I couldn't hop parks, I would completely skip DAK only because it has a few attractions. It is a beautiful park, but so is TDS. The ideas of the park are great ideas but not opening with Beastly Kingdom and it never coming, plus Asia not ready on time... I have to go with TDS from just what I have seen and heard of it.

 

[speck76]

I would say TDS only because they did not open as a half park, because the lack of rides (even today) is still a huge factor. If I couldn't hop parks, I would completely skip DAK only because it has a few attractions. It is a beautiful park, but so is TDS. The ideas of the park are great ideas but not opening with Beastly Kingdom and it never coming, plus Asia not ready on time... I have to go with TDS from just what I have seen and heard of it.

You kind of missed the point all together. TDS cost 4-5 times more than DAK did to build, yet only had twice the impact of DAK.

 

[mkt]

I shall bail from the business talk on this thread, since it's obvious I don't know crap about business.

So Brad.. how's Speck?

 

[speck76]

I shall bail from the business talk on this thread, since it's obvious I don't know crap about business.

So Brad.. how's Speck?

She is sleeping....she was playing around with Chase and Milo for about an hour, which is about her limit on play-time.

 

[HennieBogan1966]

Economics 101?

Not to offend, but this is not rocket science. As someone who has been in the retail industry for close to 15 years now, I can say this. (which I also learned in economics class). It's supply and DEMAND!!!! You can have all the supply you want, but if the public doesn't demand it, then good luck to ya!!

Problem is, most of us don't want (ie demand) overpriced hotel rates, overpriced merchandise, or goods/services. This is why so many people shop at Wal Mart, as opposed to more upscale businesses which offer many of the same merchandise categories. THE PRICE!!! PERIOD!!!

That's why Disney does offer all of the discounted packages that they do. They know, as do I, that if you can get them in the door, there is profit to be made. Goods/Services, (food, beverages, etc.,), as well as merchandise, tend to be very high margin items. Therefore, the pricing of the packages in and of itself, is minor in any "equation" that some may come up with. Which is why having your own licensing on product is so important. Removes the middle man, therefore increasing your profit margin.

We can talk all day long about long-winded economic theories which we "think" attribute to the decline in attendance at any given time. Fact is,
as goods/services continue to increase in price for everyday living, vacation and discretionary spending will continue to decrease.

I submit there is another way to help all of these factors across the board. LOBBY THE GOVERNMENT TO LOWER THE TAX BURDEN ON AMERICAN CITIZENS!!!!! IT'S OUR MONEY ANYWAY.

 

[speck76]

Not to offend, but this is not rocket science. As someone who has been in the retail industry for close to 15 years now, I can say this. (which I also learned in economics class). It's supply and DEMAND!!!! You can have all the supply you want, but if the public doesn't demand it, then good luck to ya!!.

Here is the thing....the supply stayed the same..has stayed the same since 1999 when IOA opened, but the demand went into the toilet. The point is that lowering the price alone does not increase the demand, it simply gives an opportunity to capture more of the existing demand.

Problem is, most of us don't want (ie demand) overpriced hotel rates, overpriced merchandise, or goods/services. This is why so many people shop at Wal Mart, as opposed to more upscale businesses which offer many of the same merchandise categories. THE PRICE!!! PERIOD!!! .

Most don't, but some do. I wont shop at Wal-Mart...I think it sucks, I would rather pay more at Super Target and have an enjoyable experience.

I submit there is another way to help all of these factors across the board. LOBBY THE GOVERNMENT TO LOWER THE TAX BURDEN ON AMERICAN CITIZENS!!!!! IT'S OUR MONEY ANYWAY.

Yes, and our schools and roads can continue to get worse and worse.

 

[HennieBogan1966]

Okay, so you're saying that lowering the price would merely increase the existing demand. Question, isn't that then, in fact, increasing the demand we're speaking of? To believe what you're saying, one would have to say that no one ever buys products of any kind because they are less expensive than that of a competitor. Just convenience. That if they had the choice, they'd shop somewhere more expensive, probably because it's a "nicer" place to shop. Or they have "name" brand products, as opposed to generic.

Your second point about shopping at other than Wal Mart is somewhat of a half-truth. YOU might shop elsewhere for your own personal reasons, but that doesn't mean that everyone else would. It would be like saying that I would buy the exact model car, and pay more for it, merely because I like the salesman more at one lot than another, or because the lot was more pleasant to walk around. Again, doesn't seem logical to me.

To your third point, you may be willing to hand over your check to the Fed. Govt., but I am not. We can debate about the conditions of roads/schools as it relates to taxation, and I would probably agree with you. Fact is, our govt. funds TOO MANY hand out programs, to property fund those you speak of.

Maybe the govt. should take a cue from Disney as it regards these things. As I see it, they rarely have a problem funding the repair of roads, buildings, new projects, attractions. NOTE that I said "funding" these programs.

 

[speck76]

Okay, so you're saying that lowering the price would merely increase the existing demand. Question, isn't that then, in fact, increasing the demand we're speaking of? To believe what you're saying, one would have to say that no one ever buys products of any kind because they are less expensive than that of a competitor. Just convenience. That if they had the choice, they'd shop somewhere more expensive, probably because it's a "nicer" place to shop. Or they have "name" brand products, as opposed to generic. .

No, you missed the point. Pricing does not influence demand, it increase your ability to capture more of the demand. Say 10 guests call the hotel reservation line each minute, and 6 of them do not buy due to price. Now, you lower the price. Of the 10 people now calling each minute, only 5 do not buy due to price....Still, only 10 people are calling for minute. What have they done to increase the amount of people calling.

In retail terms (since I don't believe the two are relevant comparisons) If Wal-Mart has a weekly sale, but does not send out an advertisement, how is anyone going to know? They are not going to capture any new cutomers, because they did not promote their offerings.

Now, the tricky part is, if Wal-MArt puts a $10 fan on sale for $5, how many people would have bought that fan for $10 anyway. If they move 2 times the amount of units at $5 as they did at $10, they are still only making the sames amount of gross revenue, but the profit margin has gone to hell.

Your second point about shopping at other than Wal Mart is somewhat of a half-truth. YOU might shop elsewhere for your own personal reasons, but that doesn't mean that everyone else would. It would be like saying that I would buy the exact model car, and pay more for it, merely because I like the salesman more at one lot than another, or because the lot was more pleasant to walk around. Again, doesn't seem logical to me.

No, it does not mean other would, but why is Super Target still in business when the Wal-Mart just down the street is much cheaper on almost every item? To some people, price is the deciding factor, to others (like myself) it is not. I would gladly pay more for something that was a better "value" to me personally.

 

[Kopp8699]

You kind of missed the point all together. TDS cost 4-5 times more than DAK did to build, yet only had twice the impact of DAK.

I get what you are saying, but I still disagree. TDS was far more expensive and got that much revenue, while Animal Kingdom was less and didn't do too bad. But what I am saying is that TDS looks better to me as a theme park than Animal Kingdom... If Disney would have put more into the park it would have done better, like having the two other sections of the park there. TDS was pretty much good when it opened, it may have cost more but still it was worth the investment. While AK still lacks in my eyes, i think I would be a little more satisfied going to TDS. I am not a fan of AK, nor will I be a huge fan of it when Everest opens (no matter how great I am anticipating it to be) because it still is a shell of what it could have been. As I said, if it wasn't for the park hoppers, I would not even go to that park, because I feel like I waste time there. TDS also has more potential, any attraction can basically fit there and with AK, because with animals, they have to be very careful not to put the animals in danger... plus there are only so many animal encounter type rides that the public could take. In my oppinion, I would rather spend my money at Disney Seas than Animal Kingdom. So I feel like I would get a bigger bang for my buck, and if a majority of the general public feels that way, and spends more time in the park and spends money, they did get a bigger bang for their buck. People would want to return to TDS being how great it was, when some people (my whole family) did not want to go back 2 DAK because of how bad the park was for us. This also means Disney would get a bigger bang for their buck in ticket sales, food sales, and merchandise sales. That's just the way I see it.

 

[speck76]

I get what you are saying, but I still disagree. TDS was far more expensive and got that much revenue, while Animal Kingdom was less and didn't do too bad. But what I am saying is that TDS looks better to me as a theme park than Animal Kingdom... If Disney would have put more into the park it would have done better, like having the two other sections of the park there.

(do you have to bold your posts?)

I think you are missing my point. TDS is a FAR better park, which many more attractions than DAK. I would much rather be 10 minutes from a park like TDS than DAK too. The fact is DAK cost less than 1/4 the cost of TDS, but had almost 2/3 the financial impact. (WDW got a 3.4million boost in admissions property wide, TDL/DS got a 4.5million boost in admissions, but it cost TDL $3billionUSD more for only 1 million more guests)

Also, you have a major flaw in your logic, as their is no telling that if DAK would have been built with many more attractions, more people would have gone to the park.

 

[Kopp8699]

(do you have to bold your posts?)

I think you are missing my point. TDS is a FAR better park, which many more attractions than DAK. I would much rather be 10 minutes from a park like TDS than DAK too. The fact is DAK cost less than 1/4 the cost of TDS, but had almost 2/3 the financial impact. (WDW got a 3.4million boost in admissions property wide, TDL/DS got a 4.5million boost in admissions, but it cost TDL $3billionUSD more for only 1 million more guests)

Also, you have a major flaw in your logic, as their is no telling that if DAK would have been built with many more attractions, more people would have gone to the park.

I get what you are saying now, and I did not bold my post this time because of your request lol :lol: . It's my AIM font so I am used to seeing what I type in bold. Guess it is just a preference of mine, but anyways back on topic. I thought you were more so glorifying DAK. It is your own oppinion if you do so, but I am not impressed with what it is now and I am more impressed with TDS. I was also saying that if you pay less (like the budget for DAK didn't allow everything at opening) you get less. It doesn't matter how much was paid for the park, TDS has more to do than DAK in my oppinion. Regardless how much it costs overall, I think it is a bigger bang for my buck to go to TDS. If 1,000,000+ more people went to TDS it is still huge. Plus WDW is one of the top, if not the top, destinations for families. If they have a 4th park, of course you are going to attend it. When it opened, people said how it was a half day park and were a little dissapointed, hence where I said that if it had more, more people would enjoy it. I am just saying that if more people went to it and enjoyed their park experience, then they would tell people on their extraordinary time there so others would go. In the longer run, it seems that TDS is a better investment and gets a bigger bang for their buck.

Edit: Wow I didn't realize how the tread drifted lol. The original topic was about Epcot killing WoL and now we are talking about TDS and AK lol.

 

[speck76]

I get what you are saying now, and I did not bold my post this time because of your request lol :lol: . It's my AIM font so I am used to seeing what I type in bold. Guess it is just a preference of mine, but anyways back on topic. I thought you were more so glorifying DAK. It is your own oppinion if you do so, but I am not impressed with what it is now and I am more impressed with TDS. I was also saying that if you pay less (like the budget for DAK didn't allow everything at opening) you get less. It doesn't matter how much was paid for the park, TDS has more to do than DAK in my oppinion. Regardless how much it costs overall, I think it is a bigger bang for my buck to go to TDS. If 1,000,000+ more people went to TDS it is still huge. Plus WDW is one of the top, if not the top, destinations for families. If they have a 4th park, of course you are going to attend it. When it opened, people said how it was a half day park and were a little dissapointed, hence where I said that if it had more, more people would enjoy it. I am just saying that if more people went to it and enjoyed their park experience, then they would tell people on their extraordinary time there so others would go. In the longer run, it seems that TDS is a better investment and gets a bigger bang for their buck.

Edit: Wow I didn't realize how the tread drifted lol. The original topic was about Epcot killing WoL and now we are talking about TDS and AK lol.

Ok...I see the problem

DAK = a bigger bang for "Disney's" buck
TDS = a bigger bang for the guest's buck

 

[Kopp8699]

Ok...I see the problem

DAK = a bigger bang for "Disney's" buck
TDS = a bigger bang for the guest's buck

Exactly... I guess it was just a misunderstanding :hammer: . When you said bang for their buck, I was thinking overall, including guests first and then company. You were thinking company and then guests. We just switched who's buck was being discussed first. I get where you are coming from more now, how DAK spent less and had a lot of guests visit, and I hope you understand where I am coming from.

On a side note: notice the unbolded font, considering how you made a request I will try not bold every single post of mine.