Not everyone is hurting ...

[Orange Bird]

Universal had LESS crowds and still made money. Their reduced staff wasn't overworked and stressed out trying to handle too many folks. Disney may be a deal these days, but the quality of the experience is definitely lower than in the past due to staff reductions and such. It is always crowded, which by itself reduces guest experience. They aren't reinvesting much money in soaking up those constant crowds, either. They are lowering the long term quality of the product to fill hotel rooms now because they overbuilt in the boom times. This can be fixed, but why is this so hard to see as a current problem? And why is 74 a bad person for pointing this out? I honestly think they are in real danger of making the Disney legacy end with the current adult generations because they are not creating that same Disney experience we cherish for this generation. We may give them a pass, but we are already sold on Disney. What if our kids aren't? I'm sorry, but I love Disney and I am still definitely in agreement with 74. I am not a doom and gloomer. I'm just not willing to be blinded by my love of disney.

Exactly right. Agree 100%

 

[Orange Bird]

Here is what I said a few weeks ago before Disney released its Third Quarter report. It is still true. Universal is doing a better job than Disney. As a life-long Disney fan, I hate to say that, but it is true.

WD Parks & Resorts operating income was down 50% in the second quarter of 2009 (ending March 28). If attendance is the same then the cause of the huge drop in profit is a result of decreased guest spending. Of course part of this is just guests spending less on property, but a lot of it is a result of these discounts. How much are these discounts really helping the bottom line? Sure the parks are full, but they are making 50% less profit.

How smart is this?

Especially when you factor in greater wear and tear on the parks, and greater wear and tear on the cast members. What's wrong with the parks being a little less full, if it gives management an opportunity to take care of a little maintenance. Plus, less crowded parks means a better experience for the guests who are there, which could translate to better word of mouth and greater customer loyalty.

Of course the big issue, which the article brings up: is Disney training guests to expect discounts in the future? This could hurt them in the long run if people wait to go only when there are discounts offered. Knott's Berry Farm, near Disneyland, got themselves into that trap years ago and can't get out.

And part of the justification for all those lay-offs was lower attendance. How do they justify lay-offs when they are serving just as many guests?

Attendance does not equal profit. Attendance plus guest spending equals profit. My opinion: WDP&R went too far with the discounts and the layoffs. Moderation on both would have resulted in a better experience for guests and cast members, and greater customer loyalty and greater cast member loyalty, and a more secure future.

 

[CBOMB]

Universal had LESS crowds and still made money. Their reduced staff wasn't overworked and stressed out trying to handle too many folks. Disney may be a deal these days, but the quality of the experience is definitely lower than in the past due to staff reductions and such. It is always crowded, which by itself reduces guest experience. They aren't reinvesting much money in soaking up those constant crowds, either. They are lowering the long term quality of the product to fill hotel rooms now because they overbuilt in the boom times. This can be fixed, but why is this so hard to see as a current problem? And why is 74 a bad person for pointing this out? I honestly think they are in real danger of making the Disney legacy end with the current adult generations because they are not creating that same Disney experience we cherish for this generation. We may give them a pass, but we are already sold on Disney. What if our kids aren't? I'm sorry, but I love Disney and I am still definitely in agreement with 74. I am not a doom and gloomer. I'm just not willing to be blinded by my love of disney.

Excellent post, very thoughtful.

Rather than turning this thread into comments about '74, shouldn't the main focus be on how Uni took a hit in attendance, while gaining in profit? To me that's amazing. WDW's attendance stayed about the same or is up by a small margin, and their profits are down.

What is Uni doing that WDW is missing? Surely one of you learned folks out there could explain this unusual occurence. How, in this depressed economy, did Uni do so well, when others in this field appear to be struggling?

 

[unkadug]

Excellent post, very thoughtful.

Rather than turning this thread into comments about '74, shouldn't the main focus be on how Uni took a hit in attendance, while gaining in profit? To me that's amazing. WDW's attendance stayed about the same or is up by a small margin, and their profits are down.

What is Uni doing that WDW is missing? Surely one of you learned folks out there could explain this unusual occurence. How, in this depressed economy, did Uni do so well, when others in this field appear to be struggling?

I guess you too missed one point of the article. Profits are DOWN.

For the first half of the year, Universal said attendance fell 16 percent. Total profit declined 54 percent to $10.6 million.

 

[Orange Bird]

I guess you too missed one point of the article. Profits are DOWN.

For the first half of the year profits were down at Universal just as they were for Disney during this time period.

However for the second quarter of the year (roughly March 29 - June 30, 2009) Universal's profits are up and Disney's are down. Both Disney and Universal made cuts and offered discounts to deal with slipping profits during the first quarter of the year.

Universal did a much better job with their strategic cuts and discounts than Disney did.

Here is what the artical said about the period of March 29 - June 30, 2009 regarding Universal.

Operating profit, which strips out expenses such as interest payments on debt, rose 15 percent to $51.4 million.

 

[Orange Bird]

What is Uni doing that WDW is missing? Surely one of you learned folks out there could explain this unusual occurence. How, in this depressed economy, did Uni do so well, when others in this field appear to be struggling?

Universal discounts were not as deep. Disney gave away the farm. Universal's discounts were just right. They found the sweet spot. They were able to discount enough to attract some people without giving too much away.

Also their cuts were smarter. Universal cut marketing costs--a big cost that does not affect the guest experience. Disney did not cut marketing.

Universal's layoffs were more limited to high level people and office workers who had minimal effect on the park's opperation. Disney laid off very few high level folks but laid off Guest Service Managers who have direct effect on the guest experience every day. But GMS don't really make that much money, so laying off them did not really help the bottom line that much.

 

[JT3000]

Seems to me that Universal can only GO UP... I mean, can they get any lower in attendance???

Considering they're two of the most attended parks in the country, what do you think?

 

[yeti]

It's an economic downturn. Everyone is hurting.

BTW what's wrong with the DDP?

 

[unkadug]

For the first half of the year profits were down at Universal just as they were for Disney during this time period.

However for the second quarter of the year (roughly March 29 - June 30, 2009) Universal's profits are up and Disney's are down. Both Disney and Universal made cuts and offered discounts to deal with slipping profits during the first quarter of the year.

Universal did a much better job with their strategic cuts and discounts than Disney did.

Here is what the artical said about the period of March 29 - June 30, 2009 regarding Universal.

You still didn't finish the article.

Operating profit, which strips out expenses such as interest payments on debt, rose 15 percent to $51.4 million.

OP rose to 51.4 million. This was a rise in profit from the past quarter. (hence the headline.)

The more telling story is toward the bottom of the article.

For the first half of the year, Universal said attendance fell 16 percent. Total profit declined 54 percent to $10.6 million.

Total profit declined 54 percent to $10.6 million for the first half of the year.
So...no matter how far up this quarter was from the past quarter, they are still down.

 

[Orange Bird]

You still didn't finish the article.

OP rose to 51.4 million. This was a rise in profit from the past quarter. (hence the headline.)

The more telling story is toward the bottom of the article.

Total profit declined 54 percent to $10.6 million for the first half of the year.
So...no matter how far up this quarter was from the past quarter, they are still down.

Of course I finshed the article. I restated that profits were down for the six moth period in the very post which you just quoted. What is most telling is that Universal's profits are up during a quarter in which Disney's profits are down. This is what we are discussing.

I'm sorry but telling me that I didn't finish the article, which I obviously did, and telling CBOMB that he/she missed the point of the article, when clearly he/she did not, is rude. The point of this thread, which we are discussing, is the FACT that Universal was up in the past three months during which Disney was down. We all understand that overall Universal, like Disney, has been down for the past six months. That is a given. The similarity between Disney and Universal's profits are not interesting. The discrepancy over the past three months is very interesting.

 

[agent86]

Of course I finshed the article. I restated that profits were down for the six moth period in the very post which you just quoted. What is most telling is that Universal's profits are up during a quarter in which Disney's profits are down. This is what we are discussing.

I'm sorry but telling me that I didn't finish the article, which I obviously did, and telling CBOMB that he/she missed the point of the article, when clearly he/she did not, is rude. The point of this thread, which we are discussing, is the FACT that Universal was up in the past three months during which Disney was down. We all understand that overall Universal, like Disney, has been down for the past six months. That is a given. The similarity between Disney and Universal's profits are not interesting. The discrepancy over the past three months is very interesting.

Excellent points! I (and I'm sure most of the people reading this thread) understand what you're talking about. Unkadug, and a few others, are just trying to do some misdirection to distract from the point that Universal simply accomplished something that Disney wasn't able to accomplish.

 

[agent86]

I've been going fairly regularly since 2001 [13 trips so far] and have not seen any reductions in the Disney experience in that 8 year stretch.

I'm not blinded by love of Disney nor am I snorting pixie dust.

If you haven't noticed ANY reductions in the Disney experience over the past 8 years, then I would say that yes, you are definitely "blinded" by a Disney bias.

 

[donsullivan]

There's a major differences in the economic models between Disney and Universal that are getting lost in this discussion. Universal doesn't operate any of the hotels on the property the way Disney does. They are all in arrangements sort of like Swan and Dolphin are at WDW where Loew's operates the hotels. If there is a significant drop in occupancy rates in the resort hotels it will not show up in Universal earnings.

If Loew's started incentives to keep the hotels filled, this would not have an impact on Universal's numbers at all. Disney however, owns most of the hotels, and as a result has to take the loss if they have a drop in occupancy or revenue-per-guest-night numbers.

In general, Universal has suffered with an identity crisis in their ownership since the Universal/NBC merger. GE never had any desire to own the theme parks and said so rather publicly. As a result they didn't make any investments at all while they were looking to see if they could find a buyer. That lack of investment for many, many years has resulted in an environment that has gotten very stale and with the exception of a blip in attendance numbers the year The Mummy opened has seen a continuing decline in attendance for many years now.

They seem to be coming out of that viewpoint with investments like RRR coaster and Harry Potter but only the actual opening of those attractions (not speculation) will show whether they create a one-time blip in attendance or those additions reverse the longer term trend and they see attendance numbers starting to climb again.

 

[Monty]

If you haven't noticed ANY reductions in the Disney experience over the past 8 years, then I would say that yes, you are definitely "blinded" by a Disney bias.

And sadly even you are entitled to your opinion. :wave:

EDIT: I note you conveniently edited out my statement "Others may have, but I can only speak for myself." to better suit your own bias.

 

[CBOMB]

Universal discounts were not as deep. Disney gave away the farm. Universal's discounts were just right. They found the sweet spot. They were able to discount enough to attract some people without giving too much away.

Also their cuts were smarter. Universal cut marketing costs--a big cost that does not affect the guest experience. Disney did not cut marketing.

Universal's layoffs were more limited to high level people and office workers who had minimal effect on the park's opperation. Disney laid off very few high level folks but laid off Guest Service Managers who have direct effect on the guest experience every day. But GMS don't really make that much money, so laying off them did not really help the bottom line that much.

Evidently they did something right to turn it around so quickly. Most companys see it as a positive right now to say profits are down, but not as much as they expected them to be.

I know the article said the reduced spending in marketing accounted for half of the savings at Universal. If anything WDW seemed to increase their marketing campaign. That could have been a wise strategy to draw folks in, but once they were there it seems the guest failed to spend their money.

The question for me then becomes, what did Uni do differently to get their guest to spend money?

Edit: Does anyone know what discounts, and in what areas, Universal offered this last quarter?

 

[Pumbas Nakasak]

Pretty mute point since half the gob es posting on here claim never to enter Universal anyway, such is their inane support of a corporate brand.

 

[unkadug]

Excellent points! I (and I'm sure most of the people reading this thread) understand what you're talking about. Unkadug, and a few others, are just trying to do some misdirection to distract from the point that Universal simply accomplished something that Disney wasn't able to accomplish.

No distraction, just making sure that people realize that this is just a PR spin on the numbers. Not trying to call out any one individual, just making sure that people understand the facts and not just reading the headlines.

 

[WDW1974]

Quote:
<TABLE cellSpacing=0 cellPadding=6 width="100%" border=0><TBODY><TR><TD class=alt2 style="BORDER-RIGHT: 1px inset; BORDER-TOP: 1px inset; BORDER-LEFT: 1px inset; BORDER-BOTTOM: 1px inset">But the customers who did come spent more money on average, as per-capita spending rose 3 percent during the quarter. Universal credited "selective price changes" designed to maximize money spent on tickets, which more than offset decreased spending on items such as food and merchandise. </TD></TR></TBODY></TABLE>

That's *astounding*. Every other theme park operator reported drops in per cap spending in the most recent quarter:

WDW: per-guest spending down 4%.
Disneyland: 8% drop in per-guest spending (same article).
Cedar Fair: Per-geust spending down from $40.45 to $39.50, a 2.3% drop.
Six Flags: down 4% to $36.70.


I can't find the numbers for InBev/Busch parks (Busch Gardens/Sea World), but I'd be surprised if they were much different.

Hats off to Universal---they've made the best of a bad situation.

At least someone noticed that ...

Of course I'm still trying to figure out why 850 posts on Harry Potter belongs on the WDW News and Rumor Board (the one people actually read and respond to), but a thread talking about Uni's third quarter results vs. Disney somehow belongs here where it will die quickly.

Oh, and great points Orange Bird ...

 

[WDW1974]

Exactly... As long as these parks are LOSING money.... 74 wants to make is sound like all doom and gloom for Disney cause they didn't make 1 billion bucks this quarter but all is rosey at Universal cause they made a profit... Well, Disney MADE a profit too.. Geez...

No. That's not my point at all.

As a matter of fact, I hailed Disney for its results and pointed out that maybe all the layoffs and cost cutting weren't needed.

I have a big issue with Wall Street viewing only INCREASES in profits (and usually by double digits) as success.

That's just not realistic. Not in the era of the "Great Recession".

But Disney's focus on filling rooms at any cost and keeping attendance from dropping (scares them to death because they equate it with being the best) versus profits isn't very smart in my view.

I'd rather see attendance plummet if it meant better profits/revenue/guest spend.

 

[WDW1974]

They're making a profit in a severe economic downturn. :shrug:

No one is denying that. You're just stating a fact like the world is fl... round.

I've been going fairly regularly since 2001 [13 trips so far] and have not seen any reductions in the Disney experience in that 8 year stretch. Others may have, but I can only speak for myself. The Disney trip I had this past February was as enjoyable as my first.

I'm not blinded by love of Disney nor am I snorting pixie dust. I do not see any significant problem in the foreseeable future for Disney with my generatioon, my son's or eventually his children's.

I've been going regularly since 1974. Been an APer since 1982. I think I hit 13 trips by age 12.

You started going in 2001 ... when arguably Disney was at its lowest point in Orlando ... or close ... in many ways 2004-2006 was a period when overall things actually improved (except for dining). But my perspective goes back a whole lot longer.

And while I respect your opinion, and understand it from your perspective, I think it's awful presumptuous to think your son or grandchildren will have the same quality or better experience from Disney.

Perspective and experience mean a lot.
Anyway, that's it. Have a great trip!