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Walt Disney World’s Biggest Investment since 1998
- Thread starter ParentsOf4
- Start date
No Name
Well-Known Member
On the bright side, Walt Disney Studios Park helps the castle park retain its theme and cohesiveness. It also tries to help the hotel issue.
In Hong Kong's castle park, they have added TSL and will be adding "mini land" extensions to tomorrowland and fantasyland. In Shanghai Disneyland's castle park, they are adding TSL too.
However, Paris was able to keep TSL out of their castle park due to the existence of the Walt Disney Stuidos Park. WDSP serves as a very good location for single-IP-land additions (what the company is in love with these days). So when they go to add Star Wars Land, Cars Land, Marvel Land, Nemo Land, future IP aquistion land... there's no struggling to squeeze them into the castle park. Heck, there's no reason to do so. WDSP needs the additions and will gladly take them.
As far as hotels go, well, Eisner and co. showed their confidence in the resort by opening with seven. Does Disneyland Paris release their hotel occurpancy rates? I believe it was quite low for many years. I am not sure if the second park inscreased occupancy, though I imagine it did, even if not by much. And if it becomes a full-fleshed, full-day park, hotel occupancy should rise, thereby contuning to helping that issue.
So there is a positive side...
Which sounds to me an awful lot like what HKDL is getting (Frozen boat ride, Marvel).
I like originality. I hope I am wrong. But hey, if cloning saves them a buck and allows them to stretch the budget further... I'm fine with it. The number of people who would visit both Paris and Hong Kong is negligible. I'm just glad that plans are materializing.
In Hong Kong's castle park, they have added TSL and will be adding "mini land" extensions to tomorrowland and fantasyland. In Shanghai Disneyland's castle park, they are adding TSL too.
However, Paris was able to keep TSL out of their castle park due to the existence of the Walt Disney Stuidos Park. WDSP serves as a very good location for single-IP-land additions (what the company is in love with these days). So when they go to add Star Wars Land, Cars Land, Marvel Land, Nemo Land, future IP aquistion land... there's no struggling to squeeze them into the castle park. Heck, there's no reason to do so. WDSP needs the additions and will gladly take them.
As far as hotels go, well, Eisner and co. showed their confidence in the resort by opening with seven. Does Disneyland Paris release their hotel occurpancy rates? I believe it was quite low for many years. I am not sure if the second park inscreased occupancy, though I imagine it did, even if not by much. And if it becomes a full-fleshed, full-day park, hotel occupancy should rise, thereby contuning to helping that issue.
So there is a positive side...
Which sounds to me an awful lot like what HKDL is getting (Frozen boat ride, Marvel).
I like originality. I hope I am wrong. But hey, if cloning saves them a buck and allows them to stretch the budget further... I'm fine with it. The number of people who would visit both Paris and Hong Kong is negligible. I'm just glad that plans are materializing.
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SorcererMC
Well-Known Member
That is the same as what I keep thinking, as I'm fixated on the second chart and the fact that the domestic parks had little to no significant investment for such a stretch of time in the 2000s (for various reasons, then NFL, MM+, and DCA) ...and that it will still be a couple of years before the new investments are fully realized. Unreal - that's almost a generation.
On the international parks I'm a bit wary of DLP improving substantially given the current tourism industry situation (it will still be several months before a turnaround would be evident, and current US travel alert expires 20 Feb 2017). As for SDL, well, I'm not entirely convinced that it will be a resounding success for the near-term, just because it had a great opening... I think the spring high season will give a better indication of how it might do overall, eg if it is gaining traction or momentum.
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the.dreamfinder
Well-Known Member
Lunar New Year will be very interesting. The park probably won't be able to handle the pressure, especially if attractions start breaking down. A bad first Lunar New Year showing hurt Hong Kong and the effects lasted for years.
http://nytimes.com/2006/02/04/world...-the-year-of-the-dog-starts-with-a-growl.html
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SorcererMC
Well-Known Member
So I knew it took a while for HKDL to become profitable - but I don't think I realized that it was 7 years (2013). Not to mention that it was losing $200 mln annually. I guess I'm just going to post the article because it's short, and at the end it asks about SDL.
http://mediadecoder.blogs.nytimes.com/2013/02/18/hong-kong-disneyland-turns-a-profit/
Hong Kong Disneyland Turns a Profit
By Brooks Barnes February 18, 2013 11:57 am February 18, 2013 11:57 am
LOS ANGELES — Mickey Mouse is finally making money in Hong Kong.
The Walt Disney Company on Monday said that its seven-year-old theme park and resort complex in Hong Kong turned a profit for the first time — a modest $14 million, but a profit nonetheless — following an aggressive expansion costing several hundred million dollars.
To compare, the park lost about $31 million dollars during the previous fiscal period. As recently as 2008, the park was losing roughly $200 million a year. Disney owns 48 percent of Hong Kong Disneyland, with the balance controlled by the local government.
Disney said attendance at the park increased 13 percent last year, to 6.7 million people. Revenue was up 18 percent; occupancy at two themed hotels, which have a combined 1,000 rooms, stood at 92 percent.
Hong Kong Disneyland has been the smallest of Disney’s theme parks around the world, limiting interest in annual passes and repeat attendance. But a continuing expansion to increase the size of Hong Kong Disneyland by 25 percent appears to have had dramatic effects.
Already open are new rides themed to the “Toy Story” movies and an Old-West area called Grizzly Gulch; coming this spring is another area called Mystic Point, billed by Disney as “the site of mysterious forces and supernatural events in the heart of a dense, uncharted rain forest.”
One question for the future: To what degree, if any, will Disney’s mega-resort in Shanghai, now under construction and scheduled to open in 2015, take wind out of Hong Kong Disneyland’s sails?
Goofnut1980
Well-Known Member
It seems funny. They spend domestically and people come.. in droves! Look how DL has gone from stagnant over the years to investing in the two parks and now it's crazy busy. There is no slow season in the domestic parks... We were in DL in January, yes January and the lines were stupid. Then World in early May... busy again... and go back on Friday to World and hear it has been crazy there lately. Even November was busy as friends went the 2nd week and said they have never seen the parks busy in November before.
Animaniac93-98
Well-Known Member
Next year Hotel New York will close completely for rennovations. It'll be interesting to see how that affects the occupancy %.
2008 was the first full year ToT was in operation and 2015 for Ratatouille. I think that's partially why those years saw occupancy increases over the previous ones.
Creathir
Premium Member
No offense, but your chart's scale makes it appear very dire...
I'm all for Disney getting their numbers up, but try and also keep things in perspective.
Attachments
Hotels (and theme parks) are interesting businesses. Costs are relatively fixed. Once those costs are covered, profits soar. If those costs are not covered, losses accumulate. What appears to the novice to be small changes in occupancy rate (or attendance) can greatly affect profitability. My chart accurately represents this.
In the year that Disneyland Paris reported a hotel occupancy of 90.9%, operating income was €90.5M.
In the year that Disneyland Paris reported a hotel occupancy of 75.4%, operating loss was €65.4M.
Only a 15% difference, yet all the difference in the world.
Betcha didn't know that.
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tirian
Well-Known Member
Rodan75
Well-Known Member
@ParentsOf4 - random question (and I know you are not a fan of DVCs) If occupancy is that low at the DLP hotels why wouldn't they make the DLPs a cheaper option for DVC members to use points. Orlando DVC units are harder to book these days and the occupancy rates in Orlando are much higher / demand is higher. You would think they would use just a little effort to get US folks to go to Paris.
SorcererMC
Well-Known Member
Some context for DLP: For the Paris hotel industry in the past year alone, there has been a double-digit decline of 12% in hotel occupancy rate to 71.6%, with upscale hotels faring worse than midscale hotels. Double digit declines in RevPAR as well: -15% so far this year (annual numbers not yet available). Avg Daily Rates are roughly the same ~€234 for upscale hotels.
@creathir Dire (or devastating) is exactly how I would describe it: There have been declines in the past few years but the industry is hurting more now due to economic uncertainties and security concerns, hotels are heavily discounting, and the French government is revamping their strategy....back to DLP, their occupancy rate seems to have performed better than the average this year but underperformed in years past, for example that 2014 DLP minimum at 75.4% was below the greater Paris average 77.3% for similarly priced hotels. But DLP's avg spend per room of €235 is on par.
Aside from its existing issues (including recapitalization problems), DLP is generally consistent with the local tourism industry trends...which means that losses will likely continue for the foreseeable future. There might be a slight bump for the 25th anniversary, which would ultimately be disappointing (ie curbing losses rather than boosting profitability in what would otherwise be a banner year).
It could get interesting, though: http://blogs.wsj.com/moneybeat/2016...r-accuses-euro-disney-of-magic-in-accounting/
Recall that TWDC has already made €1 Bln injections twice in the last four years 2012 and 2014 Recapitalization Plan of which increasing their stake was included.
@creathir Dire (or devastating) is exactly how I would describe it: There have been declines in the past few years but the industry is hurting more now due to economic uncertainties and security concerns, hotels are heavily discounting, and the French government is revamping their strategy....back to DLP, their occupancy rate seems to have performed better than the average this year but underperformed in years past, for example that 2014 DLP minimum at 75.4% was below the greater Paris average 77.3% for similarly priced hotels. But DLP's avg spend per room of €235 is on par.
Aside from its existing issues (including recapitalization problems), DLP is generally consistent with the local tourism industry trends...which means that losses will likely continue for the foreseeable future. There might be a slight bump for the 25th anniversary, which would ultimately be disappointing (ie curbing losses rather than boosting profitability in what would otherwise be a banner year).
It could get interesting, though: http://blogs.wsj.com/moneybeat/2016...r-accuses-euro-disney-of-magic-in-accounting/
Recall that TWDC has already made €1 Bln injections twice in the last four years 2012 and 2014 Recapitalization Plan of which increasing their stake was included.
Well, I am a DVC member so writing that I'm not a "fan" of them isn't exactly how I'd word it.
But yes, as you suggest, I dislike Disney timeshares as financial vehicles for the company because they sacrifice long-term profits for short-term gains. Disney seems to have gotten around that with PVB by charging such high purchase prices, Maintenance Fees, and points-per-night that it will take decades for many PVB members to reach the "magical" break-even point.
I'm sure Disney would turn Disneyland Paris hotels into timeshares if there was money to be made and it was permitted. However, I'm ignorant of the Parisian timeshare market so I don't know:
- Is there a market for a timeshare with marginal weather for a good portion of the year? (I suppose Disney could do what it does at HHI, with much higher point requirements in the summers and on weekends.)
- What are the local laws governing timeshares? (Remember that Disney's current timeshares are in locations with some of the most favorable regulations.)
the.dreamfinder
Well-Known Member
@ParentsOf4, if Disney ever decided to roll back DVC at some point in the future, how could they do it?
You mean without creating an uproar among some of their most loyal fans who signed decades-long contracts?
Disney's problem is the opposite. What happens on January 31, 2042 when over 20 million DVC points hit the market all at once?
Disney always seems to be behind the curve when it comes to its hotels, reacting to last year's problem rather than anticipating the market. The most recent examples are the room conversions at the Polynesian and Wilderness Lodge. These were approved when Deluxe Resort room occupancy was languishing in the 70s. Now hotel occupancy is up and Disney is about to launch its most ambitious theme park openings in a generation, sure to drive up demand, yet there are fewer highly profitable Deluxe Resort rooms today then when Disney built nothing but DVCs for over a decade.
Iger said the following at the last earnings call:
We also have other kinds of expansion opportunities, like hotels, for instance, where not only do we have the property but we've seen such high occupancy rates in Orlando and in California, that we believe that it would be smart for us to build more hotels out - we have no announcements to make, per se -- but build more hotels out at both sites and take advantage o f what we're seeing there. That clearly is very beneficial to us.
By the time these get built, I suppose there will be another major recession and Disney will be sitting on thousands of empty hotel rooms...
ford91exploder
Resident Curmudgeon
You mean without creating an uproar among some of their most loyal fans who signed decades-long contracts?
Disney's problem is the opposite. What happens on January 31, 2042 when over 20 million DVC points hit the market all at once?
Disney always seems to be behind the curve when it comes to its hotels, reacting to last year's problem rather than anticipating the market. The most recent examples are the room conversions at the Polynesian and Wilderness Lodge. These were approved when Deluxe Resort room occupancy was languishing in the 70s. Now hotel occupancy is up and Disney is about to launch its most ambitious theme park openings in a generation, sure to drive up demand, yet there are fewer highly profitable Deluxe Resort rooms today then when Disney built nothing but DVCs for over a decade.
Iger said the following at the last earnings call:
We also have other kinds of expansion opportunities, like hotels, for instance, where not only do we have the property but we've seen such high occupancy rates in Orlando and in California, that we believe that it would be smart for us to build more hotels out - we have no announcements to make, per se -- but build more hotels out at both sites and take advantage o f what we're seeing there. That clearly is very beneficial to us.
By the time these get built, I suppose there will be another major recession and Disney will be sitting on thousands of empty hotel rooms...
In other corporate news ESPN has lost a million additional subscribers in the last two months...