Spirited News & Observations II -- NGE/Baxter

[Goofyernmost]

Curious, if Potter isn't sustainable then what the heck is Avatarland?

Combined, both phases of Potter will likely equal Avatars budget (or maybe edge it out slightly.) Tim and Sir Oinks, do you think Avatar will bring 2 consecutive years of 30% growth and the merchandise numbers of Potter?

Avatar is an unknown, but it sure seems riskier and more shortsighted then Diagon Alley.

I want to commend Flynn on his quality posts in this discussion, and say I wish @WDW1974 would return soon.

I kinda have to feel that way about Avatar. To be honest I had to look up Avatar because I had no idea what it was. I had never read the books or seen any of the Potter movies, but I knew what it was about. So I went even further and asked my Grandkids if they liked Avatar and they all (well not all, the 18 month old just looked at me and drooled) didn't like it. All but one liked the idea of Star Wars and they all thought Carsland would be super cool.

My point is although Avatar may very will be popular, it doesn't have a completely broad appeal, IMO. If I wanted to see a bunch of blue creatures, I'd get a DVR of the smurfs. If there is an Avatar land, I would probably check it out, due to curiosity, but it would never draw me or my family there because I just had to see it. I don't see it as a Potter swatter, not even close. Potter spanned more then one generation and appealed to the real young. That means it should last for awhile. I just don't see Avatar doing the same thing.

 

[George]

I would love to add five E-Tickets every year but the financials just won't support it. The thing about my ideas is they account for accounting, maintenance, ops and every other factor. Ultimately the pixie dust is just for show. It is a business at its foundation. Which is why Universal announced a ticket price increase today.

I would think the financials could support 2-3 e-tickets a decade.....I suppose Splash is still the cutting edge top of the line attraction necessary to anchor the most visited theme park on the planet, especially now that the logs don't smell bad.

 

[ChrisFL]

How are the Avatar sequels coming along?

 

[SirOinksALot]

Curious, if Potter isn't sustainable then what the heck is Avatarland?

Combined, both phases of Potter will likely equal Avatars budget (or maybe edge it out slightly.) Tim and Sir Oinks, do you think Avatar will bring 2 consecutive years of 30% growth and the merchandise numbers of Potter?

Avatar is an unknown, but it sure seems riskier and more shortsighted then Diagon Alley.

I want to commend Flynn on his quality posts in this discussion, and say I wish @WDW1974 would return soon.

Because Avatarland isn't about putting people through the turnstiles as much as it is about putting people in hotel rooms. Even I'll say that Disney's focus is 1) keeping people on property by occasionally 2) refreshing the parks. When Universal gets stale, it gets hit harder faster.

Henry, I've been through this time and time again. 30% attendance growth is much easier when the Uni parks were bleeding all over the place in the late 2-oh-oh-oh's. Potter brought Universal back to where it should have been all along. That's clear when you consider that WDW has had better attendance growth over the last 10 years than the Uni parks (seriously - you wouldn't expect that but it's true). And I can't even discuss merch without laughing... Universal's merch numbers were so terrible before Potter that it was something like a few (6/7ish) dollars per person.

The reality is that Universal has been terribly managed over 22 years. At 22 years, Disney was three parks, a water park, and 9 resorts deep. Instead of trying to flatten their cycles like Disney has done (first resorts, then DVC, cringe I know), they've just leveraged themselves up to do better on the peaks and get hurt worse in the valleys. They ditched the land they had... people act like they have imminent domain on Major Blvd. (lol)... the Citywalk additions over the past year were duds. Like I said, Cabana Bay is a good start but they'll be lucky to hit 60's or 70's there. And that's right, bad business decision strikes again - Lowes gets a large cut of that. There's just no market shifting from Universal, only rides from people who really haven't made good choices.

 

[Tim_4]

Curious, if Potter isn't sustainable then what the heck is Avatarland?

Combined, both phases of Potter will likely equal Avatars budget (or maybe edge it out slightly.) Tim and Sir Oinks, do you think Avatar will bring 2 consecutive years of 30% growth and the merchandise numbers of Potter?

Avatar is an unknown, but it sure seems riskier and more shortsighted then Diagon Alley.

I want to commend Flynn on his quality posts in this discussion, and say I wish @WDW1974 would return soon.

Avatar versus Potter is apples and oranges.

Avatar's job will be to turn a half day park into a full day park.

Potter's job was to turn a Disney vacation with a day or two at Universal into a Universal vacation with a day or two at Disney.

Based on those objectives, I think Avatar will be more successful. That's not saying it's better, but it's akin to earning an A in high school physics versus a B+ in quantum mechanics.

People come to Disney for Disney. Uni's growth has been driven by Potter. Nothing on the planet could have drawn the hype that Potter drew. Avatar is part of a portfolio. Potter IS the portfolio. No, it's not Universal's only draw, but it's by far their best play at the moment.

 

[SirOinksALot]

How are the Avatar sequels coming along?

No doubt they're raising the bar.

I'm guessing that reference will be lost on most.

 

[Tim_4]

IOA is a grouping of different themed lands. Very much like the MK. I just don't see any thematic problems with different lands bordering one another. The same way I have no problem with LIberty Square bordering fantasy land.

What about the train connecting Island Potter to Studio Potter? The studio piece breaks continuity entirely.

 

[flynnibus]

Ah yes, the other summer of post-Potter craze, no Jaws that I've referenced multiple times.

You've referenced... but you're the only person I've heard ANYWHERE talk about Jaws being gone once all of Aminty went away. Jaws was long in the tooth.. you keep inferring it's removal cost the parks all this attendance (with nothing to back it..). I don't have numbers.. but the ancedotal evidence I have of all the acquaintances I've known who have visited since, and every trip report I've read... no one was bothered by this at all.

 

[CDavid]

Avatar's job will be to turn a half day park into a full day park.

You don't need Avatar to do that. There are almost limitless possibilities for Animal Kingdom expansion, from the original Beastly Kingdom to new continents to even Narnia or something. Nothing special about Avatar which allows it to accomplish something other franchises cannot. There are, however, better known franchises with wider appeal and with demonstrated popularity over the years. Why take a billion dollar gamble on an unknown when you have a sure thing sitting in your basket?

People come to Disney for Disney.

Which is the strongest argument possible against Avatar. It's not what people come for. Sure, they'll explore the place since they're here anyway, but very, very few families will plan (or extend) a trip because WDW has a new Avatarland. Droids and cars may help fill hotel rooms and drive guest spending; Blue aliens won't.

 

[flynnibus]

Right, margin erosion. It's like if I sold you a hamburger for $1 that cost me 50 cents to make, then I sold the next person a $1 hamburger but it cost me $60 cents to make. Yeah, you have more dollars, and then your boss is going to come asking why that extra burger was more costly than the first one.

But again.. you're talking about a net result including investment.. you're post would make sense if you were talking about reduced margins due to operational costs, but you're using numbers that include capex improvements when talking about operating margins.

I wouldn't doubt an increase in operating costs... they've up'd many aspects of their parks to improve their customer satisfaction. That stuff costs money - but when done right it's money that pays off in customer loyalty. A concept Disney used to understand... but now lets driving margins dominate the business model instead of building brand champions... you know.. the model that made a Disney vacation a family ritual for so many.

 

[flynnibus]

Avatar versus Potter is apples and oranges.

Avatar's job will be to turn a half day park into a full day park.

Potter's job was to turn a Disney vacation with a day or two at Universal into a Universal vacation with a day or two at Disney.

Really? Based on whose fantasy? The expansion was repurposing and expansion of a land within a theme park. Whose's expectations are you dreaming of where the addition of a single ride equates into redefining how people view Disney and visit FL?

It's easy to call something a failure when you make up flight to the moon expectations that nothing in a single action could achieve.

People come to Disney for Disney. Uni's growth has been driven by Potter. Nothing on the planet could have drawn the hype that Potter drew. Avatar is part of a portfolio. Potter IS the portfolio. No, it's not Universal's only draw, but it's by far their best play at the moment.

This is getting comical.. calling Avatar more tightly integrated and aligned as a Disney property... than HP in a movie studio/media park.

Uni has more arrows in the quiver.. which is why HP is only one of the expansions going on. Oh, and they actually are being built.. now. Unlike Avatar.

 

[SirOinksALot]

But again.. you're talking about a net result including investment.. you're post would make sense if you were talking about reduced margins due to operational costs, but you're using numbers that include capex improvements when talking about operating margins.

No I'm not.

You just didn't read the 10-Q correctly. Like Mich.

 

[twebber55]

You don't need Avatar to do that. There are almost limitless possibilities for Animal Kingdom expansion, from the original Beastly Kingdom to new continents to even Narnia or something. Nothing special about Avatar which allows it to accomplish something other franchises cannot. There are, however, better known franchises with wider appeal and with demonstrated popularity over the years. Why take a billion dollar gamble on an unknown when you have a sure thing sitting in your basket?



Which is the strongest argument possible against Avatar. It's not what people come for. Sure, they'll explore the place since they're here anyway, but very, very few families will plan (or extend) a trip because WDW has a new Avatarland. Droids and cars may help fill hotel rooms and drive guest spending; Blue aliens won't.

in that case why build anything theyre already coming

 

[ParentsOf4]

No I'm not.

You just didn't read the 10-Q correctly. Like Mich.

You're quoting from the most recent 10-Q and seem to be treating a 13.3% rise in operating costs in one quarter as the death knell of Universal Florida. As I recall, your point on this was:

The difference being that Universal is losing money and losing control of costs.

Yet throughout 2012, Universal did a good job of containing operating costs, these rising modestly from $1,122M in 2011 to $1,132M in 2012.

Are we supposed to panic because of one quarter of increased operating cost?

Yet earlier you wrote the panic was because:

"we couldn't afford another summer like last one."

Hence the reason for the increased capex. Yet looking at the 10-Q ending Sept. 2012 (covering the summer months), Universal had it's best summer ever, with revenue climbing to $612M, up from $580M, while operating costs remained essentially flat, increasing slightly from $295M to $298M.

So exactly why is Universal about to collapse?

I see a business segment that's grappling with unprecedented growth. Most successful businesses go through cycles of expansion followed by optimization. A seasoned executive team will have seen this pattern before and will manage accordingly. Universal seems to be following this pattern.

In recent years, WDW has completely skipped the growth phase and has focused on optimization, which is why guests generally end up paying more for less. WDW has forgotten how to successfully invest in its product.

 

[GoofGoof]

No I'm not.

You just didn't read the 10-Q correctly. Like Mich.

You are seriously reaching here. The operating income number is up year over year. Revenue is up more than expense in actual dollars. You are focuses on the percentage increase in expense that is 1% higher than the increase in revenue and trying to draw a negative conclusion. It's just not there.

You are barking up the wrong tree. Universal is taking a calculated risk in spending as freely as they are. It could backfire. The FUTURE operating costs could spiral out of control as the parks grapple with higher operating expense due to increased attendance and aging attractions that need more attention. This could become an issue especially if revenues begin to plateau and attendance flattens out. None of this risk however is reflected in the Q1 10Q.

 

[SirOinksALot]

I never said Universal was on the verge of collapse, and you should be embarrassed for putting those words in my mouth. This all started as a comparison of construction speeds and you've done your best through mediocre reading comprehension to take it all over the place. I successfully bit on your trolling from last night, so congratulations on that.

Needless to say, the outlook is different now than in late 2011 when most of this plan was approved. And I can tell you, whoever greenlit most of what went into Citywalk last year isn't grappling with explaining unprecedented growth.

In recent years, WDW has completely skipped the growth phase and has focused on optimization, which is why guests generally end up paying more for less. WDW has forgotten how to successfully invest in its product.

No, Disney just has more mouths to feed than WDW. When Uni built Potter, Disney built two cruise ships. All three are doing quite well and receive great reviews.

 

[SirOinksALot]

You are seriously reaching here. The operating income number is up year over year. Revenue is up more than expense in actual dollars. You are focuses on the percentage increase in expense that is 1% higher than the increase in revenue and trying to draw a negative conclusion. It's just not there.

You are barking up the wrong tree. Universal is taking a calculated risk in spending as freely as they are. It could backfire. The FUTURE operating costs could spiral out of control as the parks grapple with higher operating expense due to increased attendance and aging attractions that need more attention. This could become an issue especially if revenues begin to plateau and attendance flattens out. None of this risk however is reflected in the Q1 10Q.

I'm glad the person I know didn't take this line with an executive, or else I'd probably be helping him fix up his resume.

 

[John]

I


No, Disney just has more mouths to feed than WDW. When Uni built Potter, Disney built two cruise ships. All three are doing quite well and receive great reviews.

Didn't I read something about apples and oranges somewhere?

 

[SirOinksALot]

Didn't I read something about apples and oranges somewhere?

Nah, they all fall under each company's parks/resorts umbrella. So maybe you read that somewhere else?

Post 100 is next.... maybe I should make it something Spirited?
Oh and GoofGoof is sitting on 2,000. Exciting

 

[flynnibus]

You just didn't read the 10-Q correctly. Like Mich.

No - but I'm tired of dealing in this cellar. Feel free to believe what you want... UNI is on a death spiral based on spending while they didn't have Jaws... the locusts should show up next month.