News Reedy Creek Improvement District and the Central Florida Tourism Oversight District

[Lilofan]

This is true. We are never going to get back to 2021 levels and that should not be the goal anyway. A large driver of that is wage growth. McDonald’s is hiring starting at $15 an hour near me, WDW at $18 soon. 10 years go the min wage at McDs and WDW was less than half that. It’s impossible to pay employees significantly more money and not raise prices for goods and services. Unless there is some sort of major shift in wages we can’t return to previous price levels. Wage growth traditionally lags inflation so in theory if/when inflation levels stabilize at 2% there should be some additional wage growth that occurs after that before going back to slower wage growth. It’s likely won’t be enough to make up for the last 2 years but who knows.

The May CPI report released today showed a year over year inflation rate of 4%. That’s still elevated vs the normal run rate which is around 2% but is significantly less than the rate was over the last few years. The goal of slowing inflation isn’t to get prices back to 2021 levels but to get inflation growth levels back to 2% a year, ideally. Over the last few decades where we had steady low inflation prices were still going up most years it was just at a slow and steady 2% clip.

MCO TSA agents start at just under $18 per hour and actively hiring. I think WDW entry level cast starting at $18 per hour is a less stressful role compared to front line airport TSA agent.

 

[MagicHappens1971]

MCO TSA agents start at just under $18 per hour and actively hiring. I think WDW entry level cast starting at $18 per hour is a less stressful role compared to front line airport TSA agent.

This reverts to the “well I’m an “XYZ” worker so why should they be getting paid more than me”.

I really don’t like this argument. TSA agents are federal employees (who are notoriously underpaid). Everyone should be paid what they’re worth and what can allow them to live in the area they work in. We should be happy Disney CMs are going up to $18/hr. I hope the TSA agents can try and get a raise sometime soon

 

[Andrew C]

The interest rate hikes were long over due. If we had been slowly and methodically raising rates when the economy got hot it wouldn’t have been so dramatic.

I don't disagree.

Instead we left rates at near zero for far too long, but we all enjoyed low rate mortgages and red hot stock market (I refinanced down to 2.5%

I bought in 2021 with a similar rate. I mean..I am never selling now...

 

[GoofGoof]

This reverts to the “well I’m an “XYZ” worker so why should they be getting paid more than me”.

I really don’t like this argument. TSA agents are federal employees (who are notoriously underpaid). Everyone should be paid what they’re worth and what can allow them to live in the area they work in. We should be happy Disney CMs are going up to $18/hr. I hope the TSA agents can try and get a raise sometime soon

I have no issue with CM or TSA raises. The fact that CMs are going to $18/hr is going to be a driver of higher costs so either Disney (1) raises prices (2) cuts services or (3) accepts less profit. We all know #3 won’t happen so they start with #1 as far as they can take it and then add in some #2 to cover the rest. I don’t mind paying more if the increase goes to CM salaries. I don’t want to pay more to cover streaming losses or other bad business practices. both are probably happening.

Taking this whole tangent back to the topic, I don’t think the RCID dispute or FL political environment is the key driver of softening demand at WDW (its not irrelevant either, just not the key driver). I think it’s more a combination of too aggressive price hikes and a less stable economy and to a lesser extent declining new offerings after the 50th celebration and people pulling back some on make up vacations post Covid. This Summer could possibly be nothing more than a speed bump for WDW or it could be a sign of what is to come. Stay tuned.

 

[MagicHappens1971]

Taking this whole tangent back to the topic, I don’t think the RCID dispute or FL political environment is the key driver of softening demand at WDW (its not irrelevant either, just not the key driver).

I don’t think it’s the key driver either, but agree that it has some weight.

I think it’s more a combination of too aggressive price hikes and a less stable economy and to a lesser extent declining new offerings after the 50th celebration and people pulling back some on make up vacations post Covid. This Summer could possibly be nothing more than a speed bump for WDW or it could be a sign of what is to come. Stay tuned.

I think the overall economy will be the biggest driver of what the future is for WDW. I think Chapeks extreme nickel and diming did serious damage to the Disney “brand”, I think the 50th was pretty lackluster and may have left a bad taste in some peoples mouths as well.

Overall though, I think travel is just slowing down in general. I work at a resort that is seeing its lowest summer numbers since pre-Covid. A lot of people were “revenge traveling”, and now with a looming recession, some may be cutting back on discretionary spending.

I’m visiting WDW in just a few days and welcome the lower crowds, I just know it’s not good for the longevity of the company.

 

[MrPromey]

I was not. I was in St Pete Beach.

But I am jealous of those who snuggled with god’s big brown fluffy snuggly buggly cuddly killing machine.

Waters are a whole lot calmer (and less salty) on our coast.

 

[Goofyernmost]

Ahh to yearn for when school milk only cost a nickel. Perhaps maybe a dime or a quarter for those of you younger. Also, get off my lawn. (Wasn't a park ticket under $50 at some point too?)

Almost... In 1983, there was only MK and Epcot was just born: This is what it cost to go there at the time. You'll notice at the bottom it says prices subject to change and they surely did.

 

[MisterPenguin]

Inflation has not lowered. The rate of increase is slowing. Seeing we are in year 2 of an inflationary cycle, inflation has compounded over the last 2 years.

Most people call the "lowering" of inflation as "going down."

Inflation is calculated based on one year, not 2.

You are correct that the higher prices we paid in the past year is an extra cost we don't get back unless there is deflation (based on annual calculus).

But if groceries that cost $100 last year went up to $150 six months later and then six months later went back down to $100; we normally call that comparison to six months ago as "inflation went down."

 

[Nubs70]

This is true. We are never going to get back to 2021 levels and that should not be the goal anyway. A large driver of that is wage growth. McDonald’s is hiring starting at $15 an hour near me, WDW at $18 soon. 10 years go the min wage at McDs and WDW was less than half that. It’s impossible to pay employees significantly more money and not raise prices for goods and services. Unless there is some sort of major shift in wages we can’t return to previous price levels. Wage growth traditionally lags inflation so in theory if/when inflation levels stabilize at 2% there should be some additional wage growth that occurs after that before going back to slower wage growth. It’s likely won’t be enough to make up for the last 2 years but who knows.

The May CPI report released today showed a year over year inflation rate of 4%. That’s still elevated vs the normal run rate which is around 2% but is significantly less than the rate was over the last few years. The goal of slowing inflation isn’t to get prices back to 2021 levels but to get inflation growth levels back to 2% a year, ideally. Over the last few decades where we had steady low inflation prices were still going up most years it was just at a slow and steady 2% clip.

The Driver is not wage growth.

The driver is this ^^^^

 

[GoofGoof]

Most people call the "lowering" of inflation as "going down."

Inflation is calculated based on one year, not 2.

You are correct that the higher prices we paid in the past year is an extra cost we don't get back unless there is deflation (based on annual calculus).

But if groceries that cost $100 last year went up to $150 six months later and then six months later went back down to $100; we normally call that comparison to six months ago as "inflation went down."

Said another way:

May 2020 groceries cost $100
May 2021 annual inflation rate 5% = same groceries now cost $105
May 2022 annual inflation rate 9% = same groceries now cost $114.45
May 2023 annual inflation rate 4% = same groceries now cost $119.03

So it is an accurate statement to say the inflation rate is down compared to a year ago which is the most common way to look at inflation. It is also accurate to say prices today are 19% higher than May 2020. If inflation was running at recent historic average rates the prices would still be up about 6% as inflation was typically around or below 2% a year on average so the spike in inflation over the last few years means prices are up roughly 13% more than expected run rate.

In theory if wages increased 5%, 9% and 4% each year then the buying power of a dollar would be equal, but that is even oversimplifying things as not all costs are impacted by inflation. Think a fixed car payment, fixed rate school loans, fixed rate mortgage, gas. In theory wages need to increase enough to cover the increased costs. So if 40% of expenses are not impacted by inflation and the other 60% goes up 8.6% (2022 rate) then you would need about a 5% pay increase to “keep up” with inflation.

As far as WDW is concerned they are going to be specifically sensitive to inflation since it’s not essential and discretionary spending is the first thing most people cut if their bills exceed their income. So when you don’t get the 5% raise in the example above you don’t stop eating or driving to work. Things like dining out, vacations and other non-essentials get cut.

 

[GoofGoof]

The Driver is not wage growth.

View attachment 723492

The driver is this ^^^^

Sure Covid stimulus money starting back in 2020 was the driver of inflation going way up. A lot of people conveniently forget this started prior to January 2021 because it’s a simple talking point. The Covid dollars are gone. Continuing inflation has more to do with overall costs being higher and labor is a big factor. My local MCDonalds is raising prices now to make up for the huge wage increases they needed to find workers. If the only driver of the inflation was covid dollars dumped on the market we should have been back to 2% or less a year ago or so.

 

[mmascari]

Think a fixed car payment, fixed rate school loans, fixed rate mortgage, gas.

You can even put a silver lining on those that if you're paying back fixed rate costs established in 2020 with dollars from 2023 that have less buying power, you're getting a discount.

Continuing inflation has more to do with overall costs being higher and labor is a big factor. My local MCDonalds is raising prices now to make up for the huge wage increases they needed to find workers.

Profits are up too. I would even suggest that profits are up a much larger percentage than wages. Along with wage increases having a much smaller increase impact on prices compared to the wage increase for most things. Meaning a 10% wage increase isn't going to create a 10% price increase, but something much smaller.

COVID dollars are gone, but the supply chain impacts are still real. Not nearly as dramatic as initially. But, much slower to recover to "normal" or the prior steady state than the time the disruption took to take place. It's relatively easy to stop everything and break all the supply chains. It's significantly harder and takes more time to build it back up. After all, the old steady state was the result of the beginning of time until then to create it. It'll be much faster the second time.

Now, if you had bought a WDW season pass in 2020 with 2020 dollars at the 2020 price, but that pass wasn't for use in 2020 but for the year 2023 instead, and as a bonus you actually paid for it in 2023 using 2023 dollars, that would be a huge deal. Both the lower price, and the dollars with less buying power getting the same value. You would have doubly saved on the deal. Of course, they didn't actually sell that as a product. Likewise, if you had bought a one year Magic Kingdom passport in 1983 but only paid for it now in 2023 with 2023 dollars, it would have been practically free. Also not a sales option they offered, unfortunately,

 

[Nubs70]

Yes, this is a factor as well. Corporations have used “inflation” as a smokescreen to raise prices above their increase in costs resulting in extra profits. Part of the reason is our polarized political environment. A faction of people is so desperate to paint the situation as dire to place blame on the current administration that they can’t stop squawking about inflation. Say something is dire enough and people will eventually buy it. Corporations aren’t dumb. If they can raise prices under the cover of inflation they are going to do it. Consumers would normally push back on those price hikes but they are being told repeatedly it’s due to inflation.

The reason is the true believers of MMT. Printing money, rent foreberance, loan forgiveness, and contract nullification are bad precedence and have bad consequences.

Companies have raised prices to maintain margins. To maintain the same % margin, the dollar increase is greater at every price increase. 5% of $100.is $5. 5% of $105 is $5.25

 

[GoofGoof]

The reason is the true believers of MMT. Printing money, rent foreberance, loan forgiveness, and contract nullification are bad precedence and have bad consequences.

Companies have raised prices to maintain margins. To maintain the same % margin, the dollar increase is greater at every price increase. 5% of $100.is $5. 5% of $105 is $5.25

I think there is more to it than that. In the 10 years from 2010 to 2020 the national debt more than doubled but inflation averaged less than 2% annually.

The debt to GDP ratio has not been below 70% since 2008. That’s definitely a problem. We needed some temporary stimulus to get out of the recession back then but then there was never an attempt to reign in that spending. Historically, wars, economic slow downs and recessions have resulted in temporary spikes in the ration which were later corrected. This time around once the economy recovered spending should have been reduced and/or taxes raised but instead we increased spending and did a massive tax cut. That policy has come back to haunt us big time right now. A portion of that tax cut sunsets over the next 4 years but we are going to need something more to close the gap.

 

[flyakite]

This is on the home page for RCID/CFTOD:

CENTRAL FLORIDA TOURISM OVERSIGHT DISTRICT ANNOUNCES SEARCH FOR NEW FIRE CHIEF​

Administrator Glenton Gilzean, Jr. thanks Chief Richard LePere Jr. for a decade to the district as he retires
The Central Florida Tourism Oversight District Administrator Glenton Gilzean Jr., today, announced a search for the next fire chief for the District. The search was announced two weeks after Chief LePere announced his retirement which will take effect in August.

 

[JoeCamel]

The reason is the true believers of MMT. Printing money, rent foreberance, loan forgiveness, and contract nullification are bad precedence and have bad consequences.

As have tax breaks to the tune of ~2 trillion for corporate interests, that have shown to end up in brokerage accounts rather than "trickling down" to the working class plus prices increase at the nominal rate or higher.

 

[MisterPenguin]

 

[Lilofan]

A number of these officials and actually some I had worked with firmly believe in a Shakespeare quote from Macbeth

Fair is foul, foul is fair.

 

[Goofyernmost]

Most people call the "lowering" of inflation as "going down."

Inflation is calculated based on one year, not 2.

You are correct that the higher prices we paid in the past year is an extra cost we don't get back unless there is deflation (based on annual calculus).

But if groceries that cost $100 last year went up to $150 six months later and then six months later went back down to $100; we normally call that comparison to six months ago as "inflation went down."

Anyone that thinks that inflation is cumulative really doesn't have any grasp of how it works. What you said is correct. It is based on year to year. If it was 9% last year and 6% this year it means that the rate of inflation is lower. It doesn't mean that everything is less expensive. The fact is if it dropped to a -9% then you ought to buckle up because you're in for a bumpy ride. It dropped way the hell down during the great depression. Inflation will always happen and it is also thought to be closely tied with wages. That is why the argument is made that if you raise minimum wage so goes the price of everything. That is true but just a small insignificant part of it.

Right now if you want to see inflation slow down then the previous "good years" when businesses were not allowed to become monopolies and ceilings were placed on some life sustaining requirements were established and enforced needs to come back. It may be years before we ever get our heads out of our butts and start demanding it happen. That won't be possible until our leadership stops acting like children and do their jobs and the public somehow gets an injection of common sense. Something that used to be considered a thing to be proud of, it does seem that ship has sailed for the time being. Or maybe it is only the loudest BS is all that is allowed to be heard.

 

[Lilofan]

Yeah it’s a really strange time for the economy. Inflation is obviously still an issue, but most other economic factors have turned positive. The bear market from last year has officially been declared over after just 9 months which is relatively short. The looming recession still hasn’t materialized. I don’t think there is a good comparison in recent history. If inflation continues to trend down the rest of this year 2024 could be setup for a major economic boom. However, there’s also a chance inflation stays higher than we want and further rate cuts eventually push us into that recession. I think the next 6 months will be very interesting.

Economic factors are getting positive but with a number of positions around the country still unfilled, customer service, supply chain issues etc , economic boom or not it will be more frustrations for consumer and worker.