That’s a ridiculous thing to say. Playing nice with Disney’s financial stake when the city environment totally changed makes absolutely no sense. The city council completely changed so we aren’t even playing nice with the same folks. When the tax agreement collapsed, why would you expect Disney to voluntarily build a 4 or 5 star hotel just to play nice? Both go hand in hand. You can’t have one without the other. Anaheim lost its chance. They have to deal with it.
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Disney Irish
Premium Member
It’s called an opinion. But why do you expect them to build a lesser one if they even build one at all?
Also they’re playing nice to show they can, it’s called playing the political game.
Either way again it’s all moot as nothing is happening on the hotel front anyways.
Darkbeer1
Well-Known Member
You are so wrong on so many counts as regarding politics. My duties have been on overdrive the last few weeks, and for the foreseeable future.
UNITE HERE is still here and pushing buttons on multiple fronts, and they won't go away.
And building anything but a 4/5 star makes no sense, the current inventory for 3 and 3.5 stars is large, and a new group of a few thousand rooms are about to go online (including two 4 Stars, the JW Marriott should open early April. )
UNITED HERE is pushing buttons and Disney already moved forward by taking itself out of receiving city subsidies.
Disney can make a 3 and 3.5 star and charge 4 and 5 star prices. This has been proven. Do you think Paradise Pier getting $350 per night rates is justified? Of course not, but Disney makes it’s money.
I don’t think politics forces Disney to make 4 or 5 star hotel rooms. That train has passed. The proof is they aren’t doing it. Some hotels are still doing it under the old agreement so this has nothing to do with Disney since Anaheim cancelled the subsidy on its own and thus Disney has no choice, but to cancel the hotel as if it won’t anyways with the proposition that passed.
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Disney Irish
Premium Member
Except Disney didn’t build PPH, they bought it. Same with the DLH, they didn’t build it they bought it. The only hotel Disney has ever built in Anaheim is the GCH, which falls under the 4 diamond classification.
So if anything the proof is that Disney would build a 4 or 5 diamond hotel just based on history.
In a sea of $100 a night rooms in Anaheim, it costs 3 times as much to stay at Disneyland
This doesn’t prove anything. Disney built plenty of hotels at all quality and price ranges, but it’s quite clear Disney commands much higher prices due to scarcity of its own hotels. Disney can only compete with itself in Anaheim.
Disney Irish
Premium Member
You’ve just proven the point for me. In a sea of sub-4 diamond hotels why would Disney even want to build one when it’s can build a 4 or 5 diamond one and charge a premium price.
Darkbeer1
Well-Known Member
Anaheim political focus is the Angel Stadium issue, and UNITE HERE/DPOC is trying to spin things in crazy ways.
If that goes as planned, then hopefully the Eastern Gateway will get some attention.
But three council seats are up for grabs next year, and if the Angel Stadium deal goes south, the Mayor could be looking at a recall.
So both deals HAS to favor the city.
Disney will NOT build a 4th Hotel on property for the foreseeable future, just to make it clear that they won't go back on their word.
Garden Grove makes sense, showing that if GG offers a good tax rebate package, Disney will build.
But I attend the meetings, I help choose which paths the city takes.
I had a breakfast meeting with Bill O'Connell, the owner of the JW Marriott and the Stovall Inn chain. A total of 5 people at the breakfast, and to be honest, the vast majority of discussion was myself, Bill and one other member, the other two didn't have much to say that day.
Disney is a main source of the funds we spend, we are talking about a million a year. Trust me that they watch over that money very carefully. I know what the crystal ball is saying in regards to the direction Disney is looking at in regards to city projects.
And a Hotel is NOT in the future.
If that goes as planned, then hopefully the Eastern Gateway will get some attention.
But three council seats are up for grabs next year, and if the Angel Stadium deal goes south, the Mayor could be looking at a recall.
So both deals HAS to favor the city.
Disney will NOT build a 4th Hotel on property for the foreseeable future, just to make it clear that they won't go back on their word.
Garden Grove makes sense, showing that if GG offers a good tax rebate package, Disney will build.
But I attend the meetings, I help choose which paths the city takes.
I had a breakfast meeting with Bill O'Connell, the owner of the JW Marriott and the Stovall Inn chain. A total of 5 people at the breakfast, and to be honest, the vast majority of discussion was myself, Bill and one other member, the other two didn't have much to say that day.
Disney is a main source of the funds we spend, we are talking about a million a year. Trust me that they watch over that money very carefully. I know what the crystal ball is saying in regards to the direction Disney is looking at in regards to city projects.
And a Hotel is NOT in the future.
It doesn’t sound 100% financial to not build hotels. There’s still hurt feelings there. Maybe beyond 2021 and Iger’s retirement will they reconsider. The whole point of luxury hotel rooms was the subsidy so I just don’t think Disney will do it without the subsidy, which is why I suggest 3 star. So logically, it makes no sense that Disney will ever consider building any luxury hotel on its own.
Once there is a new CEO, new things could happen and many mistakes could be corrected. After Iger took over, Disney was suddenly able to buy Pixar and fix DCA. Now, a new CEO will be necessary to fix Galaxy’s Edge and other resort issues. That’s my hope.
Once there is a new CEO, new things could happen and many mistakes could be corrected. After Iger took over, Disney was suddenly able to buy Pixar and fix DCA. Now, a new CEO will be necessary to fix Galaxy’s Edge and other resort issues. That’s my hope.
RollerCoaster
Well-Known Member
Totally ridiculous!
EPCOT is dying right now. Disney is having to rescue it from a certain death and your going to pitch us that Westcot should have been built. Ridiculous. California Adventure is actually a very good theme park. The only challenge it has is the overly critical Disneyland fan base and the fact that it stands next to what is arguably the best theme park in the world.
DDLand
Well-Known Member
Let's do some math!
According to various news sources, Disney's hotel was going to get $267 Million over 20 years. That number actually tells us a great deal. First let's divide by 20 and we get $13,350,000 per year in reimbursements. We know that number is 70% of 15% of the new hotel's total yearly revenue. Thus we can render it like this:
13,350,000 = (0.7)(0.15)x
The variable x equals Disney's yearly revenue from exclusively its hospitality business (no character meals!). By dividing both sides by the two known values we will arrive at Disney's projected hotel revenue. It ends up equaling about $127 Million a year. Not a shabby sum. But there's only one problem. This is actually inflated! But first let's treat it as fact.
127,000,000 = (number of rooms)(number of days)(average price per room)
With this simplistic model, we can determine Disney's expected revenue. We know the hotel was going to have roughly 700 rooms. We also know how many days are in a year! Thus we can find the price the data uses. The price ends up coming out to roughly $500 for an average room night at this new hotel. Does this sound convincing? Would a journalist or politician plug the number of rooms, the number of days, and the average price into calculator and determine the amount of money in reimbursements? Yes! But alas, methinks they forgot a variable that is quite important. The occupancy rate! Without occupancy rates below one, I think we would all get into the hotel business and raise prices! Sadly for budding tycoons, we actually have to convince people to stay at our hotel. Thus the new and more accurate formula would look like this:
Revenue = (700)(365)(500)(occupancy rate)
In certain markets, hotels can regularly hang in the 70% range for occupancy and seasonally even lower. Walt Disney World is no stranger to occupancy rates in the 70%s. Disneyland has traditionally been stronger due to a smaller inventory, and has been able to achieve above 90%. I'm not sure where it is right now, but let's say everything is good and occupancy is roughly 90%. That leaves us with the still very impressive $114 Million a year in revenue. Obviously this is all VERY simplistic, but it does actually give us an okay idea of what we could have expected from this hotel. We can take our new revenue number and put it back into the original equation. We find Disney with a still impressive $12 Million a year in reimbursements.
Let's pivot. Suppose Disney spends $500,000 per new room in the hotel. That is the equivalent of $350 Million in investment. Let's round up to $400 Million to be generous. Disney's fixed assets like the hotel depreciate over 40 year. Divide $400 Million by 40 and you get $10 Million. With the reimbursements Disney would have essentially been getting the hotel for free! It's like if you took out a 30 year mortgage and got the first 15 years wiped out. It's a good deal! Suppose Disney was aiming for roughly 25% profit margins before depreciation. This seems like a reasonable projection, seeing as Walt Disney felt the hotel a worthwhile investment. This comes out to $28.5 Million a year in profit before depreciation. That leaves the other $85 Million labor, utilities, etc.
That $28.5 Million is a solid profit, but when depreciation is added in, it plummets to only $18.5 Million or 16% in pre tax profit. This would be a drag on margins and makes the hotel unbuildable. But add back in the rebate and suddenly your $18.5 Million profit is turned into a $30 Million profit and margins are back at 25%. That's a project worth building!
Other ancillary income from shops, services, and food should all have higher margins that further fortify this new investment's strength. It was an interesting tax arrangement. Implicit in the program is the idea that Anaheim is compressing Disney's ability to fully price rooms at their value. Disney feels that the extra 10% is justified, but with Anaheim taking it, Disney can't price at its full market value. Another implication, which is very odd, is that your room rates to Disney would be masked behind a tax. Disney would receive 110% of room rates. That 10% coming from Anaheim (the 70% of the 15%) would essentially be a hidden resort fee. Many times people complain about the sales tax on hotels, but in this case the sales tax would be going to Disney. That's not a bad way to compete on TripAdvisor!
The cancellation of this hotel really shows the strange place Walt Disney Parks are in. Disney Parks are, at the end of the day, a real-estate investment. Disney Parks develops or redevelops land into entertainment spaces. That is the nature of theme parks. Nobody tell Wall Street that though! They want Disney Parks to be achieving tech stock levels of growth and margins. Disney Parks are, by their very nature, capital heavy investments with relatively smaller rates of return than other flashier investments.
As Disney Parks was getting started, it provided a great counterbalance to the studio. Sometimes the studio would be wildly successful leaving the company with lots of cash. Disney Parks were the perfect outlet for that cash, allowing solid and sustained returns over the long run. Sometimes the studio had weaker years, and the parks would then give stability to the company and cash could even flow the other way. Disney Parks are evergreens that people love. Of course hard economic times could compress profits, but overall they acted as the company's ballast. Why is it that every other studio has been bought out besides Disney? The stability and balance brought by parks is key.
While not generating the same return on investment as other ventures, everyone understood that Disney Parks were a great business. With a little love and care, they would be a money printer and a smart way to deploy accumulated cash. They also were a fantastic brand beacon and kept fans in touch with Disney.
But that changed recently. Disneyland Paris represented a challenge to the idea that Disney Parks were a safe bet. Instead of solid and consistent returns, it turned into a money pit. This essentially put every park investment, no matter how smart, under serious scrutiny. At the same time Wall Street culture was changing. No longer was spending a great deal of money on a sure investment enough, no, it had to be ever growing and have enormous margins. Quarter to quarter performance has been emphasized ever more. Thus the appeal of "cheap" theme parks. With limited investment up front, they would drive revenue and make just as much money as their more built out siblings. Sadly for Michael Eisner, people weren't interested in "cheap" parks and they bombed.
The failure of these cheap parks was so demoralizing that Bob Iger pursued spinning off Parks and Resorts. It made sense too. The Disney he was building didn't need capital intensive investments with middling margins. Instead he would be just fine collecting a yearly check from a franchisee. Bob Iger's Disney was based off of brands like the ever growing ESPN, Pixar, and Pirates of the Caribbean. Almost all of these businesses lacked any physical presence. Disney had already spun off Disney Stores to OLC and Children's Place. Parks and Resorts was next.
But finally some moderate improvement came, and under the pressure of a man who couldn't keep his hands to himself, Iger and the board approved one last ploy to save Parks and Resorts. An ambitious overhaul of Disney California Adventure turned around Disneyland's fortunes, and Walt Disney World roared back to life (no thanks to any investment... or maintenance) in a recovering economy. Remarkably, Disneyland and Walt Disney World have supported ever increasing levels of price hikes. At some point Iger decided that some investment in the parks was good. Not too much, but just enough to add in a nice new IP land.
Disney is now stuck in an awkward place. It is simultaneously loving the parks, and also trying desperately to avoid the capital expenditures needed to make them a reality. Thus, stagnating parks are receiving ever higher prices. The capital expenditures that are approved have enormous pressure to be huge successes. There's no such thing as an investment into the parks just to improve park experience or drive some increased attendance. Instead, each update has to be a blockbuster once in a two decade experience that turns a park into a "full day experience." Star Wars was approved because they believed that it would end up driving millions of new people to Disneyland and Hollywood Studios. Marvel Lands are popping up all over the world in the hope that they will bring millions of new people. Epcot is being demolished in the hope that some trees and a flying saucer building will bring millions of new people. A dinky hotel without subsidies is totally against the path Disney is taking. It has to be big with several basis points in improved margins to make the cut (that's why Disneyland Paris and Hong Kong are getting attention... They are both making essentially no money so that's a huge 0 dragging down profit margins. Any improvement, like to a mediocre 10% would be a huge improvement).
Now that brings us to the present. Iger is very pleased to be riding Anaheim's two parks and Walt Disney World's 30,000 hotel rooms to ever increasing profitability. But none of that infrastructure would have ever had been built if he was CEO. Case in point is the cancellation of this hotel project. Disney says that they'll invest in other projects around the globe if they didn't build the hotel. That's utter crap. Disney instead will repurchase some more stock or acquire some hot new IP. The Anaheim hotel is still a good investment, but just not a good enough investment for Disney. Basic improvements aren't worth the investment, because it will likely not boost margins in any discernible way. Take the hatbox ghost for instance. Fans had been obsessing about it for decades, but the only thing that finally got it installed was as part of 60th celebration package that could be advertised. They never stopped and thought "gee, I bet this simple audio-animatronic would make lots of people happy. Let's install it for our customers!" Many hotel operators would happily build a hotel with the Disney name and on Disney property, but Disney won't because of low ROI.
Park 3 won't be built because its a longterm project that will bring down margins in the short-term and is super capital heavy. In two decades Disney will be like "dang, I wish we had built a 3rd park two decades ago." They never regret building something in the long run, but Disney doesn't plan for the long run. I will say an exception to that is Shanghai Disneyland.
If they were planning for the future, Disney would be buying property, building hotels, and starting construction on a third theme park. They would build a modern mass transit system, find longterm solutions to the garages, and be building out capacity in the parks. You would see fewer concerns about margins in the next 5 years, and greater concern for the business's health in 2 decades. But Iger doesn't worry about the RoI in two decades, nah, he worries about the RoI in two years.
Disney Parks is now a strange real-estate business that hates investing in real-estate. Perhaps nothing epitomizes this better than the fact that Disney Parks and Resorts is no longer Disney Parks and Resorts. I guess that's what happens when you leave an ABC executive and a IP licensor in charge...
According to various news sources, Disney's hotel was going to get $267 Million over 20 years. That number actually tells us a great deal. First let's divide by 20 and we get $13,350,000 per year in reimbursements. We know that number is 70% of 15% of the new hotel's total yearly revenue. Thus we can render it like this:
13,350,000 = (0.7)(0.15)x
The variable x equals Disney's yearly revenue from exclusively its hospitality business (no character meals!). By dividing both sides by the two known values we will arrive at Disney's projected hotel revenue. It ends up equaling about $127 Million a year. Not a shabby sum. But there's only one problem. This is actually inflated! But first let's treat it as fact.
127,000,000 = (number of rooms)(number of days)(average price per room)
With this simplistic model, we can determine Disney's expected revenue. We know the hotel was going to have roughly 700 rooms. We also know how many days are in a year! Thus we can find the price the data uses. The price ends up coming out to roughly $500 for an average room night at this new hotel. Does this sound convincing? Would a journalist or politician plug the number of rooms, the number of days, and the average price into calculator and determine the amount of money in reimbursements? Yes! But alas, methinks they forgot a variable that is quite important. The occupancy rate! Without occupancy rates below one, I think we would all get into the hotel business and raise prices! Sadly for budding tycoons, we actually have to convince people to stay at our hotel. Thus the new and more accurate formula would look like this:
Revenue = (700)(365)(500)(occupancy rate)
In certain markets, hotels can regularly hang in the 70% range for occupancy and seasonally even lower. Walt Disney World is no stranger to occupancy rates in the 70%s. Disneyland has traditionally been stronger due to a smaller inventory, and has been able to achieve above 90%. I'm not sure where it is right now, but let's say everything is good and occupancy is roughly 90%. That leaves us with the still very impressive $114 Million a year in revenue. Obviously this is all VERY simplistic, but it does actually give us an okay idea of what we could have expected from this hotel. We can take our new revenue number and put it back into the original equation. We find Disney with a still impressive $12 Million a year in reimbursements.
Let's pivot. Suppose Disney spends $500,000 per new room in the hotel. That is the equivalent of $350 Million in investment. Let's round up to $400 Million to be generous. Disney's fixed assets like the hotel depreciate over 40 year. Divide $400 Million by 40 and you get $10 Million. With the reimbursements Disney would have essentially been getting the hotel for free! It's like if you took out a 30 year mortgage and got the first 15 years wiped out. It's a good deal! Suppose Disney was aiming for roughly 25% profit margins before depreciation. This seems like a reasonable projection, seeing as Walt Disney felt the hotel a worthwhile investment. This comes out to $28.5 Million a year in profit before depreciation. That leaves the other $85 Million labor, utilities, etc.
That $28.5 Million is a solid profit, but when depreciation is added in, it plummets to only $18.5 Million or 16% in pre tax profit. This would be a drag on margins and makes the hotel unbuildable. But add back in the rebate and suddenly your $18.5 Million profit is turned into a $30 Million profit and margins are back at 25%. That's a project worth building!
Other ancillary income from shops, services, and food should all have higher margins that further fortify this new investment's strength. It was an interesting tax arrangement. Implicit in the program is the idea that Anaheim is compressing Disney's ability to fully price rooms at their value. Disney feels that the extra 10% is justified, but with Anaheim taking it, Disney can't price at its full market value. Another implication, which is very odd, is that your room rates to Disney would be masked behind a tax. Disney would receive 110% of room rates. That 10% coming from Anaheim (the 70% of the 15%) would essentially be a hidden resort fee. Many times people complain about the sales tax on hotels, but in this case the sales tax would be going to Disney. That's not a bad way to compete on TripAdvisor!
The cancellation of this hotel really shows the strange place Walt Disney Parks are in. Disney Parks are, at the end of the day, a real-estate investment. Disney Parks develops or redevelops land into entertainment spaces. That is the nature of theme parks. Nobody tell Wall Street that though! They want Disney Parks to be achieving tech stock levels of growth and margins. Disney Parks are, by their very nature, capital heavy investments with relatively smaller rates of return than other flashier investments.
As Disney Parks was getting started, it provided a great counterbalance to the studio. Sometimes the studio would be wildly successful leaving the company with lots of cash. Disney Parks were the perfect outlet for that cash, allowing solid and sustained returns over the long run. Sometimes the studio had weaker years, and the parks would then give stability to the company and cash could even flow the other way. Disney Parks are evergreens that people love. Of course hard economic times could compress profits, but overall they acted as the company's ballast. Why is it that every other studio has been bought out besides Disney? The stability and balance brought by parks is key.
While not generating the same return on investment as other ventures, everyone understood that Disney Parks were a great business. With a little love and care, they would be a money printer and a smart way to deploy accumulated cash. They also were a fantastic brand beacon and kept fans in touch with Disney.
But that changed recently. Disneyland Paris represented a challenge to the idea that Disney Parks were a safe bet. Instead of solid and consistent returns, it turned into a money pit. This essentially put every park investment, no matter how smart, under serious scrutiny. At the same time Wall Street culture was changing. No longer was spending a great deal of money on a sure investment enough, no, it had to be ever growing and have enormous margins. Quarter to quarter performance has been emphasized ever more. Thus the appeal of "cheap" theme parks. With limited investment up front, they would drive revenue and make just as much money as their more built out siblings. Sadly for Michael Eisner, people weren't interested in "cheap" parks and they bombed.
The failure of these cheap parks was so demoralizing that Bob Iger pursued spinning off Parks and Resorts. It made sense too. The Disney he was building didn't need capital intensive investments with middling margins. Instead he would be just fine collecting a yearly check from a franchisee. Bob Iger's Disney was based off of brands like the ever growing ESPN, Pixar, and Pirates of the Caribbean. Almost all of these businesses lacked any physical presence. Disney had already spun off Disney Stores to OLC and Children's Place. Parks and Resorts was next.
But finally some moderate improvement came, and under the pressure of a man who couldn't keep his hands to himself, Iger and the board approved one last ploy to save Parks and Resorts. An ambitious overhaul of Disney California Adventure turned around Disneyland's fortunes, and Walt Disney World roared back to life (no thanks to any investment... or maintenance) in a recovering economy. Remarkably, Disneyland and Walt Disney World have supported ever increasing levels of price hikes. At some point Iger decided that some investment in the parks was good. Not too much, but just enough to add in a nice new IP land.
Disney is now stuck in an awkward place. It is simultaneously loving the parks, and also trying desperately to avoid the capital expenditures needed to make them a reality. Thus, stagnating parks are receiving ever higher prices. The capital expenditures that are approved have enormous pressure to be huge successes. There's no such thing as an investment into the parks just to improve park experience or drive some increased attendance. Instead, each update has to be a blockbuster once in a two decade experience that turns a park into a "full day experience." Star Wars was approved because they believed that it would end up driving millions of new people to Disneyland and Hollywood Studios. Marvel Lands are popping up all over the world in the hope that they will bring millions of new people. Epcot is being demolished in the hope that some trees and a flying saucer building will bring millions of new people. A dinky hotel without subsidies is totally against the path Disney is taking. It has to be big with several basis points in improved margins to make the cut (that's why Disneyland Paris and Hong Kong are getting attention... They are both making essentially no money so that's a huge 0 dragging down profit margins. Any improvement, like to a mediocre 10% would be a huge improvement).
Now that brings us to the present. Iger is very pleased to be riding Anaheim's two parks and Walt Disney World's 30,000 hotel rooms to ever increasing profitability. But none of that infrastructure would have ever had been built if he was CEO. Case in point is the cancellation of this hotel project. Disney says that they'll invest in other projects around the globe if they didn't build the hotel. That's utter crap. Disney instead will repurchase some more stock or acquire some hot new IP. The Anaheim hotel is still a good investment, but just not a good enough investment for Disney. Basic improvements aren't worth the investment, because it will likely not boost margins in any discernible way. Take the hatbox ghost for instance. Fans had been obsessing about it for decades, but the only thing that finally got it installed was as part of 60th celebration package that could be advertised. They never stopped and thought "gee, I bet this simple audio-animatronic would make lots of people happy. Let's install it for our customers!" Many hotel operators would happily build a hotel with the Disney name and on Disney property, but Disney won't because of low ROI.
Park 3 won't be built because its a longterm project that will bring down margins in the short-term and is super capital heavy. In two decades Disney will be like "dang, I wish we had built a 3rd park two decades ago." They never regret building something in the long run, but Disney doesn't plan for the long run. I will say an exception to that is Shanghai Disneyland.
If they were planning for the future, Disney would be buying property, building hotels, and starting construction on a third theme park. They would build a modern mass transit system, find longterm solutions to the garages, and be building out capacity in the parks. You would see fewer concerns about margins in the next 5 years, and greater concern for the business's health in 2 decades. But Iger doesn't worry about the RoI in two decades, nah, he worries about the RoI in two years.
Disney Parks is now a strange real-estate business that hates investing in real-estate. Perhaps nothing epitomizes this better than the fact that Disney Parks and Resorts is no longer Disney Parks and Resorts. I guess that's what happens when you leave an ABC executive and a IP licensor in charge...
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This is solid analysis, but even if margins are not sufficient initially and a drag, it doesn't take much effort to increase prices aggressively as Disney usually does and they could exceed profitability in a year or 2 later. Plus, additional resort fee charges and parking and other add-ons greatly increases Disney's ability to milk profits from customers.
But the unknown is what the City and the Unions will do. Disney is better off shaking that off. They will always be the bad guy. Disney is completely into liberal politics so they hope to not be bitten by it, but they will have to since business friendly conservative politics are run out of town. Disney disseminates it's experiences to the rich. How ironic.
Phroobar
Well-Known Member
Disney needs to build a theme park called Delos. It would include West World, Future World, Medieval World, Roman World and new Jurassic World. It would be the height of emersion. People would stay in these environments and have characters to act out. Everything is perfectly safe. Nothing could possibly go wrong.
lazyboy97o
Well-Known Member
Like Project Delos, the interactivity will just be cut, so it will stay nice and safe.
DDLand
Well-Known Member
Building new lands, rides, hotels, and parks are a bet on the future.
Disney California Adventure was so under built, that any expansion was HUGE. Thus the success of Cars Land. But with higher attendance than ever before and higher prices than ever before, Disneyland Resort might be hitting a short term plateau. Disney has priced a great deal of their attendance increases out of the marketplace. Trading more guests for fewer higher paying ones. Disney was trying to have their cake and eat it too, but Galaxy’s Edge has barely budged attendance.
Disneyland’s 2008 attendance was around 20 million guests. Disneyland’s 2018 attendance was 29 Million. Nearly a 50% increase during which a shockingly small amount of content was added. Cars Land, Little Mermaid, the Red Trolley, and various remakes of existing attractions are pretty much it. Disney has already expanded attendance at a pretty amazing rate over the last decade. At the same time a Deluxe AP back in 2008 would have cost $269 and now costs $729!
Which leads us to the stark reality. While Cars Land was big and important, most of the success over the last decade has little to do with the investments made over the last decade. It mostly is riding on the good will, capital, and execution of executives from the 1950s to 2000s. This recent Disneyland boom would not have happened without thoughtful and long term investments by those who had the foresight to see Disneyland’s potential. Building something today is a bet that Disneyland will stay popular and become more popular over time. It meant buying land around Disneyland BEFORE Cars Land opened. It meant building the Eastern Gateway BEFORE Galaxy’s Edge. Adding additional capacity BEFORE millions of people descend on Disneyland Resort.
Disneyland has proven to be something worth betting on. The fact that management doesn’t agree shows that they are as short sighted as ever. Galaxy’s Edge was supposed to be a gold mine. It actually is a welcome expansion in capacity and a good long term bet on Disneyland (even if it is a monstrous misfit). But Disney will look at it as a failure and freeze additional investments.
So it goes...
Disney California Adventure was so under built, that any expansion was HUGE. Thus the success of Cars Land. But with higher attendance than ever before and higher prices than ever before, Disneyland Resort might be hitting a short term plateau. Disney has priced a great deal of their attendance increases out of the marketplace. Trading more guests for fewer higher paying ones. Disney was trying to have their cake and eat it too, but Galaxy’s Edge has barely budged attendance.
Disneyland’s 2008 attendance was around 20 million guests. Disneyland’s 2018 attendance was 29 Million. Nearly a 50% increase during which a shockingly small amount of content was added. Cars Land, Little Mermaid, the Red Trolley, and various remakes of existing attractions are pretty much it. Disney has already expanded attendance at a pretty amazing rate over the last decade. At the same time a Deluxe AP back in 2008 would have cost $269 and now costs $729!
Which leads us to the stark reality. While Cars Land was big and important, most of the success over the last decade has little to do with the investments made over the last decade. It mostly is riding on the good will, capital, and execution of executives from the 1950s to 2000s. This recent Disneyland boom would not have happened without thoughtful and long term investments by those who had the foresight to see Disneyland’s potential. Building something today is a bet that Disneyland will stay popular and become more popular over time. It meant buying land around Disneyland BEFORE Cars Land opened. It meant building the Eastern Gateway BEFORE Galaxy’s Edge. Adding additional capacity BEFORE millions of people descend on Disneyland Resort.
Disneyland has proven to be something worth betting on. The fact that management doesn’t agree shows that they are as short sighted as ever. Galaxy’s Edge was supposed to be a gold mine. It actually is a welcome expansion in capacity and a good long term bet on Disneyland (even if it is a monstrous misfit). But Disney will look at it as a failure and freeze additional investments.
So it goes...
RollerCoaster
Well-Known Member
You're out of your mind and clearly not knowledgable on construction costs when you argue that it would cost $750M to $1B to open the new hotel. Did it ever occur to you that the higher cost per room that Disney was going to pay versus the national average took into account things like union labor and higher cost of construction in California?
socalifornian
Well-Known Member
I’d rather be disappointed with their use of that money for inside the parks anyways
SappySappy
Member
I would love to see another park added to the California resort, but i dont think they gonna build one in like 10 or 15 years. I mean i dont even know the location for them to build the new park. I know there's Toy Story Parking Spot but the plot is surrounded by apartments and houses i think, can they really build the park in that area?
As for theming i think Jules Verne's discovery and steampunk works designed by Tony Baxter for Discovery Bay can be utilized for a whole park instead of only one land. You know with a Vulcano, 20th century themed downtown area, Nautilus, Hyperion, hot air balloons, etc. Its gonna be like Disneysea but not really. I dont know how people opinions for vintage or steampunk things but to me its gonna be a really cool looking park.
As for theming i think Jules Verne's discovery and steampunk works designed by Tony Baxter for Discovery Bay can be utilized for a whole park instead of only one land. You know with a Vulcano, 20th century themed downtown area, Nautilus, Hyperion, hot air balloons, etc. Its gonna be like Disneysea but not really. I dont know how people opinions for vintage or steampunk things but to me its gonna be a really cool looking park.
SappySappy
Member
Yeah... they'll probably make a park with "adventures to the new world!" theme and put lands based on IPs like Wakanda or Zootopia or Frozen