News Park attendance showing significant softness heading into the Fall 2018

[Lensman]

If the onsite resorts are "full" then it's probably not the new parking fee that explains the slowdown.

I'm hesitant to create a narrative as I think it feeds people's cognitive biases and leads to irrational behavior, but here goes. Caveat: The following narrative is meant to illustrate that many things could underlie the slowdown, not to convince you that the following is the main reason for the slowdown.

So August is over and so is the height of the European vacation season. So I look to other areas of the world whose tourists flock to WDW and who stay offsite. Thus the Eye of Sauron is drawn to Brazil, among other South American countries. The US dollar is up against most world currencies and the exchange rate to the Brazillian real is now 4 real to the dollar compared to the 3 real to the dollar from a year ago. So a WDW vacation is looking 25% more expensive this year compared to a year ago. I don't know how much ahead of time Brazillians book their WDW vacations, but you can take this effect and multiply it across any number of currencies - though Brazil represents 50% of the GDP of South America. The Argentinian peso is down 50% against the dollar.

Of course, Brazilians probably only represent about 1.2% of the visitors to WDW.

I'm sure we could come up with plenty of additional narratives.

 

[CaptainAmerica]

If the onsite resorts are "full" then it's probably not the new parking fee that explains the slowdown.

Not necessarily. Like I said, I've defended parking fees in the past but allow me to play devil's advocate.

No Parking Fee:
Joe books a room at Animal Kingdom Lodge.
Kathy wants to book Animal Kingdom Lodge but it's all full, so she stays offsite.
Room occupancy: 1/1
Theme park attendance: 2

Parking Fee:
Joe refuses to pay a parking fee and he's not interested in staying off site so he cancels his trip.
Kathy books Animal Kingdom Lodge, which is now available.
Room occupancy: 1/1
Theme park attendance: 1

If there is excess on-site room demand, it's 100% feasible that net occupancy holds steady simultaneous with a decrease in park attendance due to on-site folks canceling their trips only to be back-filled by folks who would have otherwise been left off-site due to capacity constraints.

If you try to put two cups of water into a one cup container, it's going to overflow and you'll be left with just one cup of water. If you try to put 1.5 cups of water into a one cup container, it's still going to overflow and you're still going to be left with just one cup of water.

 

[DisneyFreak]

The fluctuations in attendance are (primarily) not driven by resort guests, since the resort guests are always there. The fluctuations in attendance are from local guests and off-property guests.

It's a lot easier for local guests (Florida Residents like myself) to say "no" to Disney and not go and spend money as Disney is always there for us whether we live in Orlando or a 3 hours drive away. Off property can also easier say no as Disney may not have been their primary reason for traveling to Florida. As an offsite guest they may not feel as obligated to make Disney part of their vacation.

 

[ABQ]

What we need to know is, has attendance at Universal softened. If yes, then it's some sort of thing where people just aren't going on vacation in general. If no, then it's a backlash against Disney for a number of possible reasons. Food and Wine price hikes with smaller portions, same old attractions less just the two TSL rides which neither would make me go out of my way. Are we into a black out of resident passes? I have no clue.

 

[Lensman]

Not necessarily. Like I said, I've defended parking fees in the past but allow me to play devil's advocate.

No Parking Fee:
Joe books a room at Animal Kingdom Lodge.
Kathy wants to book Animal Kingdom Lodge but it's all full, so she stays offsite.
Room occupancy: 1/1
Theme park attendance: 2

Parking Fee:
Joe refuses to pay a parking fee and he's not interested in staying off site so he cancels his trip.
Kathy books Animal Kingdom Lodge, which is now available.
Room occupancy: 1/1
Theme park attendance: 1

If there is excess on-site room demand, it's 100% feasible that net occupancy holds steady simultaneous with a decrease in park attendance due to on-site folks canceling their trips only to be back-filled by folks who would have otherwise been left off-site due to capacity constraints.

If you try to put two cups of water into a one cup container, it's going to overflow and you'll be left with just one cup of water. If you try to put 1.5 cups of water into a one cup container, it's still going to overflow and you're still going to be left with just one cup of water.

So you're saying that you think this fall's softness in attendance at WDW parks is due to people who were booking after March 21st (for whom the parking fee took effect) who, rather than switching to book an offsite hotel, choose to cancel their WDW vacation entirely, while being offset by someone who would have stayed offsite, but now is staying onsite, who then is not replaced by someone else staying offsite?

@CaptainAmerica, I've seen your very reasonable posts. This isn't you! But I do admit that it is one of myriad possibilities.

 

[EricPZ]

Hope it stays 'slow' until after our next visit in November.

 

[geekza]

Hope it stays 'slow' until after our next visit in November.

You and me both. I say we start a rumor that the flesh-eating bacteria in the water has become sentient, however scientists expect to be able to remedy the situation by December.

 

[FigmentFan82]

You and me both. I say we start a rumor that the flesh-eating bacteria in the water has become sentient, however scientists expect to be able to remedy the situation by December.

Mandingo I grock your mouth music

 

[MrHappy]

Remember, Disney's plan is for "quality" guests not "quantity" of guests.
(and by quality, I mean those with the most cash)

 

[monothingie]

What we need to know is, has attendance at Universal softened. If yes, then it's some sort of thing where people just aren't going on vacation in general. If no, then it's a backlash against Disney for a number of possible reasons. Food and Wine price hikes with smaller portions, same old attractions less just the two TSL rides which neither would make me go out of my way. Are we into a black out of resident passes? I have no clue.

Not that it's directly correlated but there was an article in the Sentinal in the Spring which went over a drop hotel occupancy rates in central Florida for April 2018. Again the data is almost 6 months old but.

http://www.orlandosentinel.com/business/tourism/os-bz-hotel-occupancy-dip-20180522-story.html

 

[SteamboatJoe]

Any family on a tight budget trying to plan a Disney trip would be smart to wait until after SWL opens. I am sure they took that into account. That is why we got, from what I can tell from afar, an underwhelming, TSL and a rushed and awkwardly rolled out Pixar Pier at DL. They needed something to pull people in this summer.

Neither; however, seem to have really resonated at any kind of significant level with the average consumer. The marketing campaigns struck me as small and late. Hopefully they learn that just lazily slapping popular IPs on some generic or already existing attractions isn't going to cut it when they are charging as much as they are. Higher prices will eventually lead to higher expectations. We sometimes loathe how non fan consumers keep enabling Disney's poor parks decisions but that won't last forever. Bad vibes can spread like wild fire in the social media age.

I bet they'd be less concerned about all of this if they thought the Star Wars franchise was in a good place. But I think discontent and fatigue with it is real and could affect SWL's performance.

 

[monothingie]

The promotions I'm seeing right now are 20% or 25% depending on the season, then a 30% winter offer for passholders. It wasn't that long ago when we were seeing discounts regularly in the 30% to 40% range, and back then at lower rack rates to begin with. "Struggling" to fill rooms at less-than-normal discounts isn't that crazy.

Also, WDW reported occupancy of 88% (I believe) in their last earnings call.

It was 86% down from 88% in 2017 and reflected all domestic resorts. (Pandora probably figured into this).

 

[drod1985]

Are we into a black out of resident passes? I have no clue.

Resident APs are free and clear till December 20.

 

[SteamboatJoe]

Another complication is airfare. I remember reading that increases are or have already happened due to higher fuel prices. Sure there are ways you can fly cheaper but some of those cost saving measures simply are not viable options for many.

 

[geekza]

Another complication is airfare. I remember reading that increases are or have already happened due to higher fuel prices. Sure there are ways you can fly cheaper but some of those cost saving measures simply are not viable options for many.

We thought about flying down in November, but the only local options are the super-cheap twice-a-week flights on airlines with planes that may or may not make it into the air. We came to the conclusion that the 12-hour drive would be cheaper and less-stressful than hoping that our flight doesn't get canceled, causing us to miss our reservation. Plus, air travel really sucks now. I plan on driving anywhere flying isn't a necessity.

 

[SteamboatJoe]

We thought about flying down in November, but the only local options are the super-cheap twice-a-week flights on airlines with planes that may or may not make it into the air. We came to the conclusion that the 12-hour drive would be cheaper and less-stressful than hoping that our flight doesn't get canceled, causing us to miss our reservation. Plus, air travel really sucks now. I plan on driving anywhere flying isn't a necessity.

Airfare was a significant portion of my budget the last couple of times the wife and I went and we even opted for the no refund tickets from Southwest. We don't fly out of a major airport so our carrier options are limited if we want a non-stop to Orlando. Our drive would be 15 hours with no stops or delays which is too much for us without an overnight break.

We did DL in June. Flying to with a connecor (our only option) went as planned. Flying home with a connector was a nightmare due to a storm in St. Louis cancelling our flight. We eventually got home, 6 hours later than planned at 2:30 in the morning.

 

[marni1971]

I can concur with the OP.

 

[CJR]

allow me to play devil's advocate.

That's actually a good one!

I'll toss another out there. Hotels keep getting more and more expensive, people have already been to the parks multiple times and don't feel the need to do everything anymore. With the amount of money it's taking to go on a trip, people are spending more time at the hotels and less time at the parks in an effort to get more of their money's worth from the hotel. After all, if you're paying for the Disney hotel, you should enjoy the hotel, right? My (extended) family has been doing this more and more. They went from buying seven day park hopper tickets to three days, still staying at the resort seven days.

 

[CLEtoWDW]

Is this such a bad thing? There were times in the last 5 years when Disney was “too crowded.” A 10-15% rollback in attendance wouldn’t necessarily be a bad thing so long as those attending the parks are the right people that spend money and in the parks. I’d argue that Disney could see flat to slightly up renevues if they ensure the right guests are attending the parks.

 

[TheGuyThatMakesSwords]

So gotta ask.... REGARDLESS of attendance NUMBERS (gross number of guests) - how is the NET PROFIT looking?
EVERYONE complains about crowds, then has a fit when prices rise, to reduce CROWDS.

GROSS attendance is garbage. "It's the INCOME, stupid". You know, that thing every OTHER Corporation values. The thing called the "bottom line".

So - two extreme choices:

1) NO Gate Fee.... you can guess what will happen.
2) Gate fee of $300 per person per day.... you can guess what will happen.

Between these two extremes? WDW has many choices. I don't work for them.... gonna let 'em balance a high demand resource in order to maximize profit - not the same as letting the entire planet in.

All personal opinion - I'm not necessarily right, no one else is necessarily wrong.