I now have a theory of how WDW intends to use Next Gen to improve its bottom line. It’s a three-pronged approach:
- Improve hotel occupancy rates – If guests staying at a Deluxe Resort (for example) get 4 extra FP+ per day, Moderate Resorts get 2 extra FP+ per day, and Value Resorts get 1 extra FP+ per day, this will encourage offsite guests to stay onsite and will encourage onsite guests to upgrade their hotel. Who knows, maybe they will do something similar with ADRs. I can imagine Deluxe Resort guests being able to book their ADRs 6 months in advance, Moderate 5 months, Value 4 months, and everyone else 3 months. Maybe ADRs will be linked to FP+. As a result, WDW hotel occupancy rates should improve, with more people staying at the very expensive Deluxe Resorts. Operating expenses for a hotel with 90% occupancy are not much more than a hotel with 70% occupancy. Filling unoccupied rooms in an existing hotel has a tremendous profit margin.
- Eliminate Extra Magic Hours – EMHs are an enormous operating expense. Considerable money could be saved by getting rid of these. With a multi-tiered FP+ system for onsite guests during regular park hours, EMHs are no longer needed. Hugh savings for WDW. Universal will be offering a multi-tiered perk system once they open their fourth hotel and their attendance is better than ever. Perhaps TDO thinks they can do the same with minimal impact on overall attendance.
- Price increases – Of course. Just like they did when they switched to the Magic Your Way ticket system, WDW undoubtedly has plans to rename some things and then charge more for essentially the same service.
CEO Bob Iger has publicly stated that the general public needs to be weaned off “Free Dining” and “Room Only” discounts. A multi-tiered perks system built around Next Gen might be a way to do this. Onsite guests get more FP+, better ADRs, and preferred viewing. Deluxe Resort guests get more than Moderate or Value Resort guests. As a result, WDW no longer needs to offer as many discounts if guests have stronger incentives to stay onsite, especially since these incentives require minimal opex. Potentially, this could be another way for WDW to increase revenue with minimal cost.
Looking at it this way, I see how Next Gen should improve revenue and profits better than any new attraction. No wonder these have been WDW’s worst years for attraction development.