bhg469
Well-Known Member
That's what the jaguars do to claim a selloutso they can televise games. Cover a few thousand seats with a tarp and take the seats out of the equation. If any other franchise moves before them I'll snap...
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MM+ Why we can't have nice things.
- Thread starter asianway
- Start date
ParentsOf4
Well-Known Member
I assure you that when you are on the management side of a business and someone in Finance tells you that the segment is losing hundreds of millions in profits due to discounts (profits that are tied to your bonus and stock options), you quickly starting thinking like Finance.
GoofGoof
Premium Member
Iger is not a finance guy. He has no finance background. He started his career with a BS in communications and got a job as a weatherman. I'm pretty sure he doesn't even have a dreaded MBA. He eventually hooked on with ABC and worked his way up in the ranks before Disney bought ABC but I don't think any of his roles were in the finance organization. He is a television/operations guy not a finance guy. Staggs and Rasulo are both finance guys who started their careers with investment banks (Morgan Stanley and Chase I think).
majortom1981
Active Member
AOA's infrastructure and buildings were well under way in 2001 when construction was halted in a post-9/11 economy. They needed to do something with that facility before it decayed.
As prices at WDW's hotels continued their steady climb throughout the decade and an increasing number of consumers were priced out WDW's higher-end resorts, WDW legitimately had a growing market for guests desperate to stay onsite at less overpriced resorts. (Sorry but I choke on calling AOA a "Value Resort" when I think of AOA's $350/night "suite" consisting of 2 small motel rooms.)
The last 10 years have been mostly about DVC:
- Saratoga Springs Resort (DVC) - opened 2004, 1320 rooms
- Animal Kingdom Villas (DVC) opened 2007, 708 rooms
- Bay Lake Tower (DVC) - opened 2009, 428 rooms
- Art Of Animation - opened 2012, 1984 rooms
- Villas at the Grand Floridian (DVC) - opened 2013, 147 rooms
Next up is the DVC at the Polynesian and rumors of another DVC to follow that.
Occupancy rates for popular DVCs typically are over 95% whereas Disney has been averaging more than 5,100 empty rooms per day domestically at their hotels. It's hard to justify new hotel construction when you have the equivalent of 5 empty Port Orleans French Quarter sized hotels that are empty.
On another thread, I noted that a Standard View room at the Beach Club this Christmas starts at $660/night and other room categories only go up from there.
People at WDW this week are noting lots of half-full parking lots at the Deluxe Resorts even as the theme park parking lots are bursting.
And they wonder why they have empty rooms.
And they really think being able to book attractions 60 days in advance is going to fill them.
Seems to me corporate has forgotten that WDW is an amusement park built on swampland in central Florida and that their "Deluxe Resorts" are nothing close to 5-star hotels.
Rather than lower hotel prices and build exciting new attractions, we get MyMagic+.
As I've written before, WDW no longer is in the theme park business; it's in the hotel and timeshare business.
Half full parking lots mean nothing. A lot of people take magical express to the resort
Which is why (some accuse me of snooping, which I assure you I am not interested in) I have installed webcams in 10-15 rooms at every WDW resort, in order to extrapolate room occupancy numbers. I spend hours watching them. Thankless.
majortom1981
Active Member
DVC also allows them to redo hotels and have dvc pay for them. Grand hall at poly needs a complete gut? Build a dvc there and put the redo onto the dvc.
How much of their occupancy problems are due to the dvd. Meaning people who normally stayed in the hotels bought dvc and now stay in DVC side of things instead.
But that also means locals are not showing up.....
Monty
Brilliant...and Canadian
- In the Parks
- No
Or half the guests chose to take their cars to the parks.
But that goes against the argument being made...
Occupancy rates and profit margins are complicated calculations that are virtually impossible to fathom without very specific information. The kind of information Disney never shares.
If there are no discounts at all, occupancy likely goes down. The question, and it's entirely a judgement call, is how much more occupancy you get with what level of discount and then whether the resultant income after overhead is worth more than the proffered discount. If I have 4 rooms and offer a 25% discount, If I fill all four I'm basically giving one room away for free. But if I charged full rack rate for the rooms and as a result only get guests in two, I've lost money. Trouble is, I have to guess whether I'd only rent out two or four at rack rate when trying to gauge the market for what, if any, discount I'll offer.
ParentsOf4
Well-Known Member
I'll phrase it differently. Regulars are reporting several Deluxe Resort lots noticeably less crowded than normal.
Animaniac93-98
Well-Known Member
Which is why forecasting is so important for revenue management.
Monty
Brilliant...and Canadian
- In the Parks
- No
Again, one then has to determine the root cause of the perceived decline. Are there fewer guests? Have gas prices gone up and more guests are taking DME? Have more guests arrived in groups using less vehicles with more passengers?
Anecdotal information from "regulars" [just how regular are they?] is still only part of a very subjective picture.
Monty
Brilliant...and Canadian
- In the Parks
- No
Agreed, but at least the forecasters at Disney have better data to work with than any of us have.
SirLink
Well-Known Member
If I have a 6 story hotel, and close 3 floors, that means I don't need to pay cleaners to clean those bedrooms on the 3 floors and less maintenance, etc.
Plus it looks good for stockholders to see a 93% occupancy rate than a 44% occupancy rate!
Animaniac93-98
Well-Known Member
No kidding, but detailed historical information of that kind is never publically available. Other hotels in the area may have access to regional averages for ADR, RevPar and Occupancy rates, but those numbers are certainly never released to the public.
Animaniac93-98
Well-Known Member
But you lose the potential profits of those floors. If Shareholders are smart, they'd look at (or try to find out) RevPar and not occupancy alone for a hotel.
WDWFan_Boston
Well-Known Member
Carry a cell phone in your pocket? You're already being tracked, and the tracking done by our cellphones is by GPS, which is much more accurate.
I am getting my MagicBands in a couple of weeks for a trip in February. I'm not jumping for joy about it, but I'm keeping an open mind...
GoofGoof
Premium Member
Do they still host the national college cheerleading championships at DHS? If so I'll be over that week to help a brother out with his "research"
Brian Noble
Well-Known Member
A quick check of the WDW web site for a one-night stay on 12/28:
All the Epcot-area resorts (BC, YC, BWI) have availability in nearly all view categories.
Contemporary is sold out
Poly has only Standard view rooms, all higher views gone
Grand has almost all view categories available
WL and AKL have all non-Club view categories available
CBR: Only King and Pirate rooms available
CSR: Almost all views available
POR: Only Standard view available
POFQ: Almost all views available
AoA: sold out
Movies: Standard available, preferred booked
Music: Standard available, preferred and suites booked.
Sports: sold out
POP: Standard available, other views sold out.
I didn't bother checking the DVC properties. That doesn't speak to how *many* of those rooms are in each category, but there are rooms in every price point available.
I thought about comparing to Expedia's inventory in the Orlando area, but Expedia thinks most (if not all) of the Disney resorts are sold out, so who knows whether it shows an accurate view of inventory beyond the berm.
GoofGoof
Premium Member
Deluxe resorts are canabalized by DVC the most. DVC is generally not cheaper than a value resort so the appeal is to a different demographic. They can share costs between a DVC and the hotel for shared areas, but it has to be proportionate. FL has pretty strict timeshare laws and the books of each timeshare are audited by an independent firm so it's not easy to just charge DVC owners a disproportionate amount of the cost of a common addition or expense. This is why I'm surprised that the Poly DVC plans were scaled back. They were originally talking about many more rooms and a large new pool area. If the scaled back plan ends up with DVC having about 10% to 20% of the rooms at the Poly they will be limited to charging DVC a small portion of the common costs.
ParentsOf4
Well-Known Member
I completely agree but note that WDW used to consistently have much higher occupancy rates.
Over the decades as WDW room prices increased at about double the rate of inflation, a growing segment has been priced out of them. It wasn't that long ago that a Garden Wing room at the Contemporary was the equivalent of about $200/night in today's prices. At that price, you can imagine that filling the room wasn't too difficult.
What has particularly hurt Deluxe Resort occupancy rates is DVC. In the last 10 years, WDW has more than doubled the number of DVC rooms. Until 2000, it was only OKW (761 rooms) and BWV (532 rooms). Today there are more than 4300 DVC rooms at WDW with more on the way.
Back in the old days, hotel discounts at WDW were the exceptions. Now, WDW offers discounts for most of the year.
From a business perspective, a room is like a commodity with a limited shelf life. Effectively, an unoccupied room is pure waste and represents a tremendous lost profit opportunity.
Hotel occupancy greatly contributes to the important "per guest spending" metric. It should surprise no one that corporate views improving hotel occupancy rates as vitally important at a resort with over 28,000 rooms.
Current management philosophy dictates both high volume and high margins. Anything less is viewed as lazy management. Disney wants high hotel prices and high occupancy rates.
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