TWDC 2QFY16 Earnings Call Thread

[GhostHost1000]

New here, first post, so be easy on me.

But I don't buy the attendance is ancillary notion, if that were the case, then why are they offering steeper discounts and offering them more often than normal this year? They are spinning it to sound like guests are spending more on products, however per guests spending is up simply because of the increases. Per Guests spending is up, but becasue of those increases they now have less guests to collect money from. Those increases coupled with the stagnation of the parks over the past few years, and the cuts they've made are a direct correlation as to why attendance is down at WDW.

WDW guests have been asked to do a lot over the past couple of years, including going through the headache of the implementation of MM+. I think all of those things have left a sour taste in some people's mouths, and they decided to skip a year. That's exactly what has happened in my house, and I know from this message board and others, that we aren't the only ones.

They want the parks full all the time, if they tell you differently, they are lying to you.

trust me... there are NOT offering steeper discounts and definitely not more of them. They advertise discounted rooms/packages, etc but are actually offering LESS of them then they ever have before (based on my info from travel agents I know)

30% off rooms or Free Dining may look attractive... but when only 20 people can get in on it, who cares... only those 20 people right? Their thinking is if they can interest people into going to WDW and try to book the discount but can't they'll still go and just pay more. I'm telling ya they are brilliant morons at the top

 

[ChipNDale79]

trust me... there are NOT offering steeper discounts and definitely not more of them. They advertise discounted rooms/packages, etc but are actually offering LESS of them then they ever have before (based on my info from travel agents I know)

30% off rooms or Free Dining may look attractive... but when only 20 people can get in on it, who cares... only those 20 people right? Their thinking is if they can interest people into going to WDW and try to book the discount but can't they'll still go and just pay more. I'm telling ya they are brilliant morons at the top

I've received no less than 5 pin codes this year, I've also talked to others that have received more than usual this year as well. Their promotions are not just the ones they have on their website.

 

[GhostHost1000]

I've received no less than 5 pin codes this year, I've also talked to others that have received more than usual this year as well. Their promotions are not just the ones they have on their website.

true... but pin codes are less given out then they once where. You must be on their "try to bait and hook 'em" list

 

[ChipNDale79]

true... but pin codes are less given out then they once where. You must be on their "try to bait and hook 'em" list

I am, and I think thats because I've priced out trips this year without booking, and they are trying to nudge me. It's not working this year.

I understand how the pin codes work and not everyone gets them, but when you start talking to others and all of a sudden most of you are getting pin codes, you also notice you can almost any table you want on any given day, i had a feeling minimal attendance growth was coming to WDW. i did not expect a "modest" decrease though.

 

[GhostHost1000]

I am, and I think thats because I've priced out trips this year without booking, and they are trying to nudge me. It's not working this year.

I understand how the pin codes work and not everyone gets them, but when you start talking to others and all of a sudden most of you are getting pin codes, you also notice you can almost any table you want on any given day, i had a feeling minimal attendance growth was coming to WDW. i did not expect a "modest" decrease though.

I have a bad feeling "modest" decreases will continue for another year - maybe Pandora will help bring folks back... then again the cost to do so keeps going up so...

 

[ChipNDale79]

I have a bad feeling "modest" decreases will continue for another year

I don't disagree with that, and to be honest, that's not a bad thing for the consumer.

 

[GhostHost1000]

I don't disagree with that, and to be honest, that's not a bad thing for the consumer.

for crowds no... but for wdw profit to put back into their attractions and not keep cuts costs elsewhere... it's not good

 

[ChipNDale79]

for crowds no... but for wdw profit to put back into their attractions and not keep cuts costs elsewhere... it's not good

See that’s the other thing about this thread, there’s a lot of doom and gloom regarding the future of Disney, keep in mind they are still making massive profits, they aren’t in danger of going anywhere for a long time.


The issue here is that they didn’t grow as much as people wanted them to. The low attendance will force them to do things to increase the attendance and therefore grow as a company. The last few years the consumer has allowed Disney to take the “lazy” approach. We’ve allowed them to do as little as possible to increase our experience while they’ve increased our price. Now the consumer is saying enough is enough, if you’re going to increase our pricing, then make our experience better as well. They’ve tested the market to see how far they can push it, I think, and hopefully I’m right on this, they’ve found how far they can push the market.


Lower attendance now can be a good thing, it’ll force Disney to get better.

 

[GhostHost1000]

See that’s the other thing about this thread, there’s a lot of doom and gloom regarding the future of Disney, keep in mind they are still making massive profits, they aren’t in danger of going anywhere for a long time.


The issue here is that they didn’t grow as much as people wanted them to. The low attendance will force them to do things to increase the attendance and therefore grow as a company. The last few years the consumer has allowed Disney to take the “lazy” approach. We’ve allowed them to do as little as possible to increase our experience while they’ve increased our price. Now the consumer is saying enough is enough, if you’re going to increase our pricing, then make our experience better as well. They’ve tested the market to see how far they can push it, I think, and hopefully I’m right on this, they’ve found how far they can push the market.


Lower attendance now can be a good thing, it’ll force Disney to get better.

let's hope... but based on some of Iger's comments... it almost seemed like they were more in favor of raising prices then attracting more people

 

[ChipNDale79]

let's hope... but based on some of Iger's comments... it almost seemed like they were more in favor of raising prices then attracting more people

Iger is the problem......

 

[Disone]

IMO, This is not a reaction, some much as its just a leveling off of supply and demand. Disney has been aggressively raising prices for a couple of years now, testing what the market will bare. Hopefully they have found the peak. But Iger also suggests part of the decline could be due to how the holidays fell in Q2 2016 vs. 2015. I think it will take more then one quarter of attendance drop to send the message to corporate to hold on the price increases.

 

[GhostHost1000]

IMO, This is not a reaction, some much as its just a leveling off of supply and demand. Disney has been aggressively raising prices for a couple of years now, testing what the market will bare. Hopefully they have found the peak. But Iger also suggests part of the decline could be due to how the holidays fell in Q2 2016 vs. 2015. I think it will take more then one quarter of attendance drop to send the message to corporate to hold on the price increases.

I don't buy the holiday calendar at all.... they will say anything to make it sound better

I'm like you I hope they've found their ceiling

 

[gdrj]

In theory isn't the dynamic pricing meant to change guests habits and have them visit during non-peak times? If that is the case attendance should go be up in May and September (I don't believe it). I can only speak anecdotally for myself. As a repeat visitor last few years averaging 4 trips a year, we have no current or pending plans to visit. It's due to a combination of things including, lack of attractions at EPCOT and HS, ticket pricing, longer waits at MK while EPCOT and HS have limited rides, increase costs from merchandise to food. Increased cost of TIW. Increased number of "special event pricing" (I know I don't have to do, and I don't but it irritates me). Extra $20 bucks to park closer when even if I arrive early. The staff reductions, which in my opinion impact my experience. Increased maintenance issues that are visible in parks (chipped paint, dirty bathrooms). Hotel standards slipping, and a lack of caring by mgt of guest concerns. Instead of probably at least a Summer and Fall Trip we are spending our money at the beach and a non Disney cruise.

I'm sure as the new attractions open this year attendance will get a bump and Mr. Iger will think all is well. Maybe it is, but as a longtime visitor the lost opportunity money is what is hard for Disney to account for. Our next trip to Orlando (whenever that is) will most likely include Universal for the first time.

 

[GhostHost1000]

In theory isn't the dynamic pricing meant to change guests habits and have them visit during non-peak times? If that is the case attendance should go be up in May and September (I don't believe it). I can only speak anecdotally for myself. As a repeat visitor last few years averaging 4 trips a year, we have no current or pending plans to visit. It's due to a combination of things including, lack of attractions at EPCOT and HS, ticket pricing, longer waits at MK while EPCOT and HS have limited rides, increase costs from merchandise to food. Increased cost of TIW. Increased number of "special event pricing" (I know I don't have to do, and I don't but it irritates me). Extra $20 bucks to park closer when even if I arrive early. The staff reductions, which in my opinion impact my experience. Increased maintenance issues that are visible in parks (chipped paint, dirty bathrooms). Hotel standards slipping, and a lack of caring by mgt of guest concerns. Instead of probably at least a Summer and Fall Trip we are spending our money at the beach and a non Disney cruise.

I'm sure as the new attractions open this year attendance will get a bump and Mr. Iger will think all is well. Maybe it is, but as a longtime visitor the lost opportunity money is what is hard for Disney to account for. Our next trip to Orlando (whenever that is) will most likely include Universal for the first time.

that's not what will happen for the majority IMO... some can only go during the summer months when kids are out of school so they will either pay more, or not go at all

 

[FullSailDan]

I don't buy the holiday calendar at all.... they will say anything to make it sound better

I'm like you I hope they've found their ceiling

I think this has way more to do with the last few years having stupidly high attendance rates and the parks being over crowded. The increased prices did exactly what they needed to do: kept the revenue up while thinning the heard. The parks can't operate at the levels they had this time last year on a continuous basis.

 

[ford91exploder]

trust me... there are NOT offering steeper discounts and definitely not more of them. They advertise discounted rooms/packages, etc but are actually offering LESS of them then they ever have before (based on my info from travel agents I know)

30% off rooms or Free Dining may look attractive... but when only 20 people can get in on it, who cares... only those 20 people right? Their thinking is if they can interest people into going to WDW and try to book the discount but can't they'll still go and just pay more. I'm telling ya they are brilliant morons at the top

The 'Bait-n-Switch' aspect is something I absolutely despise about today's Disney advertising, Yes they have 30% discounts but do you know anyone who has actually GOTTEN one of those packages. But as @GhostHost1000 notes they assume people will reserve anyway once the 1 discounted room in the resort 'sells out'. The key is in the fine print where it says 'select' rooms. We really need a truth in advertising law where disney is required IN THE AD to disclose how many rooms are on 'sale' just like up here where when you see the car ads it says X for this price.

 

[IanDLBZF]

We really need a truth in advertising law where disney is required IN THE AD to disclose how many rooms are on 'sale' just like up here where when you see the car ads it says X for this price.

Such already exists...
https://www.ftc.gov/news-events/media-resources/truth-advertising

 

[ford91exploder]

New here, first post, so be easy on me.

But I don't buy the attendance is ancillary notion, if that were the case, then why are they offering steeper discounts and offering them more often than normal this year? They are spinning it to sound like guests are spending more on products, however per guests spending is up simply because of the increases. Per Guests spending is up, but becasue of those increases they now have less guests to collect money from. Those increases coupled with the stagnation of the parks over the past few years, and the cuts they've made are a direct correlation as to why attendance is down at WDW.

WDW guests have been asked to do a lot over the past couple of years, including going through the headache of the implementation of MM+. I think all of those things have left a sour taste in some people's mouths, and they decided to skip a year. That's exactly what has happened in my house, and I know from this message board and others, that we aren't the only ones.

They want the parks full all the time, if they tell you differently, they are lying to you.

Ordinarily I'd be down at WDW for 2 weeks now, NOT THIS YEAR.

 

[ford91exploder]

Such already exists...
https://www.ftc.gov/news-events/media-resources/truth-advertising

Yes if you are a TA you know how many rooms are on sale, But a regular person trying to reserve on the web site or over the phone has no idea that there are only X number of rooms on sale. That needs to change and the ad needs to say 100 rooms on sale for 30% off not the current deliberately misleading BS.

 

[raven]

As long as those fewer guests will turn over their wallets at the gate no matter what the price, the company is happy.

So if only 1 guest comes next quarter but spends $1 Bil they will be happy? What about all those empty rooms? That would be money lost. And operating all of those attractions, restaurants and other places on a daily basis would be meaningless as well.

You actually want BOTH income AND attendance to go up. If they both are going in opposite directions then something will snap soon.