After thinking about it a bit further, it occurred to me what needs to happen at WDW.
in Jordan's defence.. he had to face more complete teams with lots of stars.. a lot of them on their prime.
After thinking about it a bit further, it occurred to me what needs to happen at WDW.
WDW needs to build.
Some historical perspective is needed to explain this simple statement.
WDW’s business was on shaky ground prior to 9/11 due to deteriorating economic conditions. After increasing by double-digits for 6 consecutive years, P&R revenue increased by only 2.9% in fiscal year 2001. (Note that Disney’s fiscal year ends in September.)
As a direct result of 9/11, P&R revenue decreased by 7.7% in 2002 and decreased another 0.8% in 2003.
P&R investments were immediately impacted. They went from over 20% of P&R revenue in 2001 to under 10% in 2002.
A lot of what’s counted as “investing activities” is basic maintenance; Furniture, Fixtures, & Equipment (FF&E) in the business world vernacular. Essentially, what happened after 9/11 was that most special projects were cancelled and capital expenditures were limited to basic maintenance. Disney cut P&R budgets to the bone.
Those who remember the time might recall WDW closing some hotel buildings and even entire hotels. WDW went into survival mode.
Now, in that financial environment, P&R investments as a percentage of revenue cratered at 9.0% in 2003 before rebounding to 15.9% in Eisner’s last fiscal year (2005).
Yet Iger managed to average 9.6% during his first 4 years as CEO. From Wall Street’s perspective, “under 10%” became the new norm.
When the number increased to 23% in 2011 and 2012, Wall Street was concerned. Eisner and Rasulo frequently were asked, “When are you going to reduce P&R investments?”
In 2013 and the first half of 2014, the number was down to about 15%. Taking into consideration the large financial commitment to Shanghai Disneyland, domestic P&R investing activities currently are at post-9/11 levels.
Yet for Eisner’s tenure prior to 9/11, P&R investments as a percentage of revenue averaged over 26%.
Iger, Rasulo, and Wall Street think that investing 15% is sufficient. However, historically, it’s an incredibly low number for Disney.
What Iger & Rasulo have done is establish a new low standard for P&R investments that Wall Street has become accustomed to.
For the last 3 years, theme park revenue growth primarily has been through higher prices. With the notable exception of Cars Land, this is what Disney reports quarter after quarter.
“Perpetual price increase” is not a viable long-term business strategy. Not surprisingly, customers expect to receive more when they are asked to pay more. Disney’s price increases are turning away a growing segment of their core market.
WDW’s business over the last few years has been propped up by a significant increase in attendance from Brazil and Argentina. The problem is: WDW has saturated that market.
Median income for guests from those two countries exceeds $100K. That places those visiting WDW in the top 2-to-3% of incomes in their respective countries. There simply aren’t enough people left in those countries who can afford WDW vacations. That market has peaked.
WDW needs to look for new sources to grow revenue. That means North America and Europe. Long-term, simply charging more only drives those markets away. Long-term, trying to squeeze pennies out of them through MyMagic+ on prices that already are up 25% over the last 3 years is simply going to be ineffective.
Rather than continuing to raise prices, Disney needs to add value back into a WDW vacation. That means either lowering prices or adding content.
There was an ecnomic boom at WDW in the mid-2000s due to creative pricing. Disney offered some really good room discounts, added Disney's Magic Express (DME), and created the less-expensive Magic Your Way (MYW) base ticket. Disney added value back into a WDW vacation.
Still, getting most senior executives to reduce prices is like asking them to sacrifice their first-born children. That leaves corporate Disney with earning money the old-fashioned way: investing.
Plain and simple, Disney needs to invest in WDW at the levels more in keeping with what it once did; levels that resulted in consistent double-digit growth.
WDW needs to build.
Oh, and getting a little more creative with pricing and adding value into the onsite hotels wouldn’t hurt either.
The finisher medal debate can get really intense...and I can't adequately explain why but Disney's policy of giving them to everyone makes me pretty angry. Admittedly somewhat irrationally so. Maybe it's because I don't consider myself a natural runner and have to work my butt off all year to get in marathon shape (20-mile run in NE Ohio winter, yeehaw!), so earning that medal really means something to me. Maybe it's because runDisney specifically calls them FINISHER medals and not PARTICIPATION medals. To me that means crossing the finish line is the way to get the medal. If not, why not just give them out at the expo? In my opinion, if you finish you earn the medal - for participating you get the shirt.!
I was under the impression Wet N Wild goes away once the new waterpark opens.
You had me at premium tequila
.
Much. Money. Grabbing. 
Most recently - Legend of Captain Jack Sparrow. Previously, American Idol, One Man's Dream, bits of New Fantasyland, the Pirates of the Caribbean tweaks, Haunted Mansion makeover.
I agree with the seats. If they had more especially in the store for the husband's to sit at and talk to the other husband's who are waiting while their wives shop. In fact if they had a bar in some of the stores they'd make even more.Until they drop dead from heat exhaustion, then send in Maleficient's crow and the rowdy crew of bad guys from Robin Hood to pick their corpses clean of cash.
Hearing the stories of the benches removed and literally sitting in storage while they are sorely needed in parks is really disheartening.
I guess Disney doesn't understand that some people would buy MORE in terms of food and beverage if they had a place to sit- and even better, a place to sit in the shade and recharge... then go strong and end the day in the giftshops. Instead we get to buy a $15 piece of crap water blowing fan thing and you can sit on the toilet, because that's in the shade and eff you if you want something better than that.
So.
After thinking about it a bit further, it occurred to me what needs to happen at WDW.
WDW needs to build.
Some historical perspective is needed to explain this simple statement.
WDW’s business was on shaky ground prior to 9/11 due to deteriorating economic conditions. After increasing by double-digits for 6 consecutive years, P&R revenue increased by only 2.9% in fiscal year 2001. (Note that Disney’s fiscal year ends in September.)
As a direct result of 9/11, P&R revenue decreased by 7.7% in 2002 and decreased another 0.8% in 2003.
P&R investments were immediately impacted. They went from over 20% of P&R revenue in 2001 to under 10% in 2002.
A lot of what’s counted as “investing activities” is basic maintenance; Furniture, Fixtures, & Equipment (FF&E) in the business world vernacular. Essentially, what happened after 9/11 was that most special projects were cancelled and capital expenditures were limited to basic maintenance. Disney cut P&R budgets to the bone.
Those who remember the time might recall WDW closing some hotel buildings and even entire hotels. WDW went into survival mode.
Now, in that financial environment, P&R investments as a percentage of revenue cratered at 9.0% in 2003 before rebounding to 15.9% in Eisner’s last fiscal year (2005).
Yet Iger managed to average 9.6% during his first 4 years as CEO. From Wall Street’s perspective, “under 10%” became the new norm.
When the number increased to 23% in 2011 and 2012, Wall Street was concerned. Eisner and Rasulo frequently were asked, “When are you going to reduce P&R investments?”
In 2013 and the first half of 2014, the number was down to about 15%. Taking into consideration the large financial commitment to Shanghai Disneyland, domestic P&R investing activities currently are at post-9/11 levels.
Yet for Eisner’s tenure prior to 9/11, P&R investments as a percentage of revenue averaged over 26%.
Iger, Rasulo, and Wall Street think that investing 15% is sufficient. However, historically, it’s an incredibly low number for Disney.
What Iger & Rasulo have done is establish a new low standard for P&R investments that Wall Street has become accustomed to.
For the last 3 years, theme park revenue growth primarily has been through higher prices. With the notable exception of Cars Land, this is what Disney reports quarter after quarter.
“Perpetual price increase” is not a viable long-term business strategy. Not surprisingly, customers expect to receive more when they are asked to pay more. Disney’s price increases are turning away a growing segment of their core market.
WDW’s business over the last few years has been propped up by a significant increase in attendance from Brazil and Argentina. The problem is: WDW has saturated that market.
Median income for guests from those two countries exceeds $100K. That places those visiting WDW in the top 2-to-3% of incomes in their respective countries. There simply aren’t enough people left in those countries who can afford WDW vacations. That market has peaked.
WDW needs to look for new sources to grow revenue. That means North America and Europe. Long-term, simply charging more only drives those markets away. Long-term, trying to squeeze pennies out of them through MyMagic+ on prices that already are up 25% over the last 3 years is simply going to be ineffective.
Rather than continuing to raise prices, Disney needs to add value back into a WDW vacation. That means either lowering prices or adding content.
There was an ecnomic boom at WDW in the mid-2000s due to creative pricing. Disney offered some really good room discounts, added Disney's Magic Express (DME), and created the less-expensive Magic Your Way (MYW) base ticket. Disney added value back into a WDW vacation.
Still, getting most senior executives to reduce prices is like asking them to sacrifice their first-born children. That leaves corporate Disney with earning money the old-fashioned way: investing.
Plain and simple, Disney needs to invest in WDW at the levels more in keeping with what it once did; levels that resulted in consistent double-digit growth.
WDW needs to build.
Oh, and getting a little more creative with pricing and adding value into the onsite hotels wouldn’t hurt either.
Shall we also start a LeBron sub-forum then?
