WDW Taking a Hit Over Gator and Massacre ...

[Brad Bishop]

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.

Maybe.

I don't know about the inner-workings of Disney so this is a bit of guesswork but...

A normal hotel/motel can only sell that room that night. If you walk into a hotel, without a reservation (most people do reservations) you can dicker on the price and they'll have an idea of what the lowest price for that evening is and you're working down to that and they're, obviously, trying to keep you above that. Below that price it's not worth it. The thing is that they only get to sell that room for that night and then that "inventory" is lost.

For example, today it's June 24, 2016 @ 3PM. They later it gets into the evening the less likely it is that a hotel is going to sell a vacant room. If they don't sell it past a certain point, they'll never have the opportunity to sell that room on June 24, 2016 again. If it were toilet paper or some other item, they still have a chance to sell it tomorrow. That room expires tonight, though, in the sense that they can't make money off of it for June 24 past today.

Now, that low-dollar amount is basically where it's no longer worth it to them. They're actually better off with the room being empty than selling it to you.

That's your normal hotel.

For a resort like Disney, something else comes into play which is the perceived value (the economic guys can educate us on the correct terminology).

For example, say the Contemporary really can make a few dollars profit on selling a room at $100/night. The perception is $1000/night for a room, though. While they may be interested in having deals which take them down below $1000/night to fill the rooms, it's not in their best interest to dilute the high-dollar perception of their rooms/hotel unless they're REALLY hurting. Part of the value of their premium product is the perception that it's a premium product.

I think this is why I've heard that WDW just shutters sections of their resorts (they'll claim something like refurbishments) rather than sell lower, even though they'd still be making some money, rather than trying to attain the goal of maximum occupancy. I think part of it is the funny-financials as mentioned by @ford91explorer, but another part is the dilution of the perceived value of their property.

Part of those financials is taxes but I bet another part is that it's better to show the higher ups a higher $/night average on rooms than a smaller $/resort gain.

Just a guess on the WDW bits, though.

 

[ford91exploder]

Maybe.

I don't know about the inner-workings of Disney so this is a bit of guesswork but...

A normal hotel/motel can only sell that room that night. If you walk into a hotel, without a reservation (most people do reservations) you can dicker on the price and they'll have an idea of what the lowest price for that evening is and you're working down to that and they're, obviously, trying to keep you above that. Below that price it's not worth it. The thing is that they only get to sell that room for that night and then that "inventory" is lost.

For example, today it's June 24, 2016 @ 3PM. They later it gets into the evening the less likely it is that a hotel is going to sell a vacant room. If they don't sell it past a certain point, they'll never have the opportunity to sell that room on June 24, 2016 again. If it were toilet paper or some other item, they still have a chance to sell it tomorrow. That room expires tonight, though, in the sense that they can't make money off of it for June 24 past today.

Now, that low-dollar amount is basically where it's no longer worth it to them. They're actually better off with the room being empty than selling it to you.

That's your normal hotel.

For a resort like Disney, something else comes into play which is the perceived value (the economic guys can educate us on the correct terminology).

For example, say the Contemporary really can make a few dollars profit on selling a room at $100/night. The perception is $1000/night for a room, though. While they may be interested in having deals which take them down below $1000/night to fill the rooms, it's not in their best interest to dilute the high-dollar perception of their rooms/hotel unless they're REALLY hurting. Part of the value of their premium product is the perception that it's a premium product.

I think this is why I've heard that WDW just shutters sections of their resorts (they'll claim something like refurbishments) rather than sell lower, even though they'd still be making some money, rather than trying to attain the goal of maximum occupancy. I think part of it is the funny-financials as mentioned by @ford91explorer, but another part is the dilution of the perceived value of their property.

Part of those financials is taxes but I bet another part is that it's better to show the higher ups a higher $/night average on rooms than a smaller $/resort gain.

Just a guess on the WDW bits, though.

Yes it is in Disney's interest to keep the perceived values up, The problem of course is people are coming to the conclusion that VALUE != CURRENT_PRICING.

 

[Rutt]

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


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.


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.


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.

I disagree here. Disney has shown that they are very competent at milking their movies and entertainment for every last penny they can get. If they felt that there was a real market for $5 discount bin movies from them, you'd see it. I find it hard to believe they'd be so hard against it at Walmart, but do so in their movie club. Just doesn't add up.

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.

Absolutely agree with you here and I think we are on the verge of quite the market correction. For too long ALL businesses have been giving less and less while taking more and more from us. Cutting the cord is becoming mainstream, the masses are noticing. Money is becoming tighter and even Disney freaks such as myself are starting to hold back. It will change because they will have to. Up until now, who could blame any of them really? (Well, I can, but I have morals and understand that I cant possibly spend 300 billion dollars in one lifetime)

 

[scout68]

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

That.

It speaks volumes as to how numb we have become to the nonsensical violence and the regularity at which is has been occurring.

The full pr triage is focused on the gator because it's a much more unusual tragedy.

Not our monthly/weekly/DAILY reports of gun violence.

 

[GoofGoof]

I suppose real warning signs could have been posted but that leads me to the notion of: Does FL need "DANGER: Sharks!" signs all along the perimeter of it's beaches? Does every park in FL need to be setup so that, no matter which way you look, you always see an aligator/snake sign so that you know?

...or is it an unfortunate incident, sometimes bad things happen, and people just need to be responsible?

With regards to #2, guests don't care. They're going to feed the wildlife. At DAK there are signs everywhere and each time I've been there guests have been feeding the wildlife. I think that the only way you stop this is to kick people out for the day. If you feed the wildlife then you're escorted to the gate and there's no re-entry. Same with bungalows, hotels, motels.. If you feed the wildlife you're gone. That's the only way I could see stopping them. I think the managers would initially think, "Oh.. but we may lose money!" The reality is that the public would very quickly get the idea of: You don't feed wildlife at Disney or you're out - they're super serious.

They need the signs. We got into a long drawn out debate over this in the other thread. Here is a summary of my opinions from that debate. Not everyone who visits WDW is aware that there are gators in the waters at SSL. Most probably know there are gators in FL but there are also a lot of foreign tourists as well who may not even be aware of the natural threats in FL. People tend to feel safe and let their guard down when they are "in the bubble". Even though SSL is connected to a natural lake and numerous canals it doesn't have the feel of being in the wilderness with the resorts, monorail and ferries on the lake. Disney can't sterilize a natural environment and remove all wildlife so the best they can do is make sure their guests are aware of the dangers. It's very simple and cheap to just have signs like the ones they have now posted. I probably wouldn't have thought they were necessary before this happened, but I was clearly wrong and so was Disney. We don't know whether a warning sign would have changed anything in this case, but it certainly couldn't have hurt.

On the feeding thing I'm definitely with you. It starts with informing guests of the rules. Some people probably don't realize it's against the rules (and the law) to feed gators. It seems kinda stupid, but you have to operate based on the lowest level of intelligence. My opinion is in addition to the new signs, guests should be informed at check-in that it's against the rules and that if you are caught breaking the rules you will be evicted from your room without refund. They should also let you know that if you see anyone else feeding the gators you should report it to the front desk. The bigger step is they need to empower CMs to actually enforce the rules. No more of this "the guest is always right", passive aggressive crap. Train CMs to comfront guests on this issue and enforce the rules. This applies to the parks too. Add language to the website and ticket booths that those caught feeding the wildlife can and will be removed from the park for the day without refund.

 

[UpAllNight]

So terrorism, a tragic accident, a poor Brazillian economy and now Brexit and worldwide uncertainty.

Will Disney come out fighting and invest right now so they're ready for when things pick back up or will they plunder along and cut projects. Their response to the last recession is what's lead to the current state of the parks.

 

[rnese]

Disney did not take the life of the poor child.
I'll say it again. Changing a floating light parade that's been in existence for over 40 years because of an accident of nature? HYPERSENSITIVITY! It does nothing! Just like the narcissistic fools who superimpose stupid flags over their social media profile photo! It does nothing but make the fools feel good about themselves!
Society needs to grow up!

 

[monothingie]

Good thing nothing happened with a mouse on property causing injury or death to a guest (God forbid). What would PR do then???

 

[Disney Analyst]

Disney did not take the life of the poor child.
I'll say it again. Changing a floating light parade that's been in existence for over 40 years because of an accident of nature? HYPERSENSITIVITY! It does nothing! Just like the narcissistic fools who superimpose stupid flags over their social media profile photo! It does nothing but make the fools feel good about themselves!
Society needs to grow up!

That's all well and good... but Disney is in charge and made the choice to be compassionate and sensitive in this time.Damned if they do, damned if they don't situation.

 

[ford91exploder]

So terrorism, a tragic accident, a poor Brazillian economy and now Brexit and worldwide uncertainty.

Will Disney come out fighting and invest right now so they're ready for when things pick back up or will they plunder along and cut projects. Their response to the last recession is what's lead to the current state of the parks.

Plunder along and cut projects of course...

 

[SorcererMC]

So terrorism, a tragic accident, a poor Brazillian economy and now Brexit and worldwide uncertainty.

Will Disney come out fighting and invest right now so they're ready for when things pick back up or will they plunder along and cut projects. Their response to the last recession is what's lead to the current state of the parks.

I'm more concerned that there will be cuts to already budgeted projects (a knee-jerk reaction, but shores up the bottom line), b/c of the uncertainty which has yet to be quantified. I'm sure there are others here who would know better than I. I think that if they want to grow, they will continue to invest, but that might not be what Wall St wants in the short-term.

 

[asianway]

Disney did not take the life of the poor child.
I'll say it again. Changing a floating light parade that's been in existence for over 40 years because of an accident of nature? HYPERSENSITIVITY! It does nothing! Just like the narcissistic fools who superimpose stupid flags over their social media profile photo! It does nothing but make the fools feel good about themselves!
Society needs to grow up!

Ill take a stab and say youre not a Millennial?

 

[trr1]

So terrorism, a tragic accident, a poor Brazillian economy and now Brexit and worldwide uncertainty.

Will Disney come out fighting and invest right now so they're ready for when things pick back up or will they plunder along and cut projects. Their response to the last recession is what's lead to the current state of the parks.

for answers to this look back to 2008 with pleasure island when that depression happened

 

[PhotoDave219]

Ill take a stab and say youre not a Millennial?

Perhaps a lizard? Certainly not human.

 

[Section106]

Do you know where 80% of WDW's Guests come from? I'll give you a hint it starts with a U and ends with an A.
Do you know the No. 3 (formerly the No. 2) market of WDW is? It starts with a U and ends with a K and is full of people wearing socks with sandals and not knowing what sunblock is.

My only point is the majority of WDW Guests (some would say VAST majority) come from places where freshwater doesn't equate with dangerous critters.

I did kill a baby water moccasin in my back yard today and I live in the USA and very near the water. Of course it is salt water as it empties into the Chesapeake. But I know that water in Florida equals gators so I won't let my 8 yo daughter anywhere near the water at WDW, except the pool.

I guess I'm trying to say that I think many people won't cancel because they are used to living with wildlife or understand the implications of vacationing in what is essentially a wildlife preserve. But if what you're saying is true I might be going back in September if the prices drop. I used all my points in April by taking some extended family members and I need my Disney fix.

 

[Ariel1986]

Call me naïve perhaps- but isn't the removal of that part of the EWP more about compassion for the Graves- rather than offending any oversensitive guests/the hyperbolic media?

Wouldn't it be horrific if it got back to the Graves that Disney- less than a week after this happened- were parading a light up chomping gator right over the spot where their son had just lost his life to an alligator?!

Isn't that the point? Being respectful to the family?

I'm pretty sure they would be attacked by many on here for being so insensitive if they had kept the gator float in...

 

[VJ]

I'm pretty sure they would be attacked by many on here for being so insensitive if they had kept the gator float in...

Or maybe the people on this site would understand that's it's just one of the floats in a water parade that has been running since Walt Disney World opened and has remained relatively unchanged in the 45 years since its debut (and since the child's death). Not trying to sound insensitive but it's not like they debuted the float right before the incident. It's been there.

 

[cheezbat]

I have friends who have cancelled their vacation plans here just recently. Some are definitely in fear of the shooting, others saw the price hikes and said it was too expensive this year.

The loss of many South America tourists this year, the shooting, the price hikes, the gator incident, and now possibly Brexit is all playing into WDW and Central Florida tourism having a rough year...and maybe more to come. It's noticeable the parks are nowhere near as packed as the past few years. I've actually been able to enjoy my visits to Universal and Disney this summer compared to summers past. From what I've been hearing, regional amusement and water parks are having a good year. I think more people are vacationing closer to home.

Here's hoping Disney does the smart thing and continues to invest...not scale back. That will only make things worse for them in the long run.

 

[englanddg]

I have friends who have cancelled their vacation plans here just recently. Some are definitely in fear of the shooting, others saw the price hikes and said it was too expensive this year.

The loss of many South America tourists this year, the shooting, the price hikes, the gator incident, and now possibly Brexit is all playing into WDW and Central Florida tourism having a rough year...and maybe more to come. It's noticeable the parks are nowhere near as packed as the past few years. I've actually been able to enjoy my visits to Universal and Disney this summer compared to summers past. From what I've been hearing, regional amusement and water parks are having a good year. I think more people are vacationing closer to home.

Here's hoping Disney does the smart thing and continues to invest...not scale back. That will only make things worse for them in the long run.

It doesn't help that Disney has grossly scaled prices up. Granted, the demand isn't declining (their attendance numbers have been dramatic the past few years, and if you'd told someone in 2004 that by 2014, Disney would have days where they had to stop admitting people to MK due to capacity issues, they'd have laughed...

I think it's a temporary thing.

Anyone cancelling over the shooting or the gator incident are doing so out of an illogical paranoia, imho...but, I do understand why people are not going, and how UK citizens after Brexit may choose to wait a year or two before they decide to spend on a US vacation at WDW...

I am skipping WDW this year (unless I end up doing a short weekend style trip for the halloween party or the christmas party, or to bookend a cruise with a few days), but that's mostly because they are doing a LOT of construction, and for my money, and what it costs, I'd rather not see a bunch of construction walls. It will probably be 2017 or more likely 2018 before I look at going for more than a few days any time soon...

That said, I am seriously considering going to other disney properties, to include going back to Disneyland, going over to Paris (maybe in 2016) or Japan (also in 2016) or even trying China (2016 or 2017) to see Shanghai and Hong Kong...

We shall see...

 

[seabreezept813]

I have friends who have cancelled their vacation plans here just recently. Some are definitely in fear of the shooting, others saw the price hikes and said it was too expensive this year.

The loss of many South America tourists this year, the shooting, the price hikes, the gator incident, and now possibly Brexit is all playing into WDW and Central Florida tourism having a rough year...and maybe more to come. It's noticeable the parks are nowhere near as packed as the past few years. I've actually been able to enjoy my visits to Universal and Disney this summer compared to summers past. From what I've been hearing, regional amusement and water parks are having a good year. I think more people are vacationing closer to home.

Here's hoping Disney does the smart thing and continues to invest...not scale back. That will only make things worse for them in the long run.

Even before the tragic events, I was hearing from my teacher friends, that although they'd love to do Disney it's just too expensive. These are all young families with girls ranging from age 6-13, which seems to be a targeted audience right now. These are also families who have gone to Disney before. The problem that I notice is inflation keeps going up, but salaries and job opportunities are not increasing.