The Spirited Back Nine ...

[Cesar R M]

Better than horrible is not good.

Yes, the 2000s were a horrendous decade for WDW investment, by far the worst ever.

However ...

$2.5B might sound like a lot but, for perspective, that represents about 1.5% of Parks & Resorts projected revenue for the decade.

Even the upcoming DAK/DHS additions will represent less than 2% of Parks & Resorts projected revenue from 2015 to 2020.

No one should leave with the impression that the upcoming expenditures represent anything more than the bare minimum of what WDW needs right now.

Right now, DAK is a disappoint while DHS is simply a mess.

DHS will probably be worse. not even worth half a day thanks to the massive closures once the construction walls are up.

 

[Nemo14]

The guy who owns it is kinda cool too.

The jury might still be out about that...

 

[Mike S]

Maybe transform at least 2 of the 4 monorail trains as NO ECVS or STROLLERS?

And deal with people crying discrimination? Not likely.

 

[asianway]

And deal with people crying discrimination? Not likely.

They could and should require all strollers to he folded though like the busses do

 

[Mike S]

They could and should require all strollers to he folded though like the busses do

That makes sense. Saying "no ECV's," not as much.

 

[BrianLo]

A fully-realized 5th WDW theme park will add significant Guest capacity to support at least an additional 10 million gate clicks annually. New lands at DAK and DHS are not going to do that.

Yes, DAK and DHS need new lands.

However, by the middle of the next decade, WDW will need a 5th theme park.

Don't let @WDW1974 hear you say that!

I agree to an extent, a 5th realized gate does siphon off guests, but there is a whole lot of optimization that can and should be done before that is required (although I agree, in the current attendance trajectory it will be required).

The dollar for dollar figure (they would spent on a 5th gate) should first be spent fixing existing infrastructure and adding capacity to the three other parks that are not pulling their weight.

Animal Kingdom of course being the easiest to shift towards. Yes, they run the risk of making the park, which is on the lower end of capacity, too attractive. But, there are significant gains in capacity just by virtue of extending park hours. I think they are making very smart infrastructure moves already with by-passes, adding table service restaurants, preparing additional entertainment. They could still be bowled over, but at least there is some preparedness going on.

Epcot is the other that has lots of capacity (and used to have more before the ceremonious stripping of several omni-movers). The main issue being the high capacity rides (Energy, Imagination, Living with the Land and to some extent Nemo) are its least compelling offerings.

DHS runs the risk of becoming a bit of a nightmare though if StarWars makes it too compelling, there is not a lot they can actually do to increase the footprint of that park.

Then there is Magic Kingdom, which quite frankly, does not need a new E-ticket. That would be about the worst thing you could do to that park right now. It must quietly and modestly increase its capacity while letting the other parks open the crowd pleasers. Even if we want them to build that Frozen attraction set for TDS in Magic Kingdom, it would push the park into complete nightmare territory. Yes the Magic Kingdom would finally have the E-ticket everyone has been begging for, but would the 2 million-extra-bodies annually be worth it?

It's mostly a matter of attendance.

Annual attendance at the Magic Kingdom throughout the decades:

• 1972: 10.7 million
• 1982: 12.6 million
• 1992: 11.5 million
• 2002: 14.0 million
• 2012: 17.5 million

Disney has reported record Magic Kingdom attendance in the two years since 2012.

The parks in general, and the Magic Kingdom in particular, simply were not designed to handle the current crowd levels.

To throw my support behind you about how new gates can be executed properly, some TDL figures...

1988: 13.38 million (5th Anniversary)
1998: 17.46 million (15th)
2008: 14.29 million (25th)
2013: 17.21 million (30th)

The key part being the opening of TDS properly alleviated the problem in 2001 by pulling in nearly 12 million guests in its first year. Last year TDS brought in just over 14 million. OLC smartly realizes there is some optimization with capacity at both parks still to be made with the mid-term projects, but long term that's the first resort that needs a new gate most imminently.

 

[Mike S]

Don't let @WDW1974 hear you say that!

I agree to an extent, a 5th realize gate does siphon off guests, but there is a whole lot of optimization that can and should be done before that is required (although I agree, in the current attendance trajectory it will be required).

The dollar for dollar figure (they would spent on a 5th gate) should first be spent fixing existing infrastructure and adding capacity to the three other parks that are not pulling their weight.

Animal Kingdom of course being the easiest to shift towards. Yes, they run the risk of making the park, which is on the lower end of capacity, too attractive. But, there are significant gains in capacity just by virtue of extending park hours. I think they are making very smart infrastructure moves already with by-passes, adding table service restaurants, preparing additional entertainment. They could still be bowled over, but at least there some preparedness going on.

Epcot is the other that has lots of capacity (and used to have more before the ceremonious stripping of several omni-movers). The main issue being the high capacity rides (Energy, Imagination, Living with the Land and to some extent Nemo) are its least compelling offerings.

DHS runs the risk of becoming a bit of a nightmare though if StarWars makes it too compelling, there is not a lot they can actually do to increase the footprint of that park.

Then there is Magic Kingdom, which quite frankly, does not need a new E-ticket. That would be about the worst thing you could do to that park right now. It must quietly and modestly increase its capacity while letting the other parks open the crowd pleasers. Even if we want them to build that Frozen attraction set for TDS in Magic Kingdom, it would push the park into complete nightmare territory. Yes the Magic Kingdom would finally have the E-ticket everyone has been begging for, but would the 2 million-extra-bodies annually be worth it?




To throw my support behind you about how new gates can be executed properly, some TDL figures...

1988: 13.38 million (5th Anniversary)
1998: 17.46 million (15th)
2008: 14.29 million (25th)
2013: 17.21 million (30th)

The key part being the opening of TDS properly alleviated the problem in 2001 by pulling in nearly 12 million guests in its first year. Last year TDS brought in just over 14 million. OLC smartly realizes there is some optimization with capacity at both parks still to be made with the mid-term projects, but long term that's the first resort that needs a new gate most imminently.

Very well thought out post. With Animal Kingdom there's still that huge plot of empty land north of Asia that's ripe for future expansion. You make a good point about Magic Kingdom and Frozen, but what if it opened at the same time Star Wars did? Couldn't that have helped split crowds between both MK and DHS? I guess if Frozen was put in DHS (the next best option besides MK) along with Star Wars that would've pushed the park a little too far over the edge. If MK and DHS really weren't the best options for Frozen and Epcot was really the only good one, then what they should've done is use the expansion pad between Norway and Mexico. It might not have been enough room for the whole TDS expansion but it's probably enough for a pretty decent sized indoor area and a clone of the main ride that TDS is getting. Make it like a transition from the real Norway to the fictional Arendelle. That's what they should've done.

 

[bhg469]

My biggest problem with the buses are how slow they are and how unpredictable they are.

Agreed 100% they could fix this easily in so many ways. Cameras at the stops. Magic band check in, phone check in. Ultimately more concurrently running g busses is needed.

 

[Goofyernmost]

Very well thought out post. With Animal Kingdom there's still that huge plot of empty land north of Asia that's ripe for future expansion. You make a good point about Magic Kingdom and Frozen, but what if it opened at the same time Star Wars did? Couldn't that have helped split crowds between both parks? I guess if Frozen was put in DHS along with Star Wars that would've pushed it a little too far. If MK and DHS really weren't the best options for Frozen and Epcot was really the only good one, then what they should've done is use the expansion pad between Norway and Mexico. It might not have been enough room for the whole TDS expansion but it's probably enough for a pretty decent sized indoor area and a clone of the main ride that TDS is getting. Make it like a transition from the real Norway to the fictional Arendelle. That's what they should've done.

What that assumes is that Frozen will maintain popularity to the same extent that Star Wars has. My personal opinion is that it will not. Little girls will maintain their fascination until the newest princess comes along and sings a song they like. And it is impossible, at this time, to tell if the popularity will continue on after the current crop of wanna be princesses have grown out of it. They have to strike while the iron is hot, because like all the most popular princesses before them, this too shall pass.

 

[Mike S]

What that assumes is that Frozen will maintain popularity to the same extent that Star Wars has. My personal opinion is that it will not. Little girls will maintain their fascination until the newest princess comes along and sings a song they like. And it is impossible, at this time, to tell if the popularity will continue on after the current crop of wanna be princesses have grown out of it. They have to strike while the iron is hot, because like all the most popular princesses before them, this too shall pass.

If the ride they built for Frozen was top quality and enjoyable it wouldn't matter if the popularity of the Frozen IP itself dropped off by the time it opened. See: Mountain, Splash.

 

[PhotoDave219]

Maybe transform at least 2 of the 4 monorail trains as NO ECVS or STROLLERS?

That will never happen

 

[Crazydisneyfanluke]

Maybe transform at least 2 of the 4 monorail trains as NO ECVS or STROLLERS?

There is to many of them for that to happen!

 

[CDavid]

Maybe transform at least 2 of the 4 monorail trains as NO ECVS or STROLLERS?

Or just build higher capacity monorails to match increased park attendance.

Sorry, never mind, don't know what I was thinking. Buses are magical and so much more efficient (how is a non-stop express train supposed to compete with a bunch of buses all stuck in traffic trying to enter or leave the park).

Yeah, I know...

 

[dhall]

More you say?

Spoiler

I still like Umbro-D2 better

 

[bhg469]

That will never happen

That would go over like a fart in church.

 

[GoofGoof]

Better than horrible is not good.

Yes, the 2000s were a horrendous decade for WDW investment, by far the worst ever.

However ...

$2.5B might sound like a lot but, for perspective, that represents about 1.5% of Parks & Resorts projected revenue for the decade.

Even the upcoming DAK/DHS additions will represent less than 2% of Parks & Resorts projected revenue from 2015 to 2020.

No one should leave with the impression that the upcoming expenditures represent anything more than the bare minimum of what WDW needs right now.

Right now, DAK is a disappoint while DHS is simply a mess.

I don't disagree that it really is the bare minimum needed and the percentage isn't large compared to historic numbers, but in terms of whole dollars spent it's pretty significant. Some quick numbers:

• The original WDW opened in 1971 and cost $400M to build. Adjusted for inflation to 2014 dollars that's about $2.3B
• The original EPCOT center cost $1.4B to build in 1982. Adjusted for inflation to 2014 dollars that's about $3.4B.
• Disney MGM Studios cost about $500M to build. Adjusted for inflation that's about $1B
• AK was built in 1998 and cost about $1B to build. Adjusted for inflation that's about $1.5B.

Added together all 4 parks as they stood on their opening days would cost just north of $8B to build in 2014 dollars. They are planning on spending about a third of that or roughly the coat of both AK and DHS combined. It's still a significant investment.

Looking at it another way the $2.5B represents 1.5% of revenue expected for the decade. If they bumped it up even a little to 5% they could spend roughly the same $8B inflation adjusted cost to build all 4 existing parks. I know this is fuzzy math because construction costs have increased at a much higher rate than inflation, but it gives you an idea of the ballpark and scale of what could be accomplished. If they jumped all the way up to the 20% of revenue number that @ford91exploder was quoting from the Eisner era that would be $32B to spend in a decade. I know they have cruise ships and timeshares and foreign parks too, but I don't know if there are enough projects to get to that level of spending. It would be a crazy level of building unlike anything seen in the history of the company.

 

[Soarin' Over Pgh]

I don't disagree that it really is the bare minimum needed and the percentage isn't large compared to historic numbers, but in terms of whole dollars spent it's pretty significant. Some quick numbers:

• The original WDW opened in 1971 and cost $400M to build. Adjusted for inflation to 2014 dollars that's about $2.3B
• The original EPCOT center cost $1.4B to build in 1982. Adjusted for inflation to 2014 dollars that's about $3.4B.
• Disney MGM Studios cost about $500M to build. Adjusted for inflation that's about $1B
• AK was built in 1998 and cost about $1B to build. Adjusted for inflation that's about $1.5B.

Added together all 4 parks as they stood on their opening days would cost just north of $8B to build in 2014 dollars. They are planning on spending about a third of that or roughly the coat of both AK and DHS combined. It's still a significant investment.

Looking at it another way the $2.5B represents 1.5% of revenue expected for the decade. If they bumped it up even a little to 5% they could spend roughly the same $8B inflation adjusted cost to build all 4 existing parks. I know this is fuzzy math because construction costs have increased at a much higher rate than inflation, but it gives you an idea of the ballpark and scale of what could be accomplished. If they jumped all the way up to the 20% of revenue number that @ford91exploder was quoting from the Eisner era that would be $32B to spend in a decade. I know they have cruise ships and timeshares and foreign parks too, but I don't know if there are enough projects to get to that level of spending. It would be a crazy level of building unlike anything seen in the history of the company.

I think somewhere in that very well broken down estimate and figures needs to be a waste category. For what Disney has been spending, money wise, versus the end product, there seems to be an awful lot of wasteful dollars being spent. What they once spent on a whole park has now only bought a fraction of that. Where's all the $$$$$ going?

It's late and I'm tired, someone please make that sound more sophisticated and elegant. Looking at you, @ParentsOf4

 

[GoofGoof]

I think somewhere in that very well broken down estimate and figures needs to be a waste category. For what Disney has been spending, money wise, versus the end product, there seems to be an awful lot of wasteful dollars being spent. What they once spent on a whole park has now only bought a fraction of that. Where's all the $$$$$ going?

It's late and I'm tired, someone please make that sound more sophisticated and elegant. Looking at you, @ParentsOf4

Definitely true. The cost of raw materials and especially labor has gone up a lot faster than inflation. It would take a lot longer and cost a lot more to build EPCOT today than it did in 1982 even after adjusting for inflation.

In addition to that factor it seems like WDI these days has a particularly bloated beaurocracy that results in bigger costs. Comparing even recent WDI projects to Universal projects there definitely seems to be a disparity in cost.

 

[ParentsOf4]

I don't disagree that it really is the bare minimum needed and the percentage isn't large compared to historic numbers, but in terms of whole dollars spent it's pretty significant. Some quick numbers:

• The original WDW opened in 1971 and cost $400M to build. Adjusted for inflation to 2014 dollars that's about $2.3B
• The original EPCOT center cost $1.4B to build in 1982. Adjusted for inflation to 2014 dollars that's about $3.4B.
• Disney MGM Studios cost about $500M to build. Adjusted for inflation that's about $1B
• AK was built in 1998 and cost about $1B to build. Adjusted for inflation that's about $1.5B.

I suggest you to be very careful when using inflation calculators. Except for a few consumer goods, they rarely portray an accurate representation of the true cost of inflation.

When Disney opened the Magic Kingdom in 1971, it wasn't only building a theme park. It was constructing an entire infrastructure including draining & clearing swamp land, building a monorail, 2 hotels, roads, and utilities. Do you really think that anyone could do that today for $2.3B?

Meanwhile, that $400M in 1971 represented 230% of the entire company's revenue for that year. Roy Disney was serious about investing in Orlando, and he drove the company to its limits to do so.

Conversely, the $2B being spent at WDW represents less than 5% of the company's revenue in 2014.

Stated differently, the $2B being spent over the next 6 years at WDW represents less than one-third of the $6.5B spent on stock buybacks in 2014 alone.

The company has priorities and Orlando is not one of them.

Corporate Disney is investing nothing more than the bare minimum to fix 2 theme parks that have been allowed to languish for over a decade.

 

[GoofGoof]

I suggest you to be very careful when using inflation calculators. Except for a few consumer goods, they rarely portray an accurate representation of the true cost of inflation.

When Disney opened the Magic Kingdom in 1971, it wasn't only building a theme park. It was constructing an entire infrastructure including draining & clearing swamp land, building a monorail, 2 hotels, roads, and utilities. Do you really think that anyone could do that today for $2.3B?

Meanwhile, that $400M in 1971 represented 230% of the entire company's revenue for that year. Roy Disney was serious about investing in Orlando, and he drove the company to its limits to do so.

Conversely, the $2B being spent at WDW represents less than 5% of the company's revenue in 2014.

Stated differently, the $2B being spent over the next 6 years at WDW represents less than one-third of the $6.5B spent on stock buybacks in 2014 alone.

The company has priorities and Orlando is not one of them.

Corporate Disney is investing nothing more than the bare minimum to fix 2 theme parks that have been allowed to languish for over a decade.

I admit the inflation calculation is fuzzy math. It was just to show the scale of money we are talking about. Forget about the past for a minute. If WDW did build a 5th gate today what would the budget likely be? $2.5B is likely in the ballpark. Possibly a little more, but not much. Shanghai's original budget was around $4B but that included the park, 2 hotels, recreation areas and all the surrounding infrastructure. I think it's a bit over budget now so the total cost will be more than $4B. Of course Disney is only covering a portion of that cost.

My only point is that $2.5B is that despite not being a large percentage of P&R revenue it's still a substantial amount of money. I agree it's doing what needs to be done for those parks just like DCA 2.0 was for that park. I agree that WDW hasn't been a priority for the company lately and I'm not saying spending $2.5B makes up for the past decade, but it's still a significant investment.