HauntedMansionFLA
Well-Known Member
Is Bobby extending his contract past 2018??
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Walt Disney World’s Biggest Investment since 1998
- Thread starter ParentsOf4
- Start date
Rteetz
Well-Known Member
Not at this time.
HauntedMansionFLA
Well-Known Member
Good, you keep hearing rumors that Wall Street doesn't want him to go. Time of new blood and ideas.
Donald Razorduck
Well-Known Member
European Theme Parks are really upping their game and that's got to be incredible pressure. we plan on a Euro trip in 2018. At a month in length, we plan on Puy du Fou, Phantasialand, Effteling and Europa for sure with a likely visit to Port Adventura/Barcelona. 2hilebplanning out 5 days in Paris, I haven't once penciled in DLP visit. It's just not very appealing ride wise.
I do plan on DL Tokyo in 2020 but our leg in China has Shanghai and HK as maybes.
I do plan on DL Tokyo in 2020 but our leg in China has Shanghai and HK as maybes.
BubbaQuest
Well-Known Member
Thanks for more great analysis, @ParentsOf4.
Was there other information provided that might indicate why operating margin increased so much (24.8%, a margin the U.S. parks have not seen since 1990) but revenue was not nearly as healthy (Domestic revenue was up a weak 4.6%)? If the operating increase was done mostly by replacing low-paying customers with higher-paying customers, wouldn't we also see a larger jump in revenue?
Maybe there were some renegotiated contracts or something (better purchase prices for Coke products, for example) that were announced? Otherwise, wouldn't this big jump in margin versus revenue indicate what others have been speculating for awhile -- replacing merchandise with cheaper sources and reduced staffing?
Was there other information provided that might indicate why operating margin increased so much (24.8%, a margin the U.S. parks have not seen since 1990) but revenue was not nearly as healthy (Domestic revenue was up a weak 4.6%)? If the operating increase was done mostly by replacing low-paying customers with higher-paying customers, wouldn't we also see a larger jump in revenue?
Maybe there were some renegotiated contracts or something (better purchase prices for Coke products, for example) that were announced? Otherwise, wouldn't this big jump in margin versus revenue indicate what others have been speculating for awhile -- replacing merchandise with cheaper sources and reduced staffing?
jt04
Well-Known Member
Possibly, but I was referring to everything in the pipeline.
It's probably best if I simply quote directly from Disney's 10K:
Operating expenses include operating labor, which increased $129 million [2.8%] from $4,580 million to $4,709 million, infrastructure costs, which increased $53 million [2.8%] from $1,881 million to $1,934 million and cost of sales, which increased $31 million [2.1%] from $1,505 million to $1,536 million. The increase in operating labor was driven by the opening of Shanghai Disney Resort, inflation and higher operations support costs, partially offset by the benefit of efficiency initiatives and lower pension and postretirement medical costs. The increase in infrastructure costs was primarily due to the opening of Shanghai Disney Resort. The increase in cost of sales was driven by higher spending on food, beverage and merchandise. Other operating expenses, which include costs for items such as supplies, commissions and entertainment, increased driven by the opening of Shanghai Disney Resort, inflation and higher volumes. Operating expenses reflected a 2% decrease as a result of the Fiscal Period Impact, which had similar impacts on operating labor, cost of sales and infrastructure costs.
Selling, general, administrative and other costs increased $29 million [1.5%] from $1,884 million to $1,913 million due to higher marketing spend for Shanghai Disney Resort, partially offset by lower domestic marketing spending.
The increase in depreciation and amortization [13.6%] was primarily due to the impact of Shanghai Disney Resort and depreciation associated with new attractions at our domestic parks and resorts.
Selling, general, administrative and other costs increased $29 million [1.5%] from $1,884 million to $1,913 million due to higher marketing spend for Shanghai Disney Resort, partially offset by lower domestic marketing spending.
The increase in depreciation and amortization [13.6%] was primarily due to the impact of Shanghai Disney Resort and depreciation associated with new attractions at our domestic parks and resorts.
This is for the entire Parks & Resorts segment (i.e. both domestic and international). So revenue was up 4.6% domestically and 5.0% overall (including the opening of SDL) but, for the segment as a whole, expenses increased at a slower pace resulting in an improved operating margin.
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BubbaQuest
Well-Known Member
Thanks again for the info!!! Always look forward to your posts.
So if I read between the lines, it sounds like what has been speculated in other threads...we're paying for Shanghai via domestic cuts. That is, if operating expenses rose 2-3% because of Shanghai, yet margin increased 24%, that magical 26% change must have come from somewhere. 13% depreciation and 5% revenue is only 18%, so maybe a 8% cut in operational expenses in the US?
Am I reading that correctly?
So if I read between the lines, it sounds like what has been speculated in other threads...we're paying for Shanghai via domestic cuts. That is, if operating expenses rose 2-3% because of Shanghai, yet margin increased 24%, that magical 26% change must have come from somewhere. 13% depreciation and 5% revenue is only 18%, so maybe a 8% cut in operational expenses in the US?
Am I reading that correctly?
I wouldn't think of it as "paying for Shanghai". Corporate Disney is seeking to maximize margin from all revenue streams. When it comes to cost cutting initiatives, price increases, and segmented offerings, we'd see what's happening even if nothing was being built in Shanghai.
Conversely, corporate Disney does take a holistic view when it comes to investments. Higher capex at Shanghai generally means lower capex at WDW. Now that the major wave of construction is complete at Shanghai, WDW is beginning to see some much needed capex dollars. Disney is spending internationally but it's down a bit. Domestically, capex is way up.
At 24.8% of Parks & Resorts revenue in 2016, P&R capex was the highest it's been since 2000. This is appreciably higher than what I estimate Disney should be spending over the long term, but I believe it needs to be higher than normal for a few years because it's been so low for so long at WDW. In other words, WDW needs some serious capex dollars to make up for more than 15 years of neglect. It's happening now so fans of WDW have a genuine reason to be happy.
Universal released its numbers a few days ago. It's always fun to compare.
For fiscal 2016, Disney's Parks & Resorts revenue was up 5.0%. Universal's pro forma revenue was up 12.7%.
For fiscal 2016, Disney's Parks & Resorts operating income was up 8.8%. Universal's pro forma operating income was up 12.2%.
Universal reported: "These results reflect higher attendance and higher per capita spending, driven by new attractions including The Wizarding World of Harry Potter in Hollywood, King Kong and the Incredible Hulk in Orlando, and the Jurassic Park coaster in Japan."
Universal also reported: "In 2017, NBCUniversal's capital investment plan is expected to increase approximately 10%, reflecting the continued spending in theme parks as these investments are clearly generating strong returns as they drive increased attendance and per capita spending."
With investment also up at WDW and DLR, FL and CA theme park fans have a lot to look forward too.
For fiscal 2016, Disney's Parks & Resorts revenue was up 5.0%. Universal's pro forma revenue was up 12.7%.
For fiscal 2016, Disney's Parks & Resorts operating income was up 8.8%. Universal's pro forma operating income was up 12.2%.
Universal reported: "These results reflect higher attendance and higher per capita spending, driven by new attractions including The Wizarding World of Harry Potter in Hollywood, King Kong and the Incredible Hulk in Orlando, and the Jurassic Park coaster in Japan."
Universal also reported: "In 2017, NBCUniversal's capital investment plan is expected to increase approximately 10%, reflecting the continued spending in theme parks as these investments are clearly generating strong returns as they drive increased attendance and per capita spending."
With investment also up at WDW and DLR, FL and CA theme park fans have a lot to look forward too.
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RSoxNo1
Well-Known Member
This type of information is a great response to the defenders of Iger that say, "the parks have never been doing better". The reality is, the parks have steadily increased but there is still plenty of room for growth.Universal released its numbers a few days ago. It's always fun to compare.
For fiscal 2016, Disney's Parks & Resorts revenue was up 5.0%. Universal's pro forma revenue was up 12.7%.
For fiscal 2016, Disney's Parks & Resorts operating income was up 8.8%. Universal's pro forma operating income was up 12.2%.
Universal reported: "These results reflect higher attendance and higher per capita spending, driven by new attractions including The Wizarding World of Harry Potter in Hollywood, King Kong and the Incredible Hulk in Orlando, and the Jurassic Park coaster in Japan."
Universal also reported: "In 2017, NBCUniversal's capital investment plan is expected to increase approximately 10%, reflecting the continued spending in theme parks as these investments are clearly generating strong returns as they drive increased attendance and per capita spending."
With investment also up at WDW and DLR, FL and CA theme park fans have a lot to look forward too.
Daveeeeed
Well-Known Member
Remember, Universal built Harry Potter to catch up with Disney and now Disney is expanding to stay on top.
RSoxNo1
Well-Known Member
Not quite.
Universal was so far below Disney at the point of the Harry Potter announcement that it took a lot more than that to catch up. Harry Potter is a huge accomplishment and it changed the theme park landscape forever. But until Universal passes another Florida park in attendance, they're still playing catchup.
What Harry Potter did do is change the way Disney thinks. Unfortunately it doesn't change the speed in which they react. Unfortunately, Disney's take away has been intellectual properties to anchor a land. The takeaway should have been, "people respond to quality and innovation". What's worse is that never should have been a takeaway. Disney has done that previously, and was continuing to do that up until the point Iger, Rasulo and Co incorrectly determined that the parks were mature.
Universal is still catching up, but they've closed the gap and they're not letting up. What they're doing is far from perfect as well, but they are forcing the issue.
HauntedMansionFLA
Well-Known Member
hopefully they get the bump in attendance when SWL opens up with the same type of crowds PotterLand gave Universal which I will go out on the limb and say they will.
Daveeeeed
Well-Known Member
100% agree with you, but besides MK the other parks were fair game from Universal. Only way Disney could obviously combat this is to expand the secondary parks. Personally, I enjoy IOA more than any other single WDW park, but Universal Studios Park is still severely lacking just to compare quality. In terms of attendance like you mentioned when Uni passes one of the MK parks that's when they stop playing catch-up. Universal has still done a lot to bring their parks up to par. From both Pitter areas, King, Transformers, Hulk, Rip-Ride-Rockit etc.
We'll see what he future brings, but the bottom line is the guest wins (even though like you mentioned Disney overkills Ips).
Thankfully no.
Not really. GE instigated the first phase of Potter as a last ditch effort to stay open.
Had Hogsmeade backfired there's a very real chance USO would have closed.
djkidkaz
Well-Known Member
Well thank god it worked out for them. It's hard to be #1 if there's no #2. Universal really isn't my cup of tea but I love that they are putting the pressure on!
Soarin' Over Pgh
Well-Known Member
Wow!