Labor cost cutting measures begin at Walt Disney World as the company enters Q1

[ParentsOf4]

While I mostly agree with the point you're making I want to clarify something here: This isn't so much about catering to the rich, as it is realizing and understanding that what they were offering before was severely underpriced. The consequence of re-leveling pricing to appeal to the masses, are parks that are clogged with people, day and night. Rides with 100+ minute waits. Restaurants booked out months in advance. Requiring a degree in industrial engineering to understand how to use Fastpass.

The parks are clogged because Disney hasn't opened a theme park in 23 years (and counting). The U.S. population has increased by 20% since the last time WDW built a theme park. In addition, Disney has been heavily advertising internationally for almost 20 years, adding nearly another 20% to WDW's attendance. As a result, WDW attendance is up 40% since 1998 yet no 5th gate.

Meanwhile, over at Universal, they've already opened a water park and are in the process of building a third theme park.

Let's think about that for a moment. In 2019, WDW averaged 14.7 million annual visitors per theme park. Meanwhile, Universal Orlando averaged only 10.6 million annual visitors per theme park.

Yet it's Universal that is building another theme park!

Disney isn't building another theme park because the Two Bobs believe their 'Guests' will pay any price for 'The Magic.'

I suspect we're like many WDW 'Guests.' We look at prices along with the nickel-and-diming and ask ourselves, "What the heck is happening to Walt Disney World?" Our annual pass will increase by 25% when we renew next year. Disney restaurants that were selling a burger for $15 a few years ago are now charging $20. Disney's Magical Express is ending. Free FastPass+ has ended. Free MagicBands have ended.

We were just at the Boardwalk and the attendants told us they are not even heating the pools. We were at the Hard Rock earlier in the week and that pool most assuredly was warmer. We enjoyed ourselves immensely at the Hard Rock pool, shivered at the Boardwalk pool.

What the heck is going on at WDW!?!?

Repeating something I wrote about earlier, we've already cancelled nights from our WDW stays, rented out those DVC points, purchased Universal annual passes, and booked nights at the Hard Rock Hotel, Royal Pacific, and Portofino Bay. Amazingly, the points we rented more than cover the cost of our Universal annual passes and 3 different stays at Universal's 3 Deluxe Resorts.

Here's a sample of some December annual pass rates at Universal:

Here's are some rates at WDW hotels for those same nights:

I'm paying $204/night in December to stay at the Royal Pacific, putting me within walking distance of two theme parks. Best of all, that price includes unlimited Express Pass all day long.

What does $753/night at the Polynesian get me? The 'privilege' of paying an extra $10 to $24 for 2 attractions (each!), plus another $15 for Genie+. That's right, over $800/night with tax and parking, and I still have to dish out another $50 per 'Guest' for something that's not as good as Express Pass. For a family of 4, that's another $200 per day, practically the cost of the entire Royal Pacific room with Express Pass included!

Relating all of this to the subject of this thread, you want to know why Disney is looking for ways to cut costs because attendance has not rebounded?

Don't blame COVID.

Blame corporate Disney for the way it treats its 'Guests'.

 

[mikejs78]

The parks are clogged because Disney hasn't opened a theme park in 23 years (and counting). The U.S. population has increased by 20% since the last time WDW built a theme park. In addition, Disney has been heavily advertising internationally for almost 20 years, adding nearly another 20% to WDW's attendance. As a result, WDW attendance is up 40% since 1998 yet no 5th gate.

Meanwhile, over at Universal, they've already opened a water park and are in the process of building a third theme park.

Let's think about that for a moment. In 2019, WDW averaged 14.7 million annual visitors per theme park. Meanwhile, Universal Orlando averaged only 10.6 million annual visitors per theme park.

Yet it's Universal that is building another theme park!

Disney isn't building another theme park because the Two Bobs believe their 'Guests' will pay any price for 'The Magic.'

I suspect we're like many WDW 'Guests.' We look at prices along with the nickel-and-diming and ask ourselves, "What the heck is happening to Walt Disney World?" Our annual pass will increase by 25% when we renew next year. Disney restaurants that were selling a burger for $15 a few years ago are now charging $20. Disney's Magical Express is ending. Free FastPass+ has ended. Free MagicBands have ended.

We were just at the Boardwalk and the attendants told us they are not even heating the pools. We were at the Hard Rock earlier in the week and that pool most assuredly was warmer. We enjoyed ourselves immensely at the Hard Rock pool, shivered at the Boardwalk pool.

What the heck is going on at WDW!?!?

Repeating something I wrote about earlier, we've already cancelled nights from our WDW stays, rented out those DVC points, purchased Universal annual passes, and booked nights at the Hard Rock Hotel, Royal Pacific, and Portofino Bay. Amazingly, the points we rented more than cover the cost of our Universal annual passes and 3 different stays at Universal's 3 Deluxe Resorts.

Here's a sample of some December annual pass rates at Universal:

View attachment 591453


Here's are some rates at WDW hotels for those same nights:

View attachment 591454

I'm paying $204/night in December to stay at the Royal Pacific, putting me within walking distance of two theme parks. Best of all, that price includes unlimited Express Pass all day long.

What does $753/night at the Polynesian get me? The 'privilege' of paying an extra $10 to $24 for 2 attractions (each!), plus another $15 for Genie+. That's right, over $800/night with tax and parking, and I still have to dish out another $50 per 'Guest' for something that's not as good as Express Pass. For a family of 4, that's another $200 per day, practically the cost of the entire Royal Pacific room with Express Pass included!

Relating all of this to the subject of this thread, you want to know why Disney is looking for ways to cut costs because attendance has not rebounded?

Don't blame COVID.

Blame corporate Disney for the way it treats its 'Guests'.

Disney does not need another theme park. They need to flesh out their existing theme parks.

 

[UNCgolf]

Disney does not need another theme park. They need to flesh out their existing theme parks.

Indeed. DHS, DAK, and EPCOT each need several more attractions before they even think about building a fifth park.

 

[CaptainAmerica]

Indeed. DHS, DAK, and EPCOT each need several more attractions before they even think about building a fifth park.

They should never build a fifth park.

 

[UNCgolf]

They should never build a fifth park.

I agree, at least for the foreseeable future. I'll probably be dead before it will be a realistic option, considering how much work needs to be done at the existing parks.

 

[ParentsOf4]

Disney does not need another theme park. They need to flesh out their existing theme parks.

Indeed. DHS, DAK, and EPCOT each need several more attractions before they even think about building a fifth park.

This is what Epcot looked like in September 2019, before the recent price increases and service cuts:

September is still considered one of the slower months at WDW.

Epcot doesn't need more rides to attract even more Guests. Before the recent price increases and service cuts, the walkways were overcrowded. The bathrooms were overcrowded. The bus stops were overcrowded. The restaurants were overcrowded.

Adding more attractions to existing parks is only going to attract more Guests, making those parks even more crowded.

WDW needs to spread out Guests among more theme parks. WDW needs a 5th theme park with 20 new attractions, not a couple at Epcot, a couple at DHS, and a couple at DAK.

Universal understands this. Universal added 2 Harry Potter lands, many new attractions at IOS & US, and a water park. Yet Universal also is building a new theme park.

Here's what happened to WDW per theme park attendance thru 2019:

Disney's recent price increases and service cuts (FP+, MDE, MB, etc.) are driving Guests away in droves. Corporate Disney is directing WDW leadership to heavily cut labor costs because Guests are not coming back in the numbers expected. Guests are not coming back because they are not stupid. They see what's happening and don't see the value anymore. For someone who goes to WDW every 2-to-5 years, they look at what their last trip cost and compare it with what that same trip will cost today, and they just walk away.

Guests are not coming back because (for example) a Disney Value Resort sometimes costs more than a Universal Deluxe Resort!

WDW needs another theme park to get Guests really excited about WDW. (Ratatouille? Really? A $5000 2-day hotel experience? Really?)

WDW needs another theme park to show that they truly care about the Guest experience.

And Disney needs to stop taking its Guests for granted.

 

[mysto]

I'm confused. I thought Disney was trying and struggling to hire additional, necessary workers to staff the parks and resorts? And now they're cutting?

There is no labor shortage.

There is a cheap labor shortage.

 

[mikejs78]

There is no labor shortage.

There is a cheap labor shortage.

No, there's an actual labor shortage. Even companies that pay high wages are having trouble finding people.

 

[Marriedatdisney]

My 2 cents. The pic above of the crowds shows the problem. Parks were overcrowded. Impossible to move or ride. If they jack prices and limit attendance, ok with me. But we all know they will jack prices and let parks get that crowded again.

 

[mikejs78]

This is what Epcot looked like in September 2019, before the recent price increases and service cuts:

View attachment 591455

September is still considered one of the slower months at WDW.

Epcot doesn't need more rides to attract even more Guests. Before the recent price increases and service cuts, the walkways were overcrowded. The bathrooms were overcrowded. The bus stops were overcrowded. The restaurants were overcrowded.

Adding more attractions to existing parks is only going to attract more Guests, making those parks even more crowded.

WDW needs to spread out Guests among more theme parks. WDW needs a 5th theme park with 20 new attractions, not a couple at Epcot, a couple at DHS, and a couple at DAK.

Universal understands this. Universal added 2 Harry Potter lands, many new attractions at IOS & US, and a water park. Yet Universal also is building a new theme park.

Here's what happened to WDW per theme park attendance thru 2019:

View attachment 591458

Disney's recent price increases and service cuts (FP+, MDE, MB, etc.) are driving Guests away in droves. Corporate Disney is directing WDW leadership to heavily cut labor costs because Guests are not coming back in the numbers expected. Guests are not coming back because they are not stupid. They see what's happening and don't see the value anymore. For someone who goes to WDW every 2-to-5 years, they look at what their last trip cost and compare it with what that same trip will cost today, and they just walk away.

Guests are not coming back because (for example) a Disney Value Resort sometimes costs more than a Universal Deluxe Resort!

WDW needs another theme park to get Guests really excited about WDW. (Ratatouille? Really? A $5000 2-day hotel experience? Really?)

WDW needs another theme park to show that they truly care about the Guest experience.

And Disney needs to stop taking its Guests for granted.

"Nobody goes there anymore, it's too crowded".

Seriously, a fifth gate would be the absolute *worst* thing Disney could do right now. The amount of infrastructure and operational cost that goes into this would spread their costs too thin, it would take away from the other parts.

Comparing Uni and Disney in this regard also doesn't make sense. Uni is trying to capture more of a families vacation, and their land expansion possibilities at the other two resorts is a bit constricted. Another gate makes perfect sense for them - it makes zero sense for Disney or its guests.

Regarding that picture at Epcot - what do you think new attractions will do, especially new attractions like Ratatouille? They will help reduce the crowds in the picture you put up - because now you'll have more people on am attraction, more people in line.

DHS, Epcot, AK don't have enough. They need another 5+ attractions each. Otherwise a fifth gate will just degrade the Disney customer experience even more.

 

[UNCgolf]

This is what Epcot looked like in September 2019, before the recent price increases and service cuts:

View attachment 591455

September is still considered one of the slower months at WDW.

Epcot doesn't need more rides to attract even more Guests. Before the recent price increases and service cuts, the walkways were overcrowded. The bathrooms were overcrowded. The bus stops were overcrowded. The restaurants were overcrowded.

Adding more attractions to existing parks is only going to attract more Guests, making those parks even more crowded.

WDW needs to spread out Guests among more theme parks. WDW needs a 5th theme park with 20 new attractions, not a couple at Epcot, a couple at DHS, and a couple at DAK.

Universal understands this. Universal added 2 Harry Potter lands, many new attractions at IOS & US, and a water park. Yet Universal also is building a new theme park.

Here's what happened to WDW per theme park attendance thru 2019:

View attachment 591458

Disney's recent price increases and service cuts (FP+, MDE, MB, etc.) are driving Guests away in droves. Corporate Disney is directing WDW leadership to heavily cut labor costs because Guests are not coming back in the numbers expected. Guests are not coming back because they are not stupid. They see what's happening and don't see the value anymore. For someone who goes to WDW every 2-to-5 years, they look at what their last trip cost and compare it with what that same trip will cost today, and they just walk away.

Guests are not coming back because (for example) a Disney Value Resort sometimes costs more than a Universal Deluxe Resort!

WDW needs another theme park to get Guests really excited about WDW. (Ratatouille? Really? A $5000 2-day hotel experience? Really?)

WDW needs another theme park to show that they truly care about the Guest experience.

And Disney needs to stop taking its Guests for granted.

Part of the reason EPCOT looks like that is because there's not enough there for people to do, and then they made it worse by adding booths everywhere and attracting people to the walkways. EPCOT would not look anything like that if they didn't have a festival happening -- I was there in January of 2020 when no festival was happening and there were less than half as many people as there are in that photo.

Actually building a bunch of attractions at the parks they have would show they care about the guest experience -- building a fifth park would do the opposite. It would show that they don't care that they have a bunch of underbuilt parks and want to charge you even more to experience what you should be able to experience in all the empty space at the three underbuilt parks (EPCOT wasn't always underbuilt, but it is now that they've made so many changes for the worse).

A fifth park would be a much bigger cash grab than adding the necessary attractions at the existing parks. I would be furious if they did that right now.

 

[Sir_Cliff]

I think what @ParentsOf4 is saying makes sense, and they have certainly provided evidence that suggests a new one is required.

Must admit, though, I am with those who think they need to build out their existing parks and try to address overcrowding through increased capacity. It would be nice if their next big initiative was to build capacity across the parks, identifying areas that were basically lying vacant and developing a program of smaller attractions with a few E-tickets sprinkled in. It would seem more efficient to essentially add a new park's worth of capacity across the resort that used the existing infrastructure.

I suspect a concern for Disney is also the greater difficulty they have to adjust to changing circumstances the bigger the resort gets. Hotels are a little easier to close in whole or part, but another theme park and all the infrastructure to go with it represents more exposure in the event of a future pandemic, economic downturn, war, etc. Wasn't this the reason Steve Jobs suggested to Iger they should sell the parks?

 

[Lilofan]

He has took direct shots at the contracts of highest levels of executives at Disney. He says he wants to restructure both the length and compensation structure of the contracts of top Disney executives.

Last year when Iger and Chapek voluntarily took a 100% and 50% salary pay cut last summer when the 28K layoffs were announced, execs were told they would take a 25% and 20% pay cut also. Not all perhaps would take this all in stride.

 

[Lilofan]

And we really think meet and greets are returning soon?

It won't return soon like those private beach club white cabanas tents without the pool view for rent ( $650 per day ) at MK Tomorrowland a few years ago complete with a cabana boy/girl to assist you with food and drink offerings . That idea crashed and burned quickly during operation and the white tents were removed after that.

 

[John park hopper]

Last year when Iger and Chapek voluntarily took a 100% and 50% salary pay cut last summer when the 28K layoffs were announced, execs were told they would take a 25% and 20% pay cut also. Not all perhaps would take this all in stride.

Even with pay cuts which were lifted in August 2020 --salary plus compensations Disney executives pulled in millions for 2020 correct me if I'm wrong Iger 21 mil--Capek 14 mil. IMO if you can make that kind of money good for you but I'm not going to feel sorry for you if your pay is cut by a few mil not when CM's are out of work or taking hour cuts for a $15 /hour job

 

[themarchhare]

It's become really hard to be optimistic about WDW.

 

[Patcheslee]

1. Minor attractions and diversions, *not* E-tickets.

2. More physical space, i.e. more square footage to stuff bodies.

3. Not having virtual queues.

4. Higher prices.

No one has mentioned getting the train running full circuit at MK again. It's not new, but from what I saw for demand when it was running only the back of the park, it could help.
Also is the Conservative Station and train running at AK yet?

 

[ToTBellHop]

Epcot needs to go back to the old model—huge pavilions with an hour or two of content for you to engage with in each one. They still have the huge pavilions but most aren’t keeping you for more than 30 min. Whatever the hell they call Future World East is the most glaring example.

At least they are bringing entertainment back.

World Showcase, in particular, being crowded is because it’s a year-round booze fest. Give people something to do other than get drunk.

 

[Lilofan]

Even with pay cuts which were lifted in August 2020 --salary plus compensations Disney executives pulled in millions for 2020 correct me if I'm wrong Iger 21 mil--Capek 14 mil. IMO if you can make that kind of money good for you but I'm not going to feel sorry for you if your pay is cut by a few mil not when CM's are out of work or taking hour cuts for a $15 /hour job

You just described corporate America 101.

 

[Lilofan]

It's become really hard to be optimistic about WDW.

Let's see how Chapek will described state of the company during Wall Street public conference call with the Wall Street analysts to go over Q4 results on November 11 after the stock market close of that day. I hope the Q&A directed at Chapek and the CFO can give company shareholders direction to the future of TWDC.