DLR 3rd gate possibilities

[truecoat]

Disney definitely needs to add more hotels. If they build a third park, they need to build at least one more hotel.

They should tear down the Paradise Pier hotel. They didn't build it to begin with and they could make a bigger themed hotel utilizing some of the space in that area better.

 

[Darkbeer1]

Disney definitely needs to add more hotels. If they build a third park, they need to build at least one more hotel.

Why? The profit margins are not so great, especially in California, where labor and other costs are high.

The majority of Hotel rooms in Orange County are already in Anaheim, and the parks layout give Disney no real advantage.

Let others build the Hotel Rooms Disney needs, and Disney can make its profits on the parks, food and beverage.

 

[Darkbeer1]

They should tear down the Paradise Pier hotel. They didn't build it to begin with and they could make a bigger themed hotel utilizing some of the space in that area better.

The Paradise Pier is not part of the Disneyland Resort zoning area. It has its own separate piece of land that is zoned in the Resort Area..

So if rebuilt, would have to go through the whole Planning Commission process just like the Eastern Gateway. More than likely couldn't add any more rooms, would have to add parking spaces, and probably other stipulations.

 

[truecoat]

The Paradise Pier is not part of the Disneyland Resort zoning area. It has its own separate piece of land that is zoned in the Resort Area..

So if rebuilt, would have to go through the whole Planning Commission process just like the Eastern Gateway. More than likely couldn't add any more rooms, would have to add parking spaces, and probably other stipulations.

Ugh. I suppose it would be near impossible to move it to the DLR.

 

[Darkbeer1]

Ugh. I suppose it would be near impossible to move it to the DLR.

Any changes to the DLR Specific Plan would lose a lot of Grandfathered items. Same as if they wanted to add the Eastern Gateway.

As the State Farm lady would say... "Don't mess with my Plan!"

 

[DanielBB8]

Why? The profit margins are not so great, especially in California, where labor and other costs are high.

The majority of Hotel rooms in Orange County are already in Anaheim, and the parks layout give Disney no real advantage.

Let others build the Hotel Rooms Disney needs, and Disney can make its profits on the parks, food and beverage.

But they are charging $350 a night at Paradise Pier and $450 at Disneyland Hotel and Grand Californian. Whereas the competition is charging $200 a night. And can charge additional packages to those staying onsite. This is like keeping money on the table. It’s a marginal difference that could make a difference. If their tenants at Downtown Disney aren’t doing so well, the hotels are guaranteed money as well as customers for all those stores and restaurants. Well, that’s the hope.

 

[Darkbeer1]

But they are charging $350 a night at Paradise Pier and $450 at Disneyland Hotel and Grand Californian. Whereas the competition is charging $200 a night. And can charge additional packages to those staying onsite. This is like keeping money on the table. It’s a marginal difference that could make a difference. If their tenants at Downtown Disney aren’t doing so well, the hotels are guaranteed money as well as customers for all those stores and restaurants. Well, that’s the hope.

The more Disney adds hotel rooms, the amount of the Disney surcharge goes down.

And any new inventory will more than likely be off-property.

 

[The Grand Inquisitor]

Why? The profit margins are not so great, especially in California, where labor and other costs are high.

The majority of Hotel rooms in Orange County are already in Anaheim, and the parks layout give Disney no real advantage.

Let others build the Hotel Rooms Disney needs, and Disney can make its profits on the parks, food and beverage.

I just thought of it for added capacity

 

[DanielBB8]

The more Disney adds hotel rooms, the amount of the Disney surcharge goes down.

And any new inventory will more than likely be off-property.

This could be true, but Disney added hotel capacity in Orlando as if there’s no tomorrow. Their prices increased in all their current properties as if it doesn’t matter that hotels are on the east side of Harbor. Maybe Disney should do the Universal model of having a separate company finance and construct new hotel rooms on their property. Disney is way too heavily leveraged in any case.

 

[Disney Irish]

This could be true, but Disney added hotel capacity in Orlando as if there’s no tomorrow. Their prices increased in all their current properties as if it doesn’t matter that hotels are on the east side of Harbor. Maybe Disney should do the Universal model of having a separate company finance and construct new hotel rooms on their property. Disney is way too heavily leveraged in any case.

Anaheim and Orlando are two very different markets. You can't compare the two in regards to building new Disney hotel capacity. It makes almost no financial sense for Disney to build a new hotel (outside of a new tax deal) in Anaheim as the ROI would literally take decades. Also as there is so much non-Disney hotel capacity in Anaheim it makes more sense for Disney to partner with a hotel chain then it does for them to build a new hotel.

 

[shambolicdefending]

Let others build the Hotel Rooms Disney needs, and Disney can make its profits on the parks, food and beverage.

One could theorize that Disneyland is already at or near peak profitability, and they might have a tough time consistently growing above and beyond inflation rates in the future.

Especially since WDI no longer seems to have a clear edge over competitors...

 

[DanielBB8]

Anaheim and Orlando are two very different markets. You can't compare the two in regards to building new Disney hotel capacity. It makes almost no financial sense for Disney to build a new hotel (outside of a new tax deal) in Anaheim as the ROI would literally take decades. Also as there is so much non-Disney hotel capacity in Anaheim it makes more sense for Disney to partner with a hotel chain then it does for them to build a new hotel.

The non-Disney hotel construction increased dramatically since Disney announced new theme park construction. Thus, this is at Disney’s expense. Their loss. There won’t be a new tax deal since the proposition passed. Nonetheless, there are real tax advantages to building hotels.

Disney still can collect a premium especially with Convention visitors who expect higher quality. Thus, building Deluxe quality hotels have advantages if it wants to avoid the budget traveler.

As for comparing the 2 locations, this thread is about a third park. Anaheim is a tourist destination. Two parks requires at least 3 days, 2 nights to enjoy. A third park needs 4 days, 3 nights. So does Disney decide it can’t take the next step? More people are visiting Anaheim from out of state.

 

[DanielBB8]

One could theorize that Disneyland is already at or near peak profitability, and they might have a tough time consistently growing above and beyond inflation rates in the future.

Especially since WDI no longer seems to have a clear edge over competitors...

Galaxy’s Edge failure means they need to work this out temporarily, but the new price increases at the Cantina means “what me worry?”

 

[Disney Irish]

The non-Disney hotel construction increased dramatically since Disney announced new theme park construction. Thus, this is at Disney’s expense. Their loss. There won’t be a new tax deal since the proposition passed. Nonetheless, there are real tax advantages to building hotels.

Disney still can collect a premium especially with Convention visitors who expect higher quality. Thus, building Deluxe quality hotels have advantages if it wants to avoid the budget traveler.

As for comparing the 2 locations, this thread is about a third park. Anaheim is a tourist destination. Two parks requires at least 3 days, 2 nights to enjoy. A third park needs 4 days, 3 nights. So does Disney decide it can’t take the next step? More people are visiting Anaheim from out of state.

Except you're not considering cost as a factor. Disney has to consider all aspects of the project including construction cost and labor costs. So I don't see how its a loss to Disney if the guest is showing up anyways. This idea that Disney is leaving money on the table because they don't have a 4th hotel is a fallacy. Disney is going to get the guests money anyways just by them showing up. But what is happening is Disney doesn't have the large cost of construction or labor that would be required to get a 4th hotel. Let someone else take on that burden and Disney still benefits anyways.

 

[DanielBB8]

Except you're not considering cost as a factor. Disney has to consider all aspects of the project including construction cost and labor costs. So I don't see how its a loss to Disney if the guest is showing up anyways. This idea that Disney is leaving money on the table because they don't have a 4th hotel is a fallacy. Disney is going to get the guests money anyways just by them showing up. But what is happening is Disney doesn't have the large cost of construction or labor that would be required to get a 4th hotel. Let someone else take on that burden and Disney still benefits anyways.

Cost was always clearly defined on a per room basis whether $500K for 4 Star or $1 million for 5 Star.

“According to USAToday, the average hotel room is roughly 325 square feet with interior dimensions of approximately 13'x25' (including a full bathroom). In the United States, the average hotel will have 115 rooms and require around 48,000 square feet.”

“The above figures place this construction at a $463 per square foot cost, though a national average of stands between $325 and $450 for hotel contractors. This pricing structure assumes that the work is unionized. "Open shop" laborers would follow a price structure that includes - carpenters, masons and excavators charging an average of $70 per hour, electricians between $65 to $85 per hour, painters between $20 and $35 per hour and plumbers between $45 and $65 per hour.”

So this is saying it will cost an average room $150K for a 325 sq foot hotel room. A 100 room hotel is $15 million. Not a lot compared to $1 Billion Galaxy’s Edge.

Over a 30 year period, the construction costs are a fraction of cost to run the hotel. The bigger costs are housekeeping, maintenance, front desk, and everything else. Then hotels manage to charge for things that used to be included like hotel amenities via a hotel resort fee like $40 a day and overnight parking at $35 a day. Another innovation is no daily housekeeping. Pure profit.

Disney will benefit anyways since only a fraction of guests stay onsite as well as do other things like dining and special event reservations. So the argument is more about how much risk they are willing to take. This drawn out decision making won’t make construction costs cheaper when they do decide to pull it like the long delayed parking structure.

 

[Disney Irish]

Cost was always clearly defined on a per room basis whether $500K for 4 Star or $1 million for 5 Star.

“According to USAToday, the average hotel room is roughly 325 square feet with interior dimensions of approximately 13'x25' (including a full bathroom). In the United States, the average hotel will have 115 rooms and require around 48,000 square feet.”

“The above figures place this construction at a $463 per square foot cost, though a national average of stands between $325 and $450 for hotel contractors. This pricing structure assumes that the work is unionized. "Open shop" laborers would follow a price structure that includes - carpenters, masons and excavators charging an average of $70 per hour, electricians between $65 to $85 per hour, painters between $20 and $35 per hour and plumbers between $45 and $65 per hour.”

So this is saying it will cost an average room $150K for a 325 sq foot hotel room. A 100 room hotel is $15 million. Not a lot compared to $1 Billion Galaxy’s Edge.

Over a 30 year period, the construction costs are a fraction of cost to run the hotel. The bigger costs are housekeeping, maintenance, front desk, and everything else. Then hotels manage to charge for things that used to be included like hotel amenities via a hotel resort fee like $40 a day and overnight parking at $35 a day. Another innovation is no daily housekeeping. Pure profit.

Disney will benefit anyways since only a fraction of guests stay onsite as well as do other things like dining and special event reservations. So the argument is more about how much risk they are willing to take. This drawn out decision making won’t make construction costs cheaper when they do decide to pull it like the long delayed parking structure.

I don’t know where that hotel in the USA Today was being built. But it was going to cost a minimum $225k per room for Disney to build the new hotel. So that is minimum almost $200M for the almost 800 rooms that would have been in the hotel. That is even before they hire one person to staff the place. And remember because of how things are done in Anaheim a majority of the construction workers, staff, contractors, etc., have to be union. So that pushes costs even more.

Bottomline I saw estimates that before one single guest even books a room it would cost Disney between $750M-1B to open a new hotel in Anaheim. That is a few cry to the $15M from the USA Today article you’re looking at. So again it makes no financial sense to build in Anaheim when other hoteliers can front that cost for you and you still get the same guests.

 

[DanielBB8]

I don’t know where that hotel in the USA Today was being built. But it was going to cost a minimum $225k per room for Disney to build the new hotel. So that is minimum almost $200M for the almost 800 rooms that would have been in the hotel. That is even before they hire one person to staff the place. And remember because of how things are done in Anaheim a majority of the construction workers, staff, contractors, etc., have to be union. So that pushes costs even more.

Bottomline I saw estimates that before one single guest even books a room it would cost Disney between $750M-1B to open a new hotel in Anaheim. That is a few cry to the $15M from the USA Today article you’re looking at. So again it makes no financial sense to build in Anaheim when other hoteliers can front that cost for you and you still get the same guests.

All you’re saying is it’ll cost a lot of money so they shouldn’t do it. This is besides how much they are already spending on attractions that will create demand for new hotel rooms for those staying extra days and are willing to stay onsite, but they couldn’t.

Disney could spend any amount of money for hotel rooms. There’s no set amount. The only denominator is costs will only go up the longer they wait.

 

[Disney Irish]

All you’re saying is it’ll cost a lot of money so they shouldn’t do it. This is besides how much they are already spending on attractions that will create demand for new hotel rooms for those staying extra days and are willing to stay onsite, but they couldn’t.

Disney could spend any amount of money for hotel rooms. There’s no set amount. The only denominator is costs will only go up the longer they wait.

You’re just not getting it. I get that you want Disney to just back up the money truck and unload their money and build a hotel or two. But it has to make financial sense, and it doesn’t right now in Anaheim. It made financial sense when they were getting the tax break, it doesn’t now that they’re not.

And yes there is a set minimum amount for the hotel rooms. Anaheim wants Disney to build a four or five diamond hotel. There are strict definitions for rooms for these type of hotels. The cost per room is very expensive. It’s the reason why there aren’t very many in Orange County and why Anaheim wants it. So they can attract more affluent guests for the convention center. It was the whole reason for the tax deal in the first place.

 

[DanielBB8]

You’re just not getting it. I get that you want Disney to just back up the money truck and unload their money and build a hotel or two. But it has to make financial sense, and it doesn’t right now in Anaheim. It made financial sense when they were getting the tax break, it doesn’t now that they’re not.

And yes there is a set minimum amount for the hotel rooms. Anaheim wants Disney to build a four or five diamond hotel. There are strict definitions for rooms for these type of hotels. The cost per room is very expensive. It’s the reason why there aren’t very many in Orange County and why Anaheim wants it. So they can attract more affluent guests for the convention center. It was the whole reason for the tax deal in the first place.

Didn’t you get the news? That deal is dead. Disney won’t be doing 5 star hotels since it doesn’t want to be forced to pay $18 an hour wages for the entire resort. Disney is free to design the hotel to any budget it wants. Anaheim can’t dictate the budget regardless. And since Disney cancelled the hotel, it should be clear the original plans won’t be revived.

“The Walt Disney Co. has canceled plans to build a 700-room luxury hotel near its Anaheim resort, citing the city’s elimination of a tax rebate agreement that would have saved the media giant $267 million over 20 years.

The cancellation of the hotel — what would have been the fourth at the resort — highlights growing tensions between the Burbank company and the city of Anaheim, once considered a reliable business partner for Disney.”

Anaheim confirmed the deal is dead and they’re the one that killed it.

“The conditions changed in August when the city notified Disney representatives that it was killing an agreement made last year to rebate 70% of the hotel’s transient occupancy tax back to Disney over 20 years — worth about $267 million. The transient occupancy tax is 15% of the overnight rate.

Anaheim officials say Disney was to blame for ending the agreement by changing the location of the proposed hotel after the deal was struck and the economic impact studies were completed.”

 

[Disney Irish]

Didn’t you get the news? That deal is dead. Disney won’t be doing 5 star hotels since it doesn’t want to be forced to pay $18 an hour wages for the entire resort. Disney is free to design the hotel to any budget it wants. Anaheim can’t dictate the budget regardless. And since Disney cancelled the hotel, it should be clear the original plans won’t be revived.

“The Walt Disney Co. has canceled plans to build a 700-room luxury hotel near its Anaheim resort, citing the city’s elimination of a tax rebate agreement that would have saved the media giant $267 million over 20 years.

The cancellation of the hotel — what would have been the fourth at the resort — highlights growing tensions between the Burbank company and the city of Anaheim, once considered a reliable business partner for Disney.”

Anaheim confirmed the deal is dead and they’re the one that killed it.

“The conditions changed in August when the city notified Disney representatives that it was killing an agreement made last year to rebate 70% of the hotel’s transient occupancy tax back to Disney over 20 years — worth about $267 million. The transient occupancy tax is 15% of the overnight rate.

Anaheim officials say Disney was to blame for ending the agreement by changing the location of the proposed hotel after the deal was struck and the economic impact studies were completed.”

I’m fully aware the deal is dead. But Disney is also playing nice with Anaheim. So if they were to design and build a new hotel, and we all know it’s not happening, it would be a four or five diamond hotel.

Anyways it’s all moot as they aren’t building anything except maybe the EGW for the foreseeable future. After that who knows but for now it ain’t happening.