The top executive at the Walt Disney Co. said this morning that he expects his company’s theme parks will scale back discounting during the second half of 2010, though he acknowledged that “we don’t know when we will essentially be able to turn it off.”
Disney Chief Executive Officer Bob Iger noted that the promotions Disney’s parks are currently offering – including another buy-four-get-seven hotel-night offer at Walt Disney World – are slightly smaller than deals they offered earlier this year, when the global recession was at its worst.
“We’ll be able to continue to dial that back over the latter part of 2010,” Iger told financial analysts at the UBC Media and Telecommunications Conference in New York.
Since the beginning of this year, Disney has been using a series of deep discounts at its theme-park resorts – on hotel rooms, food, tickets and more – to keep attendance afloat amid an overall slump in travel and tourism. While the company has relied on promotions to prop up attendance during previous downturns, it has not before used them for such an extended period of time.
The strategy has kept Disney World and Disneyland in Anaheim, Calif., full, which Disney executives say helps ensure continued word-of-mouth marketing and leads to return trips. But it has eroded margins: Operating profit at Walt Disney Parks and Resorts sank 25 percent during the company’s 2009 fiscal year, which concluded Oct. 3.
Some analysts have expressed concern that the strategy may lead to a permanent expectation of discounts among Disney customers, which would make it difficult to return to full prices without harming attendance. Some also worry that the promotions have simply cannibalized future attendance by luring people who were planning to take trips later.
Iger, as he has before, dismissed both concerns. He said, for example, the promotions have attracted new customers who would not otherwise have visited a Disney park.
“We’re not concerned about weaning ourselves and the marketplace of the discounts,” Iger said.
Still, Iger declined to predict when Disney might be able to stop discounting entirely. Tourism-industry experts have been watching for indications that Disney is preparing to pull back its promotions as a likely sign of improvement in the broader travel market.
Iger said it is difficult to make long-term predictions right now because travelers are not planning trips far in advance. “Visibility well into the year is very limited,” he said.
“It’s just not a market that lends itself to long-term commitments or early buying,” Iger said.
http://thedailydisney.com/blog/2009...ack-on-park-discounts-in-latter-part-of-2010/
Disney Chief Executive Officer Bob Iger noted that the promotions Disney’s parks are currently offering – including another buy-four-get-seven hotel-night offer at Walt Disney World – are slightly smaller than deals they offered earlier this year, when the global recession was at its worst.
“We’ll be able to continue to dial that back over the latter part of 2010,” Iger told financial analysts at the UBC Media and Telecommunications Conference in New York.
Since the beginning of this year, Disney has been using a series of deep discounts at its theme-park resorts – on hotel rooms, food, tickets and more – to keep attendance afloat amid an overall slump in travel and tourism. While the company has relied on promotions to prop up attendance during previous downturns, it has not before used them for such an extended period of time.
The strategy has kept Disney World and Disneyland in Anaheim, Calif., full, which Disney executives say helps ensure continued word-of-mouth marketing and leads to return trips. But it has eroded margins: Operating profit at Walt Disney Parks and Resorts sank 25 percent during the company’s 2009 fiscal year, which concluded Oct. 3.
Some analysts have expressed concern that the strategy may lead to a permanent expectation of discounts among Disney customers, which would make it difficult to return to full prices without harming attendance. Some also worry that the promotions have simply cannibalized future attendance by luring people who were planning to take trips later.
Iger, as he has before, dismissed both concerns. He said, for example, the promotions have attracted new customers who would not otherwise have visited a Disney park.
“We’re not concerned about weaning ourselves and the marketplace of the discounts,” Iger said.
Still, Iger declined to predict when Disney might be able to stop discounting entirely. Tourism-industry experts have been watching for indications that Disney is preparing to pull back its promotions as a likely sign of improvement in the broader travel market.
Iger said it is difficult to make long-term predictions right now because travelers are not planning trips far in advance. “Visibility well into the year is very limited,” he said.
“It’s just not a market that lends itself to long-term commitments or early buying,” Iger said.
http://thedailydisney.com/blog/2009...ack-on-park-discounts-in-latter-part-of-2010/
