Eddie Sotto's take on the current state of the parks (Part II)

[Eddie Sotto]

"Prefab" is the story here, and instead of building finished rooms as at WDW, they did the exact opposite, they prefabbed the building itself and finished the interiors later. It supposedly takes a 9 quake so that's pretty stable. Of course, man's longevity or lack of it dictates the need for "instant" architecture. Someday we will live forever and not have to worry about that. Here's the WDW US Steel story of building the Contemporary.

 

[Eddie Sotto]

I see WDW as analogous with any aging city, that is having aging infrastructure. There's little reason for newer attractions to have issues, except that with only a certain annual budget, more and more of the money might have to be earmarked for aging attractions, refurbs, etc. Having said all that, however, I can understand why large issues might not be fixed (ie: Yeti) but I would think that inexpensive fixes (the infamous postings of chipped paint, burned out light bulbs, etc.) would not be addressed practically daily. Even in my previous (old) house, I had to save to get a new roof, but the little things were always done. I could afford those.

The aging city comparison is a good one. Knott's Berry Farm had so much of it's revenue go into fixing 60 year old assets they had little left for new shows. Disneyland has similar issues of things rotting from being up in years. Even the trees eventually die. Even the costs of bringing things up to current code when you redo a space is huge. Think about how many systems become incompatible over the years? Some of the audio and computer systems back when I was there were over 20 years old and costly to upgrade. So you point out, the longer it's all there the higher the annual bill becomes and the bigger the projects. Someday it's a Sewer system or some other big infrastructure change outs, none of which return investment. So you can only devote so much capital each year to the core asset with out a greater percentage being used to bring guests back.

The other reason I like the aging city discussion, is that instead of "urban renewal" on the original assets, they run to develop the "suburbs" instead!

 

[Darth Sidious]

The aging city comparison is a good one. Knott's Berry Farm had so much of it's revenue go into fixing 60 year old assets they had little left for new shows. Disneyland has similar issues of things rotting from being up in years. Even the trees eventually die. Even the costs of bringing things up to current code when you redo a space is huge. Think about how many systems become incompatible over the years? Some of the audio and computer systems back when I was there were over 20 years old and costly to upgrade. So you point out, the longer it's all there the higher the annual bill becomes and the bigger the projects. Someday it's a Sewer system or some other big infrastructure change outs, none of which return investment. So you can only devote so much capital each year to the core asset with out a greater percentage being used to bring guests back.

The other reason I like the aging city discussion, is that instead of "urban renewal" on the original assets, they run to develop the "suburbs" instead!

Do you think that the fact that these rides eventually through time become more costly to refurb leads to Test Track type refurbs later down the road? Simply put do they typically wait to utilize CAPEX on old shows/rides until they have 'a re-envisioned' plan... therefore this is why we wait what seems to be longer for major fixes? or do they simply hate the idea of taking a ride out of commission for so long all while dumping huge money into it? I'd imagine a million factors go into each project but speaking generally.

 

[StageFrenzy]

The aging city comparison is a good one. Knott's Berry Farm had so much of it's revenue go into fixing 60 year old assets they had little left for new shows. Disneyland has similar issues of things rotting from being up in years. Even the trees eventually die. Even the costs of bringing things up to current code when you redo a space is huge. Think about how many systems become incompatible over the years? Some of the audio and computer systems back when I was there were over 20 years old and costly to upgrade. So you point out, the longer it's all there the higher the annual bill becomes and the bigger the projects. Someday it's a Sewer system or some other big infrastructure change outs, none of which return investment. So you can only devote so much capital each year to the core asset with out a greater percentage being used to bring guests back.

The other reason I like the aging city discussion, is that instead of "urban renewal" on the original assets, they run to develop the "suburbs" instead!

Which is why you should upgrade existing roads over building new ones, building new roads causes people to settle along the new route clogging both the old and new without fixing the old. However in Florida we have a lack of grid in the surrounding area, so there ends up being one way in and out making it more difficult to get around. Also much like Cali we continue to experience significant growth quickly making existing infrastructure outdated. In certain respects the economic downturn while horrible overall has allowed some infrastructure to catch up to demand. Without getting into too much politics we should be reinvesting now in our infrastructure and be ready for when we need that infrastructure.

 

[Eddie Sotto]

Do you think that the fact that these rides eventually through time become more costly to refurb leads to Test Track type refurbs later down the road? Simply put do they typically wait to utilize CAPEX on old shows/rides until they have 'a re-envisioned' plan... therefore this is why we wait what seems to be longer for major fixes? or do they simply hate the idea of taking a ride out of commission for so long all while dumping huge money into it? I'd imagine a million factors go into each project but speaking generally.

You look at the popularity of the ride (measured by utilization) against it's "cost per guest carried", or the average of the staff and upkeep against the actual ridership. The Subs were a VERY high operation cost combined with a low capacity, making the cost per guest carried very high. When a major rehab comes along, like "reinforce the entire lagoon", then it does not make sense to keep the ride and they do something else or nothing. In WDW it was nothing, in DL it was Nemo. They believed Nemo would bring more guests to the park which justifies the spend (In Nemo's case, the huge spend was actually dis proportunate to the small capacity by a large margin, but that was John Lassiter chiming in). In the case of Test Track, they needed to do something to keep GM in the game. That is a defensive move as GM would eventually walk (costing them yearly sponsorship fees) if "World of Motion" scored any lower on guest satisfaction, etc. Test Track was exciting and was more heavily weighted with ad placement for GM so they went for it.

That was the fate of Horizons when GE left. It was low utilization, high operation cost and no sponsor money coming in to cover anything. GE was not happy that the ride was not that popular and cost was an issue. They pulled out. We tried to save the Horizons building (for MS) as there were issues of tax depreciation and write down of the assets as facilities over many years, but that did not pan out agains the cost of new.

In GM's case, EPCOT needed to have a thrill ride to draw a broader audience and getting GM involved in funding that was the best way to refresh an attraction and have something to market.

 

[Darth Sidious]

You look at the popularity of the ride (measured by utilization) against it's "cost per guest carried", or the average of the staff and upkeep against the hourly capacity. The Subs were a VERY high operation cost combined with a low capacity, making the cost per guest carried very high. When a major rehab comes along, like reinforce the entire lagoon, then it does not make sense to keep the ride and they do something else or nothing. In WDW it was nothing, in DL it was Nemo. They believed Nemo would bring more guests to the park which justifies the spend (In Nemo's case, the huge spend was actually dis proportunate to the small capacity by a large margin, but that was John Lassiter chiming in). In the case of Test Track, they need to do something to keep GM in the game. that is a defensive move as GM would eventually walk (costing them yearly sponsorship fees) if "World of Motion" scored any lower on guest satisfaction, etc.

That was the fate of Horizons when GE left. It was low utilization, high operation cost and no sponsor money coming in to cover anything. GE was not happy that the ride was not that popular and cost was an issue. They pulled out. We tried to save the Horizons building (for MS) as there were issues of tax depreciation and write down of the assets as facilities over many years, but that did not pan out agains the cost of new.

In GM's case, EPCOT needed to have a thrill ride to draw a broader audience and getting GM involved in funding that was the best way to refresh an attraction and have something to market.

As a newly graduated finance guy it always interested me how TWDC budgets and spends. Thank you for the informative response.

 

[RSoxNo1]

You look at the popularity of the ride (measured by utilization) against it's "cost per guest carried", or the average of the staff and upkeep against the actual ridership. The Subs were a VERY high operation cost combined with a low capacity, making the cost per guest carried very high. When a major rehab comes along, like "reinforce the entire lagoon", then it does not make sense to keep the ride and they do something else or nothing. In WDW it was nothing, in DL it was Nemo. They believed Nemo would bring more guests to the park which justifies the spend (In Nemo's case, the huge spend was actually dis proportunate to the small capacity by a large margin, but that was John Lassiter chiming in). In the case of Test Track, they needed to do something to keep GM in the game. That is a defensive move as GM would eventually walk (costing them yearly sponsorship fees) if "World of Motion" scored any lower on guest satisfaction, etc. Test Track was exciting and was more heavily weighted with ad placement for GM so they went for it.

That was the fate of Horizons when GE left. It was low utilization, high operation cost and no sponsor money coming in to cover anything. GE was not happy that the ride was not that popular and cost was an issue. They pulled out. We tried to save the Horizons building (for MS) as there were issues of tax depreciation and write down of the assets as facilities over many years, but that did not pan out agains the cost of new.

In GM's case, EPCOT needed to have a thrill ride to draw a broader audience and getting GM involved in funding that was the best way to refresh an attraction and have something to market.

This is pretty interesting, although I would think that at times a ride's utilization is somewhat hard to quantify. Sure, they can do a guest count but is that count cannibalizing other attractions? You can look at an attraction like Expedition Everest and see that the attendance to that park increased by a million guests once it opened, but over the course of the year it accommodated probably close to 6 million riders.

 

[Pixiedustmaker]

You look at the popularity of the ride (measured by utilization) against it's "cost per guest carried", or the average of the staff and upkeep against the actual ridership.

I kinda feel that this sort of thinking makes sense for large factories where they are making widgets, but Disneyland thrives because it has a plethora of rides which are both high quality and very varied in terms of guest experience. With such a layout, it is inevitable that some attractions will cost more to build, or maintain than others, perhaps by multiples. We know what cheap amusement parks look like, they buy roller coasters and cheap thrill rides and lightly theme them.

The Subs were a VERY high operation cost combined with a low capacity, making the cost per guest carried very high. When a major rehab comes along, like "reinforce the entire lagoon", then it does not make sense to keep the ride and they do something else or nothing. In WDW it was nothing, in DL it was Nemo.

There are stories that WDW maintenance/management got ride operators to make it look like the subs were falling apart when the brass toured them due to internal complaints with maintenance. They put water in one sub and pretended the thing was falling apart! So, I think there is a difference between high maintenance costs and rides that maintenance would rather not having to maintain. Supposedly, the high cost of the subs is the projector bulbs, $10,000 per month. Well, now in the 21st Century they have projectors with long lived LED light sources. So, eventually when they do a refurb the Subs will cost less to operate. The electric motors are certainly costing much less to keep going versus the old diesel engines.

They believed Nemo would bring more guests to the park which justifies the spend (In Nemo's case, the huge spend was actually dis proportunate to the small capacity by a large margin, but that was John Lassiter chiming in).

It is just like with Tony Baxter/Treehouse/Tarzan only . . . Nemo made the company billions when you consider merchandizing, and Nemo 2 will make billions when you consider merchandizing. I'm sure Nemo 2 will get a $200 million dollar marketing budget, at least . . . I think having a Nemo ride in Disneyland is synergy with the films, and they will push a lot of Nemo merch and stuff in the park.

If they cut Nemo, then logically they could cut the train around the park, a high maintenance ride, but perhaps not with the ridership guests want? Of course, a lot of folks would hate this, as the train is such an integral part of the park. Even if you miss the train on a visit, to just see the train pass through the station as you enter Disneyland . . . it's starting a movie with an awesome action sequence, like in the first Indiana Jones.

BVS is a carefully measured half-a-teaspoon of magic, you've got the Red Car Trolley (perhaps even lower ridership than the subs), and shopping and a recreation of a building that was torn down decades ago. Not saying that the Carthay doesn't have a little charm, but there is a reason it got junked and why medieval castles are still standing and are heavily visited in Europe.

Everything in BVS and the non-Carsland DCA looks like the history of budget cuts writ large. You've got Mermaid with a couple upgraded animatronics . . . inside of a warehouse with cheap plastic fish, almost saying, "We'll let you look at two Ariels, one Ursula, and be happy about that and overlook everything else.

In the same vein, I think most guests enjoy walking by the sub lagoon, even if they aren't able to get on the ride during their visit. It sends a message that management is keeping things running. When Nemo 2 comes out, I'm sure everybody and their cousin will want to ride Nemo after/before seeing the film. They could even add some new surprises.

 

[Pixiedustmaker]

This is pretty interesting, although I would think that at times a ride's utilization is somewhat hard to quantify. Sure, they can do a guest count but is that count cannibalizing other attractions? You can look at an attraction like Expedition Everest and see that the attendance to that park increased by a million guests once it opened, but over the course of the year it accommodated probably close to 6 million riders.

One park can "cannibalize" the attendance of another park . . . but within a given park, you paid to ride everything, anything, as many times as you want. If a new ride opens, then it will relieve pressure on the other rides, or as in the case of AK's EE, it may increase park wide attendance.

Ride counts they use to determine the enduring,or not, popularity of a given attraction. And this is important when/if they decide to renovate, replace, or remove without replacement.

 

[HMF]

Aesthetic tour of Main Street USA at Disneyland with Kim Irvine.
http://disneyparks.disney.go.com/bl...in-disneyland-park-with-imagineer-kim-irvine/

 

[RSoxNo1]

One park can "cannibalize" the attendance of another park . . . but within a given park, you paid to ride everything, anything, as many times as you want. If a new ride opens, then it will relieve pressure on the other rides, or as in the case of AK's EE, it may increase park wide attendance.

Ride counts they use to determine the enduring,or not, popularity of a given attraction. And this is important when/if they decide to renovate, replace, or remove without replacement.

But did people extend their day at the Animal Kingdom? Did it take attendance away from other parks or was it all new guests? I anticipate that part of the advantage of Next Gen is that many of these questions can be answered by monitoring guest traffic flow. Did attendance drop at Dinosaur when Expedition Everest opened, or was the effect more like that of Star Tours on Toy Story Mania where the larger capacity attraction (Star Tours) brought guests into the park that also went to the lower capacity attraction (Toy Story Mania).

 

[Darth Sidious]

But did people extend their day at the Animal Kingdom? Did it take attendance away from other parks or was it all new guests? I anticipate that part of the advantage of Next Gen is that many of these questions can be answered by monitoring guest traffic flow. Did attendance drop at Dinosaur when Expedition Everest opened, or was the effect more like that of Star Tours on Toy Story Mania where the larger capacity attraction (Star Tours) brought guests into the park that also went to the lower capacity attraction (Toy Story Mania).

Good points here... I want to believe the addition of Marvel and Star Wars rides will go to parks in need of an attendance boost. I think they bring in new guests that will come spend the day. Sadly for us in the US, I see this being best utilized overseas.

 

[Eddie Sotto]

Aesthetic tour of Main Street USA at Disneyland with Kim Irvine.
http://disneyparks.disney.go.com/bl...in-disneyland-park-with-imagineer-kim-irvine/

Kim Irvine has been with the company many many years and is truly dedicated to making the show better no matter what it takes. When I was down there they volunteered their time to repaint the Dinosaurs when the budget would not allow it. It shows that the management also knows how to do the art! Kim is a great leader and a rare talent.

 

[Eddie Sotto]

This is pretty interesting, although I would think that at times a ride's utilization is somewhat hard to quantify. Sure, they can do a guest count but is that count cannibalizing other attractions? You can look at an attraction like Expedition Everest and see that the attendance to that park increased by a million guests once it opened, but over the course of the year it accommodated probably close to 6 million riders.

They take many factors into account when it comes to incremental attendance. If something new takes guests from another show, they can see that.

 

[Eddie Sotto]

I kinda feel that this sort of thinking makes sense for large factories where they are making widgets, but Disneyland thrives because it has a plethora of rides which are both high quality and very varied in terms of guest experience. With such a layout, it is inevitable that some attractions will cost more to build, or maintain than others, perhaps by multiples. We know what cheap amusement parks look like, they buy roller coasters and cheap thrill rides and lightly theme them.



There are stories that WDW maintenance/management got ride operators to make it look like the subs were falling apart when the brass toured them due to internal complaints with maintenance. They put water in one sub and pretended the thing was falling apart! So, I think there is a difference between high maintenance costs and rides that maintenance would rather not having to maintain. Supposedly, the high cost of the subs is the projector bulbs, $10,000 per month. Well, now in the 21st Century they have projectors with long lived LED light sources. So, eventually when they do a refurb the Subs will cost less to operate. The electric motors are certainly costing much less to keep going versus the old diesel engines.



It is just like with Tony Baxter/Treehouse/Tarzan only . . . Nemo made the company billions when you consider merchandizing, and Nemo 2 will make billions when you consider merchandizing. I'm sure Nemo 2 will get a $200 million dollar marketing budget, at least . . . I think having a Nemo ride in Disneyland is synergy with the films, and they will push a lot of Nemo merch and stuff in the park.

If they cut Nemo, then logically they could cut the train around the park, a high maintenance ride, but perhaps not with the ridership guests want? Of course, a lot of folks would hate this, as the train is such an integral part of the park. Even if you miss the train on a visit, to just see the train pass through the station as you enter Disneyland . . . it's starting a movie with an awesome action sequence, like in the first Indiana Jones.

BVS is a carefully measured half-a-teaspoon of magic, you've got the Red Car Trolley (perhaps even lower ridership than the subs), and shopping and a recreation of a building that was torn down decades ago. Not saying that the Carthay doesn't have a little charm, but there is a reason it got junked and why medieval castles are still standing and are heavily visited in Europe.

Everything in BVS and the non-Carsland DCA looks like the history of budget cuts writ large. You've got Mermaid with a couple upgraded animatronics . . . inside of a warehouse with cheap plastic fish, almost saying, "We'll let you look at two Ariels, one Ursula, and be happy about that and overlook everything else.

In the same vein, I think most guests enjoy walking by the sub lagoon, even if they aren't able to get on the ride during their visit. It sends a message that management is keeping things running. When Nemo 2 comes out, I'm sure everybody and their cousin will want to ride Nemo after/before seeing the film. They could even add some new surprises.

It's difficult to measure all the peripheral values of rides and attractions in relation to each other and the overall experience. there are anomalies for sure. I'm just giving you a general sense of how they used to value things. They also do guest satisfaction surveys and factor those results in.

 

[WDW1974]

It's difficult to measure all the peripheral values of rides and attractions in relation to each other and the overall experience. there are anomalies for sure. I'm just giving you a general sense of how they used to value things. They also do guest satisfaction surveys and factor those results in.

I'm convinced they miss the most common factors on what guests like and dislike and why and why some things are worth having even if they don't directly affect the bottom line because you have a culture at Disney where execs are hardly ever in the parks. They need to be out and experiencing and observing. Simple and basic and something Old Dead Guy Walt knew so well.

Even a good ops guy like my pal Georgie K (who does like being out in the parks) is largely confined to being at a desk all day. He was smart enough to get plenty of face time with fans in his first few months (wonder whose advice he took for that one ... nope, not Andy's!), but now isn't seen nearly as often.

You learn far more from basic observation and interacting with guests and cast regularly than you will from surveys and spread sheets and cost analysis etc.

BTW, did you ever get to know my old LaughingPlace.com buddy Lee MacDonald at all? Heard your name had been bandied about on that site of late.

 

[The Empress Lilly]

When I was down there they volunteered their time to repaint the Dinosaurs when the budget would not allow it. It shows that the management also knows how to do the art! Kim is a great leader and a rare talent.

'...Kim is a great leader'. *giggles*

I never knew Great Leader Kim was also a rarely talented paleontologist! And preserved our glorious dinosaurs (the largest in the world!) by handpainting them! There is no limit to the gifts he gives our people!

 

[Darth Sidious]

I'm convinced they miss the most common factors on what guests like and dislike and why and why some things are worth having even if they don't directly affect the bottom line because you have a culture at Disney where execs are hardly ever in the parks. They need to be out and experiencing and observing. Simple and basic and something Old Dead Guy Walt knew so well.

Even a good ops guy like my pal Georgie K (who does like being out in the parks) is largely confined to being at a desk all day. He was smart enough to get plenty of face time with fans in his first few months (wonder whose advice he took for that one ... nope, not Andy's!), but now isn't seen nearly as often.

You learn far more from basic observation and interacting with guests and cast regularly than you will from surveys and spread sheets and cost analysis etc.

BTW, did you ever get to know my old LaughingPlace.com buddy Lee MacDonald at all? Heard your name had been bandied about on that site of late.

A good executive would plain clothes walk in the park and observe carefully. Most importantly they would listen... But that sort of exec doesn't really exist anymore. Then if you are that sort of exec it might be hard to 'break the typical corporate culture' that restricts this from happening.

 

[Eddie Sotto]

BTW, did you ever get to know my old LaughingPlace.com buddy Lee MacDonald at all? Heard your name had been bandied about on that site of late.

Not really. I have some old interviews on the history of TDL and Encounter over there, but that was years ago.

To answer your question, I am a firm believer in informed observation over surveys or studies. Asking guests what they want does not often lead to breakthroughs. I doubt the iPad was invented in a focus group. Data can be interpreted many ways, but prolonged observation gives you data in context, and in some ways that alone can yield wisdom.

 

[Eddie Sotto]

'...Kim is a great leader'. *giggles*

I never knew Great Leader Kim was also a rarely talented paleontologist! And preserved our glorious dinosaurs (the largest in the world!) by handpainting them! There is no limit to the gifts he gives our people!

You learn something every day on this thread.