WDW Taking a Hit Over Gator and Massacre ...

[BrerJon]

With what's happening in the U.S., South American, and U.K. economies, the price increases could very well be the dumbest move in all of Iger's tenure.

Disney makes a big deal about 'locking in' vacations way in advance, it's the reason it's going all out on 2017 promotions, Free Dining etc., to get money in the bank way in advance of having to supply anything in return. The current economic outlook for Brazil and the UK is not one that lends itself to planning a trip a year in advance when you've no idea how much your money will be worth or if you'll even have a job to pay for the trip by then.

So even if the technical impact on the wider economy ends up not being too bad, this will almost certainly shut down any advance bookings, and that's going to send a big shock to the WDW bank balance.

 

[asianway]

Thought about putting this in my Spirited thread, but I feel it is important enough to not be buried in 200-plus pages. And it isn't specifically about the gators and bad parenting and whether George Kalogridis should be fired (he should), so I'd respectfully ask the mods to not bury this when the inevitable complaints due to who is writing it here come in.

From a trusted and well-placed source:

First, in what has been a very lousy summer (no, I don't care that there were 300 minute waits for Frozenstrom as we all know why that is and what it means) for WDW and O-Town in general, things are about to get worse in the $$$ department:

"The Grand Floridan has seen a huge surge of cancellations and requests to be moved to other resorts. There have also been a larger than normal request of refunds for Guest choosing not to visit at all due to the events on property and off."

Second, the ridiculous (and @WDWFigment wrote a nice blog post on his own site about this) and knee-jerk reaction of WDW in making it seem like gators don't exist in any realm, even fantasy ones are the rule of the day. In other words, who knows whether parade floats or foamheads will ever be allowed to return because one child died in 44 years.

I also forgot somehow that Typhoon Lagoon and Blizzard Beach both have alligators as mascots. One wonders if they'll rip out the fiberglass versions and change the maps because THAT will address the problems, not properly warning Guests these animals are present and properly warning them that they will be subject to fining, trespass and banning if they or their children feed gators.

Playing pretend is always so much better. From the source again:

"Marketing has been reviewing every single piece of collateral and pulling anything that shows or depicts an alligator or crocodile in addition to showing beaches in resort photos and listings as amenities.

Blizzard Beach and Typhoon Lagoon had a whole summer campaign featuring their respected gator mascots that was pulled at the last minute."

If anyone wondered how WDW would handle a crisis, you are now seeing it in full view and it isn't pretty at all.

All of the various factors sure makes the decision to keep AK open late look very ill timed. Any reports on if the goals were met? Or might they pull the plug to stop the bleeding?

 

[EJDThree]

First of all, I want to make sure that everyone knows I feel horrible about what happened with that poor family.

But the truth of the matter is, alligators are wild animals. They do what they need to do to survive. And they will adapt. Eradicating the population would put too many people up in arms. A gator was not chosen as a mascot because they kill children. Its an animal. Removing the jokes from Jungle Cruise was a smart idea though.

 

[SorcererMC]

It's an understandable strategy in a strong economy but, in business, timing is EVERYTHING.

Increasingly, it's looking like Disney jacked up prices just when its three largest markets are teetering.

With what's happening in the U.S., South American, and U.K. economies, the price increases could very well be the dumbest move in all of Iger's tenure.

This. Quote for truth/emphasis.

 

[Shane7694]

@Tay @Shane7694 So what, you guys have nothing else to do but insult people on here at 1:30am for having different opinions?

As was said before, everyone has different opinions on how this situation was handled. Everything is our own opinion, as yours is. For those people not getting it, OPINION: a view or judgment formed about something, not necessarily based on fact or knowledge. It doesn't make anyone more right than the other, and the whole point of an open forum is to openly discuss things, not tear each other apart. Most people on here agree that the event was absolutely tragic, and the entire weekend was shocking and sad. No one is saying "feed the child to the alligator" ... so please clarify where people are being inconsiderate. No one believes the families of the shooting or the alligator attack should have gone through what they did. Not sure where you guys are getting the "whacko" and "nut" insults from.

There's literally nothing Disney could have done once the child was attacked to avoid a massive PR hit. What was done was done, an awful accident on property. They can deal with that while having a slow summer every once in a while. Not like they or anyone else asked for it.

I didn't insult anyone.. I just said there are some crazy people on here which is true..

 

[CJR]

Ummm, I literally just bought 20 movies from their own movie club for $7 apiece. They are always on sale somewhere. The only one Ive paid full price for lately is BATB (presale) which here in Toronto is nearly impossible to get for some reason. I'd like to thank my dear children for losing the copy we had already.

I'm not saying no one can find a decent deal on a Disney movie, but I don't consider the DMC a normal retailer that masses would shop at. It's kind of the DVC for movies, and it's only a matter of time before Disney cracks down on those "rejoiners", who consistently cancel and rejoin to get the club's entry offer.

My point is you can't walk into Walmart and find a blu-ray of Bedknobs and Broomsticks for $7.88 in the bargain bin with movies from pretty much any other studio. Disney controls their movies much more closely and probably loses lots of sales as a result. Very few people are going to pay $15-$20 for a 30+ old film, unless it's one of those "elite few" like Star Wars.

Just like these movies Disney could, but doesn't sell, they mismanage their hotels rooms for the exact same reasons: They think their product is worth more than it actually is and are in denial about it.

 

[dizneycrazy09]

It seems like the news coming out of the UK today is kicking Disney while it's already down. I think this snowball is going to pick up speed down the hill. I'm going to be keeping a close eye on this.

What will the response be? Invest and give people a reason to spend their money? Or ride out the hard times and hope that the "less stuff for more money" holds the bottom line? The next 18 months are going to be an interesting time for the company and more specifically the theme park division.

 

[Filby61]

...Just like these movies Disney could, but doesn't sell, they mismanage their hotels rooms for the exact same reasons: They think their product is worth more than it actually is and are in denial about it.

Decades of financial success, coupled with a management culture that rewards political yessmanship more than aptitude, has resulted in an inbred hierarchy that is incapable of believing it can be wrong. "Denial" doesn't begin to describe it.

 

[asianway]

I'm not saying no one can find a decent deal on a Disney movie, but I don't consider the DMC a normal retailer that masses would shop at. It's kind of the DVC for movies, and it's only a matter of time before Disney cracks down on those "rejoiners", who consistently cancel and rejoin to get the club's entry offer.

My point is you can't walk into Walmart and find a blu-ray of Bedknobs and Broomsticks for $7.88 in the bargain bin with movies from pretty much any other studio. Disney controls their movies much more closely and probably loses lots of sales as a result. Very few people are going to pay $15-$20 for a 30+ old film, unless it's one of those "elite few" like Star Wars.

Just like these movies Disney could, but doesn't sell, they mismanage their hotels rooms for the exact same reasons: They think their product is worth more than it actually is and are in denial about it.

Is this why I cant get a "Gus" release?

 

[CJR]

Is this why I cant get a "Gus" release?

They'd rather have you not watch it, or watch it for free through... other means. Selling it for a profit just makes too much sense.

 

[SorcererMC]

Decades of financial success, coupled with a management culture that rewards political yessmanship more than aptitude, has resulted in an inbred hierarchy that is incapable of believing it can be wrong. "Denial" doesn't begin to describe it.

That's a (ETA: fairly) damning assessment, but recent events suggest you're right.

 

[Nubs70]

Disney makes a big deal about 'locking in' vacations way in advance, it's the reason it's going all out on 2017 promotions, Free Dining etc., to get money in the bank way in advance of having to supply anything in return. The current economic outlook for Brazil and the UK is not one that lends itself to planning a trip a year in advance when you've no idea how much your money will be worth or if you'll even have a job to pay for the trip by then.

So even if the technical impact on the wider economy ends up not being too bad, this will almost certainly shut down any advance bookings, and that's going to send a big shock to the WDW bank balance.

P&R will be in for a nice hit on Financial Income statement on the 10k

 

[fosse76]

It seems like the news coming out of the UK today is kicking Disney while it's already down. I think this snowball is going to pick up speed down the hill. I'm going to be keeping a close eye on this.

What will the response be? Invest and give people a reason to spend their money? Or ride out the hard times and hope that the "less stuff for more money" holds the bottom line? The next 18 months are going to be an interesting time for the company and more specifically the theme park division.

The response is going to be to raise prices to make up for lost income in addition to cutbacks to also make up for the lost revenue. The idea behind room discounts is to get people in the resort and get them to spend the savings at the resort (including the parks).

 

[Brad Bishop]

Is this why I cant get a "Gus" release?

https://amzn.com/B008H6GH9W

 

[Rutt]

I'm not saying no one can find a decent deal on a Disney movie, but I don't consider the DMC a normal retailer that masses would shop at. It's kind of the DVC for movies, and it's only a matter of time before Disney cracks down on those "rejoiners", who consistently cancel and rejoin to get the club's entry offer.

My point is you can't walk into Walmart and find a blu-ray of Bedknobs and Broomsticks for $7.88 in the bargain bin with movies from pretty much any other studio. Disney controls their movies much more closely and probably loses lots of sales as a result. Very few people are going to pay $15-$20 for a 30+ old film, unless it's one of those "elite few" like Star Wars.

Just like these movies Disney could, but doesn't sell, they mismanage their hotels rooms for the exact same reasons: They think their product is worth more than it actually is and are in denial about it.

I'm not sure that's true. If they couldn't get $20-30 for their movies at these stores, the stores would not carry them (which obviously is not true as Ive never seen a store that did not have an entire Disney section). If they could make MORE money doing it like you suggest they would. The fact is, many people still do walk into a Walmart/ Target/ Best Buy and pay $15-30 for Disney DVDs, be it Jungle Book, Mary Poppins, Herbie, etc. If there was a huge demand for Bedknobs, it would be there. I don't see that movie really being a bargain bin must have though. BTW, one of my fave movies ever. My kids hate it though.

 

[ford91exploder]

It is still ridiculous. People always pay different rates. I just stayed at Cabana Bay at UNI. I paid $50 a night as the friend of a TM. When you fly an airline you may be paying $278 for your seat and on one side of you is someone who is paying only $212 and someone else who is paying $511. It is the nature of the business.

Not discounting distressed inventory is just plain stupid. Disney can sell a room at the Poly for $99 a night and make a profit much like they can sell a LE pin at an outlet store for $1.99 and make a profit. It's all about the size of the profit.

Yes Disney could sell a unused room at the Poly for $99 but because Disney is all about financial engineering these days they would rather report an illusory 'loss' on the unsold room which can be used to manipulate the taxes than record a small profit on the room.

 

[RSoxNo1]

Good point. I get not trying to be insensitive. And that is the correct move both morally and from a business standpoint. BUT ... Disney and Disney Legal and Disney PR takes things to absurd and obscene levels.



I would be shocked if they weren't. This is an Orlando issue, not a Disney-specific one. And people might fear gators, but they also fear mass shootings, especially when said shooter cloaks an insane hate crime in an ISIS wrapper.

Yet there's no call to remove the shootout scene in Great Movie Ride...

 

[rael ramone]

Yes Disney could sell a unused room at the Poly for $99 but because Disney is all about financial engineering these days they would rather report an illusory 'loss' on the unsold room which can be used to manipulate the taxes than record a small profit on the room.

I wonder if they would just declare any canceled room 'out of inventory' to keep the percentages up...

 

[CJR]

I don't normally like to to split up quotes, but I think it would be easier to follow this way:

I'm not sure that's true. If they couldn't get $20-30 for their movies at these stores, the stores would not carry them (which obviously is not true as Ive never seen a store that did not have an entire Disney section).

Stores carry stuff they have trouble selling all the time, that's nothing new. Most Disney sections consist almost entirely of recently released movies that are still rather popular, with a select few mixed in that haven't moved off the shelf in ten years, because they're priced too high and Disney won't allow stores to discount.

If they could make MORE money doing it like you suggest they would. The fact is, many people still do walk into a Walmart/ Target/ Best Buy and pay $15-30 for Disney DVDs, be it Jungle Book, Mary Poppins, Herbie, etc.

They could make more money, they just choose not to because they don't run their business properly. The movies you mentioned are their more popular films. Less popular films are not sold in most stores, you'd need to look online, where they're still $15-$20 for an unopened copy, right around the same price as their more popular films.

If there was a huge demand for Bedknobs, it would be there. I don't see that movie really being a bargain bin must have though.

That's it though, if it's not a bargain bin must have, why would they think people would spend even more on it? There isn't a huge demand for Bedknobs, or most of Disney's films that are over a few years old. However, the demand would probably be equal to other films from other studios that already allow their movies to be placed in bins. If Universal can still sell a copy of An American Tale in the bin, Disney could sell Bedknobs. Instead, Disney would rather the film be "rare", translate it however you will.

Snow White, Jungle Book or Mary Poppins are far from the deepest reaches in Disney's massive film collection.

Please note, this topic isn't about movies, I was just highlighting that Disney's mismanagement stretches beyond the hotel business. Disney misses out on sales because they overvalue their properties and don't price to meet demand. This sends a lot of people directly to their competition. Do some still buy the product, yes. Does it max out profitability, I'm going to say no.

EDIT: I want to add, because people are usually quick to point to Disney's "record resort profits", that Disney's growth under Iger is not sustainable. You cannot continuously count on raising prices as your way of "growing your business". Eventually, you're going to have to price to demand and build something new to generate more revenue. If Disney's demand is really so high, why not build a new resort, a new park, a new theme park resort somewhere else in the country? Empty rooms is not a good sign, especially when places down the street are building more rooms to meet their demand.

 

[ford91exploder]

I wonder if they would just declare any canceled room 'out of inventory' to keep the percentages up...

Don't know I've been told that there are accounting rules for 'out of inventory' that once it's out it has to stay out for a fixed interval.