Spirited News, Observations & Thoughts Tres

[the.dreamfinder]

I wonder if Disney, knowing their fondness for contingency plans, has considered the possibility of killing or significantly reducing DVC?

 

[Magenta Panther]

I wonder if Disney, knowing their fondness for contingency plans, has considered the possibility of killing or significantly reducing DVC?

I'm kind of curious as to whether DVC has really been that profitable for Disney?

 

[HenryMystic]

Georgie K was at a D23 meetup held at House of Blues today. @WDW1974

 

[Darth Sidious]

The original DVC price-point was built around DVC guests being "rich" and effectively spending as much or more than average resort guests. DVC, after all, is targeted at the Deluxe Resort market. For about its first 10 years, Disney gave DVC members free APs, that's how much they valued their business, that's how much they wanted them in the theme parks. Even today, DVC members receive a $150 AP discount.

DVC was intended to be an exclusive "club". However, with the relatively recent construction of SSR, AKV, and BLT, the game has changed. Those 3 resorts added the equivalent of nearly 2400 2-bedroom suites to the mix. Prior to those 3 resorts, DVC had only about 1700 equivalent rooms. Many of these rooms subdivide into studios and 1-bedrooms, effectively doubling the number of DVC guests. Combined, these numbers now make up an appreciable portion of WDW's total onsite occupancy. DVC is no longer the exclusive club it once was intended to be.

A company doesn't think simply in terms of revenue; it thinks in terms of profit. MF essentially covers cost only, very little profit. From a corporate perspective, I don't care what my revenue is if I'm not making money. I don't operate a private company with in intention of breaking-even.

Think of it this way. Looking at just my MF, it costs me $65/night to stay in a studio at the Boardwalk Villas during the popular Food & Wine Festival. Even with a 30% discount, a comparable room at the Boardwalk Inn is $336/night for those same nights. The difference between those two numbers closely mirrors how much Disney makes off each stay at a Deluxe Resort per night. That's a huge amount of money; 7 nights in a Deluxe resort is more profitable for Disney than a family of 4 buying 7-day tickets. For someone staying at the Boardwalk Inn, Disney is banking a ton of cash. For someone staying on points at the Boardwalk Villas, Disney is banking essentially 0.

Disney has made a lot of money selling DVC but that money is already on the books. That's profit made in previous years. It doesn't help Disney in future years.

The first DVCs are set to expire in 2042. That's in 29 years. 29 years is an eternity in business. As the number of DVC resorts expands and take up a larger percentage of WDW onsite guests, how does Disney fill that 29-year gap?

Perhaps worse, in 29 years, DVCs will flood the market. It will take years or even decades for Disney to sell all those points. In the meantime, Disney eats MF at those resorts.

Disney tried selling 15-year extensions at OKW but it flew like a lead balloon. For the next few decades, Disney's going to be facing an increasing problem with its growing inventory of DVCs if Disney doesn't figure out a way to get DVC members back into the parks spending money and wanting to extend their contracts. The way to do that is either offer rock-bottom prices (yeah, sure, Disney loves offering lower prices) or to get them back into the parks the same way they get anyone into the parks, by investing in the parks.

As usual, another fine post Po4. For all the cost cutting they do in certain areas it is astounding how fiscally irresponsible they are in other ways. You defined a perfect example of this with DVC. The P&R segment has a profit margin of around 14%... That's pretty bad. If you add back in depreciation expenses you still get low 20s. Uni, with their investments in the P&R segment has a 45% margin before depreciation... Almost double (I believe Disney was 23% without depreciation).

 

[RyenDeckard]

Is anybody else noticing, on these boards and people you know, that most people are splitting vacations 3/3 disney/universal, or not even doing disney at all?

My friends now either split their vacation time in half between the resorts, or don't even bother with Disney except for a day "for sentimental reasons". This is insane amounts of hyperbole, and it's very much just my experiences so it could be the company I keep, I'm just wondering if anybody else has experienced this.

 

[Animaniac93-98]

Is anybody else noticing, on these boards and people you know, that most people are splitting vacations 3/3 disney/universal, or not even doing disney at all?

My friends now either split their vacation time in half between the resorts, or don't even bother with Disney except for a day "for sentimental reasons". This is insane amounts of hyperbole, and it's very much just my experiences so it could be the company I keep, I'm just wondering if anybody else has experienced this.

I did this last October. 4 nights at UNI with a day at MK. Worked perfectly for me.

 

[misterID]

Is anybody else noticing, on these boards and people you know, that most people are splitting vacations 3/3 disney/universal, or not even doing disney at all?

My friends now either split their vacation time in half between the resorts, or don't even bother with Disney except for a day "for sentimental reasons". This is insane amounts of hyperbole, and it's very much just my experiences so it could be the company I keep, I'm just wondering if anybody else has experienced this.

I never thought I'd be swapping Disney days for Universal, but it's happening. We'll be staying at a UNI resort (first time ever) next year. If they had more family rides, like Madagascar, it might be that Disney might just get ONE of my UNI days... But my beach days (St. Augustine and Cocoa) will remain intact

 

[Goofyernmost]

In January I spent one day at Disney (my sister was in the 5K). Then two days at Universal. The first time ever that I spent more time at Uni then WDW. Times they are a changin.

 

[the.dreamfinder]

Did anyone notice during Tom Stagg's interview at the D conference the kinds of jokes Walt and Kara made about the Magicband "So when does this start sucking money out of my wallet?" and Staggs played along. While there's nothing wrong with a joking quip, we certainly have left the era of "everyone is a VIP" and "quality is the best business plan".

 

[Calvin Coolidge]

Is anybody else noticing, on these boards and people you know, that most people are splitting vacations 3/3 disney/universal, or not even doing disney at all?

My friends now either split their vacation time in half between the resorts, or don't even bother with Disney except for a day "for sentimental reasons". This is insane amounts of hyperbole, and it's very much just my experiences so it could be the company I keep, I'm just wondering if anybody else has experienced this.

Anecdotally, I'll use my parents as an example:

In the 1990s they would stay on property (except their first visit with kids, when they stayed at the Radisson) and visit the Disney parks, one day each, plus one day at Sea World (father had free tickets through his employer) and one day at Cape Canaveral at the Kennedy Space Center.

In 2001, hearing good things about IOA, especially Spider-Man, the family stayed two nights at Hard Rock Hotel (on property @ Uni) to utilize the Express Pass, then moved to Wilderness Lodge for the rest of the trip, one day at each Disney park.

2006, memorably, nightmarishly terrible service at the Yacht Club (on the concierge floor, even!) convinces my parents to never stay on-property at Disney again.

Their most recent trip was all spent at the Royal Pacific at Universal. 3 days of Universal parks, 3 days of Disney parks (they skipped Epcot, which they had been to the year before while in Florida on business).

The combination of Disney's declining quality of service, value, and appeal to adults without young children, plus Universal's relative increase in value, quality, and appeal drove an upper-middle income, high-spending couple away from Disney (also: The biggest reason they gave was wanting to "do Harry Potter," which neither of them have read, though my father has caught a few of the movies on cable. I don't seem them saying the same about Avatar, although they like DAK a lot already).

 

[Goofyernmost]

The combination of Disney's declining quality of service, value, and appeal to adults without young children, plus Universal's relative increase in value, quality, and appeal drove an upper-middle income, high-spending couple away from Disney (also: The biggest reason they gave was wanting to "do Harry Potter," which neither of them have read, though my father has caught a few of the movies on cable. I don't seem them saying the same about Avatar, although they like DAK a lot already).

I think there are a lot of us like that. I have absolutely NO interest in Avatar.

 

[John]

My original post on DVC concerned the proposition that DVC members somehow were guaranteed revenue streams for WDW. In the end, DVC members are not much different from everyone else who visits WDW frequently. Disney needs to invest to get them into the theme parks, just like any repeat guest. Disney cannot assume DVC members will visit the parks in perpetuity.

The financial downside facing Disney is that DVC eventually does save money for those staying at Deluxe Resorts. In the long run, Disney is losing revenue by letting DVC members invest today for a cheap stay 5, 10, 20, even 50 years from now. Again, Disney is sacrificing long-term profits for short-term gains. They're going to want to make up the lost revenue somewhere. That means higher prices all around for everyone. Ultimately, DVC becomes a financial burden for anyone who is not a DVC member.

Great....sounds like the current government/taxpayer system we have now.

 

[doctornick]

I doubt very much that the above is accurate.

Personal opinion or info from people in the know?

What have you been hearing about DAK?

 

[luv]

When I vacationed in Orlando, In two weeks, I would typically do 5-6 days at WDW, 4 at Uni, 2 at Sea World and 1 Gatorland day.

 

[Animaniac93-98]

I don't seem them saying the same about Avatar, although they like DAK a lot already).

In order for anyone to want to "see Avatar" it will have to be open first. That attitude from the general public may come when the ads start running for it, but that's four years away, and Disney will have to suffer from its lack of new attractions in the mean time.

 

[Studios Fan]

With Avatar, I'm still not sure why they are using IP that they don't own. It is not like DAK is a park that thrives on IP anyway. It's funny they could do so much more with things like Jungle Book and Lion King but they decide to go with Pandora.

 

[englanddg]

With Avatar, I'm still not sure why they are using IP that they don't own. It is not like DAK is a park that thrives on IP anyway. It's funny they could do so much more with things like Jungle Book and Lion King but they decide to go with Pandora.

Box office numbers, I suspect.

Silly...to me. Box Office just means it was a spectacle, not that it was great or even spawned a massive long term fan base.

Car accidents are spectacles as well. People slow down just to see them. That doesn't mean you should put one into a theme park.

 

[stevehousse]

With Avatar, I'm still not sure why they are using IP that they don't own. It is not like DAK is a park that thrives on IP anyway. It's funny they could do so much more with things like Jungle Book and Lion King but they decide to go with Pandora.

Why do people keep obsessing about this? This isn't the first time or last time Disney will use an IP that wasn't theirs! I just don't get why you get butt hurt about it! As long as it produces a good ride or attraction I'm all for it! At the end of the day I don't care who owns it...

 

[Ignohippo]

Why do people keep obsessing about this? This isn't the first time or last time Disney will use an IP that wasn't theirs! I just don't get why you get butt hurt about it! As long as it produces a good ride or attraction I'm all for it! At the end of the day I don't care who owns it...

Easy. Disney has many, many properties that don't have the representation in the parks that they deserve. As Studios Fan said quite well, a Jungle Book or Lion King (or both) area at DAK would be fantastic – and at a fraction of the cost that Avatar would cost.

Instead, TWDCo will spend $500 million + on the construction of a property they don't own and will probably spend millions on gaining the rights to the property. What's worse, is people fear this property doesn't actually have "legs". Yes, it was one of the biggest money producers in movie history, but how many people can actually name two characters from it? It isn't like SW, Indiana Jones or Harry Potter. It hasn't left nearly the lasting impression or had the staying power that those properties have.

And for that kind of money, they need to be guaranteed that people will actually plan their vacations to visit the attraction. I don't see many people who would drawn to WDW for Avatar, Once again, even worse is the fact that the attraction may just be Soarin' pt.2.

Oh, and it doesn't fit thematically with DAK very well, either.

We can't get a MI coaster for DHS but we can get a $500 million area based on Avatar? There's something terribly, terribly wrong with that.

 

[Genie of the Lamp]

So I watched the Destination America tv channel this afternoon(or travel channel 2.0 as I like to call it) and they had quite a few documentaries on there today dealing with mainly with cruise ships and Orlando area theme parks (excluding Wdw).

The first one I watched was the Disney Cruise Line: Behind the Magic documentary focusing on primarily the Dream and Fantasy showcasing the ships' majestic charms and offerings and what not. Basically a full detailed overview of these recently new ships. This is a brand new documentary as it just debuted today on that channel. The documentary featured much commentary from Karl Holz (who's up in age), Joe Lanzisero, Jim Urry, and Lisa Migliorati with occasional comments from Staggs and some other imagineers I'm not familiar with. O and even an appearance from the weatherman at the end. Just by watching this on my tv, I was in awe by the scope in detail and size of these ships. They truly seem great and one of the main points/emphasis in this show was the fact that these ships had something to offer for everyone be it the oceaneers club for little kids, game lounges and outdoor sports courts for teens, or spas for adults just to name a few. I was also truly amazed at the extra little details that are onboard those ships like the interactive art/animation on the ships, the portholes,etc. Lastly, how could I forget the cast members which leads me to my main point. A while back, Spirit went in depth about the great service he recieved on his DCL voyage on the Wonder. Well I can see why he would want to commend DCL on that front and as usual, he knows what he's talking about. These cast members really seem to provide guests with great '5 star like' service and truly care about their guests by making sure they have the best Disney Cruise experience possible. I found it interesting that for the rotational dining, when guests have a certain waiter for breakfast, they also have that same waiter for lunch and dinner as well which really is a great way for the cast to open up/connect with the guests (still can't get out of my mind that they go through 50,000 Ibs of vegetables and 40,000 Ibs of fruit each day). An important thing I took away from the cast was that anytime they went to approach a guest party, they had full eye contact and had big smiles on their faces 24/7. Simply put, they seem to treat you like royalty. This is the first good disney P&R documentary I've seen in a while, and I perferred this over that DCL Lightship Entertainment documentary which focused on the Magic and Wonder. As someone who hasn't been on a DC yet I can say that after watching this show, it has me strongly considering a voyage (the Dream as of now) in the near future and I'm sure if others watched as well, they'd feel the same as me. On a final note, the last scene had Karl Holz talking about the future of DCL and he basically said "we here at DCL and the folks over at WDI are always dreaming of new possibilites to better position the DCL business and also better enhance/personalize our guests future experiences onboard our ships" which to me translates to new ships eventually coming at some point, just a matter of when it happens.

The other show was a new Orlando Theme Parks documentary primarily focusing on SeaWorld and Gatorland. There were however quite a few moments showcasing the Universal Parks. They specifically focused on Suess land and Kidzone and went in depth on how Uni Creative brought these areas to life. What they were trying to get at here was the message that Uni isn't all about thrill rides/roller coasters as it has it's fair share of family/kid attractions and lands as well. I didn't really invest myself too much in the other parks they talked about.

A shoutout to @trr1 for informing me of these new shows (or at least the DCL one).