Save the Adventurers Club

[Master Yoda]

Great write-up by Jason. We all know by now that Disney felt it could make more profit renting out the spaces for restaurants than it could by running clubs. That's the "not profitable" enough part of the club discussion.

But they were wrong. VERY wrong.

For now, there is no question that they were wrong. The closing of PI landed perfectly around the crashing of the economy. What would have been a sure thing 3 years prior turned into a disaster. In retrospect, TDO should have eaten crow and kept the clubs open until things improved. For whatever reason, be it pride, stupidity or a combination of both, they elected to go ahead with the plan of shuttering PI and going for the easy money.

Turn the clock forward to 2014-2015 and the decision might become the correct one. If Disney fills the empty spaces with third parties they get guaranteed profit with no more effort than it takes to check the mail.

 

[trr1]

so is Hyperion Wharf postponed or cancelled? I havent heard anything lately

 

[jt04]

so is Hyperion Wharf postponed or cancelled? I havent heard anything lately

Last word (from Steve) is that it is being reimagined. Many speculate it might even get a new name.

The buzz created by Splitsville will likely draw attention to DTD from other interested parties. IMO.

 

[MichWolv]

I once worked for a company that made a $12,000,000 profit one year.
The very next year the profit was only $9,000,000. They closed the place. Apparently it wasn't "Profitable enough" that year.

Makes sense. If the investment needed to earn that $9 million is $50 million, you'd probably conclude that it's profitable enough. If the investment needed is $300 million, maybe not so much. You'd instead take your $300 million and do something else with it. Like when you take money out of your savings account and invest it some other way. Your savings account is profitable...just not profitable enough.

 

[Buried20KLeague]

For now, there is no question that they were wrong. The closing of PI landed perfectly around the crashing of the economy. What would have been a sure thing 3 years prior turned into a disaster. In retrospect, TDO should have eaten crow and kept the clubs open until things improved. For whatever reason, be it pride, stupidity or a combination of both, they elected to go ahead with the plan of shuttering PI and going for the easy money.

Turn the clock forward to 2014-2015 and the decision might become the correct one. If Disney fills the empty spaces with third parties they get guaranteed profit with no more effort than it takes to check the mail.

It would take longer than that, I'd expect. Factor in how long the new locations would have to be open to make up for lost revenue these past years while everything has been shuttered.

I'd guess that they would have to collect royalties on any new locations for a handful of years to make up for the profit they've lost. And that would just get them back to "even".

 

[Master Yoda]

It would take longer than that, I'd expect. Factor in how long the new locations would have to be open to make up for lost revenue these past years while everything has been shuttered.

I'd guess that they would have to collect royalties on any new locations for a handful of years to make up for the profit they've lost. And that would just get them back to "even".

Without knowing hard numbers it is impossible to tell. For all we know PI as a whole was operating in the red. If that was the case closing the clubs could have been a better option than keeping them open. Loosing $100 a week stinks but is stinks less than loosing $150 a week.

 

[Buried20KLeague]

Without knowing hard numbers it is impossible to tell. For all we know PI as a whole was operating in the red. If that was the case closing the clubs could have been a better option than keeping them open. Loosing $100 a week stinks but is stinks less than loosing $150 a week.

Well sure. We've got no way to know, really. All we can do is go on what most "in the know" have said... That the AC was profitable, while the clubs around it were not.

But even that is fuzzy. For example... We have no idea what entity "owned" the physical buildings, and what they might have been charging to the corporate entities that actually ran the clubs. What if their lease rates were artifically inflated? What if utilities etc were billed in the leases with hefty surcharges?

I've seen that happen quite a bit. One division pays another division to occupy a space, and the rates are MUCH higher than market value. It's a completely legal, easy way to make one area look more profitable and another area not as much. One could do this for a number of reasons... Tax implications? Maybe you're trying to build a case to close some locations? Hmmm...

Maybe the division that owned the buildings had a similar set up as are in place with 3rd parties currently... A huge (million?) fee, plus a percentage of the gross? It's completely possible that they did something like this internally, and that could EASILY effect how profitable a location can look.

It just drives me nuts when people say PI wasn't profitable because there are SO many ways to make that sort of thing look however you want it to.

Now I can't remember what got me off on this tangent. :shrug: :lol:

 

[mcjaco]

It certainly is amusing how often TDO is completely unwilling to tap into obvious sources of revenue. In the Muppets thread, people were literally begging Disney to open the Muppets What-not Workshop at DHS so they could buy a $200 puppet from them... and yet I somehow doubt I we'll we ever see it. Not to mention all the shuttered restaurants at the MK.

Posts by members here, are not the overall general public. Ths small subsegment of Disney Fanatics posting their desire for something, is not going to sway a alrge corporation, such as Disney, to placate them. They're going to go for what the general population tells them they want/desire in their park going adventures.

I don't understand why the small group of Disney nuts always assume that because they propose it on a forum filled with other Disney nuts, that it must be a good idea for the general good of the Disney Corp.

 

[wdw71fan]

Well sure. We've got no way to know, really. All we can do is go on what most "in the know" have said... That the AC was profitable, while the clubs around it were not.

But even that is fuzzy. For example... We have no idea what entity "owned" the physical buildings, and what they might have been charging to the corporate entities that actually ran the clubs. What if their lease rates were artifically inflated? What if utilities etc were billed in the leases with hefty surcharges?

I've seen that happen quite a bit. One division pays another division to occupy a space, and the rates are MUCH higher than market value. It's a completely legal, easy way to make one area look more profitable and another area not as much. One could do this for a number of reasons... Tax implications? Maybe you're trying to build a case to close some locations? Hmmm...

Maybe the division that owned the buildings had a similar set up as are in place with 3rd parties currently... A huge (million?) fee, plus a percentage of the gross? It's completely possible that they did something like this internally, and that could EASILY effect how profitable a location can look.

It just drives me nuts when people say PI wasn't profitable because there are SO many ways to make that sort of thing look however you want it to.

Now I can't remember what got me off on this tangent. :shrug: :lol:

Financials ending 2004 were the last time any club in PI was profitable.. 2003 For Adventurers club, and thats was 'just barely'...

Crowds don't always equal profits... The business model for PI did not evolve properly with the times..

 

[Buried20KLeague]

Financials ending 2004 were the last time any club in PI was profitable.. 2003 For Adventurers club, and thats was 'just barely'...

Crowds don't always equal profits... The business model for PI did not evolve properly with the times..

Again... Unless you see how every dollar comes and goes, I argue that being "just barely" profitable could be because that's how it was INTENDED to look.

If your information is even correct.

It may be, I don't know.

Also, I have no idea how the PI cover charge was broken down and attributed to each club, if it even WAS. Where did the PI entrance fees go? Were they distributed? If so, how? If not, who not? You say crowds don't equal profits... I argue that crowds certainly WOULD help the bottom line, if the PI entrance fees were cut between clubs somehow.

I'm simply trying to make the point that there's a LOT about the accounting practices of PI that we have no idea about, and that those practices could have a huge bearing on the profitability (or lack thereof) of the clubs. How and where they chose to account for different revenues could have completely impacted what the clubs looked like on paper.

 

[KungalooshAL]

Posts by members here, are not the overall general public. Ths small subsegment of Disney Fanatics posting their desire for something, is not going to sway a alrge corporation, such as Disney, to placate them. They're going to go for what the general population tells them they want/desire in their park going adventures.

I don't understand why the small group of Disney nuts always assume that because they propose it on a forum filled with other Disney nuts, that it must be a good idea for the general good of the Disney Corp.

Personally, I assume nothing. Other than that your sole purpose for posting is to antagonize.

 

[KungalooshAL]

Again... Unless you see how every dollar comes and goes, I argue that being "just barely" profitable could be because that's how it was INTENDED to look.

If your information is even correct.

It may be, I don't know.

Also, I have no idea how the PI cover charge was broken down and attributed to each club, if it even WAS. Where did the PI entrance fees go? Were they distributed? If so, how? If not, who not? You say crowds don't equal profits... I argue that crowds certainly WOULD help the bottom line, if the PI entrance fees were cut between clubs somehow.

I'm simply trying to make the point that there's a LOT about the accounting practices of PI that we have no idea about, and that those practices could have a huge bearing on the profitability (or lack thereof) of the clubs. How and where they chose to account for different revenues could have completely impacted what the clubs looked like on paper.

MY point is that a marginally profitable attraction that draws guests can lead those same guests who wouldnt show w/o the AC into far more profitable spending at the parks or otherwise...

 

[Hakunamatata]

MY point is that a marginally profitable attraction that draws guests can lead those same guests who wouldnt show w/o the AC into far more profitable spending at the parks or otherwise...

In all seriousness, how many people do you think made the AC their vacation destination and just happen to fill the days in the parks?

 

[Mouse Detective]

In all seriousness, how many people do you think made the AC their vacation destination and just happen to fill the days in the parks?

Quite a few but even for those who did the opposite, AC (and all of the Pleasure Island clubs) was one more thing that made WDW such a great vacation destination choice.

Also, I have no idea how the PI cover charge was broken down and attributed to each club, if it even WAS.

Very true, for all we know all the ticket revenue went to one account while the profitability of any club was based solely on drink sales against the cost of labor for that location. I agree that when it comes to accounting, it would be easy to make any one entity money-making or money-losing depending on how revenue and expenses are allocated.

 

[Buried20KLeague]

Quite a few but even for those who did the opposite, AC (and all of the Pleasure Island clubs) was one more thing that made WDW such a great vacation destination choice.




Very true, for all we know all the ticket revenue went to one account while the profitability of any club was based solely on drink sales against the cost of labor for that location. I agree that when it comes to accounting, it would be easy to make any one entity money-making or money-losing depending on how revenue and expenses are allocated.

Another probable reality, too, is that the AC might have shouldered some of the burden of the very poor performing clubs. It could be that the AC may have stood very strong based on its own merit, but was brought down by other underperforming clubs. We'll never know.

 

[jt04]

Another probable reality, too, is that the AC might have shouldered some of the burden of the very poor performing clubs. It could be that the AC may have stood very strong based on its own merit, but was brought down by other underperforming clubs. We'll never know.

We agree for once so perhaps that means we do know.

 

[KungalooshAL]

In all seriousness, how many people do you think made the AC their vacation destination and just happen to fill the days in the parks?

dunno but it undoubtedly was enough to put the decision to choose Disney for vacation over the top for some. And, if something as appealing as the AC was marginally profitable, unique as it was, it'd been worth keeping!!

 

[mcjaco]

Personally, I assume nothing. Other than that your sole purpose for posting is to antagonize.

This entire thread is filled with assumptions. :brick:

Another probable reality, too, is that the AC might have shouldered some of the burden of the very poor performing clubs. It could be that the AC may have stood very strong based on its own merit, but was brought down by other underperforming clubs. We'll never know.

GAH, AC was one of the underperforming clubs! The entire PI complex was underperforming!!!

How much pixie dust have you guys inhaled?

 

[wm49rs]

Apparently enough to keep this thread progressing.....

 

[Buried20KLeague]

This entire thread is filled with assumptions. :brick:



GAH, AC was one of the underperforming clubs! The entire PI complex was underperforming!!!

How much pixie dust have you guys inhaled?

I'm assuming, then, that you have complete access to each location's financials.

Look, if you've read basically ANY of my postings, you'd know I'm not a pixie dust snorter. If you're not getting my point, that means you don't know much about business. Let me state it as simply as possible:

A business's success (or failure) can be greatly effected by factors outside of simple revenue minus operating cost.

There. That's as easy as I can spell it out. Maybe it wasn't a viable business, maybe it was. We'll never know.

But I would hope at the very least that you're smart enough not to take TDO's word for it.