Is attendance really down at WDW this or…

[Coaster Lover]

IF Disney can get as much (OR MORE) money from less folks, that's a win (for both the Disney and the guests?)

Their recent dependency on Genie+ revenue creates some complications. If fewer people are at the parks, lines are shorter and the urgency to get Genie+ and ILL decreases... though I guess Disney can always run fewer trains/boats (where possible) to artificially increase wait times...

 

[Tha Realest]

Their recent dependency on Genie+ revenue creates some complications. If fewer people are at the parks, lines are shorter and the urgency to get Genie+ and ILL decreases... though I guess Disney can always run fewer trains/boats (where possible) to artificially increase wait times...

Yes. A perverse incentive is built into it, that’s for sure.

It also highlights a larger cascade effect, at how both the prospect of ridiculous up front costs and “necessary” add-ons has now become cost prohibitive, which in turn affects resort occupancy, turnstile tickets, merch, food …. All because they had to be too obviously greedy at the margins.

 

[Lilofan]

It’s clear no one has been groomed or fast tracked as a successor, even though that was an express reason he was brought back as a caretaker CEO.

Ask yourself - why is that?

Perhaps you can count in less than one hand the number of external candidates considered for the job?

 

[Lilofan]

This has to be very worrying. Hotel discounts, pass discounts, passholder incentives, all of it geared towards boosting shortfalls in attendance. Anecdotal stories of softened demand from numerous travel agents and posters’ personal experiences in the parks over the last few days confirming this.

If operations are not meeting or beating their forecasted sales and attendance figures drastic action may be in order to make up for the shortfall.

 

[Tha Realest]

Perhaps you can count in less than one hand the number of external candidates considered for the job?

I think that’s a big part of it. There are few actual, real world feasible prospects for the job. I also think Iger has a history of undercutting heirs apparent (or actual) time and time again, and doesn’t appear to be in a hurry to bring along the next leader.

 

[jpeden]

I think that’s a big part of it. There are few actual, real world feasible prospects for the job. I also think Iger has a history of undercutting heirs apparent (or actual) time and time again, and doesn’t appear to be in a hurry to bring along the next leader.

The only way this should be run (but it won't) would be for the Board to run an independent search of Iger, with an executive search firm hired to find, review, and interview prospective candidates, with that list of candidates being kept secret until it was announced who the finalists were and the Board was ready to go public.

Outside that it will be whoever Iger wants to hire.

 

[Lilofan]

I think that’s a big part of it. There are few actual, real world feasible prospects for the job. I also think Iger has a history of undercutting heirs apparent (or actual) time and time again, and doesn’t appear to be in a hurry to bring along the next leader.

Iger signed up for a two year contract. If no internal and external candidates are in the picture then the Disney Board will once again ask him stay longer.

 

[Lilofan]

The only way this should be run (but it won't) would be for the Board to run an independent search of Iger, with an executive search firm hired to find, review, and interview prospective candidates, with that list of candidates being kept secret until it was announced who the finalists were and the Board was ready to go public.

Outside that it will be whoever Iger wants to hire.

I think with the Disney Board whose role is to select someone to replace Iger in two years the Board would interview the candidates not an exec search firm.

 

[Nubs70]

It’s clear no one has been groomed or fast tracked as a successor, even though that was an express reason he was brought back as a caretaker CEO.

Ask yourself - why is that?

Many possibilities and permutations...

An initial look at this holiday weekend attendance may suggest WDW had hit/exceeded a price point that supports Iger's goal of reduced attendance at acceptable revenue. However, the proof will be in PCGS and PRGS in respect to gross revenue which we will have confirmation by end of next quarter.

 

[el_super]

Their recent dependency on Genie+ revenue creates some complications.

I don't think they are, or ever intended to be, dependent on Genie+ for revenue. It was always seen as a stop-gap for the decline in guest satisfaction due to ever increasing lines. If they knew there would be this much demand for it, they would have just increased the gate price $15 bucks and kept it free like Fastpass.

 

[jpeden]

I think with the Disney Board whose role is to select someone to replace Iger in two years the Board would interview the candidates not an exec search firm.

Yes but a firm would be responsible for the first round of screening interviews normally - only presenting suitable finalists to the Board for interview in my experience of how these things work.

 

[jpeden]

I don't think they are, or ever intended to be, dependent on Genie+ for revenue. It was always seen as a stop-gap for the decline in guest satisfaction due to ever increasing lines. If they knew there would be this much demand for it, they would have just increased the gate price $15 bucks and kept it free like Fastpass.

Disagree that it had anything to do with declining guest satisfaction. It was 100% about an additional revenue stream, just like with the resort parking fees. It would have been simple to raise rates $20 a night across all resorts and actually gotten that revenue from all guests (including the ones who didn't drive) but by charging for parking they could do both - raise rates AND add a new revenue source (I'm still shocked they canned this by the way).

With G+., they could have easily increased the gate price $15 a ticket and no one would have batted an eye, but it didn't let them be "dynamic" with fluxuating prices and it wasn't an additional revenue stream. Now with G+ they can increase ticket costs AND charge for LL and ILL as they see fit. They started charging for it separately because they knew there was demand for it - not because they under-estimated the demand.

 

[Lilofan]

Yes but a firm would be responsible for the first round of screening interviews normally - only presenting suitable finalists to the Board for interview in my experience of how these things work.

One of the questions I would ask a candidate is would you consider selling parts of the company ( ESPN, Parks and Resorts ) to the highest bidder? There was a time Iger thought about selling off Parks and Resorts.

 

[PREMiERdrum]

FWIW today's front desk onesheet here at All Star Music lists the resort at 83% of available capacity, with 263 available rooms. There are at least 4 other large school band groups here apart from the one I brought. The desk clerk said that Movies and Sports were "lighter" than Music this week because of the groups.

 

[jpeden]

One of the questions I would ask a candidate is would you consider selling parts of the company ( ESPN, Parks and Resorts ) to the highest bidder? There was a time Iger thought about selling off Parks and Resorts.

I wish he would have sold Parks and Resorts off, specifically to the Oriental Land Company (although I doubt they have an interest in running the US Parks and Resorts). And honestly had he sold it off I think it would have just been WDW - they'll never sell of Disneyland - the PR would be a nightmare.

 

[jpeden]

FWIW today's front desk onesheet here at All Star Music lists the resort at 83% of available capacity, with 263 available rooms. There are at least 4 other large school band groups here apart from the one I brought. The desk clerk said that Movies and Sports were "lighter" than Music this week because of the groups.

83% the week of Memorial Day seems....low. Especially for a "value" driven hotel that is supposed to help WDW appeal to the masses and make them seem that an on-property trip is obtainable and affordable.

 

[PREMiERdrum]

83% the week of Memorial Day seems....low. Especially for a "value" driven hotel that is supposed to help WDW appeal to the masses and make them seem that an on-property trip is obtainable and affordable.

I was here with a group the same week last year and there was zero availability. It's very low.

 

[Coaster Lover]

I don't think they are, or ever intended to be, dependent on Genie+ for revenue. It was always seen as a stop-gap for the decline in guest satisfaction due to ever increasing lines. If they knew there would be this much demand for it, they would have just increased the gate price $15 bucks and kept it free like Fastpass.

I don't think they are dependent on it now, but I think they are "addicted" to it. It's a SIGNIFICANT source of revenue with no/minimal cost overhead to operate. While they could likely earn some "good will" by just increasing everyone's ticket by $15 and including Genie+ in the cost, there would still be an exec who would say "why not just keep Genie+ as a paid option and STILL increase ticket prices by $15"? I feel like we only see it come back included (even if they raise ticket prices accordingly) if they are REALLY struggling (same with bring back Magical Express).

 

[ParentsOf4]

FWIW today's front desk onesheet here at All Star Music lists the resort at 83% of available capacity, with 263 available rooms. There are at least 4 other large school band groups here apart from the one I brought. The desk clerk said that Movies and Sports were "lighter" than Music this week because of the groups.

83% the week of Memorial Day seems....low. Especially for a "value" driven hotel that is supposed to help WDW appeal to the masses and make them seem that an on-property trip is obtainable and affordable.

For perspective, in the year following 9/11 when WDW attendance plummeted, WDW hotel occupancy bottomed out at 76%, the lowest it's ever been for an entire year. A few years after the Great Recession of 2007-8, WDW hotel occupancy dropped to 79%.

Value Resorts generally are supposed to have higher occupancy than Moderate and Deluxe Resorts. If the most crowded All Star is at 83%, then it must be pretty bad for Memorial Day weekend.

 

[Nubs70]

For perspective, in the year following 9/11 when WDW attendance plummeted, WDW hotel occupancy bottomed out at 76%, the lowest it's ever been for an entire year. A few years after the Great Recession of 2007-8, WDW hotel occupancy dropped to 79%.

Value Resorts generally are supposed to have higher occupancy than Moderate and Deluxe Resorts. If the most crowded All Star is at 83%, then it must be pretty bad for Memorial Day weekend.

A good guage for where WDW is for price point and general strategy.

If Values have the highest occupancy rate, with the lower occupancy the higher you go on the price point, the entire price structure is in trouble.

If the Deluxe resorts have a higher occupancy rate than the Values , this will validate Bob the Elder's luxury branding strategy. PCGS and PRGS can show a positive result but overall net income may be lower if attendance drops too far.

We shall see....