Surge Pricing Holding Up (Semi) Annual Increase ...

[ford91exploder]

True, we only have anecdotal evidence. I can only speak anecdotally that in the times I've talked with you and others about Disney removing ability to leave negative feedback, the number of proven examples to the contrary FAR outweigh those. Is there bias in the type of person who would point out evidence to the contrary? Sure. Just as much bias as there might be for those looking to highlight outliers as commonplace.

Both of those pale in comparison to the known biases in survey responses though. As you said, it's very unknown, at least to me, how much this has made it into the business culture. I'll absolutely give you that. I struggle with that daily in my job, trying to get analytical thinking into business partners, and could easily see Disney management being anti-quant.

I think based on what I've seen and absorbed I don't think Disney is doing any quant work, My reasoning for that the phrase often repeated, "Stooping for Pennies while Dollars fly over their head', Disney seems to be managed by cost accountants these days rather than quantitative analysis even though they obviously have the tools for quant work.

Example the shop at the Grand Floridian routinely runs out of snacks/staples by 6-7PM during busy seasons because management is afraid have unsold merchandise because they will get written up for it (confirmed by multiple insiders). A quant approach would ensure that stocking levels were appropriate for all seasons and the marginal cost of the few unsaleable items is more than compensated for by the profit on the popular items sold. At the SAME hotel nuts were eliminated at the bar, The reason salty nuts are served at bars is to make one thirsty so by cutting the bar nuts Disney probably is selling ONE beer when they could have sold TWO and from friends in the restaurant business there are no dollars as profitable as alcodollars.

 

[ford91exploder]

You say the executives get promoted because of results, but Bob Chapek has no experience in Parks and Resorts. The last wunderkind to make the leap from Consumer Products to Parks and Resorts (for the same sort of reasons) was Paul Pressler.

And we all know what happened there - and his trail of destruction after Disney proved it was him not his environment.

 

[ford91exploder]

Maybe it's just my personality. I'll take science over art any day. If I want someone to make a decision that impacts business on such a drastic level, I want it done with all the facts possible, not on a gut feeling.

As will I, However the Mark V calibrated gut that says 'something is wrong here' has caused me to check the science and saved the day many times because of errors in the way the science was done, In the end data rules but one must be sure that the data is good because too often we have 'Garbage in, Gospel Out"

 

[GhostHost1000]

I agree... my saying is they are trying to save a penny today which will cost them dollars down the road...

I think part of the problem oddly enough is the parks are doing so well in attendance...so they probably don't see the major need to spend money and improve the guest experience even more...sad.

If Disney could get EPCOT, HS, and AK up to the level of the MK (or at least close in terms of attractions, appeal, and guest attendance) and improve the guest experience then we have a better scenario all around where it would be more of a money printing machine then they have today... and then the option to expand further would exists as well

over the past 15 years they have created a stagnant hole and now the oh #&*^ moment is beginning to occur in DHS and AK while their evil step brother down the road Uni is putting them to shame in construction efforts.

 

[ford91exploder]

I guess it means we care a heck of a lot more about what happens at WDW than we do about what happens at Universal; shocking for a WDW fansite.

Right, because in a market based economy, paying customers have absolutely no right to express their opinions about products or services they are actually paying for.

Also recall UNI is adding both small and large items not CUTTING as Disney is doing, People will tolerate price increases without complaint if the perceive increased value.

 

[sshindel]

I think based on what I've seen and absorbed I don't think Disney is doing any quant work, My reasoning for that the phrase often repeated, "Stooping for Pennies while Dollars fly over their head', Disney seems to be managed by cost accountants these days rather than quantitative analysis even though they obviously have the tools for quant work.

Example the shop at the Grand Floridian routinely runs out of snacks/staples by 6-7PM during busy seasons because management is afraid have unsold merchandise because they will get written up for it (confirmed by multiple insiders). A quant approach would ensure that stocking levels were appropriate for all seasons and the marginal cost of the few unsaleable items is more than compensated for by the profit on the popular items sold. At the SAME hotel nuts were eliminated at the bar, The reason salty nuts are served at bars is to make one thirsty so by cutting the bar nuts Disney probably is selling ONE beer when they could have sold TWO and from friends in the restaurant business there are no dollars as profitable as alcodollars.

The example of the Floridian is a good example of not using quantitative inventory analysis in their resort shops. To me that shows that it has not made it throughout the entire organization. I'd feel though that they likely wouldn't start with something as "small" as this. The first bits would likely start at some of the areas most likely to have the greatest impact. If inventory management is going to be attempted, I'd imagine it would start at places like The Emporium and World of Disney, be improved and perfected, then make it's way down to the smaller shops.
And I could easily come up with a reason that salty nuts (hehe Beavis, he said nuts) would be taken away, even to the detriment of drink sales. Allergies. I'm almost convinced that in the next 30 years, nuts will be illegal due to allergy risk. Now, could the nuts be replaced with other salty snacks? Sure. I just don't know the financial numbers to show that it was financially the right move. If nuts cost enough less than alternatives that adding the new snack offsets the amount of money they might make by an increase in drink sales, then potentially it was the correct financial decision. I just looked around for studies quantifying the increase in drink sales by serving salty snacks, and I couldn't find any studies that mention it. It was a brief search though, so that doesn't mean that this hasn't been researched. I'd suspect that the increase is not double, but that there is a measurable increase.

 

[sshindel]

Also recall UNI is adding both small and large items not CUTTING as Disney is doing, People will tolerate price increases without complaint if the perceive increased value.

Are we forgetting the massive capital investments in DAK, DHS, and Disney Springs?

 

[ford91exploder]

It doesn't take the Marx brothers. Innovation and revolution is simply not predictable or provable. Well, it's predictable that something "new" will come along, but not what it will be, nor how the audience will respond. I like to use Sears as an example, because they were such a powerful brand and retail leader. But they did not view Walmart as a threat. And they decided to abandon their mail-order business in 1993, a mere 1 YEAR before Amazon.com would be founded and become the undisputed king of the mail-order business, although it looks radically different from the catalogs of old. Coke researched the heck out of New Coke, and their customers still rejected it. That wasn't because they were stupid. Look at the outrage over the alleged statement by executives at the first vendor meeting about the inclusion of female characters in TFA product. They brought data to say don't do it, and the marketplace reacted differently. That hurt Disney and its brand. As Parentof4 said, sometimes it is more art than science. And if you fail to include the possibility that art knows better, you will continue to be blindsided. Yes, do all the data mining, but remain mindful that at some point you might have to said, "this does or doesn't feel right regardless of what the numbers say today."

Sears also alienated one of it's core customer bases, Handymen or as they are called now "Maker's" by cutting variety and cheapening their tool offerings,

Sears before they ran off the rails was a store families could go to. I'm going to use roles instead of sexes, The homemaker could shop for everything needed for the home there while the handyperson could buy the tools and hard goods needed for their latest project. This of course led to lots of crossover sales like auto repairs (we can get oil change/tires/repair) while we do our shopping. Or major appliances/home entertainment.

Now Sears tools are to be avoided and the sales results from the stores reflect the changed demographic, Yes WalMart would have cannibalized some of Sears business but you CANNOT write off your most loyal customers who spent money EVERY week and not expect to see a major downturn in your business which is EXACTLY what Sears did. Once again this was driven by senior management with NO experience on the sales floor with no feeling for their products. Sound Familar????

 

[ford91exploder]

Are we forgetting the massive capitol investments in DAK, DHS, and Disney Springs?

Look at the capex charts done by @ParentsOf4, WDW needs at this point Billions per year of CAPEX not a few hundred million. WDW's plant and equipment is depreciating faster than it's being replaced.

 

[ford91exploder]

The example of the Floridian is a good example of not using quantitative inventory analysis in their resort shops. To me that shows that it has not made it throughout the entire organization. I'd feel though that they likely wouldn't start with something as "small" as this. The first bits would likely start at some of the areas most likely to have the greatest impact. If inventory management is going to be attempted, I'd imagine it would start at places like The Emporium and World of Disney, be improved and perfected, then make it's way down to the smaller shops.
And I could easily come up with a reason that salty nuts (hehe Beavis, he said nuts) would be taken away, even to the detriment of drink sales. Allergies. I'm almost convinced that in the next 30 years, nuts will be illegal due to allergy risk. Now, could the nuts be replaced with other salty snacks? Sure. I just don't know the financial numbers to show that it was financially the right move. If nuts cost enough less than alternatives that adding the new snack offsets the amount of money they might make by an increase in drink sales, then potentially it was the correct financial decision. I just looked around for studies quantifying the increase in drink sales by serving salty snacks, and I couldn't find any studies that mention it. It was a brief search though, so that doesn't mean that this hasn't been researched. I'd suspect that the increase is not double, but that there is a measurable increase.

As to nuts well replace with Pretzels they hold more salt per square MM than nuts do,

To your major point, The key issue is what model is Disney using I suspect it's one which sets a cash burn rate rather than one which maximizes profit, i.e. for N customers we will spend no more than Y dollars per customer. Disney is too focused on the concrete and predictable to use a model which maximizes POTENTIAL profit, Disney would rather have a smaller 'Guaranteed' profit.

 

[ford91exploder]

You'll win. I just bought a house. I'm broke for the next 30 years. Just promise me you'll let me have a few drinks with you while we sing like the birdies sing...

I will

 

[ford91exploder]

Well, this is just about the scariest and most depressing thread I've ever seen.

I've always wondered why the Disney company feels the need to build parks overseas. I think I understand now - it's the same mentality that thinks if you've got one pizza shop that's successful, you've got to open more - the "grow the company" mentality I mentioned in another thread. So the mantra for Disney seems to be "grow the parks", and all over the freaking place. And the results seem to be that all that did was extend the financial risk and dilute the U.S. parks' exclusive mojo. Whee, what a brilliant strategy, that failed even for Domino's.

What Lee said really shocked me. I can't imagine...in order to ride, say, the Tower more than once a day, you'd need a special price package? Gahh!!! And some here are making noises again about the parks being sold off to some foreign investor? Talk about a PR nightmare. Disney parks owned by a Saudi oil prince - that would be the end, the ultimate end. There is no way to spin something like that into something positive, not even with pixie dust.

I'm going to watch my Mary Poppins DVD again and try to remember why I like and admire the Walt Disney Company so much...

As to Disney parks being owned by a Saudi Oil price that ship has already sailed, The largest shareholder in DLP after Disney is Prince Alaweed.

 

[sshindel]

Look at the capex charts done by @ParentsOf4, WDW needs at this point Billions per year of CAPEX not a few hundred million. WDW's plant and equipment is depreciating faster than it's being replaced.

I was responding to your statement:

Also recall UNI is adding both small and large items not CUTTING as Disney is doing, People will tolerate price increases without complaint if the perceive increased value.

Your statement implies that Universal is spending and Disney is not, they are not adding they are cutting. How much CapEx Disney decides to use is arguable, but your statement implies that there is no capital investment, when that is definitively not the case. If you reword your statement to say that Disney isn't spending enough, then it's an opinion that is arguable, but still factual. By implying that Disney is only cutting, your argument doesn't have a solid foundation.

 

[wdisney9000]

I'll take science over art any day. If I want someone to make a decision that impacts business on such a drastic level, I want it done with all the facts possible, not on a gut feeling.

But it was a gut feeling that created the magic we all know and love, not science. That gut feeling and the artistic expression of many talented people is what has allowed the company to become "the most powerful brand", and for some time now, it has taken a back seat to the science and mathematics of running the parks. Of course, the science aspect is important, but for too long they have operated from a standpoint of "we have enough magic".

 

[sshindel]

But it was a gut feeling that created the magic we all know and love, not science. That gut feeling is what has allowed the company to become "the most powerful brand", and for some time now, it has taken a back seat to the science and mathematics of running the parks. Of course, the science aspect is important, but for too long now, they have operated from a standpoint of "we have enough magic".

I'd argue that there was a lot of science that went into making that art work. I'll agree with a point made to me last night that a balance is required, and even give that potentially that balance isn't correct at the moment.
Walt would have never been able to get anything off the ground without the numbers guys finding a way to make his dreams work.

 

[ford91exploder]

I was responding to your statement:

Your statement implies that Universal is spending and Disney is not, they are not adding they are cutting. How much CapEx Disney decides to use is arguable, but your statement implies that there is no capital investment, when that is definitively not the case. If you reword your statement to say that Disney isn't spending enough, then it's an opinion that is arguable, but still factual. By implying that Disney is only cutting, your argument doesn't have a solid foundation.

Fair enough, But I think we can agree that at least on Guest facing stuff at least for now Disney is cutting not adding.

 

[Jeffxz]

I'm surprised they haven't added an upcharge for FastPasses.

Maybe even a Platinum Level admission, They can charge $200-$400 a day and allow you to use the fastpass lane for all rides. Think how much they could make with that. Plenty of of people would spend the money to avoid the line.

They pretty much already have this.

https://disneyworld.disney.go.com/events-tours/vip-tour-services/

 

[skyphotographer]

For me, what has set the Disney parks apart from others has always been the total experience. The attention to details, always giving you a reason to want to come back because you know that you didn't see and do everything you wanted to on your last trip. Street performers and greeters are a big part of this.

I see Disney cutting the very things that have made them desirable as a vacation destination. I've been to Uni many times and just did not get the same feeling I do at Disney. Are they stripping the magic out of Disney?

 

[cdi]

South American guests, Disney has a huge discount program to bring them to Orlando. Disney is going for the One and Done guest who will buy lots of merchandise and the South Americans certainly load up on the merchandise to take back home.

What are the discounts for South American guests? can't find any discounted prices here in Brazil!

 

[Mike S]

For me, what has set the Disney parks apart from others has always been the total experience. The attention to details, always giving you a reason to want to come back because you know that you didn't see and do everything you wanted to on your last trip. Street performers and greeters are a big part of this.

I see Disney cutting the very things that have made them desirable as a vacation destination. I've been to Uni many times and just did not get the same feeling I do at Disney. Are they stripping the magic out of Disney?

Yes.