NextGen Deep Impact

[asianway]

I’m a numbers person and there’s something that’s been bugging me about WDW’s numbers.

Between theme parks and water parks alone, WDW attendance is about 51M annually. Many park hop. Taking that into account, I’ll guess maybe 35M people actually visit WDW per year.

WDW has about 30,000 rooms. Between families of 3 or 4 and couples, I’ll guess the average number of people in a room is 3. In 2012, the occupancy rate was 78%. So, a rough estimate means that approximately 25.6M (30000 X 3 X 0.78 X 365) people stayed in WDW rooms last year.

Using these numbers alone (35M vs 25.6M) this suggests the overwhelming number of people visiting WDW should be onsite guests.

I’ve always been under the impression that most WDW visitors are offsite guests but have no idea if this is true. If this is correct, then a lot of people are staying at WDW hotels but not visiting the theme parks. If this is the case, then TDO has to be really frustrated. These people are staying in WDW hotels and TDO is offering cheap tickets (incrementally, WDW ticket prices increase by only $10-$14 after 3 days), yet they still can’t get them to into the theme parks.

Based on this, I think one of the goals of NextGen is to get onsite guests back into the theme parks by offering onsite guests first crack at FP+. The idea behind this is that if guests have “good” FP+ for (for example) Peter Pan on Monday, Soarin’ on Tuesday, TSM on Wednesday, Space Mountain on Thursday, etc. won’t they want to use them? If onsite guests are at WDW using them, then they are not heading up I-4 to see “The Boy Who Won’t Be Named”. In turn, this means they are spending money at WDW on food and merchandise.

If you have feedback, I’d be really interested in reading it. Does this make sense? Are there mistakes in my estimates or assumptions?

I wonder if 3 is a good number - some people travel solo, so it may be 2 point something. Also, does the 78% include DLR? Wasnt Spirit saying WDW has been in the 60s many days now that Animation is open?

Good analysis though, never looked at it that way.

 

[Disneyhead'71]

So......how is Fastpass+ going to effect someone who is local, who has no AP, and who buys a one day/one park pass for close to $90.

 

[BernardandBianca]

That doesn't seem to be the direction that WDW is heading. They are not looking to run the place like a small business. I think it's clear from the list Parentsof4 posted that the benefits to AP holders is shrinking and the focus is moving away from catering to those guests. I'm not saying I like it, but it appears to be the trend. With WDW there is a constant demand from tourists. I don't have any hard stats, but I assume the vast majority of guests who visit WDW are not local AP holders. Take the extreme example of an AP holder who shows up at MK at 6pm after having dinner at the local Chilis. They park for free, ride rides, enjoy the parade and fireworks and leave at 10Pm. Since they used their AP they spend nothing that night but they used park amenities and filled capacity that the company sees as better being filled by tourists. The name of the game at WDW seems to be filling hotel rooms and maximizing the cash spent by each guest. They are not going to stop selling local APs, but I am pretty sure that TDO would not be upset to lose some of these guests since they know that they can replace them with a tourist staying on property enjoying the DDP and using the ME bus service so no practical means to get off property to eat or shop. If this was not the case they would at least attempt to be competitive with other local parks and they would not be cutting out merchandise discounts and jacking up AP prices.

The one item that seems to be missing from your analysis above is that this is not a zero sum game. Saying that TDO would not be upset to lose some of these guests and replace them with a tourist staying on property presupposes that eliminating one means you replace with the other. I don't believe this is true - WDW doesn't appear to be turning away on-property guests so that APs can come. I haven't heard of too many days where all the rooms on property are taken, and if they are, then how does removing an AP who is not staying in a room open up space for an on-property guest? (And if the AP is staying in a room, then that translates into an on-property guest.) The AP going to the park is going to be in addition to every other guest, not usually instead of such guest. See the thread on how often WDW goes to phase 4 in closing gates - I believe we see a blue moon more frequently.

 

[Disneyhead'71]

The one item that seems to be missing from your analysis above is that this is not a zero sum game. Saying that TDO would not be upset to lose some of these guests and replace them with a tourist staying on property presupposes that eliminating one means you replace with the other. I don't believe this is true - WDW doesn't appear to be turning away on-property guests so that APs can come. I haven't heard of too many days where all the rooms on property are taken, and if they are, then how does removing an AP who is not staying in a room open up space for an on-property guest? (And if the AP is staying in a room, then that translates into an on-property guest.) The AP going to the park is going to be in addition to every other guest, not usually instead of such guest. See the thread on how often WDW goes to phase 4 in closing gates - I believe we see a blue moon more frequently.

Then why on earth would they dis the APers while courting the On-site Package People? We are not idiots. We see what's going on.

 

[GoofGoof]

The one item that seems to be missing from your analysis above is that this is not a zero sum game. Saying that TDO would not be upset to lose some of these guests and replace them with a tourist staying on property presupposes that eliminating one means you replace with the other. I don't believe this is true - WDW doesn't appear to be turning away on-property guests so that APs can come. I haven't heard of too many days where all the rooms on property are taken, and if they are, then how does removing an AP who is not staying in a room open up space for an on-property guest? (And if the AP is staying in a room, then that translates into an on-property guest.) The AP going to the park is going to be in addition to every other guest, not usually instead of such guest. See the thread on how often WDW goes to phase 4 in closing gates - I believe we see a blue moon more frequently.

Other than extremely popular times (like this week) you are right, there is still room for more people in the parks and I'm not saying they don't want local AP holders to keep coming back. They just want their margins on these guests to be higher so they are attempting to get more upfront money from them. Although you could add more tourists in addition to keeping your AP holders there are variable costs associated with running the parks too. The fixed costs are sunk, but the variable costs go up or down based on the number of guests. Things like transportation, bathroom cleaners and CMs used for crowd control or other non-ride specific purposes are just a few examples. The long running assumption has always been that attendance is the name of the game. Draw as many guests as possible. This seems to be changing. The end game is now more than ever focused on extracting the most from each guest. Some folks around here who are smarter than me (or at least mor knowledgeable in TDOs corporate practices) seem to believe that they are turning their backs on AP holders, especially locals who do not stay on property. I'm not saying its a great idea. It's a little short sighted considering that right after 9/11 when many were afraid to fly the locals kept the parks open and in business.

 

[GoofGoof]

P.S. Sorry this is essentially a repost but I thought it answered your question

I liked it again anyway. I think your just trying to collect stats now

 

[asianway]

3 is just a guess. Your guess is as good as mine.

Yes, the 78% includes DLR. In terms of onsite rooms, DLR is tiny compared to WDW, maybe 10%? Therefore, the 78% number should be overwhelmingly driven by WDW.

AOA is an interesting beast. IMHO it's better than the previous Value Resorts. A new resort should have driven occupancy rates up, with everyone wanting to stay at the new resort despite its higher prices. TDO quickly started offering AOA discounts, which is a very bad sign. It's telling that during the 2012 Earnings conference call, Jay Rasulo blamed AOA for the decline in occupancy rates.

Introducing all of that inventory at a time of sagging attendance was sure to make a big dent. Bigger than had it happened during an upturn.

 

[nytimez]

Then why on earth would they dis the APers while courting the On-site Package People? We are not idiots. We see what's going on.

I suspect they know there's a breaking point for most APers, since APers tend to be a little more savvy than the average guest. But I also suspect they're interested in testing that breaking point.

 

[Disneyhead'71]

ParentsOf4: Me thinks Disney is wrong on their assumption about Day Guests. I USED to be a pass holder, and I would NEVER pay rack rate for admission media. And to say that I have done my homework would be an understatement. But I can get 4 day comp passes a year through work (I only utilized 2 this year because I simply don't care to go down there,12 miles). But I predict I will use NONE after Fastpass+ kicks off.

How bad must it be down there when they can't even get someone screen named Disneyhead into the parks for free?

 

[Mickey2minnie1]

When do you foresee this kicking in for everyone? This summer?

 

[GoofGoof]

TDO's problem was not in introducing the inventory (i.e. AOA rooms) but instead in not giving customers sufficient reasons to purchase that inventory. My guess, just a guess, is:

• Occupancy rates among the Value Resorts were the highest so they thought they needed to do something to address demand. Instead, perhaps AOA simply cannibalized occupancy at other resorts.
• $340/night for a 2-room suite at a "Value" Resort is a lot of money, especially since comparable offsite suites are available for under $100/night and 2-bedroom condos for even less. Seriously, if you want to stay onsite, just get 2 connecting rooms at a Moderate Resort for about the same price. (Yes, I've been inside the suites and know they have a bit more than just 2 connecting rooms. I'd rather stay in a Moderate Resort and not cook my meals.)
• TDO believes they will need the additional rooms once NextGen kicks in.

Mix-and-match whatever you feel is appropriate or come up with your own guesses. But somebody, somewhere, said "Let's build it". Even with sagging attendance, they didn't do so because they thought it was going to lose money.

Off topic, but if you rent DVC points from an owner you can get a 2 bedroom villa at a deluxe resort for about the same cost or a little more than the AOA family suite and The villa is practically twice the size. AOA suite = 585 square feet (sleeps 6) vs BLT 2 bedroom suite 1,152 square feet (sleeps 9) - plus you get a full kitchen and an extra full bathroom (3 total). A standard view 2 bedroom BLT suite for the first week in December is 273 points. The AOA family suite at the same time is $304 per night so $2,394 for the week after tax. If you rent the points for $9 it costs about the same. Sorry for the topic drift, but since I was actually considering this for next fall your point on AOA being kinda expensive for a value resort hit home.

 

[CountryBearFan]

Anamatronics are all garner holt
Test track 2 is all gm
FLE is all Burbank
Star tours 2 is all Lucas

Tdo has nothing to do with anything in its parks.

We get it, wdwmagic. We get it.

Exactly. EVERYBODY needs to read this post.

TDO is NOT responsible for everything at WDW, so that term needs to stop being used this instant!

 

[disney fan 13]

Exactly. EVERYBODY needs to read this post.

TDO is NOT responsible for everything at WDW, so that term needs to stop being used this instant!

T-D-O

 

[nytimez]

TDO!

 

[CountryBearFan]

Us "old timers" just wish they would do it while ALSO caring about the guest experience, like they did until the early to mid 90s. But, they do not.

No. They DO!

 

[Disneyhead'71]

Then why is Burbank "Cleaning House" in the hallowed halls of TDO?

 

[SirLink]

Generally on these boards, "TDO" (Team Disney Orlando) is the acronym used to cover those involved in the WDW decision-making process. Large corporations such as TWDC (The Walt Disney Company) are extremely complex with convoluted organizational structures. When posting, it gets rather tedious to try to specify exactly who might be responsible for what decision that impacts WDW. Hence, the frequent use of the acronym "TDO". Sorry if it bothers you.

In reality, TDO is a building, not a specific group of people.

Really cause they seem to be more like a collection of Mining Robots - I don't have to repost "The TD-O" song do I?

 

[Funmeister]

I'm not sure who the "due respect" was directed at, but hopefully not me. If so, you misinterpreted my post. I was merely citing WDW's philosophy, and not stating global rules. Sorry if you took it wrong.

But it is indeed the goal if every business to "separate people from their money". That's just a terrible way to put it.

Nah...don't read into it. Just saying my preference of how I would prefer to "generate" revenue. Nothing against you...gave my opinion without you asking for it. No worries.

 

[Disneyhead'71]

Some people, those that have honor, want to earn my money. Others just want to manipulate me into giving it to them.

One of this paths leaves me feeling satisfied and happy to throw more money at them. The other path just leaves me feeling "dirty" and manipulated.

 

[lazyboy97o]

Exactly. EVERYBODY needs to read this post.

TDO is NOT responsible for everything at WDW, so that term needs to stop being used this instant!

You need to read more closely and understand context. He was trying to credit Team Disney Orlando, not buy into your nonsense.