Understanding Why Disney's Magical Express Is Ending

[GymLeaderPhil]

Another thing to consider is that maybe Mears didn’t want to extend their partnership with Disney. Perhaps they feel it’s more profitable for guests to use their lower occupancy vehicle services.

Or that Disney and Mears couldn’t come up with an acceptable financial agreement.

 

[Dranth]

Resort guests get free parking at the Theme Parks. I’m sure some like the flexibility of hopping in their car whenever they want to leave versus waiting for a bus/boat that could be potentially crowded with sweaty people and screaming children.

Going from one resort to another can also be tricky and time consuming with internal transportation too.

Very much this.

I use my car down there these days for many reasons but the flexibility is one of the biggest. I get where I am going faster, deal with less people, spend less time outside in the heat, etc.

The one exception to this for me is when staying at a skyliner resort. We stayed at CB for the first time our last trip just to try it out and I have to admit, that thing was amazing. We used it exclusively for DHS and Epcot with the exception of the mornings we were trying for Rise boarding groups. Once they start cramming unrelated groups into the same cabin again it may lose some appeal for me but we’ll see.

 

[thehowiet]

Given the increased traffic on property over the past decade or so you would think TDO would want to decrease not increase congestion. I imagine more rental and ride-share vehicles driving to/from and on property would have an environmental impact as well.

 

[castlecake2.0]

My family has been going to Disney from Canada almost every year since 1971. We were able to manage without magical express before and will be able to after. Not saying that’s the same for everyone, but there’s no way this is going to drop occupancy in a meaningful way or they would not have done it.

 

[Lilofan]

Given the increased traffic on property over the past decade or so you would think TDO would want to decrease not increase congestion. I imagine more rental and ride-share vehicles driving to/from and on property would have an environmental impact as well.

There is a Shell gas station near Crossroads/535 down the road from Disney Springs. It is notorious for outrageous prices per gallon of gas. They have been called out but the owner does not seem to care.

 

[tpac24]

I was just there this past week. Flew in on April 1st. There was a 75 minute wait for ME and a 45 minute wait for Uber pick up so I ended up with a 100 dollar Meers cab trip after tip to my resort. It was worth it!

 

[Lilofan]

I was just there this past week. Flew in on April 1st. There was a 75 minute wait for ME and a 45 minute wait for Uber pick up so I ended up with a 100 dollar Meers cab trip after tip to my resort. It was worth it!

At least you got a mode of transport. Currently there are no rental cars available at MCO and if there was any a economy car Kia start at $300 per day rental.

 

[Disorbust]

It seems counterintuitive to add another push to off site. The parking fees, the crazy hotel rates and remember they had EMH at many of the offsite resorts. I think the individual revenue management teams run their algorithms to meet their internal controls (Chapeks 10% growth) for revenue, and have no thoughts towards a overall business strategy.

As far as Vegas goes they were having issues prior to the pandemic. I read an article that was warning about resort fees going up in Vegas and hotel occupancy going down. They are no longer the number one destination for baclorette parties, Nashville is.

 

[Goofyernmost]

Throughout the first 30 years of Walt Disney World's (WDW) existence, WDW Guests paid for their own transportation from Orlando International Airport to WDW.

This model worked for decades. Hotel occupancy remained high and corporate Disney built more hotels to meet ever increasing demand.

9/11 changed everything. Annual hotel occupancy plummeted to 77%. This was a historically bad number for WDW, unprecedented really.

During the years that followed, Disney tried to increase occupancy by offering discounts. Despite these discounts, occupancy remain stubbornly low. Even worse, the important Per Room Guest Spending (PRGS) (i.e. how much Guests spend in each occupied room) flatlined. The discounts were not attracting onsite Guests but were hurting revenue. Something needed to be done.

In an attempt to solve these duel problems, Disney created Disney's Magical Express (DME) in 2005.

Maybe if Disney offered free airport transportation, more Guests would stay onsite. By staying onsite without alternate means of transportation, perhaps these Guests would spend all their vacation dollars at WDW. With hotel occupancy and PRGS stuck in a rut, anything was worth a try.

As it turned out, DME succeeded beyond all expectations. From 2006 to 2008, hotel occupancy jumped to an incredible 89% while PRGS increased 13.1.%. DME was a major winner for corporate Disney.

Fast-forward to 2019.

By 2019, annual hotel occupancy was over 90%. For those who might be unfamiliar with how hotel bookings work, once room occupancy reaches levels such as these, it becomes difficult to fill additional rooms. Check-out dates don't line up with check-in dates. Increasing occupancy becomes nearly impossible. Disney's corporate leadership reiterated this point during several earnings calls. From corporate Disney's perspective, the hotels were "full" in 2019.

Third-party services such as Uber created a second issue. With transportation being easier and cheaper, Guests were leaving the "Disney Bubble", meaning Disney was capturing less of their vacation dollars. Indeed, despite hotel price increases of over 5%, PRGS increased by only 2.3% in 2019, the lowest since the Great Recession of 2009.

DME no longer seemed to be needed to fill rooms, while it also no longer was an effective tool for capturing onsite vacation dollars.

The corporate wheels started to turn. DME was expensive but not working. Why not get rid of MDE?

By eliminating DME, Disney might lose bookings but some of those lost bookings would be filled by other Guests, Guests who had been unable to get the rooms they wanted due to high occupancy. Besides, even if occupancy dropped a bit, the cost of providing DME to all hotel Guests was greater than revenue that might be lost due to a modest decrease in hotel occupancy.

Ultimately, DME is costing Disney more than it's worth and you, the WDW vacationer, are going to pay the price.

I think that it is a good summary of what has been happening and why. I just have one question, if occupancy never reached 100% why would anyone have been turned away? Unless, it was based on the physical number of rooms in the resort instead of available rooms. Many rooms might have been unrentable because of repairs, general maintenance or other planned reasons. I do agree that they finally realized how much it was costing and shortly after (or maybe before) they started charging for parking they did the math and figured that they were losing a lot of revenue by paying to bring people in instead of charging for parking. They, of course, will still have people that uber in and are still going to be a captive audience. Next you may see them establish a paid generically named shuttle service to competitive venues to get money from those that were going to pay someone to take them to those places anyway. All of it pure profit with no major expense even close to MDE.

 

[marni1971]

Given the increased traffic on property over the past decade or so you would think TDO would want to decrease not increase congestion..

They do. Or did.

 

[marni1971]

There is a Shell gas station near Crossroads/535 down the road from Disney Springs. It is notorious for outrageous prices per gallon of gas. They have been called out but the owner does not seem to care.

The other one is on Vineland. So bad even the tourists know to avoid it.

 

[marni1971]

At least you got a mode of transport. Currently there are no rental cars available at MCO and if there was any a economy car Kia start at $300 per day rental.

Thankfully it seems short term now. Managed to snag a car for the fall yesterday from MCO Alamo having read about the countrywide shortage I took the plunge - got the class we wanted at an acceptable price.

Now we just need to be able to fly.

 

[JoeCamel]

At least you got a mode of transport. Currently there are no rental cars available at MCO and if there was any a economy car Kia start at $300 per day rental.

Maybe that was true for a minute but not today
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[JoeCamel]

The other one is on Vineland. So bad even the tourists know to avoid it.

One just north of the airport and another southwest of Universal. I think they pay the site lease based on gallons pumped so maybe they just need front for other business?

 

[ParentsOf4]

I just have one question, if occupancy never reached 100% why would anyone have been turned away?

Let’s use a simple example to show why it’s so difficult to achieve 100% room occupancy.

I have booked an 8-night stay, Saturday to Sunday. You want to arrive on the 2nd Saturday of my trip. Even though the room is available after that, you cannot book my room.

The reality is much more complex. There are thousands booking rooms. Disney can get check-outs and check-ins to line up pretty well, but it’s not perfect.

In addition, some days of the week are more in demand than others. Person A wants a Saturday to Sunday 8-night trip while person B wants a Thursday to Sunday 3-night trip. Both are booking Thursday to Sunday, but only one is booking Sunday to Wednesday.

Friday and Saturday nights are in highest demand, while Monday to Wednesday nights are in least demand. This is reflected in Disney’s variable pricing. A Saturday night costs a lot more than a Tuesday night. You can pay for a much cheaper trip if you check-in Sunday and check-out Thursday, yet those nights still are less likely to be booked.

Finally, Disney often blocks off certain types of bookings. For example, try to book just Saturday night at Art of Antimation. Now try to book that same Saturday for a multi night stay.

Disney is trying to “save” the high demand Saturday night at a Value Resort for those who are staying multiple nights.

 

[Disstevefan1]

There's still one glaring point that doesn't make much sense - why wouldn't Disney try to charge for this service first instead of eliminating it entirely? Even sharing revenue with Mears as their partner, they could have made a good profit that would offset any costs. Disney leaving revenue on the table is a strange thing to see.

Just a guess on my part, I think we will see the identical service we had right down to the exact skinned busses, this time for a price.. Its the Disney way.

 

[HauntedPirate]

I don't see why people renting a car wouldn't still use Disney internal transportation to get around the resort. The buses are far more convenient than driving yourself to one of the parks and getting in all the traffic plus having to pay the parking fees.

I have a car when I'm at Disney (because I drive there from Atlanta) and hardly ever use it -- mainly just to go to other resorts for occasional meals. Although I now have to pay the exorbitant resort parking costs (as @Sirwalterraleigh mentioned above with regards to the Boardwalk, when I was at POR last January the lot outside our building was never more than about 5% full), driving to the parks every day would double that expense.

Currently, getting to every park except MK is easier and faster in your own vehicle vs. the internal Disney bus system. But think about park close at MK pre-Covid - there were huge waits for buses. The bus system hasn’t been a high spot for years.

As DVC members, we’ve rented a car most stays for the last 15+ years. I see no changing of that plan anytime soon. If they take away the complimentary parking for DVC members at resorts, that could be yet another tick in the negative column to push us away from WDW. Once cruises resume, there is far less draw at the parks right now, especially for a family with children when it comes to food & beverages and the money needing to be spent in the parks, even with eating 2 meals per day in our room.

 

[Skibum1970]

Currently, getting to every park except MK is easier and faster in your own vehicle vs. the internal Disney bus system. But think about park close at MK pre-Covid - there were huge waits for buses. The bus system hasn’t been a high spot for years.

As DVC members, we’ve rented a car most stays for the last 15+ years. I see no changing of that plan anytime soon. If they take away the complimentary parking for DVC members at resorts, that could be yet another tick in the negative column to push us away from WDW. Once cruises resume, there is far less draw at the parks right now, especially for a family with children when it comes to food & beverages and the money needing to be spent in the parks, even with eating 2 meals per day in our room.

Agree with this completely. MK is the hardest by far to access via car but it is far easier using a rental car for all other parks.

 

[mattpeto]

Throughout the first 30 years of Walt Disney World's (WDW) existence, WDW Guests paid for their own transportation from Orlando International Airport to WDW.

This model worked for decades. Hotel occupancy remained high and corporate Disney built more hotels to meet ever increasing demand.

9/11 changed everything. Annual hotel occupancy plummeted to 77%. This was a historically bad number for WDW, unprecedented really.

During the years that followed, Disney tried to increase occupancy by offering discounts. Despite these discounts, occupancy remained stubbornly low. Even worse, the important Per Room Guest Spending (PRGS) (i.e. how much Guests spend in each occupied room) flatlined. The discounts were not attracting onsite Guests but were hurting revenue. Something needed to be done.

In an attempt to solve these duel problems, Disney created Disney's Magical Express (DME) in 2005.

Maybe if Disney offered free airport transportation, more Guests would stay onsite. By staying onsite without alternate means of transportation, perhaps these Guests would spend all their vacation dollars at WDW. With hotel occupancy and PRGS stuck in a rut, anything was worth a try.

As it turned out, DME succeeded beyond all expectations. From 2006 to 2008, hotel occupancy jumped to an incredible 89% while PRGS increased 13.1.%. DME was a major winner for corporate Disney.

Fast-forward to 2019.

By 2019, annual hotel occupancy was over 90%. For those who might be unfamiliar with how hotel bookings work, once room occupancy reaches levels such as these, it becomes difficult to fill additional rooms. Check-out dates don't line up with check-in dates. Increasing occupancy becomes nearly impossible. Disney's corporate leadership reiterated this point during several earnings calls. From corporate Disney's perspective, the hotels were "full" in 2019.

Third-party services such as Uber created a second issue. With transportation being easier and cheaper, Guests were leaving the "Disney Bubble", meaning Disney was capturing less of their vacation dollars. Indeed, despite hotel price increases of over 5%, PRGS increased by only 2.3% in 2019, the lowest since the Great Recession of 2009.

DME no longer seemed to be needed to fill rooms, while it also no longer was an effective tool for capturing onsite vacation dollars.

The corporate wheels started to turn. DME was expensive but not working. Why not get rid of DME?

By eliminating DME, Disney might lose bookings but some of those lost bookings would be filled by other Guests, Guests who had been unable to get the rooms they wanted due to high occupancy. Besides, even if occupancy dropped a bit, the cost of providing DME to all hotel Guests was greater than revenue that might be lost due to a modest decrease in hotel occupancy.

Ultimately, DME is costing Disney more than it's worth and you, the WDW vacationer, are going to pay the price.

This is great, thanks for sharing.

It's just quite ironic that removing a Bubble Perk to drive down bookings is something they are striving for. Hopefully it bites them a bit (maybe they won't be happy at 80% hotel occupancy for instance) over the next few years and they reconsider.

I still think Genie will be providing an alternate way (with a fee) to the resorts.

 

[JoeCamel]

This is great, thanks for sharing.

It's just quite ironic that removing a Bubble Perk to drive down bookings is something they are striving for. Hopefully it bites them a bit (maybe they won't be happy at 80% hotel occupancy for instance) over the next few years and they reconsider.

I still think Genie will be providing an alternate way (with a fee) to the resorts.

They have been discouraging APs for years. Some years more than others but a long stretch in the 2010's