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The Spirited Seventh Heaven ...
- Thread starter WDW1974
- Start date
ABQ
Well-Known Member
Right, but my point of it being what the post about having your phone on before entering the parks reasoning was is all I was getting it. And still questioning as @Lee was. Is that what he was referring to? I hope not, lines are slow enough already, at least if you have a bag that is.
fillerup
Well-Known Member
Yes, it's time - with FY14 being 3/4 behind us - for the questions to become much more probing and insistent. No more of the generic "We're reducing spending on MM+ and our guests are receiving the benefits of this new technology and are overwhelmingly pleased with the new experiences."
culturenthrills
Well-Known Member
And it has seemed in the last 10-15 years when they do build something there are all kinds of problems, the yeti, clearances on Dumbo, updated DL monorail issues, not taking into account daily operational issues, etc. They seem to waste money on things the guests aren't really gonna notice but they think is neat. They almost seem to have contempt for the guests. They dont know how to get bang for their buck. Whereas Universal Creative seems to try to get the best bang for their buck. Taking existing tech aka kuka arm, coasters, airport terminal shuttle, rfid tech and adapt it and create something new that has never been seen before on a reasonable budget. They truly seem to try to build from the pov of the guests, how will they see this, react to it, etc. Something WDI seems to have lost at times. Where they seemed to be more about pleasing themselves and we created these custom doo hickeys that cost $$$$ when they could have used something off the shelf. After riding HE a few times looking around I noticed that wow things were already getting scuffed up and banged up already but then I looked closer and realized that UC did all that and had aged it to looked used and lived in and alive like a real train would or that almost half of DA is undercover or air conditioned which is just a brilliant design for Florida weather so you don't have to get wet if you don't want to or you can cool off without going into a shop. They have out Disneyed Disney.
GoofGoof
Premium Member
It has to deliver now. The point is this particular analyst is listing MM+ as one of the 3 potential key drivers to growth for TWDC and as a result a higher stock price. This is based on the expectations set by Iger and Co. If they don't deliver, Wall Street will be all over them.
NJBrandon
Well-Known Member
Why would I care about parks in Asia that I will never visit in my life? I care about Orlando because that is where I will be going and that is where I will be spending my money. I'm glad you agree that Universal is the one that is growing in Orlando.
baymenxpac
Well-Known Member
georgia wide receiver chris conley made a star wars fan film, and i'd argue that it might be better than the prequels:
GoofGoof
Premium Member
Amen.What? Nothing except that MyMagic+ is a failure on this site?
Looks like I have to repost something I wrote a couple of months back on another Spirited thread ....
Disney has made a horrible mistake with MyMagic+.
Now that I have your attention ...
No, I’m not bashing MyMagic+. Quite the opposite. The just-released Q2 company financial results suggest that MyMagic+ could have been a key driver to financial success, if leveraged properly. However, it looks like Disney leadership is letting a tremendous opportunity slip away.
Let’s focus on a single passage from the company’s press release for this quarter and consider what Disney’s 10Q filing tells us about it:
"Higher operating income was due to growth at our domestic parks and resorts driven by increased guest spending at Walt Disney World Resort, higher attendance at Disneyland Resort and increased occupied room nights at both resorts. Higher guest spending was due to higher average ticket prices and food, beverage and merchandise spending. These increases were partially offset by higher costs which were driven by spending on MyMagic+ and labor and other cost inflation, partially offset by lower pension and postretirement medical costs."
As disclosed in the 10Q, domestic theme park attendance is up 3% but that number is artificially low as a result of Easter shifting to Q3 this year. As indicated in the press release, it appears most, perhaps even all, of the quarter’s gain is driven by DLR. WDW attendance essentially is flat.
Flat attendance at any Orlando theme park is pretty good performance right now, especially with the loss of Easter week.
Historically, theme park attendance tends to decline before the unveiling of a major addition. Park goers tend to defer their visits, waiting for the big opening.
Although it’s debatable whether Seven Dwarfs Mine Train (SDMT) qualifies as a truly major addition, it is WDW’s best addition since Expedition Everest in 2006. That’s 8 years; practically a lifetime between rides when it comes to amusement parks. For Disneyphiles, SDMT represents the best thing in years.
There should be no debate that Diagon Alley is a huge addition in Orlando.
With Diagon Alley and SDMT rolling out this summer, it’s likely that large numbers delayed their Orlando vacations this year. Even with the addition of Diagon Alley, Universal remains a 2 or 3 day vacation for most, giving WDW the opportunity to draw these guests into their resort for 3 or 4 days. This summer, Diagon Alley will increase attendance at both Uni and WDW.
All things considered, flat attendance at WDW right before the opening of Diagon Alley and SDMT is pretty good performance. WDW remains as popular as ever.
Another number from the 10Q to consider is Per Capita Guest Spending (PCGS). This represents the amount spent per person at the theme parks. This is up only 4% 2Q2013 vs 2Q2014.
For corporate Disney, this is bad, really bad. In recent quarters, 8% has been the norm. WDW has raised ticket prices an average of 12% over the last 12 months. Food, beverage, and merchandise prices are up considerably too.
A 4% PCGS increase along with much higher prices suggest WDW theme park prices are reaching a breaking point. Rather than simply pay Disney’s higher prices, guests are reducing spending. That means fewer meals; fewer drinks; fewer t-shirts. All these are high margin items. This adversely impacts profitability. Disney simply cannot keep charging more for the same old same old. Their paying customers are starting to revolt.
Taken together, the attendance and PCGS numbers suggest that guests still love WDW but just can’t stomach the prices anymore.
Disney needs to slow down theme park price increases and look for revenue elsewhere.
Guess what? They have it at the hotels if they are not afraid to use it.
What do I mean?
Unlike the theme park numbers, which are roughly split 2-to-1 between WDW vs. DLR, the 10Q hotel numbers are nearly 90% of what’s happening at WDW. Overwhelmingly, these numbers represent what’s happening in Orlando.
And this quarter’s hotel numbers are good.
Really good.
Both for Disney and for consumers.
MyMagic+ was rolled out to onsite guests in October and was announced before then, just in time to influence guest hotel choices for the just-reported quarter.
Guests responded tremendously. Whether frightened at the prospect of being treated like second-class citizens and being forced to stand in those sometimes ungodly FastPass+ kiosk lines or simply being attracted by the idea of preselecting 3 attractions before arriving, guests decided to stay onsite.
Occupancy skyrocketed from 80% to 86% year-over-year, one of the largest jumps in the history of WDW. Available Room Nights remained flat, suggesting this surge in occupancy was real.
This is not some correction easily attributable to external factors such as the economy or cheap travel. The improved occupancy represents a significant rethinking by WDW guests on the way they selected their hotels.
Remember, pre-selection of FastPass+ wasn’t made available to offsite guests until April, after the end of the quarter. Throughout the entire second quarter, onsite guests had a distinct advantage over offsite guests. The second quarter results show a customer base ready to respond to this advantage by purchasing more high-margin hotel stays.
Also helping this surge were flat hotel rates.
Per Room Guest Spending (PRGS) represents the amount spent per occupied room night at the hotels, including “guest spending on food, beverage and merchandise at the hotels”. PRGS was up only 2.6%. Think about that for a moment. Taking into account food, beverage and merchandise price increases at the hotels and actual room rates were flat.
Taken together, MyMagic+ along with flat hotel rates helped fuel a surge in onsite hotel stays.
Did I mention that WDW’s hotels are obscenely profitable?
Once a hotel reaches a certain occupancy rate, the incremental cost of filling extra rooms is minimal. At Disney’s occupancy rates, the incremental cost of filling extra rooms is perhaps $20 or $30/night. Yet PRGS was $275/night. That’s a lot of profit.
WDW has nearly 24,000 hotel rooms. Until the most recent quarter, over 5,000 of these were going empty most nights. $275 X 5,000 X 365 nights per year equals, well, it equals a lot of money every year.
Whether you like it or not, MyMagic+ could work as a tool to increase the number of onsite hotel stays. MyMagic+ could be used to fill those empty rooms, even justify the construction of additional rooms.
With Disney’s incredible margins, increased hotel stays are WDW’s next chance to cash in big.
Yet WDW management is letting this opportunity slip away.
Offsite guests now are able to make their FastPass+ selections 30 days in advance, considerably reducing the appeal of onsite stays. Piling on top of that, MagicBands now are for sale for a measly $12.95. Rather than representing a badge of distinction for onsite guests, MagicBands can be purchased for about the same price as those cheap metal pins Disney sells by the tens-of-millions.
Offsite and local guests won’t like the suggestion but, if kept as an exclusive onsite perk, MyMagic+ was a potential gold mine or, in the spirit of SDMT, a potential diamond mine.
Fortunately for offsite and local guests, Disney management was afraid to leverage MyMagic+ to its full potential.
It just goes to show that WDW continues to be mismanaged, both creatively and financially.
WDW desperately needs strong leadership with vision.
It seemed to me like the biggest financial gain from MM+ would have been increased room occupancy. No clue why they would let that one slip away. Another lesson they should have learned from their buddy down the road.
Mike S
Well-Known Member
That actually does sound like a great way they could've made money off of it. I think they could've still included passholders with MM+ and still make a killing just from the hotel stays.What? Nothing except that MyMagic+ is a failure on this site?
Looks like I have to repost something I wrote a couple of months back on another Spirited thread ....
Disney has made a horrible mistake with MyMagic+.
Now that I have your attention ...
No, I’m not bashing MyMagic+. Quite the opposite. The just-released Q2 company financial results suggest that MyMagic+ could have been a key driver to financial success, if leveraged properly. However, it looks like Disney leadership is letting a tremendous opportunity slip away.
Let’s focus on a single passage from the company’s press release for this quarter and consider what Disney’s 10Q filing tells us about it:
"Higher operating income was due to growth at our domestic parks and resorts driven by increased guest spending at Walt Disney World Resort, higher attendance at Disneyland Resort and increased occupied room nights at both resorts. Higher guest spending was due to higher average ticket prices and food, beverage and merchandise spending. These increases were partially offset by higher costs which were driven by spending on MyMagic+ and labor and other cost inflation, partially offset by lower pension and postretirement medical costs."
As disclosed in the 10Q, domestic theme park attendance is up 3% but that number is artificially low as a result of Easter shifting to Q3 this year. As indicated in the press release, it appears most, perhaps even all, of the quarter’s gain is driven by DLR. WDW attendance essentially is flat.
Flat attendance at any Orlando theme park is pretty good performance right now, especially with the loss of Easter week.
Historically, theme park attendance tends to decline before the unveiling of a major addition. Park goers tend to defer their visits, waiting for the big opening.
Although it’s debatable whether Seven Dwarfs Mine Train (SDMT) qualifies as a truly major addition, it is WDW’s best addition since Expedition Everest in 2006. That’s 8 years; practically a lifetime between rides when it comes to amusement parks. For Disneyphiles, SDMT represents the best thing in years.
There should be no debate that Diagon Alley is a huge addition in Orlando.
With Diagon Alley and SDMT rolling out this summer, it’s likely that large numbers delayed their Orlando vacations this year. Even with the addition of Diagon Alley, Universal remains a 2 or 3 day vacation for most, giving WDW the opportunity to draw these guests into their resort for 3 or 4 days. This summer, Diagon Alley will increase attendance at both Uni and WDW.
All things considered, flat attendance at WDW right before the opening of Diagon Alley and SDMT is pretty good performance. WDW remains as popular as ever.
Another number from the 10Q to consider is Per Capita Guest Spending (PCGS). This represents the amount spent per person at the theme parks. This is up only 4% 2Q2013 vs 2Q2014.
For corporate Disney, this is bad, really bad. In recent quarters, 8% has been the norm. WDW has raised ticket prices an average of 12% over the last 12 months. Food, beverage, and merchandise prices are up considerably too.
A 4% PCGS increase along with much higher prices suggest WDW theme park prices are reaching a breaking point. Rather than simply pay Disney’s higher prices, guests are reducing spending. That means fewer meals; fewer drinks; fewer t-shirts. All these are high margin items. This adversely impacts profitability. Disney simply cannot keep charging more for the same old same old. Their paying customers are starting to revolt.
Taken together, the attendance and PCGS numbers suggest that guests still love WDW but just can’t stomach the prices anymore.
Disney needs to slow down theme park price increases and look for revenue elsewhere.
Guess what? They have it at the hotels if they are not afraid to use it.
What do I mean?
Unlike the theme park numbers, which are roughly split 2-to-1 between WDW vs. DLR, the 10Q hotel numbers are nearly 90% of what’s happening at WDW. Overwhelmingly, these numbers represent what’s happening in Orlando.
And this quarter’s hotel numbers are good.
Really good.
Both for Disney and for consumers.
MyMagic+ was rolled out to onsite guests in October and was announced before then, just in time to influence guest hotel choices for the just-reported quarter.
Guests responded tremendously. Whether frightened at the prospect of being treated like second-class citizens and being forced to stand in those sometimes ungodly FastPass+ kiosk lines or simply being attracted by the idea of preselecting 3 attractions before arriving, guests decided to stay onsite.
Occupancy skyrocketed from 80% to 86% year-over-year, one of the largest jumps in the history of WDW. Available Room Nights remained flat, suggesting this surge in occupancy was real.
This is not some correction easily attributable to external factors such as the economy or cheap travel. The improved occupancy represents a significant rethinking by WDW guests on the way they selected their hotels.
Remember, pre-selection of FastPass+ wasn’t made available to offsite guests until April, after the end of the quarter. Throughout the entire second quarter, onsite guests had a distinct advantage over offsite guests. The second quarter results show a customer base ready to respond to this advantage by purchasing more high-margin hotel stays.
Also helping this surge were flat hotel rates.
Per Room Guest Spending (PRGS) represents the amount spent per occupied room night at the hotels, including “guest spending on food, beverage and merchandise at the hotels”. PRGS was up only 2.6%. Think about that for a moment. Taking into account food, beverage and merchandise price increases at the hotels and actual room rates were flat.
Taken together, MyMagic+ along with flat hotel rates helped fuel a surge in onsite hotel stays.
Did I mention that WDW’s hotels are obscenely profitable?
Once a hotel reaches a certain occupancy rate, the incremental cost of filling extra rooms is minimal. At Disney’s occupancy rates, the incremental cost of filling extra rooms is perhaps $20 or $30/night. Yet PRGS was $275/night. That’s a lot of profit.
WDW has nearly 24,000 hotel rooms. Until the most recent quarter, over 5,000 of these were going empty most nights. $275 X 5,000 X 365 nights per year equals, well, it equals a lot of money every year.
Whether you like it or not, MyMagic+ could work as a tool to increase the number of onsite hotel stays. MyMagic+ could be used to fill those empty rooms, even justify the construction of additional rooms.
With Disney’s incredible margins, increased hotel stays are WDW’s next chance to cash in big.
Yet WDW management is letting this opportunity slip away.
Offsite guests now are able to make their FastPass+ selections 30 days in advance, considerably reducing the appeal of onsite stays. Piling on top of that, MagicBands now are for sale for a measly $12.95. Rather than representing a badge of distinction for onsite guests, MagicBands can be purchased for about the same price as those cheap metal pins Disney sells by the tens-of-millions.
Offsite and local guests won’t like the suggestion but, if kept as an exclusive onsite perk, MyMagic+ was a potential gold mine or, in the spirit of SDMT, a potential diamond mine.
Fortunately for offsite and local guests, Disney management was afraid to leverage MyMagic+ to its full potential.
It just goes to show that WDW continues to be mismanaged, both creatively and financially.
WDW desperately needs strong leadership with vision.
Actually it's almost impossible to prove one way or another if next gen is working. My best gage to judge is if Disney increases their 4 park total attendance more in actual numbers than universal. Reading this site one would think Disney is falling apart but most people know better. If universal grows 15% in total attendance they will draw 2.5 million more this year. Disney needs a 6% increase get 3 million more. The strongest sign for a major increase is the increase in park hours for the rest of the year. This is something disney has never done this far in advance. I also think the signs look great for universal since they will be building more hotel rooms, or should I say their partner is. After all all the Universal Hotels are a partnership with Loews and not owned by universal like most of Disney's are. Based on hotel occupancy it's possible that universal could increase 20% and Disney 10% which would be a little over 3 million for universal and 5 million for Disney. Universal is doing great and bringing in wonderful rides but Disney is also doing very well and growing.
asianway
Well-Known Member
There seems to be a chicken or the egg thing going on with "menu planning" I don't quite understand. Who is the one to actually say "Epcot needs an E ticket as of 2010 and is now 4 years overdue"? WDI, TDI, or Burbank? I've heard all 3 and get confused every time this comes up thanks
ParentsOf4
Well-Known Member
Within the confines of an earnings call, Wall Street has been about as probing as possible with regard to MyMagic+'s financial performance.
An earnings call is not like some "60 Minutes" piece of journalism. It's intended to be an extremely polite Q&A. A question is asked once, answered, and then it's on to the next question.
A couple of earnings calls ago, Wall Street took the unusual step of asking Iger about MyMagic+'s financials twice. Something like that rarely happens during one of these calls.
Wall Street just doesn't understand how MyMagic+ is supposed to pay for itself. (Note they don't ask Universal similar questions about Diagon Alley.
)Let's look at Wall Street's questions from the last six straight earnings calls and see if anyone can answer them with anything more meaningful that Iger's and Rasulo's hand-waving replies.
February 5, 2013: "On the parks, I guess it was mostly cost-related. Could you clarify on the technology spend -- or MyMagic+ or however you want to refer to it -- how much more to go is -- the press reported it's something like $800 million to $1 billion of spend on that effort. How much more is there to go?"
May 7, 2013: "Bob, if you could talk about the timing of the rollout of MyMagic+. Is there any way to give us a sense of the potential impact from that initiative? It's not the easiest thing for us to model."
May 7, 2013: "Perhaps then, Bob, just in terms of timeframe, would that be something where by fiscal 2014 you would think we start to see some impact?"
August 6, 2013: "You didn't mention MyMagic+. Any comment on how that's impacting business at this point?"
November 7, 2013: "And just a follow-up question on the domestic parks. I think in the past, you've sort of called out some incremental expense that we may see in different initiatives. I guess is there something incremental we should look out for in fiscal 2014? I guess, where are you on the spending around MyMagic+? And then on MyMagic+ when we might see, I guess, some signs or data points of how it's impacting the business?"
February 5, 2014: "Then for Bob, you guys had talked about the cost of MyMagic+ this quarter, but can you give us some indications of how the rollout's going on revenue and customer behavior, because per capita is really good at this point, so what's going on with MyMagic+?"
February 5, 2014: "Then just my second question on MyMagic+, I know you said the benefit of guest satisfaction, but there must be some benefit to revenue to be able to put a device button, get out of the store, run to doors quickly. Is it showing up in the per cap revenues? On the cost side, how much more is there to go? How much more it is there to go now?"
May 6, 2014: "And then any color maybe on the cost side with the launch cost, if there is anything significant for this last phase of the opening and I guess additional costs of MyMagic+ there, or is most of that behind us?"
Wall Street is asking the same basic questions again and again because Iger and Rasulo are not giving satisfactory answers. Iger & Rasulo keep tiptoeing around the questions, talk about vague notions of getting the guest to spend more as a result of a “better experience”, and then move on.
We're now at the point where MyMagic+ should start having an effect. Let's watch the numbers from the next four quarters and see what happens.
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bhg469
Well-Known Member
Not a chance! That place is going to be coo coo bananas crowded for months. I wish I could be there but I know I will probably never be able to see it with the minimal crowds that would make it even cooler to visit.Don't tell me spirit went and joined #potterwatch.
ParentsOf4
Well-Known Member
Disney (like Universal) nearly always has some problems when they build something.
The difference is that the WDW of the 1980s simply wouldn't let something as glaringly bad as Disco Yeti fester for the better part of a decade.
NJBrandon
Well-Known Member
That is probably the worst gauge you could possibly use. Of course 4 parks with a higher base attendance are going to increase in raw numbers more than 2 parks with a lower base of attendance. That is a ridiculous way to look at things.
The reason to care about growth in Asia is if you want to ever retire you will need income and that will come from corporate growth. There is a much lower growth rate in the United States than Asia. If you invest you 401 in companies that only invest in the United States you will not have as much. From a standpoint of world growth Disney is doing better than Comcast. From a standpoint of Orlando theme parks Universal is growing at a higher percent. If Disney had invested their money in Orlando rather than Shanghai they would have had a 5th gate, more hotels and DVC's but their profits would not increase the way they will when Shanghai opens. Does this matter to theme park fans? Only if they own stock and or mutual funds. Who are those people? The ones who vacation in Orlando. However now that Shanghai is just about done from a capital standpoint you will see a much higher investment in WDW. I still predict a 5th gate at WDW announced prior to 2021 and the completed upgrades to both Epcot and DHS.
Mr. Moderate
Well-Known Member
Thank you for saying this and it's what I've not only been trying to say myself, but feeling it as well. The direction of the company and the state of the parks, especially at WDW really bothers me. It seems pretty clear to me that there's a segment of the top management not even trying anymore to wow us with the newest attractions and technology, as the 24/7 lets milk Frozen for all it's worth mindset, is in full swing. My Face Book feed is tied to a lot of news of what's going on in the theme parks and it makes me shake my head at seeing the difference in what both companies are offering to us fans. It's depressing to see DVC, or worse yet, Frozen after Frozen crap be the highlight of WDW offings, but then see the jaw dropping spectacle of what USO is offering. Just seems unreal to me.