Disney(World) vs. Disney(land)?

[GoofGoof]

Let's explain it like this:

Yes, Disney company as a whole reported great numbers. Parks & Resorts looks wonderful. On a scale of 1 to 10 they hit a solid 9.8. (The numbers scale is pure analogy, bear with me.) The point these folks are trying to make is that the sum of all the parks added together made that total number good. The fact that there was an obvious omission of WDW's piece of that 9.8 score while specific mention was thrown for the huge contributions from Tokyo (which Disney doesn't even own, it's all a license agreement), Disneyland, and Disney Cruise Line speaks volumes. Again, the sum of the numbers is good. But that number breakdown is more like:

Tokyo: 2.5
Disneyland: 3.5
Disney Cruise: 3.0
WDW: 0.8

It's obvious when one of the bunch there isn't pulling its weight. The way TDO keeps their numbers looking okay is they cut spending by reducing offerings, cutting budgets, etc. basically they spend less but charge the guest more. It's not a healthy business model. At some point consumers get tired of spending more to get less.

I know you said these numbers were just an analogy, but I'm curious where you came up with the breakdown. I couldn't find anywhere that Disney discloses WDW separate from DL and the cruise ships. Per the 10Q parks and resorts domestic revenues are up 11% while international was up 5% so more of the revenue growth comes from domestic (DL, WDW and DCL). They mentioned that Tokyo was a large driver of the 5% growth in International due to the 2011 numbers being down due to the tsunami. They don't break operating revenue by domestic vs international. On the earnings call someone asked a question about the breakdown between CA and FL for parks. The specific question was "can you give us a sense of what the attendance trends look like through the quarter and maybe next quarter? CA vs FL is there anything you are seeing differently than previous years? Jay Rasulo's answer "Nope. Not really a big difference between those two parks". Unless you think the CFO is lying (which I know a lot of people probably do) it sounds like they are saying there is not a big difference in attendance number increases between FL and CA.

On a related note, they disclose domestic hotel occupancy rates at 82% which is flat year over year. This includes DL and cruise ships, but the bulk of rooms are at WDW. I think WDW has around 30,000 rooms, DL around 2,300 and the cruise ships 4,000 rooms? (no clue if the cruise number is accurate but they talked about 2,500 passengers per ship so i would assume around 1,000 rooms per ship). That means WDW has over 80% of the total rooms. Even if DL and DCL were at 100% occupency WDW would have to be at 78% occupency to get the total to 82%. Makes me question how occupancy could be 60% at WDW as reported by some people on here.

 

[menamechris]

So one things been bugging me...these people buying the $1.5M homes at Golden Oak - they don't seem to be the demo that likes getting nickel and dimed to death. And part of their deal is getting EMH access right? That just got cut so...is any of this affecting sales?

I think a lot of people in that demo get it. Most people don't become rich overnight. These people (I am sure) saw how people clawed and blew tons of money to get into Celebration - only for Disney to dorp any and all association (besides the manhole covers). I would expect a similar situation with Golden Oak. Disney will associate with it until they have made all the money they can - and then probably outsource it to a third party and let them keep the mickey ears on the sign. "Old Money" understands this and probably isn't buying in. "New Money" - well..I guess they will be able to check it off as a lesson learned in a few years.

 

[WDW1974]

On a related note, they disclose domestic hotel occupancy rates at 82% which is flat year over year. This includes DL and cruise ships, but the bulk of rooms are at WDW. I think WDW has around 30,000 rooms, DL around 2,300 and the cruise ships 4,000 rooms? (no clue if the cruise number is accurate but they talked about 2,500 passengers per ship so i would assume around 1,000 rooms per ship). That means WDW has over 80% of the total rooms. Even if DL and DCL were at 100% occupency WDW would have to be at 78% occupency to get the total to 82%. Makes me question how occupancy could be 60% at WDW as reported by some people on here.

Not that it matters, but Disney also operates resorts in Vero Beach, Hilton Head and Oahu. And WDW's inventory is about 25,000 when all rooms are included ... but they often take vast quantities out for various raesons.

But since you questioned my number, I never stated WDW was at 60% for the year. Just that resorts have been doing poorly this summer. I also don't know how DVC is factored in when it is an owner versus a renter.

I can tell you that there is no way that WDW has been 78% sold out thus far in 2012 ... and Disney would look at that number as a failure. They want mid 80s and above.

 

[Lee]

I hear he has a wonderful singing voice...and he was Insider of the Year in 2004.

Well, one of those statements is true...

So, would you like 'One Little Spark' or 'It's Fun to Be Free' or my personal favorite 'Energy, You Make The World Go Round'? ... Also, there is no truth to that terrible 'net rumor that Lee Skypes with Fanbois in the nude while doing his EPCOT renditions. He used to, but Mrs. Lee caught him, he spent three nights sleeping with the possums and now is cured.

Sir, you threaten my sterling reputation when you cast such dispersions.

Actually, I think I'll ask him for an Adventurers Club tune. Perhaps that will melt my cold, cold doom and gloomer heart!

I might be good for a rousing rendition of the Colonel's Beer Song...

 

[lazyboy97o]

Spirit, I can't seem to get excited about any proposed expansions until the current regime is out. Am I supposed to put my faith and hope into the very people who have allowed the collapse to occur? The very people who don't seem to get DHS are supposed to fix it?

Sorry, I can't get excited...not yet. Been burned too many times. Maybe if Lee would sing Epcot tunes to me. I hear he has a wonderful singing voice...and he was Insider of the Year in 2004.

My issue is more that, one potentially good move could see those who have been a poison to the Resort being rewarded and allowed to stay to continue on as they were before.

 

[WDW1974]

I think a lot of people in that demo get it. Most people don't become rich overnight. These people (I am sure) saw how people clawed and blew tons of money to get into Celebration - only for Disney to dorp any and all association (besides the manhole covers). I would expect a similar situation with Golden Oak. Disney will associate with it until they have made all the money they can - and then probably outsource it to a third party and let them keep the mickey ears on the sign. "Old Money" understands this and probably isn't buying in. "New Money" - well..I guess they will be able to check it off as a lesson learned in a few years.

There's a lot of things I'd like to say about the type of person who would buy in Golden Oak (and as a borderline 1%er myself it's not an issue with people having money because that is a GOOD thing), but they wouldn't be nice so I think I'll just think them and contemplate Larry Hagman's eye brows.

 

[ScoutN]

but they wouldn't be nice so I think I'll just think them and contemplate Larry Hagman's eye brows.

Easy there! That is a touchy subject with the season finale tonight. Where will I get my weekly doses of truth and proper tactics perceived as evil.... Oh wait

 

[Lee]

There's a lot of things I'd like to say about the type of person who would buy in Golden Oak (and as a borderline 1%er myself it's not an issue with people having money because that is a GOOD thing), but they wouldn't be nice so I think I'll just think them and contemplate Larry Hagman's eye brows.

Funny how rich, mogul types (even fictional ones) start to look kinda odd as they get old, huh?

 

[WDW1974]

Well, one of those statements is true...

Sir, you threaten my sterling reputation when you cast such dispersions.

Um ... Not that I am a ritter of nuthin of da sort, but I believe the wordage you be looking for would be 'aspersions' and I would never cast them against someone who is a bigshot Imagineer for Disney.

Oh wait, you aren't that, are ya?

 

[WDW1974]

Funny how rich, mogul types (even fictional ones) start to look kinda odd as they get old, huh?

Now, you are ATTACKING MY LOOKS?!??!?

You do know I am irresistable to most women (including yours!) and a large chunk of fanbois too!

 

[Lee]

Um ... Not that I am a ritter of nuthin of da sort, but I believe the wordage you be looking for would be 'aspersions' and I would never cast them against someone who is a bigshot Imagineer for Disney.

Oh wait, you aren't that, are ya?

My bad. It's been a long day and my skills as a wordsmith aren't what they should be.

And, yes... I am a big shot Imagineer. The biggest! I tell Bruce Vaughn what's what! I give Bob Weiss what fer! I tell Crazy Joe which earring to wear on Tuesdays!


Or...not...

Now, you are ATTACKING MY LOOKS?!??!?

You do know I am irresistable to most women (including yours!) and a large chunk of fanbois too!

Surely nothing in my post could be construed as being directed at you yourownself.
But... there is a photo on my fridge (taken in the vicinity of a hibachi) I could post.
Let me go warm up the scanner...

 

[WDW1974]

My bad. It's been a long day and my skills as a wordsmith aren't what they should be.

That's OK. You could write for the O-Sentinel tomorrow ... hell, you might even ask some real questions unlike JRG.

And, yes... I am a big shot Imagineer. The biggest! I tell Bruce Vaughn what's what! I give Bob Weiss what fer! I tell Crazy Joe which earring to wear on Tuesdays!

Are you the one that got him to add the nipple rings? (Joe ... I have no idea if Bruce has them, but being an Imagineer ...)

Surely nothing in my post could be construed as being directed at you yourownself.
But... there is a photo on my fridge (taken in the vicinity of a hibachi) I could post.
Let me go warm up the scanner...

Um ... yeah ... ah ... only the worst photo taken of me in 2011 ... so ... just gonna slowly step back ... from the topic ... yeah, nothing to see here. Nope ... JT and the troll sorta killed the topic ... so maybe I should make a sandwich. ... You stay away from that scanner now. ... Have a glass of raccoon juice with rabbit pieces to wind down.

 

[PeoplemoverTTA]

Kathy Mangum is a good Imagineer, but she's nothing exceptional. And she hasn't been brought in because WDI in FLA is a mess (although it really sorta is), but because they need a leadership face as they embark on major projects.

This is another excellent point. From Travel Channel specials to the plethora of Cars Land videos on the Disney Parks Blog, Kathy Mangum is a familiar face to people on the forums, but also to Helen Housewife in Michigan, thanks to how well they've pimped her out on various media outlets. She may be a good leader, but she is also a fairly recognizable and "trustworthy" Imagineer. People who associate her with Cars Land are more apt to "trust" her if she's at the helm of future WDW development.

I know WDI is a major source of backbiting and fighting - any idea how well regarded Mangum is within WDI?

 

[WDW1974]

This is another excellent point. From Travel Channel specials to the plethora of Cars Land videos on the Disney Parks Blog, Kathy Mangum is a familiar face to people on the forums, but also to Helen Housewife in Michigan, thanks to how well they've pimped her out on various media outlets. She may be a good leader, but she is also a fairly recognizable and "trustworthy" Imagineer. People who associate her with Cars Land are more apt to "trust" her if she's at the helm of future WDW development.

I know WDI is a major source of backbiting and fighting - any idea how well regarded Mangum is within WDI?

Good point in the first paragraph.

Yes, I have an idea. No, I'd rather not comment.

 

[the.dreamfinder]

Are you the one that got him to add the nipple rings? (Joe ... I have no idea if Bruce has them, but being an Imagineer ...)

At 1:24, there is a Burning Man book on his shelf, so I guess I wouldn't put it past him. I wonder if imagineers have made stuff for Burning Man before.
Hmm... I also wonder how long it takes Joe to put his earrings on in the morning ...

 

[TalkingHead]

WDW will soon open the FLE which will be an amazing success.

JT, you ignored my question, so I assume you don't have an answer. How will FLE be an amazing success? Increased attendance? More spending per visitor? Or is this just more of the hot air you spew?

 

[jt04]

Nice post. I do have some comments and look forward to your response. And remember, all of what I'm about to write is just my opinion. I'm willing to acknowledge upfront that it could be wrong!

Yes and no. And I agree that Pandora is a good example of this.

If Disney is like most Fortune 500 companies, overall decisions on how much to spend are made at the highest levels of the company. This includes decisions such as "11% of 2011's gross revenue will be spent on R&D in 2012." Typically, individual business units within the company then have to make their pitch why they deserve a bigger piece of that funding. Divisions that make a better pitch get a bigger chunk. Fundamentally, they are competing with each other for the same R&D funding. In a mature organization that works well together, this process goes smoothly as even the losing side recognizes that the company is better off with the money spent elsewhere. However, very large corporations (like Disney) tend to have internal fiefdoms and leaders with huge egos. No one likes to "loose" in this environment, even if "losing" is more financially beneficial for the company as a whole. The perception is that TDO has been at the losing end of the battle for some time. Build more cruise ships, expand at DCA, open a DVC in Hawaii, improve other properties, but WDW is pretty much the same resort it was 15 years ago.

Pandora is a perfect example of just how ineffective TDO has been. Perhaps the biggest change to WDW in 20 years is not even being championed from within TDO! That's an incredible indictment of TDO.

A company does not grow its business by not spending money. It grows its business by spending money wisely.

It is easy to achieve short-term gains by cutting corners and increasing prices. This is not a sustainable business model for long-term growth. Taken to its extreme, Disney could have made a lot more money short-term by terminating the entire maintenance and R&D staffs. Long-term, this is financial suicide. Fundamentally, TDO seems to have adopted a strategy that thinks suicide in small doses is the best business plan.

It depends on how you measure #1. GM was a business disaster for decades long before it lost the #1 spot. GM's senior management adopted a "we're too big to fail" mentality. (Sound familiar?) I think most people who post on this thread are passionate about WDW and don't want WDW to adopt the same mentality.

I suspect Iger's primary concern is how the public will perceive him in 2014, assuming he runs for public office. Iger is more concerned with the overall perception of The Walt Disney Company than he is with whether WDW gets a new land or has burned out light bulbs. And that's the difference between Iger and Walt Disney. If those many stories about Walt are true, Walt really did care about all those things. Walt built DL because he wanted it, even when nearly everyone else thought it was a bad idea. To quote Walt:

Don't we wish current Disney management thought like this?

Get back too me please when you have grasped the idea that "TDO" no longer has the leverage in these matters. It is coloring your perspective of how everything happens. WDW is NOT the same as it was 15 years ago as huge sums have gone into expanding resorts and restoring infrastructure both behind the scenes and "on-stage". Especially since Iger took over. Now the table is set for adding content to the parks. It was absolutely necessary for events to happen in the order they have.

Now we get to the fun part.

 

[IWant2GoNow]

WDW will soon open the FLE which will be an amazing success. Test Track is being completely reimagined. Pandora is underway most likely.

The FLE is going to look amazing, Test Track was long overdue for a refurb/redo, & Pandora well, as someone put it, at least it's something.

But... my thinking is now, I pray these things DON'T have an "amazing success" because knowing how everything works at TDO currently, that would give them enough to say "Well, numbers (skewed of course) are way up. Guess we don't need to do as much as we thought."

Now I believe numbers will go up once FLE is fully running & they may even jump a smidge when 7DMT opens up in 2014, but with the current shake up going on within WDI, will that be enough? I sure as heck hope not.

 

[jt04]

The FLE is going to look amazing, Test Track was long overdue for a refurb/redo, & Pandora well, as someone put it, at least it's something.

But... my thinking is now, I pray these things DON'T have an "amazing success" because knowing how everything works at TDO currently, that would give them enough to say "Well, numbers (skewed of course) are way up. Guess we don't need to do as much as we thought."

Now I believe numbers will go up once FLE is fully running & they may even jump a smidge when 7DMT opens up in 2014, but with the current shake up going on within WDI, will that be enough? I sure as heck hope not.

See the post above I just wrote. TDO does not make big decisions anymore it would not appear. They basically are a level of operations management. Big decisions are made in California. Pandora is the evidence of that.

 

[jt04]

I think you and I agree about TDO. It's why I wrote:

I think most of the people you see as the problem left long ago. No sense in beating that dead horse.

I have long since moved on and tend to dwell on how things are and will be rather than how they were.