Parks Noticeably slower this Father's Day Weekend

[matt9112]

It is the economy and the olympics this summer that is killing attendance. Been here since Friday and not seeing any tour groups or aouth American groups.

brazilian economy is on fire. all those tour groups can no longer afford it.

 

[MySmallWorldof4]

Oh ya it is any group, but I was just commenting on the groups from South America. I've experienced cheer groups etc. But still I think the Brazilian groups tend to be more rude if you know what I mean.

I know what you mean. Although when we were in MK last July, there was an obnoxious Argentinian teenage group. We were in the queue for BTMMR and they were singing at the top of their lungs some song in Spanish. It was in the indoor area so it was really even more irritating than it would have been if it was outdoors. People around us were grumbling and I had the urge to start singing "God Bless America".

 

[MySmallWorldof4]

It is the economy and the olympics this summer that is killing attendance. Been here since Friday and not seeing any tour groups or aouth American groups.

Hoping that holds for next week.

 

[gmajew]

Hoping that holds for next week.

It appears so based on hotel and staff comments.

 

[SorcererMC]

So if there is a decrease in intl tourists - due to Brazilian economy, and I suspect fewer UK visitors due to exchange rate at parity - how would a 2-3% drop in summer attendance affect operations? What about the upcoming July 4th weekend - is that a bellwether?

 

[Brad Bishop]

So if there is a decrease in intl tourists - due to Brazilian economy, and I suspect fewer UK visitors due to exchange rate at parity - how would a 2-3% drop in summer attendance affect operations? What about the upcoming July 4th weekend - is that a bellwether?

Cuts in staff and service and price increases to make up for the shortfall, perhaps?

 

[SorcererMC]

Cuts in staff and service and price increases to make up for the shortfall, perhaps?

Do you (or anyone else) think that the market will continue to bear price increases after what was already done this spring? That is, will people think 'it's Disney, so I'll pay it'. Or just more 'optional' upcharges?

 

[Much-Pixie-Dust]

I know what you mean. Although when we were in MK last July, there was an obnoxious Argentinian teenage group. We were in the queue for BTMMR and they were singing at the top of their lungs some song in Spanish. It was in the indoor area so it was really even more irritating than it would have been if it was outdoors. People around us were grumbling and I had the urge to start singing "God Bless America".

While we have seen many nicely behaving groups, the worst behaved group was an Argentinian group with at least 150 in it at Epcot the week after Thanksgiving 2012. You could hear them across the lagoon chanting. They would randomly stop walking and start backing up to do a dance/walk thing. But the worst was when they chanted so loudly in front the America amphitheater during the candlelight processional. It lasted about 15-20 minutes and it was so loud it drowned out the singers and narrator (Andy Garcia). It was awful and disrespectful to both the performers as well as to the content of the processional. People complained to CMs but their standard response was "we aren't allowed to tell them to stop". It was a group of teenage girls with only one "adult" and he was the very young flag holder. I wanted so bad to grab that flag and break its stick.

 

[Much-Pixie-Dust]

So if there is a decrease in intl tourists - due to Brazilian economy, and I suspect fewer UK visitors due to exchange rate at parity - how would a 2-3% drop in summer attendance affect operations? What about the upcoming July 4th weekend - is that a bellwether?

We encountered multiple UK families this trip. Noticed no change in their numbers from past trips.

 

[Brad Bishop]

Do you (or anyone else) think that the market will continue to bear price increases after what was already done this spring? That is, will people think 'it's Disney, so I'll pay it'. Or just more 'optional' upcharges?

I actually think that attendance is a trailing indicator. They cuts/price increases now will more than likely be reflected in attendance a few years out. So, for now, you have families that have been planning this for ages, are really looking forward to it and, only after, will decide, "Yeah, that was awesome and totally worth it!" or "No... our vacation money is better spent elsewhere next time." For the immediate future I think they can continue to raise prices and continue cutting costs for the short term and see the swelling of the bottom line.

That being said, I think they're losing the idea of "guest experience" and having guests really pleased with being there and really excited about coming back.

 

[SorcererMC]

I actually think that attendance is a trailing indicator. They cuts/price increases now will more than likely be reflected in attendance a few years out. So, for now, you have families that have been planning this for ages, are really looking forward to it and, only after, will decide, "Yeah, that was awesome and totally worth it!" or "No... our vacation money is better spent elsewhere next time." For the immediate future I think they can continue to raise prices and continue cutting costs for the short term and see the swelling of the bottom line.

That being said, I think they're losing the idea of "guest experience" and having guests really pleased with being there and really excited about coming back.

Thanks for elaborating. I also think that families who have already planned will still go...no real short-term impact, but maybe incremental changes long-term.

 

[Dad 2 M & M]

Cuts in staff and service and price increases to make up for the shortfall, perhaps?

I could see cuts, but what prices would be increased? Resorts? Just checked and there is STILL AP discount availability for every price point next week!!

Do you (or anyone else) think that the market will continue to bear price increases after what was already done this spring? That is, will people think 'it's Disney, so I'll pay it'. Or just more 'optional' upcharges?

I doubt the market will bear and would expect many discount offers soon. I would love to see more optional up-charges.....the After Hours Event was worth the $75....

 

[EUmickey]

EURO>USD (and smaller extent GBP>USD) exchange rates aren't helping much either. Way less money to spend in America for those.

 

[EngineJoe]

While we have seen many nicely behaving groups, the worst behaved group was an Argentinian group with at least 150 in it at Epcot the week after Thanksgiving 2012. You could hear them across the lagoon chanting. They would randomly stop walking and start backing up to do a dance/walk thing. But the worst was when they chanted so loudly in front the America amphitheater during the candlelight processional. It lasted about 15-20 minutes and it was so loud it drowned out the singers and narrator (Andy Garcia). It was awful and disrespectful to both the performers as well as to the content of the processional. People complained to CMs but their standard response was "we aren't allowed to tell them to stop". It was a group of teenage girls with only one "adult" and he was the very young flag holder. I wanted so bad to grab that flag and break its stick.

Yup.
CMs are
Powerless against The Brazilian Tour Groups. What makes people think they will stop tourist from feeding the wildlife when they can't even control the Brazilians over the last decade.

 

[EngineJoe]

It's like the worst time to go to Disney world with al the closures. All the overseas people
Are saving their money for a trip in 2017 when Star Wars/avatar/toy storyline open. The overseas people can't go everyear so they have to choose more wisely when to go.

 

[SorcererMC]

I could see cuts, but what prices would be increased? Resorts? Just checked and there is STILL AP discount availability for every price point next week!!
I doubt the market will bear and would expect many discount offers soon. I would love to see more optional up-charges.....the After Hours Event was worth the $75....

So putting 'attendance as trailing indicator' together with most families planning their vacation 3-6+ months out...that shifts the potential impact to the fall Halloween and Christmas 'upcharge season', which they've already announced prices and ticketing for. I'm curious about what kinds of discounts may be seen then, too. I'm also thinking that DVC owners who schedule far in advance aren't likely to cancel, but I don't know what percentage of their consumer base are DVC owners. Or intl tourists for that matter, although I think I've seen that intl tourists account for up to 1/3 of Florida tourists, maybe 20-30%. My notes say that in 2013 Brazilian tourists were 20.2% of FL visitors at 770,000, surpassing UK visitors (no source attribution).

 

[Brad Bishop]

So putting 'attendance as trailing indicator' together with most families planning their vacation 3-6+ months out...that shifts the potential impact to the fall Halloween and Christmas 'upcharge season', which they've already announced prices and ticketing for. I'm curious about what kinds of discounts may be seen then, too. I'm also thinking that DVC owners who schedule far in advance aren't likely to cancel, but I don't know what percentage of their consumer base are DVC owners. Or intl tourists for that matter, although I think I've seen that intl tourists account for up to 1/3 of Florida tourists, maybe 20-30%. My notes say that in 2013 Brazilian tourists were 20.2% of FL visitors at 770,000, surpassing UK visitors (no source attribution).

I think you're looking at "attendance as a trailing indicator" wrong. People who have plans 6 months out are very likely going to keep those plans. The question is that what they're thinking and feeling when they return home from their vacation at WDW. It also depends on their vacation cycle. For example, some may typically go to WDW every year while others may have a 5 or 10 year cycle.

A really good time where they come back and are ecstatic about the time they have and the value that they received, may have them going right back next year or it may have them taking that 10-year cycle and reducing it to 5 years. This is good for WDW. If this is true across the board for most visitors then you have a kind of attendance compression that happens across the next few years. More people going more frequently.

An OK time and OK value may have them just staying put and continuing with their normal cycles. The ones going every year continue to go and the ones who do it every 5-10 years hit it at about the same rate.

The problem arises if people had a OK time (or, at least, not a great time) and the value just wasn't there. Most people think that if they're shelling out big bucks to Disney then they're going to have an awesome time. They expect that. With cuts, increased prices, and nickel and diming on things, they may very well leave slightly soured which would put their return trip, if they choose to go back, farther out and you end up with a long-term decompression of attendance.

The thing is that someone who started planning a WDW vacation today to go a few years out (with saving for it and all that) is still going to go but their attitude when they return is going to affect whether/how soon they will go back so I think if WDW's decisions in cuts in staff, quality, and price increases are going to have an effect they'll likely start around 2020 but even that will be offset by a bump in attendance for the 50th so it'll likely be after the 50th before there's an attendance drop. So think 5-10 years out instead of 6 months.

I think there's something else at play, too, which could hit them a generation out: Right now you have people in their 40s who grew up with WDW and have fond memories of how neat the MK was and remember Epcot being built and that being neat and DHS and DAK. Those people have kids who are, or will be soon, hitting adulthood and probably have similar fond memories. Somewhere in the mix, though, is a generation that has memories of stagnant parks, dated designs (Epcot FW being the most prominent), and stale attractions. I think that there's a generation in there where it's not a fond memory of WDW but more of a ho-hum memory. In addition to that, that same generation has fond memories of Harry Potter/Universal. To me that is something that could be an overall issue with a generation that doesn't feel the need or desire to head back (with their children) to WDW. It's not magical for everyone.

Of course, you could weigh all of this out with the increase in population and the limited availability of the parks. There's a larger pool of folks vacationing to draw from and they're only going to get so many people in the park on any given day AND it's pretty much a year-round vacation destination, now, which wasn't the case 30 years back, so it may just all balance out.

 

[SorcererMC]

I think you're looking at "attendance as a trailing indicator" wrong. People who have plans 6 months out are very likely going to keep those plans. The question is that what they're thinking and feeling when they return home from their vacation at WDW. It also depends on their vacation cycle. For example, some may typically go to WDW every year while others may have a 5 or 10 year cycle.

A really good time where they come back and are ecstatic about the time they have and the value that they received, may have them going right back next year or it may have them taking that 10-year cycle and reducing it to 5 years. This is good for WDW. If this is true across the board for most visitors then you have a kind of attendance compression that happens across the next few years. More people going more frequently.

An OK time and OK value may have them just staying put and continuing with their normal cycles. The ones going every year continue to go and the ones who do it every 5-10 years hit it at about the same rate.

The problem arises if people had a OK time (or, at least, not a great time) and the value just wasn't there. Most people think that if they're shelling out big bucks to Disney then they're going to have an awesome time. They expect that. With cuts, increased prices, and nickel and diming on things, they may very well leave slightly soured which would put their return trip, if they choose to go back, farther out and you end up with a long-term decompression of attendance.

The thing is that someone who started planning a WDW vacation today to go a few years out (with saving for it and all that) is still going to go but their attitude when they return is going to affect whether/how soon they will go back so I think if WDW's decisions in cuts in staff, quality, and price increases are going to have an effect they'll likely start around 2020 but even that will be offset by a bump in attendance for the 50th so it'll likely be after the 50th before there's an attendance drop. So think 5-10 years out instead of 6 months.

I think there's something else at play, too, which could hit them a generation out: Right now you have people in their 40s who grew up with WDW and have fond memories of how neat the MK was and remember Epcot being built and that being neat and DHS and DAK. Those people have kids who are, or will be soon, hitting adulthood and probably have similar fond memories. Somewhere in the mix, though, is a generation that has memories of stagnant parks, dated designs (Epcot FW being the most prominent), and stale attractions. I think that there's a generation in there where it's not a fond memory of WDW but more of a ho-hum memory. In addition to that, that same generation has fond memories of Harry Potter/Universal. To me that is something that could be an overall issue with a generation that doesn't feel the need or desire to head back (with their children) to WDW. It's not magical for everyone.

Of course, you could weigh all of this out with the increase in population and the limited availability of the parks. There's a larger pool of folks vacationing to draw from and they're only going to get so many people in the park on any given day AND it's pretty much a year-round vacation destination, now, which wasn't the case 30 years back, so it may just all balance out.

Thanks for this great post on long-term/ big picture analysis, and very good points re: vacation cycle. I was trying to get at what might happen in the medium-term, and what is their market segmentation since they are moving to tiered pricing...b/c that seems a lot murkier to me. I'm trying to assess the econ impact of recent events over the next couple of years, but long-term I think that you are right - no real impact and other factors at play eg UO. I'll have to think more about what you wrote before saying more.

 

[Dad 2 M & M]

So putting 'attendance as trailing indicator' together with most families planning their vacation 3-6+ months out...that shifts the potential impact to the fall Halloween and Christmas 'upcharge season', which they've already announced prices and ticketing for. I'm curious about what kinds of discounts may be seen then, too. I'm also thinking that DVC owners who schedule far in advance aren't likely to cancel, but I don't know what percentage of their consumer base are DVC owners. Or intl tourists for that matter, although I think I've seen that intl tourists account for up to 1/3 of Florida tourists, maybe 20-30%. My notes say that in 2013 Brazilian tourists were 20.2% of FL visitors at 770,000, surpassing UK visitors (no source attribution).

I don't see the upcharge being that big of a deal as most of the families in your scenario would be buying multi-day tics, not 1 day and thus a much less impact of change in price. Now some might think the MNSSHP & MVMCP could suffer on the peak price dates, but my take is the "more affordable" early dates will now sell out, and that had not been the case in the past. I'm hoping the parks stay slower, as that is what we all have wanted. And YES, it IS worth more money for a slower/less crowded vacation...

BTW, I would call it "Laggard Effect" instead of trailing indicator...

 

[SorcererMC]

BTW, I would call it "Laggard Effect" instead of trailing indicator...

that occurred to me as well but I chalk it up to semantics...I get it now.

I know I'm going to have to do some digging b/c of the attendance statistics issues (probably have to find that old thread)...and overall, I'm thinking about what is the 'ripple effect' of recent events...and being able to parse it out from the spring changes. This is for my own edification btw; my gut feeling is that there might be a cross-roads here on lower attendance, pricing strategy, consumer confidence, and uncertainty, etc. I really appreciate the feedback here b/c I'm a little rusty, and many characteristics unique to Disney.

And re: Brazilian tourists, I noticed from the EPCOT thread that Disney has a long-term strategy to retain those visitors (despite the current pol/ econ issues).