Understanding Why Disney's Magical Express Is Ending

[Nubs70]

The analysis is spot on - someone convinced Disney execs that subsidizing DME was no longer needed. I subsidizing because yes pre-DME many of us paid our way to/from MCO in some form. Notice that the cost of a hotel room will not be going down come 2022, Disney just created more margin by reducing expenses. And trust me these numbers are watched and published every single day, broken down in so many ways. By hotel, by segment, by park, heck by attraction even.

Precisely, the cost (expense) of MDE was rolled into the price of the room. Now that expense in removed without a corresponding reduction in room price. If related to the price of nightly parking fee, WDW just gained 2 nights of parking fees per room booking on MDE transported customers.

 

[Nubs70]

Disney is counting on strong to historic demand after the next couple of years. People want to travel - went to the beach for Spring Break and it was quite crowded. If anything, Disney has a supply problem coming up

Disney has a space problem.

Typical spacing, where the feeling of being crowded does not exist, is 18 inches or 3ft person to person or an area of 9*PI. Physical distancing is 6ft person to person or 36*PI. Social distancing requires 4x the space for each individual. The available personal space of the parks is 25% of design while occupancy is stated at 35% of design. This is why the parks feel quite crowded.

 

[Bpmorley]

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 will be filled by other Guests, Guests who had been unable to get the rooms they wanted due to high occupancy. Besides, even if occupancy drops a bit, the cost of providing DME to all hotel Guests is expected to be greater than revenue 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.

Absolutely on point. Although I do think free dining/dining plans play some part in that PRGS. As quality and quantity took a downturn. As new DVC members in 2004 we spent about 5 years never leaving the bubble. I guess around 08/09 we started noticing everything going up. We started renting a car. Which pretty much paid for itself with how much cheaper it was to go a restaurant less than a mile away. They started to recoup some of that money with having to pay to park at resorts(luckily not DVC, at least yet)
I just read that disney and that train line are not cooperating on locations. So I'm anxious to see how this plays out and what disney will do to keep the money in.

 

[Goofyernmost]

The timing of this suggests to me that someone either really wants or doesn't want DME.

If they expect a pent-up demand for WDW over the next year and they expect capacity to hold up, then they'll be able to say "look! the consumer's don't notice/care!"; if they expect a drop off in consumer spending coming out of the pandemic, then the hotel capacity drop off could be associated with DME.

I expect two outcomes of letting go of DME (as one who has used it lots over the last decade) independent of the pandemic:

1. Fewer new purchases of DVC. DME made the idea of coming back so easy that we wanted to buy into return trips.

2. Guest satisfaction levels (especially for return visitors) will be lower, which eventually will hit capacity. Initially, families probably won't realize it's gone.

That being said, the last time we went in October, the DME capacity was abysmal and were I a complainer, it would have definitely reflected it in my Guest Satisfaction survey. I suppose if our June and October trips are the same, I may be happy to see it gone. But knowing how it has been when it was good, I already miss it.

We will never really know what straw broke the camels back on this, but @ParentsOf4 has outlined the story and the timeline very well.

Having been in the busing business I can confidently say that there is nothing inexpensive about operating scheduled bus route. They have to go back and forth even if absolutely no one rides because you can't take the chance that someone won't be there waiting, even if it is just one. They Contract that service but what Disney has to pay for the service has to cover cost of equipment, fuel, insurance, repairs, operators, supervision, scheduling, permits, airport fee's even down to the crew that cleans the buses every night. On top of that the contractor needs to make a profit. It is very, very expensive to operate. Actually Disney is lucky that despite the lost revenue caused by the Pandemic it gave them the opportunity to make some very significant changes and have a helping hand from the virus. Their decision was helped along by the pure unadulterated greed move of charging parking fees for paying guests pre-virus. That was just pure gonads! But, I guess it is now paying off. The minor increase in revenue is now going to be much bigger. They not only are easily able to cut the MDE cost, but have a whole new source of revenue.

To be honest, since I am a confirmed offsite visitor, I'm happy to see it happen. It will bring a lot of life back to the Rte. 192 strip, but also help the car rental folks as well and the roadside vendors, restaurant and attractions. It basically is good for the local economy that not all the excess money isn't heading straight to California and the offices of WDC. I think that WDW might have a problem of maintaining their hotel occupancy and some of the lower end dining establishments onsite. But, it will just be time before it is all up to normal again.

 

[Goofyernmost]

This may have been covered but it anyone thinks that the hassle created by no more MDE is bad just wait till you start relying on the "Train" service. Remember that no one carries your bag for you on a train unless you are on the Orient Express in the 1930's. Then once you get to the train station at WDW you still have to get to your resort. Even if Disney provides free transportation to the resorts, you will still have to drag your butt through another step that wasn't previously needed.

It used to be so simple, you landed at MCO, went to the Car rental locations where you had made reservations well in advance of arrival, walked to the parking garage with your baggage and drove about 10 or 12 miles to your Disney resort, or in my case to my reserved hotel along the way. If I were to make a prediction, I hope the Car Rental folks stock up on plenty of cars, because before to long people will realize that having that vehicle makes things much more magical and diverse.

 

[Bpmorley]

This may have been covered but it anyone thinks that the hassle created by no more MDE is bad just wait till you start relying on the "Train" service. Remember that no one carries your bag for you on a train unless you are on the Orient Express in the 1930's. Then once you get to the train station at WDW you still have to get to your resort. Even if Disney provides free transportation to the resorts, you will still have to drag your butt through another step that wasn't previously needed.

It used to be so simple, you landed at MCO, went to the Car rental locations where you had made reservations well in advance of arrival, walked to the parking garage with your baggage and drove about 10 or 12 miles to your Disney resort, or in my case to my reserved hotel along the way. If I were to make a prediction, I hope the Car Rental folks stock up on plenty of cars, because before to long people will realize that having that vehicle makes things much more magical and diverse.

Lets see how that plays out. Car rental agencies are at an all time low for inventory right now. Prices are thru the roof. And without DME at MCO you can bet those prices will stay high, even if they grow their inventory.

 

[the.dreamfinder]

This may have been covered but it anyone thinks that the hassle created by no more MDE is bad just wait till you start relying on the "Train" service. Remember that no one carries your bag for you on a train unless you are on the Orient Express in the 1930's. Then once you get to the train station at WDW you still have to get to your resort. Even if Disney provides free transportation to the resorts, you will still have to drag your butt through another step that wasn't previously needed.

For the guests who would have their baggage delivered to their room under DME, they could do the same for a hypothetical rail service.

In addition, it is quite common for trains that service airports to have luggage storage in each car. Brightline’s current cars have them.

 

[Nubs70]

For the guests who would have their baggage delivered to their room under DME, they could do the same for a hypothetical rail service.

In addition, it is quite common for trains that service airports to have luggage storage in each car. Brightline’s current cars have them.

The trains only has luggage storage for a fraction of the seats in the carriage. Imagine an entire carriage of WDW patrons.

 

[Goofyernmost]

Lets see how that plays out. Car rental agencies are at an all time low for inventory right now. Prices are thru the roof. And without DME at MCO you can bet those prices will stay high, even if they grow their inventory.

That will change quickly. They know exactly when DME is going to stop and they will be ready and also for the first time in almost two decades they will again have to be competitive. You will see those rental rates falling as supply outruns demand. It happened before and it will surely happen again. Before they adjusted to the DME they practically paid you to rent a vehicle. Then when the dust all settled competition was not as strong and it became expensive again. If they don't then Uber and the like will be the winners. It's all a very highly tuned system. Car Rental businesses are not Disney. They have to stay competitive. One car isn't better then the other for these purposes and even if they were they all pretty much carry the same inventories.

 

[HauntedPirate]

Lets see how that plays out. Car rental agencies are at an all time low for inventory right now. Prices are thru the roof. And without DME at MCO you can bet those prices will stay high, even if they grow their inventory.

I saw plenty of cars available for rental in mid-March. Although it was a business rate, I rented a vehicle for $235 for a week (mid-size and picked an SUV due to my Emerald Aisle membership). But prices are higher now than they have been for a while during non-peak times. I guess that’s what happens when rental car companies dump 1/2 to 3/4 of their inventory during a pandemic.

 

[Goofyernmost]

For the guests who would have their baggage delivered to their room under DME, they could do the same for a hypothetical rail service.

In addition, it is quite common for trains that service airports to have luggage storage in each car. Brightline’s current cars have them.

It depends on what train line is used for the model. I traveled by train, a lot of miles around Europe and NO ONE carried a bag for me. They had storage compartments on every train car. DME went to every resort, it wasn't a central drop off point. They didn't just get to the Welcome sign at WDW and pull over and tell everyone to have a nice day, this is WDW and now you're on your own. Granted some of the room locations are a long ways from check-in, but it was quite different.

 

[Cesar R M]

That's definitely the corporate mindset and I'm sure they've done quite a bit of research before pulling the plug, but I'm interested to see how it goes.

I don't think the lack of Magical Express will stop people from making a trip to WDW (at least in any numbers significant enough to matter). I do think it may drive some guests to off-site hotels, though, and I'm not sure those spots will all automatically be filled by other visitors. The elimination of rope drop for off-site guests was almost certainly part of the calculation and an attempt to keep people on-site, but there aren't that many guests that rope drop to begin with (if it was done by the majority of guests, it would stop being beneficial).

I've read some hints that hotel bookings have actually not been especially high at the deluxes in recent years, but I have no idea if that's actually true.

The ease of DME was a huge bonus for me to stay in the bubble. Aka less paperwork less crap.
Instead of having everything together, we have to waggle more websites, more tickets, more paper.

 

[The Colonel]

A small technical point; I don't believe DVC members can be charged for parking as their dues finance the parking lots.

Also, DME buses were required to depart no later than 30 minutes after the first guest boarded.

 

[chriskbrown]

Disney has a space problem.

Typical spacing where the feeling of being crowded does not exist is 18 inches or 3ft person to person or an area of 9*PI. Physical distancing is 6ft person to person or 36*PI. Social distancing requires 4x the space for each individual. The available personal space of the parks is 25% of design while occupancy is stated at 35% of design. This is why the parks feel quite crowded.

Well I expect this to go out the window by the fall of 2021. Desantis wants full parks now actually. Interesting to watch how Disney

This may have been covered but it anyone thinks that the hassle created by no more MDE is bad just wait till you start relying on the "Train" service. Remember that no one carries your bag for you on a train unless you are on the Orient Express in the 1930's. Then once you get to the train station at WDW you still have to get to your resort. Even if Disney provides free transportation to the resorts, you will still have to drag your butt through another step that wasn't previously needed.

It used to be so simple, you landed at MCO, went to the Car rental locations where you had made reservations well in advance of arrival, walked to the parking garage with your baggage and drove about 10 or 12 miles to your Disney resort, or in my case to my reserved hotel along the way. If I were to make a prediction, I hope the Car Rental folks stock up on plenty of cars, because before to long people will realize that having that vehicle makes things much more magical and diverse.

I rent cars or drive as one of my kids uses a wheelchair at WDW or DL.

First, the current rental experience has no cars on Side B, but this is temporary. But it was a hassle.

As DVC members, I love having a car at Disney we get food if we want off property (hello Chic-Fil-A by AKL) plus we always get groceries to save money on meals and snacks. Moreover, we use it to visit and eat at resorts. Once you have sat out at Geyser Point for a meal and drinks, it's hard to not want to go back. Last trip my daughter and I visited all of the deluxe resorts. Sannaa to-go bread service was a huge hit.

 

[chriskbrown]

A small technical point; I don't believe DVC members can be charged for parking as their dues finance the parking lots.

Also, DME buses were required to depart no later than 30 minutes after the first guest boarded.

DVC members staying on points do not pay parking. Which is one of many reasons why DVC resorts have more cars than other hotels

 

[ParentsOf4]

The timing of this suggests to me that someone either really wants or doesn't want DME.

Actually, the timing is pretty good.

Let's look at this the way those making this decision might be looking at it.

First, COVID has resulted in the most dramatic change in the history of WDW. Ever. Eliminating DME now is more like background noise than a thunderclap. Now is the time to make the announcement without being skewered by the travel media. (Complaints by a handful on fan sites do not count for much.)

Second, someone stuck their neck on the chopping block to make this decision. If hotel occupancy plummets, there will be a scapegoat or sacrificial lamb. The uncertainty caused by COVID delays this axe from falling, if it ever falls. "It's COVID's fault" is going to be the mantra for a couple of years.

 

[Jrb1979]

Actually, the timing is pretty good.

Let's look at this the way those making this decision might be looking at it.

First, COVID has resulted in the most dramatic change in the history of WDW. Ever. Eliminating DME now is more like background noise than a thunderclap. Now is the time to make the announcement without being skewered by the travel media. (Complaints by a handful on fan sites do not count for much.)

Second, someone stuck their neck on the chopping block to make this decision. If hotel occupancy plummets, there will be a scapegoat or sacrificial lamb. The uncertainty caused by COVID delays this axe from falling, if it ever falls. "It's COVID's fault" is going to be the mantra for a couple of years.

I know many want to believe Covid is the reason. A lot of these cuts were planned, Covid gave them an excuse.

 

[Sirwalterraleigh]

Lets see how that plays out. Car rental agencies are at an all time low for inventory right now. Prices are thru the roof. And without DME at MCO you can bet those prices will stay high, even if they grow their inventory.

wouldn’t they prefer it that way?

 

[Lilofan]

DVC members staying on points do not pay parking. Which is one of many reasons why DVC resorts have more cars than other hotels

DVC has its perks like a private lounge in Epcot, private moonlight magic parties, free laundry services in the DVC resorts, etc.

 

[Nubs70]

Actually, the timing is pretty good.

Let's look at this the way those making this decision might be looking at it.

First, COVID has resulted in the most dramatic change in the history of WDW. Ever. Eliminating DME now is more like background noise than a thunderclap. Now is the time to make the announcement without being skewered by the travel media. (Complaints by a handful on fan sites do not count for much.)

Second, someone stuck their neck on the chopping block to make this decision. If hotel occupancy plummets, there will be a scapegoat or sacrificial lamb. The uncertainty caused by COVID delays this axe from falling, if it ever falls. "It's COVID's fault" is going to be the mantra for a couple of years.

The new corporate mantra. Hear it every day.