Spirited News & Observations II -- NGE/Baxter

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Skyway

Well-Known Member
Lee said:
As Rasulo said yesterday, they are looking to MM+ to keep people on property. Now, with the first reveal of Potter 2.0, the tug of war between the two resorts is taking shape.
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This highlights the biggest challenge for Disney: selling the "value" of MM+

More than a decade after the introduction of FastPass, a large portion of WDW visitors still do not understand how to use it, even after they've arrived at the resort.

With MM+, Disney will have to educate visitors WHEN THEY'RE PLANNING THEIR TRIPS not only how FP+ works, but also any other benefits that MM+ will bring them. If Disney doesn't sell those perks before the visitor arrives, MM+ provides little benefit to the company.

Now, that sales pitch will be competing with TV spots and social media posts showing dragons, thrill rides, and one-of-a-kind immersive experiences at Universal.

Any marketer knows its much easier to sell a product when you have a product to show the customer.
 
Cosmic Commando

Cosmic Commando

Well-Known Member
Planning your next WDW vacation:
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Planning your next Uni vacation:
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GoofGoof

GoofGoof

Premium Member
WDWDad13 said:
I think NexGen has some serious potential... especially when they start integrating into attractions that can call you out by name or say happy birthday or anything like that (which we haven't seen yet) but for now... eh... I also think the Snow White coaster will be and look better than most think..... where I get nervous is looking at DHS and AK... I know for a fact some Disney visitors are already giving those days up to check out IOA (HP) so if they don't inject a massive IV into those parks soon...those numbers could continue to fall after HP 2.0 and they can't just inject money into the MK, it has to be resort wide now. I think Disney Springs will be a hit as well, but DHS and AK need something or somethings BIG (and I don't know if 1 avatar ride, gift shop and restaurant is all AK needs either)
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I hope you are right. My "glass half full" opinion is that the success of FLE and the competition down the street leads to major additions to DHS and AK.

Here's the only issue I see with that. Disney may be OK with the lost attendance at DHS and AK if it means they don't have to have large capital outlays and increased operating costs. With multi-day passes the difference in cost between a 3 day pass and a 5 day pass is a little over $20. If people buy the 3 day pass instead of the 5 and spend 2 days at Uni, Disney loses $20. Granted they lose the spending on food and merchandise, but they also avoid the increased operating costs from both the new rides and the increased crowds that would exist if they went with an expansion. They would also have the additional depreciation expense. They may not be as broken up as we think about some people cutting a few days out and visiting Uni instead. Add to this Nextgen, DME and free dining promotions and a lot of people will end up staying on property anyway.

I think that is why things like a new cruise ship or the DCA expansion are easy to green light. They have more tangible ROI and they add new revenue streams. Probably why Disney Springs and its guaranteed rents from vendors has broken ground already but Avatar is on life support and Carsland hasn't been greenlit. As a fan I want the expansions to go through, but I can understand the hesitation from a business standpoint.
 
Darth Sidious

Darth Sidious

Authentically Disney Distinctly Chinese
GoofGoof said:
I hope you are right. My "glass half full" opinion is that the success of FLE and the competition down the street leads to major additions to DHS and AK.

Here's the only issue I see with that. Disney may be OK with the lost attendance at DHS and AK if it means they don't have to have large capital outlays and increased operating costs. With multi-day passes the difference in cost between a 3 day pass and a 5 day pass is a little over $20. If people buy the 3 day pass instead of the 5 and spend 2 days at Uni, Disney loses $20. Granted they lose the spending on food and merchandise, but they also avoid the increased operating costs from both the new rides and the increased crowds that would exist if they went with an expansion. They would also have the additional depreciation expense. They may not be as broken up as we think about some people cutting a few days out and visiting Uni instead. Add to this Nextgen, DME and free dining promotions and a lot of people will end up staying on property anyway.

I think that is why things like a new cruise ship or the DCA expansion are easy to green light. They have more tangible ROI and they add new revenue streams. Probably why Disney Springs and its guaranteed rents from vendors has broken ground already but Avatar is on life support and Carsland hasn't been greenlit. As a fan I want the expansions to go through, but I can understand the hesitation from a business standpoint.
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I think that it mostly has to do with spending on P&R in regards to their reporting. They need to spend in their other parks right now to fix severe problems and where there is a failure to reach higher revenue streams. Then for the reasons you mentioned above they see WDW as low on the priority list for CAPEX. I think it is likely on their to do list and their radar but at the moment they don't want to do it all now when they can spread it across multiple years. Mix that with huge acquisitions and you can understand the reasoning behind the decisions in regards to their effect on share prices.

Just to elaborate further on your points really.
 
S

stlphil

Well-Known Member
Mr Bill said:
The full footnote for the "per room guest spending" metric:


So it's definitely a daily metric.

@asianway, interesting question. I'm not entirely sure how they go about calculating it, but my best guess would be the total receipts from the hotels and all shops and restaurants located within hotels.
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All these numbers are easily spun that WDW is doing great, but the reality is much harder to determine because comparing this year to last year is totally an apples-to-oranges comparison:

For example, a quick back-of-the-envelope calculation based on Lutz's reports shows that Cars Land (okay DCA 2.0) alone possibly contributes 4-5% of the year over year domestic attendance boost.

A significant chunk of the increase, as already mentioned, is due to the extra holiday days in the quarter this year vs. last year. Did WDW really do better, or were the domestic parks "improvements" just an artifact of the calendar + DCA?

Then there is the per room guest spending number. This year there are more family suites in the mix compared to last year. The mix of rooms being compared isn't the same, so what does this number even mean? To illustrate the issue, lets make the (totally unrealistic) assumption that all DVC members traded out this quarter and so Disney reservations rented out several thousand two bedroom suites each night instead of regular hotel rooms to the general public. If per room guest spending went up just a few percent, this wouldn't be a good thing it would be a very bad thing from Disney's point of view because the much bigger rooms and presumably much larger number of guests in each room should provide a much larger per room spending increase.

I'm not claiming to know the answers to these questions, just pointing out that the conclusions are not cut-and-dried.
 
GoofGoof

GoofGoof

Premium Member
stlphil said:
All these numbers are easily spun that WDW is doing great, but the reality is much harder to determine because comparing this year to last year is totally an apples-to-oranges comparison:

For example, a quick back-of-the-envelope calculation based on Lutz's reports shows that Cars Land (okay DCA 2.0) alone possibly contributes 4-5% of the year over year domestic attendance boost.

A significant chunk of the increase, as already mentioned, is due to the extra holiday days in the quarter this year vs. last year. Did WDW really do better, or were the domestic parks "improvements" just an artifact of the calendar + DCA?

Then there is the per room guest spending number. This year there are more family suites in the mix compared to last year. The mix of rooms being compared isn't the same, so what does this number even mean? To illustrate the issue, lets make the (totally unrealistic) assumption that all DVC members traded out this quarter and so Disney reservations rented out several thousand two bedroom suites each night instead of regular hotel rooms to the general public. If per room guest spending went up just a few percent, this wouldn't be a good thing it would be a very bad thing from Disney's point of view because the much bigger rooms and presumably much larger number of guests in each room should provide a much larger per room spending increase.

I'm not claiming to know the answers to these questions, just pointing out that the conclusions are not cut-and-dried.
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This is true. Companies will always try to spin things to look positive and the extra holiday in Q2 is skewing things. The tables in the 10Q at least have to be consistent year over year. The tables are audited or at least reviewed quarterly and the SEC and external auditors frown upon making changes to the data reported unless there is a legit change to the business or economy. If they did change the inputs to the tables they would need to recast prior years to the new format.
 
asianway

asianway

Well-Known Member
Looks like the mommy bloggers are in town being showered with comps. My invite must have been lost in the mail.

Anyone have a clue how many moms are represented?
 
luv

luv

Well-Known Member
tracyandalex said:
As others have said, I just don't see how MM+ draws folks in and keeps them. ET has been saying everyone's name for years and yeah I guess it's a little cool, but that is definitely not why I want to go to US! There are too many unknowns with MM+ and currently I feel like it is more of a turn off to the repeat visitors than an incentive to come back.
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Amen.
 

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