News Expect closure of Hong Kong Disneyland and Shanghai Disneyland to impact Walt Disney World

[MisterPenguin]

Funny thing about shaving off some late night hours off of the movies: WDW just recently extended the Pixar/Disney Shorts hours in Epcot not only all the way to closing, but even into EMH. I would have thought that would have been scaled back, but it hasn't... yet.

 

[Cesar R M]

Yes, and to be fair to them, they are minimizing impact on guests. We can debate whether the company needs to make the cuts, but the folks shaving an hour off a show’s hours aren’t involved in that conversation. They just do what they’re told and try to limit impact. 7 shows losing an hour is better than losing one show (potentially) forever. I would have preferred this technique over removing Great Moments in History...

These comparisons always makes me laugh.
Its like trying to compare getting your limbs wrecked for months versus losing a hand permanently.

 

[TrainsOfDisney]

Funny thing about shaving off some late night hours off of the movies: WDW just recently extended the Pixar/Disney Shorts hours in Epcot not only all the way to closing, but even into EMH. I would have thought that would have been scaled back, but it hasn't... yet.

Is Pixar sponsoring the attraction?

 

[havoc315]

When an entire continent is shut down from most forms public entertainment, it's logical that a worldwide entertainment company will cut costs as best it can to reduce losses.

Not really that logical. There is ALWAYS an incentive to cut costs --- to reduce losses and/or increase profits.
A shut down in one unit of the business does not change the incentives as to the other business units.
In fact, must of the cost cutting is built into the shut down --- A shut down park might not generate profit, but it also generates far fewer costs.

Why did Disney World "invest" money into Villains Night, offering extra entertainment over Disney After Hours? Because they know the small additional investment allows them to charge higher prices... and it thereby pays for itself and increases profit.

Reductions in hours can save some labor costs. But also decreases revenue -- less time of people eating in the park, buying in-park extras. Fewer purchases of park hopper add-on, if hours are too short to warrant hopping. Even fewer 1-day ticket sales .... (park closes at 11pm, someone may actually buy a ticket just to enter at 7pm and spend 4 solid hours. But if the park is closing at 8pm, nobody will plan on buying a ticket for a 7pm entry).

It would be equally logical to increase investment in the unaffected parks -- knowing that potential customers are cancelling trips to China, and therefore inviting those guests to spend their tourism dollars in the unaffected parks.

But there is always an incentive to cut the costs that can be cut, without reducing profit. If they can save money by reducing hours, and it doesn't keep away the guests... they will do it. If they can get by with fewer parades and shows...

The push back comes from customer experience and guest satisfaction. Whether Disney World has a parade or not is never a make or break decision about whether someone books the trip. But the more you cut, the less guests enjoy the trip. The less they enjoy the trip, the less likely they are to book return trips... More likely negative word of mouth is generated.
Disney wants the reputation of delivering "magical vacations." If that reputation gets replaced with, "it's like a trip to the DMV"... then in the long term, they will lose money.

It's true that some companies will resort to cost cutting to prop up short term profits, usually to make stockholders happy. But smarter companies simply plan for the long term. As long as they have enough operating cash (or borrowing capability), there is no reason to cut costs just because certain business units are in trouble.

I

 

[danv3]

Can they just say "you work and get paid an hour less per day from now on" in the US? I know in my country a company can't do that..

Probably not so easy at Disney due to the union contracts, but in general under US law the employer can change an employee’s schedule, or rate of future compensation with advance notice. It’s not a great way to maintain good relations with your employees, but it does happen.

 

[thecouch]

knowing that potential customers are cancelling trips to China, and therefore inviting those guests to spend their tourism dollars in the unaffected parks.

I know on my Australian disney groups I'm in a lot of people have cancelled (forced or getting in early) Asian disney trips and are going to disneyland this year

 

[Jack Heckleton]

It would be equally logical to increase investment in the unaffected parks -- knowing that potential customers are cancelling trips to China and therefore inviting those guests to spend their tourism dollars in the unaffected parks.

That's exactly what has happened to me, we originally had a trip booked to Shanghai Disneyland in April but have switched our plans to now visit Tokyo for the opening of Beauty and the Beast instead. Luckily everything we booked (Including on-site accommodation) included free cancellations.

 

[steve76]

It would be great if HKDL could use the closure to accelerate construction on the castle, Marvel and Frozen attractions - I'm sure they could do it a lot faster with full access to the site without guests and without noise restrictions. In an ideal world they would get these done ASAP now so that, when they did reopen, they would have something new to attract guests. But of course, with no income there is no doubt no funding for this.

It's a real shame, for HKDL at least - it's a lovely little park that just cannot seem to catch a break. I assume that when the park reopens it will be slow to start - I wonder whether we could have a situation where it's only open a few days a week initially (maybe just to test the water).

My first visit to HKDL was at the height of the SARS outbreak. I remember every time I got off an attraction, a cast member would wipe down all the handles etc. before the next guest. It was quite nice to see actually. It makes me wonder why there aren't more hand sanitiser stations in the parks (worldwide) - it would be nice, for example, before getting on TSMM and after getting off it.

 

[monothingie]

The push back comes from customer experience and guest satisfaction. Whether Disney World has a parade or not is never a make or break decision about whether someone books the trip. But the more you cut, the less guests enjoy the trip. The less they enjoy the trip, the less likely they are to book return trips... More likely negative word of mouth is generated.
Disney wants the reputation of delivering "magical vacations." If that reputation gets replaced with, "it's like a trip to the DMV"... then in the long term, they will lose money.

For Disney, guest retention programs have become a major focus. Many travel professionals will tell you that Disney is working overtime to get guests to come back. These aren't ordinary guests who may go once every 4-6 years, these are repeat Disney guests who travel once or more per year who have turned their back at Disney. These guests are discovering that for the price of a week long Disney trip they can go to Europe or Asia or on a cruise for the about the same price if not less.

Luckily for Disney (for now) there is a sucker born ever minute who will pay for the non-discounted rack rate with dining plan.

 

[larryz]

That's exactly what has happened to me, we originally had a trip booked to Shanghai Disneyland in April but have switched our plans to now visit Tokyo for the opening of Beauty and the Beast instead. Luckily everything we booked (Including on-site accommodation) included free cancellations.

Don't count on it... Japan just released a boatload of potentially infected passengers from a two-week inoculation aboard a floating petri dish.

I give it another two weeks before they realize what they did.

 

[DDLand]

For Disney, guest retention programs have become a major focus. Many travel professionals will tell you that Disney is working overtime to get guests to come back. These aren't ordinary guests who may go once every 4-6 years, these are repeat Disney guests who travel once or more per year who have turned their back at Disney. These guests are discovering that for the price of a week long Disney trip they can go to Europe or Asia or on a cruise for the about the same price if not less.

Luckily for Disney (for now) there is a sucker born ever minute who will pay for the non-discounted rack rate with dining plan.

On my trip earlier this year, you should have seen the guests. They looked like they were miserable. Occasionally, you’d pass a family having a great time, but as a rule of thumb everyone looked glum.

My traveling companion pointed out he heard someone say “let’s use our last FastPass and then cut our losses.” People feel like they have to “cut their losses” when they’re at Disney World? What happened? Another time, I heard a mother with a Big Thunder FP say to her child “we’re not using it.” She continued “FastPass are supposed to pass the line.” She was dissuaded by a 100 person line spilling out past the Big Thunder scanners. Disney has defaulted on its promise of FastPass. Or my personal favorite of being yelled at over and over to “please fill in all available space.” My dream of being herded like cattle came true at Walt Disney World!

Of course, the Mexico ride’s new audio-animatronics were already deteriorating after decades of faithful maintenance in Japan. Transportation was an enormous embarrassment. The MyMagic+ system had an outage at the front gate of Epcot, so it took 30 minutes to get scanned in. I could continue.

I love theme parks and I love Walt Disney World. I have spent 100s of hours thinking and writing about Walt Disney World. It is a passion, but frankly I was embarrassed to be a fan of Walt Disney World on this trip. It was that bad. I am not at all surprised that a non fanatic would say “once in a lifetime.” As soon as you decide guests can’t tell when you’re ripping them off, you’ve lost. You cannot run a business based off the idea your customers are stupid. Just no.

 

[monothingie]

On my trip earlier this year, you should have seen the guests. They looked like they were miserable. Occasionally, you’d pass a family having a great time, but as a rule of thumb everyone looked glum.

For the most part Disney is a stressful endeavor, coupled with heat humidity and crowds and you have a recipe for misery. No one wants to wake up at 6am to get a backup boarding group for ROTR, or wait 4 hours for FOP or 20 minutes to get a $20 hot dog all while paying more $$$$ for tickets and upcharge events.

There is still magic there thanks to great CM, but it is being drowned out by corporate BS thanks to the likes of @realBobChapek.

 

[ImperfectPixie]

On my trip earlier this year, you should have seen the guests. They looked like they were miserable. Occasionally, you’d pass a family having a great time, but as a rule of thumb everyone looked glum.

My traveling companion pointed out he heard someone say “let’s use our last FastPass and then cut our losses.” People feel like they have to “cut their losses” when they’re at Disney World? What happened? Another time, I heard a mother with a Big Thunder FP say to her child “we’re not using it.” She continued “FastPass are supposed to pass the line.” She was dissuaded by a 100 person line spilling out past the Big Thunder scanners. Disney has defaulted on its promise of FastPass. Or my personal favorite of being yelled at over and over to “please fill in all available space.” My dream of being herded like cattle came true at Walt Disney World!

Of course, the Mexico ride’s new audio-animatronics were already deteriorating after decades of faithful maintenance in Japan. Transportation was an enormous embarrassment. The MyMagic+ system had an outage at the front gate of Epcot, so it took 30 minutes to get scanned in. I could continue.

I love theme parks and I love Walt Disney World. I have spent 100s of hours thinking and writing about Walt Disney World. It is a passion, but frankly I was embarrassed to be a fan of Walt Disney World on this trip. It was that bad. I am not at all surprised that a non fanatic would say “once in a lifetime.” As soon as you decide guests can’t tell when you’re ripping them off, you’ve lost. You cannot run a business based off the idea your customers are stupid. Just no.

As soon as they started trying to decide for their guests how many attractions per day should make them happy and trying to fill all available space as if they're playing Tetris (like an earlier poster said), they lost sight of what their product actually is and why people love it. They're slowly, but surely, killing their own product...and it hurts to say that. You cannot run a tourist business for quarterly numbers - it just doesn't work that way because it's a seasonal business, even when it's open all year, and we're seeing the results of them doing exactly that. This isn't retail. It's not manufacturing. It's not a film studio. It isn't an object that can be manipulated without repercussions (like speeding up a factory line to increase production) - it's an experience with people's emotions (and potential stress levels) tied to it. Disney's leadership doesn't seem to understand that. And yes...it really does feel like they think we're stupid, and blind to their actions and motivations.

 

[ToTBellHop]

Some oversimplify the role of parks and resorts in the company with, “but they have money! Wah!” Sure. They do. And then you follow with, “they only care about this quarter! Wah!” Not really. But they are a company. $300 million isn’t an issue. But if they report Q2 results and there is a 10% drop in profits, investors will flee and they will lose many hundreds of millions. The calculus is complicated here, but they can analyze trends company wide and make small modifications in the short-term—increase prices on some items a bit, cut hours a bit, push off construction of a super hero E-ticket by a few months, and in doing so, control their numbers to avoid frightening Wall Street. Publicly-traded companies need to keep investors. And investors are extremely testy in 2020. Just watch the stock markets. The smallest thing, like 1 person arriving in the US with Coronavirus or a tweet from someone in power can send stocks spiraling. So, yes, they must be in damage-control mode to weather this storm. Hopefully, the virus dies down quickly. Otherwise, I’d expect cuts to become more dramatic.

 

[ImperfectPixie]

Some oversimplify the role of parks and resorts in the company with, “but they have money! Wah!” Sure. They do. And then you follow with, “they only care about this quarter! Wah!” Not really. But they are a company. $300 million isn’t an issue. But if they report Q2 results and there is a 10% drop in profits, investors will flee and they will lose many hundreds of millions. The calculus is complicated here, but they can analyze trends company wide and make small modifications in the short-term—increase prices on some items a bit, cut hours a bit, push off construction of a super hero E-ticket by a few months, and in doing so, control their numbers to avoid frightening Wall Street. Publicly-traded companies need to keep investors. And investors are extremely testy in 2020. Just watch the stock markets. The smallest thing, like 1 person arriving in the US with Coronavirus or a tweet from someone in power can send stocks spiraling. So, yes, they must be in damage-control mode to weather this storm. Hopefully, the virus dies down quickly. Otherwise, I’d expect cuts to become more dramatic.

Honestly, I think allowing people to invest on their own online was a huge mistake. People are fickle. And crazy. And allowing them to watch their stocks minute by minute and change their investments with minimal effort is just a bad idea. My mother insists that she and my step-dad use a financial adviser for exactly this reason.

 

[dreamfinder]

It stinks, but looks like these are low hanging fruit to reduce staffing without

Can they just say "you work and get paid an hour less per day from now on" in the US? I know in my country a company can't do that..

Depends on the state, the contracts, and the actual employees in question. As long as you aren't actually rendering services, they don't have to pay you if you are an hourly employee. And even full time employees can be shifted to different schedules lots of time. So this is easiest to apply (I suspect) for non World Showcase locations. CP employees or local hourly non-full time staff just gets scheduled for less hours on the next schedule. Or instead of hiring a new body to replace someone who left, you simply don't fill that position and spread out the remaining hours. And even if your location wasn't hiring, you may be cross trained and redeployed elsewhere instead of that location hiring new workers. No idea how the contracts are for the international CMs though, they may be more restricted in options there.

 

[lazyboy97o]

Some oversimplify the role of parks and resorts in the company with, “but they have money! Wah!” Sure. They do. And then you follow with, “they only care about this quarter! Wah!” Not really. But they are a company. $300 million isn’t an issue. But if they report Q2 results and there is a 10% drop in profits, investors will flee and they will lose many hundreds of millions. The calculus is complicated here, but they can analyze trends company wide and make small modifications in the short-term—increase prices on some items a bit, cut hours a bit, push off construction of a super hero E-ticket by a few months, and in doing so, control their numbers to avoid frightening Wall Street. Publicly-traded companies need to keep investors. And investors are extremely testy in 2020. Just watch the stock markets. The smallest thing, like 1 person arriving in the US with Coronavirus or a tweet from someone in power can send stocks spiraling. So, yes, they must be in damage-control mode to weather this storm. Hopefully, the virus dies down quickly. Otherwise, I’d expect cuts to become more dramatic.

Plenty of publicly traded companies post loses and continue on just fine. Tesla has only had a handful of profitable quarters but early this year their market valuation exceeded Ford and GM combined. Disney goes into panic induced damage control at the tiniest blips. This isn’t extraordinary actions for extraordinary circumstances, it is they same answer they have for everything.

 

[ToTBellHop]

Plenty of publicly traded companies post loses and continue on just fine. Tesla has only had a handful of profitable quarters but early this year their market valuation exceed Ford and GM combined. Disney goes into panic induced damage control at the tiniest blips. This isn’t extraordinary actions for extraordinary circumstances, it is they same answer they have for everything.

Other companies make cuts. It just makes national news when Disney raises the price of an AP by $20. I think you are cherry-picking using Tesla. What do most entertainment companies, retailers, auto manufacturers, and banks do when they see declining profits? They cut low-hanging fruit.

 

[lazyboy97o]

Other companies make cuts. It just makes national news when Disney raises the price of an AP by $20. I think you are cherry-picking using Tesla. What do most entertainment companies, retailers, auto manufacturers, and banks do when they see declining profits? They cut low-hanging fruit.

There are plenty of companies that continue on despite temporary loses. We’re not talking about a larger downward trend. This is Disney’s response when profits have increased but not as much as they hoped. They’re not trying to keep the business afloat.

 

[havoc315]

Some oversimplify the role of parks and resorts in the company with, “but they have money! Wah!” Sure. They do. And then you follow with, “they only care about this quarter! Wah!” Not really. But they are a company. $300 million isn’t an issue. But if they report Q2 results and there is a 10% drop in profits, investors will flee and they will lose many hundreds of millions. The calculus is complicated here, but they can analyze trends company wide and make small modifications in the short-term—increase prices on some items a bit, cut hours a bit, push off construction of a super hero E-ticket by a few months, and in doing so, control their numbers to avoid frightening Wall Street. Publicly-traded companies need to keep investors. And investors are extremely testy in 2020. Just watch the stock markets. The smallest thing, like 1 person arriving in the US with Coronavirus or a tweet from someone in power can send stocks spiraling. So, yes, they must be in damage-control mode to weather this storm. Hopefully, the virus dies down quickly. Otherwise, I’d expect cuts to become more dramatic.

Not really how it works. Investors don't just look at the numbers in a vacuum and flee a bad loss. Investors are looking at the future, always.

If a company is fundamentally unhealthy, they may resort to cuts and other things to inflate their profit numbers (or hide losses).
But if a company is fundamentally healthy and growing, Wall Street won't panic over a temporary loss caused by external events. That's why Disney gives guidance, warning ahead of time that the closures will cause losses. Let investors price it into their expectations.
Companies take "write downs" all the time. Acknowledging a short term loss as they gear up for the future.

An investor will react more strongly to the news "we are investing in XXX, which we expect to generate X% growth in revenue and X% growth in profit beginning in the Xth quarter...".... Than they react to, "we lost money last quarter because of extraordinary events beyond out control"