Len Testa Crowd Analysis

[seascape]

The problem there is they can lie about the data as much as they want. Not saying they will, but it's entirely up to chapek

I think you should read the SEC rules and the laws concerning public disclosures. Do you really think an executive or in Disney's case several executives making millions of dollars a year would risk it all and issue incorrect data? They can't hide the revenue. The only so called games they can play is expenses and profits but actual cash revenue can't be hidden. If attendance is up significantly then you will see revenue up significantly. Profits can be played with which is why Disney P&R profits were up so much more on a percentage basis that Universal last quarter. Either Universal did so much worse than Disney or they spent more but we will see the revenue numbers for the quarter soon and last years attendance figures too.

 

[mikejs78]

Other indicators of crowds aren't rising like it would normally in the busy times, though (hotel capacity, other parks, disney springs, open areas). People with fast passes aren't in the standby lines. So I think there is something to the fact that My Magic + is using to hyper optimize based on projections, and if reality is slightly larger than predicted this causes the big "crowds" to appear, because they underestimated. You aren't getting what you paid for.

The analogy of the packed store with 20 checkout lines, 2 of which are actually open is a good one.

I think what happened is more like a grocery store that opens two lines on Mondays because it's the least crowded day. And that may be slightly inconvenient to people at peak points of the day, but not enough that people will complain.

Then the day before one particular Monday, there's an unexpected snowstorm predicted. Suddenly the store is packed, and the checkouts are overwhelmed, because they planned for a typical Monday.

 

[winstongator]

We will all see soon if the crowds in the 1st quarter were real or manufactured. If attendance was up significantly it will be reflected in themepark revenue and profits. It will all be clear after the conference call in April.

FY18Q1, first quarter of FY2018 , period ending Dec 30 2017, reported a while ago. P&R revenue up 13%, profit up 21%. From comment: "due to increases at our domestic parks and resorts, cruise ... vc .. DLP" Quarter to quarter domestic benefitted from Matthew being in 1Q17, while Irma was 4Q17. If you look at 4Q17 which included closed days for Irma, vs 4Q16, which had no such days, revenues were up 6%.

P&R is possibly being asked to make up for the declining profits in media networks (ESPN). I was surprised that the 4Q increase in P&R profit exceeded the decrease in profits from media networks.

 

[winstongator]

I think what happened is more like a grocery store that opens two lines on Mondays because it's the least crowded day. And that may be slightly inconvenient to people at peak points of the day, but not enough that people will complain.

Then the day before one particular Monday, there's an unexpected snowstorm predicted. Suddenly the store is packed, and the checkouts are overwhelmed, because they planned for a typical Monday.

Funny you used snowstorm. We have seen this from hurricanes the past 2 years.

 

[Disneyhead'71]

I think you should read the SEC rules and the laws concerning public disclosures. Do you really think an executive or in Disney's case several executives making millions of dollars a year would risk it all and issue incorrect data? They can't hide the revenue. The only so called games they can play is expenses and profits but actual cash revenue can't be hidden. If attendance is up significantly then you will see revenue up significantly. Profits can be played with which is why Disney P&R profits were up so much more on a percentage basis that Universal last quarter. Either Universal did so much worse than Disney or they spent more but we will see the revenue numbers for the quarter soon and last years attendance figures too.

Disney does a good job of obfuscating solid info by lumping attendance figures of WDW and Disneyland together.

 

[The Empress Lilly]

So when you're at the grocery store on a crazy busy day and they have 2 of 20 checkout lines open, you just shrug and say hey it's ok, they're a business? You are more sanguine than I.

I mean I understand that American corporations are doing the best they can to condition people to expect way less for way more money....and wow is it working.

Quite right. Why should squeezing the customer out for all he's worth be the one and only business model?

There are other considerations thinkable. Such as treating your customers with the utmost respect. And to treat your employees with respect. And your local community. And the environment. Simply as a matter of respect, pride and sustainability.

Somehow American culture has come to think it should be unthinkable that a corporation should not blag, cheat, bully its way to making as much money for anonymous investors as possible with complete disregard for all else.

 

[mikejs78]

Funny you used snowstorm. We have seen this from hurricanes the past 2 years.

I'm from New England. I experience the snowstorm scenario often, which it was why it's top of mind for me.

 

[mikejs78]

Quite right. Why should squeezing the customer out for all he's worth be the one and only business model?

There are other considerations thinkable. Such as treating your customers with the utmost respect. And to treat your employees with respect. And your local community. And the environment. Simply as a matter of respect, pride and sustainability.

Somehow American culture has come to think it should be unthinkable that a corporation should not blag, cheat, bully its way to making as much money for anonymous investors as possible with complete disregard for all else.

Corporations and boards are supposed to maximize value for shareholders. But where we've gotten lately is that has been interpreted as maximizing it on a quarter to quarter basis, by cutting corners which negatively impact the consumer and employees. I would argue, however, that a longer view will do more to maximize profits over the long term - provide unparalleled customer service, make your customers feel that you care about them. Happy, loyal customers = more frequent customers = maximizing long term profit and revenue. Disney used to excel at this. They need to learn this again.

 

[wdisney9000]

Disney used to excel at this. They need to learn this again.

The small things can make a big difference in guest experience such as having adequate staff on hand. My wife loves the nudel gratin at Sommerfest in Germany pavilion. In February when she visited, they only had one of the service windows open each time she tried to get it. She said the line was ridiculous and stretched out into the pavilion each time she tried. She never got it on that trip since she didnt want to wait 20+ minutes for a snack. Did it ruin the trip? Absolutely not, but its just one of the small things that could it have made it a bit better.

 

[mikejs78]

The small things can make a big difference in guest experience such as having adequate staff on hand. My wife loves the nudel gratin at Sommerfest in Germany pavilion. In February when she visited, they only had one of the service windows open each time she tried to get it. She said the line was ridiculous and stretched out into the pavilion each time she tried. She never got it on that trip since she didnt want to wait 20+ minutes for a snack. Did it ruin the trip? Absolutely not, but its just one of the small things that could it have made it a bit better.

It's one thing if this happens over Christmas week, or 4th of July weekend, or something like that. Quite another when it happens in January/February.

 

[Sirwalterraleigh]

I think you should read the SEC rules and the laws concerning public disclosures. Do you really think an executive or in Disney's case several executives making millions of dollars a year would risk it all and issue incorrect data? They can't hide the revenue. The only so called games they can play is expenses and profits but actual cash revenue can't be hidden. If attendance is up significantly then you will see revenue up significantly. Profits can be played with which is why Disney P&R profits were up so much more on a percentage basis that Universal last quarter. Either Universal did so much worse than Disney or they spent more but we will see the revenue numbers for the quarter soon and last years attendance figures too.

Who said anything about money?

Are people walking up and buying tickets each day? Hardly any...those sales occur in prior quarters...and nothing can be locked down as to where that money is being "used"...in a weird way.

You missed the part where i was actually agreeing with you that the potential for light "massaging" does exist.

But the fundamental argument here is quite simple: if the crowds are up, you can increase employees and maintenance and park hours to provide more value to your ticket. That was the "disney way" in the past...don't doubt me, I have lived it. It makes complete sense to question today's motives

 

[Sirwalterraleigh]

Corporations and boards are supposed to maximize value for shareholders. But where we've gotten lately is that has been interpreted as maximizing it on a quarter to quarter basis, by cutting corners which negatively impact the consumer and employees. I would argue, however, that a longer view will do more to maximize profits over the long term - provide unparalleled customer service, make your customers feel that you care about them. Happy, loyal customers = more frequent customers = maximizing long term profit and revenue. Disney used to excel at this. They need to learn this again.

Yes...but you've got the wrong management. It's not what they have. I don't want to beat it to the ground...but there's little question as to the differences

 

[Sirwalterraleigh]

The small things can make a big difference in guest experience such as having adequate staff on hand. My wife loves the nudel gratin at Sommerfest in Germany pavilion. In February when she visited, they only had one of the service windows open each time she tried to get it. She said the line was ridiculous and stretched out into the pavilion each time she tried. She never got it on that trip since she didnt want to wait 20+ minutes for a snack. Did it ruin the trip? Absolutely not, but its just one of the small things that could it have made it a bit better.

And the overall point is worst than most realize...

What is the cost of a college or international programmer to disney? At lot less than you think...it's pretty lousy to operate with "pre planned" crowding.

 

[mikejs78]

Who said anything about money?

Are people walking up and buying tickets each day? Hardly any...those sales occur in prior quarters...and nothing can be locked down as to where that money is being "used"...in a weird way.

You missed the part where i was actually agreeing with you that the potential for light "massaging" does exist.

But the fundamental argument here is quite simple: if the crowds are up, you can increase employees and maintenance and park hours to provide more value to your ticket. That was the "disney way" in the past...don't doubt me, I have lived it. It makes complete sense to question today's motives

It does. But there's also the possibility that this was just poor planning rather than profit squeezing. It's hard to ramp up employees quickly.

Time will tell. If this year is the abberation, and next year it's back to more manageable levels in Jan/Feb, then I think we can chalk this year up to poor planning. If the trend continues, then it's more likely intentional profit squeezing.

 

[Sirwalterraleigh]

P&R is possibly being asked to make up for the declining profits in media networks (ESPN). I was surprised that the 4Q increase in P&R profit exceeded the decrease in profits from media networks.

You know...I wish somebody would have come up with that about 8 years ago...when people were drunk off their free dining as the regular prices were being cranked across the board

 

[Sirwalterraleigh]

It does. But there's also the possibility that this was just poor planning rather than profit squeezing. It's hard to ramp up employees quickly.

Time will tell. If this year is the abberation, and next year it's back to more manageable levels in Jan/Feb, then I think we can chalk this year up to poor planning. If the trend continues, then it's more likely intentional profit squeezing.

Considering their love for data collecting...and the fact they've eliminated spontaneous hotel visits...tickets...tables at restaurants....rides....

...what odds are the house giving on "abberation"?

 

[ParentsOf4]

A tipping point is being reached at WDW, with the theme parks running at near-capacity year-round. The following puts this in historical perspective, showing annual attendance divided by the number of theme parks:

The problem is not merely at the attractions. The buses, walkways, dining areas, bathrooms, etc. are more crowded than ever. The theme parks were not designed to handle these loads for this extended period of time.

A fifth theme park is needed by 2025 in order to avoid a significant reduction in services.

 

[mikejs78]

A tipping point is being reached at WDW, with the theme parks running at near-capacity year-round. The following puts this in historical perspective, showing annual attendance divided by the number of theme parks:

View attachment 269633

The problem is not merely at the attractions. The buses, walkways, dining areas, bathrooms, etc. are more crowded than ever. The theme parks were not designed to handle these loads for this extended period of time.

A fifth theme park is needed by 2025 in order to avoid a significant reduction in services.

They can add capacity to the parks without a 5th gate. If they add 3-5 more attractions at each park (beyond what is currently planned) that eat up a decent # of pph, they can increase the capacity of the overall resort, without the logistical issues associated with adding a 5th gate.

 

[Sirwalterraleigh]

They can add capacity to the parks without a 5th gate. If they add 3-5 more attractions at each park (beyond what is currently planned) that eat up a decent # of pph, they can increase the capacity of the overall resort, without the logistical issues associated with adding a 5th gate.

A fifth gate isn't happening...it goes against all the realities they learned in the late 90's and the goals of the stock wonks

 

[winstongator]

A tipping point is being reached at WDW, with the theme parks running at near-capacity year-round. The following puts this in historical perspective, showing annual attendance divided by the number of theme parks:

View attachment 269633

The problem is not merely at the attractions. The buses, walkways, dining areas, bathrooms, etc. are more crowded than ever. The theme parks were not designed to handle these loads for this extended period of time.

A fifth theme park is needed by 2025 in order to avoid a significant reduction in services.

Not the best way to measure. MK's attendance is nearly double the other 3.
https://en.wikipedia.org/wiki/List_of_amusement_park_rankings#Amusement_parks
MK attendance was nearly 25% more in 2016 than 2006. 2017 had increased attendance (per DIS financials), and I would guess 2018 (TSL) will as well, as will 2019 (SWGE). New Fantasyland was a nice change in 2013 vs my prior visits in the late 80's. Epcot was up 12% over that period, but had limited additions. Frozen Ever After and the Anna & Elsa meet and greet are very popular. AK up 20% in 2016, so that's not counting Pandora. Everest opened in April 2006, so it would have added somewhat to the initial number. HS/MGM up 21% with TSMM being the attraction added.

Now take Pandora, TSL, SWGE, plus Tron, Guardians coaster, Ratatouille and where will attendance go from 2016 to 2026, or even 5 years from then in 2021?