Why Hollywood Studios is being rebuilt

[topher]

I also stand behind my original idea that the Muppets attraction should be rethemed to a Muppets Star Wars mashup 3D experience.
The mashup merchandise is in place, the location and theming is in place and it appeals to a broad audience.
Disney has just recently started the revitalization of the Muppet franchise. Why on Earth would they want to eliminate that connection?

 

[Skibum1970]

New Fantasyland needed one more good dark ride to have been considered a success. Now, I'm going to get flamed but I didn't think RSR was that over the top. Maybe it was too much hype. It's a good ride and certainly popular. However, the outdoor sequences passed by too quickly and the dark ride sequences were fun. I enjoyed it but no more than I enjoyed Space Mountain or the Haunted Mansion. I preferred Indiana Jones and the Forbidden Temple because it felt more immersive and fun. Plus, if RSR has trouble in the rain, Florida is the wrong location for it.

I hope Disney uses more of the Lucasfilm IPO as opposed to Pixar. Either way, I'll be happy to see more rides at DHS.

 

[englanddg]

New Fantasyland needed one more good dark ride to have been considered a success. Now, I'm going to get flamed but I didn't think RSR was that over the top. Maybe it was too much hype. It's a good ride and certainly popular. However, the outdoor sequences passed by too quickly and the dark ride sequences were fun. I enjoyed it but no more than I enjoyed Space Mountain or the Haunted Mansion. I preferred Indiana Jones and the Forbidden Temple because it felt more immersive and fun. Plus, if RSR has trouble in the rain, Florida is the wrong location for it.

I hope Disney uses more of the Lucasfilm IPO as opposed to Pixar. Either way, I'll be happy to see more rides at DHS.

RSR was ok, but my god was the Imagineer I dined with (Diego Parris) upset when I called it a modified version of Test Track!

But, it IS!

I rode in in Feb, and it's a really fun ride, far better than Test Track ever hoped to be, but the ride mechanics were the same, and the story wasn't all that memorable (I couldn't even tell you what it is now)...

The area, however, was amazing.

 

[Bob]

1) If done right, the "Star Wars Cantina" would be THE PLACE to get a drink @ DHS. I can picture a constant line out the door already.

2) Who needs to be bribed in order to get them to level Hollywood & Vile?

 

[NewfieFan]

I don't even care about Uni and I spend less and less time at DHS on our trips. I would hope that whatever the ride is for CL it would be a family ride. Lord knows DHS needs it (and this has been discussed to death) because TSMM is just insane in its popularity.
I don't care about Star Wars (I know I'm only one of two people on the planet that doesn't) but I'm excited for a SW expansion. Please, please, please do it right Disney. Oh my, if they cheap out on this! How are they not seeing that if a SW land done right would have people lined up at the gates!?!

 

[FrankLapidus]

I'm fully on board with Star Wars Land, provided the finished product matches the conceptual potential that a property like that carries.

I'm less on board with Carsland, I'm not against it but I would prefer a 'Pixar Studios' land that incorporated more of the studio's films rather than one that is based primarily on Cars. There is huge theme park potential in films like The Incredibles and Monsters, Inc. that have no real presence at WDW and such an overhaul at DHS would be an ideal opportunity to bring those films into the fold and expand improve the current Pixar Place.

 

[PirateFrank]

Put the hat over the top of American Idol

Great idea....dropped from a distance of about 150 feet should do the trick!

 

[GoofGoof]

I'm far from an expert, but I disagree with you. New Fantasyland was created with very little to actually "do" and lots of things to spend money on. It demonstrates TDO's commitment to increasing dollars spent per guest in the parks. I don't know the budget of NFL, but to invest hundreds of millions of dollars in mostly gift shops and restaurants tells me that in-park spending constitutes the majority of guest spending.

I mean the number of guests who stay off property is very high as well...the focus on Disney getting guests to stay on property and be "trapped" there (DME) seems to me a way to keep raising that in-park spending number.

No doubt the markup on hotels is insane (I paid $249 for a passholder rate at the Poly in 2004...crazy to think about the prices now); however, there are still 10s of thousands of guests staying off property each day. Hotels definitely equal profits, but I still think that in-park spending is a huge bulk of the profits. Because in-park spending includes all of those on- and off-property guests.

I agree with you that hotels are a nice sum of money for TDO, I just believe strongly that in-park spending consitutes a higher percentage of profits for them (without any actual knowledge to back it up...just a hunch ). And I just disagree that because guests are staying in a Disney hotel means that 2 days in Uni doesn't hurt Disney. It hurts them in a big way, regardless of where they're staying (but arguably more for the on-property guest, since Disney probably thinks they can "count" on that in-park spending from them since they're "trapped" on property).

FLE clearly addressed 2 big needs for MK: more capacity and another sit down restaurant. I don't disagree that Disney is losing money on merchandise and food sales if guests leave the property.

On the merchandise front I'm not sure how much more I would buy if I'm there 5 days vs 7 days. I think any issues with decreases in merchandise sales would more stem from the fact that the offerings at WDW tend to be stale and the Potter stuff is French and still hot. Right now you see tons of people walking around Disney resorts with Universal bags. I do think both Star Wars and Cars will significantly boost merchandise sales for Disney.

On the food side I still think DDP has a mitigating impact on lost food sales. Even if it didn't let's look at an example. A family of 4 spends $40 for CS lunch and $100 for dinner at a sit down restaurant in MK in a day. Lets round it up and call it $170 after extra drinks and a snack. Their room cost $500 a night. Even if the hotel room has a profit margin of 30% (I'm sure it's much higher) that's a profit of $150. Lets assume the food has a 100% markup. That's a profit of $85. Now if you use the same example with an AllStars room at $130 then the profit on meals is larger. It really depends on how much money people are willing to drop on a room.

Taking this whole thing back to the original post. I don't think Disney is planning a DHS overhaul as a reaction to lost business to Universal. Expansion and refurbs are part of the cycle of the business. You have to stay fresh to keep people coming back. If Disney was truly hurting they would fast track these additions and look to gain back all of these lost profits. The fact that they are taking the business as usual approach of slow build out over a period of years tells me they aren't that concerned about Universal. Since Potter opened every time something new is built at WDW people claim its in response to Potter or a Potter Swatter. What motivated Disney to grow WDW all those years prior to Potter? We know MGM was a reaction to USF opening, but why build AK or expand other areas of the resort? My point is not everything Disney does now is a reaction to Potter and it shouldn't be. Potter actually helped to expand the overall tourism base in Orlando. Sure WDW loses a day or 2 to Potter, but how many people went to Orlando in the last few years because of Potter but stayed on property at Disney and/or spent 4 or 5 days at WDW. The assumption that Disney lost 2 days from these guests isn't necessarily true. They may have gained 5 days because of Potter. Maybe that family would have gone to the beach or the Grand Canyon for vacation, but because they really wanted to see Potter they went to Orlando.

 

[cabscontrads]

Looking at all of this from a business prospective: How much money does Disney really lose if people spend a day or 2 at Universal? With multi-day passes the difference in cost between a 5 and 7 day ticket is completely negligible. Even if everyone drops down to a 5 day pass they aren't losing much on ticket revenue. On the resort front Universal still doesn't have the hotel capacity to put a dent in Disney's resort revenue. If a lot of people are still staying on property at WDW they get that revenue whether the people spend the day in a Disney park or off property.

Where they lose out is in merchandise sales and meals. The meal issue is partially mitigated by the highly popular DDP. When they get you to pay rack rate for your room and then give you free dining they have locked in the revenues even if you eat several meals off property. They actually make more money since there is no cost to Disney for the food. As an example if they offered a package that includes free dining and a room at the Poly for $4,000 they are giving you a room which after regular discounts would probably cost $3,000 for the week so they are getting $1,000 for the dining plan. Now if you eat lunch and dinner off property 2 days at Uni they still get that $1,000 but don't have to actually serve you 4 meals. For the guest they figure "my dining plan was free anyway so who cares if I waste a few meals" or more likely they bank the credits and use 2 the next day for the buffet in the castle. Point is they really don't lose much from people on the DDP. Merchandise is more problematic. Potter stuff sells like crazy. They were hoping that NextGen and the magic bands would help pry ore cash from guests. who knows if that plan will ever really work. In come Star Wars and Cars which both have huge merchandise appeal.

Some people would make the argument that guests will start splitting hotel time between the resorts and/or use Universal as their base and stay there. This could be an issue in the future for WDW if Universal added a 3rd gate, a waterpark and a whole lot of rooms. The split stay still happens, but the mouse offers their magical bus to and from the airport and a lot of people don't want to deal with the hassle of switching hotels. Remember that WDW's core business is the tourist market. Tourists who don't visit as frequently are less likely to be comfortable dealing with switching rooms and/or renting a car to get back and forth. Universal definitely has the locals market cornered. Disney has virtually written off locals by jacking up AP rates and reducing benefits for locals. Universal caters to this crowd.

In his usual accurate way, GoofGoof has again made excellent business points. Don't ring the 'Death Bell' on DHS just yet boys and girls. Give Disney braintrust a little more credit then that. As for one person who has done the math on WDW vs. Universal, Disney packaging and Marketing is still tops in the business. You need to look at the fine points of each argument. As stated by Goof Goof, packages win. Pay One Price, throw in Meals, and Transportation and your all set, without a Travel specialist.... Universal does not have the 'Bandwidth' to offer what WDW can in one package. 'Simplify'. Universal on site accommodations are very expensive. Partner Hotels come with an extensive list of Fees and expenses. Resort Fee's in many cases, Transportation, Car Rentals, Parking Fee's everywhere you go, and Meals. Also, let's not forget the attention to detail that we all know only Disney provides. No one does it better.....Just saying....

 

[NewfieFan]

FLE clearly addressed 2 big needs for MK: more capacity and another sit down restaurant. I don't disagree that Disney is losing money on merchandise and food sales if guests leave the property.

On the merchandise front I'm not sure how much more I would buy if I'm there 5 days vs 7 days. I think any issues with decreases in merchandise sales would more stem from the fact that the offerings at WDW tend to be stale and the Potter stuff is French and still hot. Right now you see tons of people walking around Disney resorts with Universal bags. I do think both Star Wars and Cars will significantly boost merchandise sales for Disney.

On the food side I still think DDP has a mitigating impact on lost food sales. Even if it didn't let's look at an example. A family of 4 spends $40 for CS lunch and $100 for dinner at a sit down restaurant in MK in a day. Lets round it up and call it $170 after extra drinks and a snack. Their room cost $500 a night. Even if the hotel room has a profit margin of 30% (I'm sure it's much higher) that's a profit of $150. Lets assume the food has a 100% markup. That's a profit of $85. Now if you use the same example with an AllStars room at $130 then the profit on meals is larger. It really depends on how much money people are willing to drop on a room.

Taking this whole thing back to the original post. I don't think Disney is planning a DHS overhaul as a reaction to lost business to Universal. Expansion and refurbs are part of the cycle of the business. You have to stay fresh to keep people coming back. If Disney was truly hurting tDt how many people went to Orlando in the last few years because of Potter but stayed on property at Disney and/or spent 4 or 5 days at WDW. The assumption that Disney lost 2 days from these guests isn't necessarily true. They may have gained 5 days because of Potter. Maybe that family would have gone to the beach or the Grand Canyon for vacation, but because they really wanted to see Potter they went to Orlando.

I agree that WDW merch is stale (there have been some recent improvements in some areas but for the most part... yes, stale). But you can't ignore the fact that time lost at Disney is money lost at Disney. You spend money when you're at Disney (DDP or not). DDP doesn't cover everything and lots of people order alcohol and apps at dinner. Don't forget the extra snacks, one per day is not a lot. There's extra water (especially when it's hot), another ice cream for a screaming toddler, a box of popcorn while waiting for the fireworks to start, etc. You see where I'm going with this? There's no doubt in my mind that's where Disney makes their money. If you're not at Disney you're spending your money elsewhere, plain and simple. If Uni is indeed pulling a Disney guest that would otherwise be hanging on property then Disney is losing money.
I believe any overhaul to DHS is in response to Uni. As much as I would rather believe that my beloved Disney cares about their parks and keeping it fresh and exciting... it's ain't so. Any construction team that moves in in the near future is in response to money lost to Uni.

 

[G00fyDad]

Great idea....dropped from a distance of about 150 feet should do the trick!

^^ A greater truth has never been uttered.

 

[DisneyArb]

Super important question - how does Gertie fit in to all this?

 

[ThemeParks4Life]

Super important question - how does Gertie fit in to all this?

She'll most likely get the axe.

 

[GoofGoof]

I agree that WDW merch is stale (there have been some recent improvements in some areas but for the most part... yes, stale). But you can't ignore the fact that time lost at Disney is money lost at Disney. You spend money when you're at Disney (DDP or not). DDP doesn't cover everything and lots of people order alcohol and apps at dinner. Don't forget the extra snacks, one per day is not a lot. There's extra water (especially when it's hot), another ice cream for a screaming toddler, a box of popcorn while waiting for the fireworks to start, etc. You see where I'm going with this? There's no doubt in my mind that's where Disney makes their money. If you're not at Disney you're spending your money elsewhere, plain and simple. If Uni is indeed pulling a Disney guest that would otherwise be hanging on property then Disney is losing money.
I believe any overhaul to DHS is in response to Uni. As much as I would rather believe that my beloved Disney cares about their parks and keeping it fresh and exciting... it's ain't so. Any construction team that moves in in the near future is in response to money lost to Uni.

Don't get me wrong, I started out by saying this:

I don't disagree that Disney is losing money on merchandise and food sales if guests leave the property.

Im not saying Disney doesn't care about losing guests to Universal, they clearly do. From a business prospective they want every dime of the guest spending in their pockets. My opinion is the new potential expansions and FLE are more about retaining current guests and keeping their parks on top while increasing what guests spend in those parks instead of reacting to a crisis over lost guests who are now visiting Universal instead of Disney.

 

[AllyInWonderland]

I hope that they don't get rid of the Sci-Fi restaurant. It's my favorite.

 

[thehowiet]

Disney wants to spend <$600 million on these developments. The impression I received is that Disney is more concerned with rebranding and relaunching this park on a budget than they are in building a world class park that will stand out. That is why while I think they will succeed with increasing DHS attendance and length of stays, they will fail in actually competing with Universal in getting some of their market share. In fact, Universal is probably going to continue to gain marketshare in spite of Pandora and DHS 2.0, which is a rather frightening reality that Disney should have confronted before blowing $2 billion+ on their stupid nextgen project. But like I said, its their money.

So it sounds like Disney still hasn't learned that going cheap doesn't usually work out for them in the long run, even after building Cars Land and seeing with their own eyes what proper funding could do to the financial success of a project. Same as it ever was.

 

[DisneyArb]

She'll most likely get the axe.

Ugh, I feel nauseous.

 

[FrankLapidus]

She'll most likely get the axe.

You would hope not. Gertie is far enough away from the areas that are apparently earmarked for redevelopment that you would think she wouldn't be impacted.

 

[Magenta Panther]

What is to replace such a large swath of real estate? Well, in short:

Cars Land, largely intact with two major exceptions. Those exceptions are the elimination of Luigi's Flying Tires and Radiator Springs Racers basically being an entirely different ride. I should note that there is a pretty good chance that the dark ride that is being subbed for Racers probably will not suck, but it is not going to be the mindblowing world class standout that RSR is at DCA, or Forbidden Journey is at IOA. I think Disney is completely out of their mind for going this route, but hey, its their money.

Star Wars Land:

This is where I have to dive into the world of speculation a bit because the snapshot I received was still full of questions about this part of the project. A second major Star Wars e-ticket is planned and I hope this ride will deliver. We shall see. Other components proposed included turning Muppetvision into the Star Wars themed show intended for the Captain EO space at Disneyland Paris and also the "Star Wars Cantina" bar/restaurant that Disney has wanted to build for quite some time. I highly suspect there is more planned for this than these additions alone but that is where the rumor mill is still sorting things out.

Disney wants to spend <$600 million on these developments. The impression I received is that Disney is more concerned with rebranding and relaunching this park on a budget than they are in building a world class park that will stand out. That is why while I think they will succeed with increasing DHS attendance and length of stays, they will fail in actually competing with Universal in getting some of their market share. In fact, Universal is probably going to continue to gain marketshare in spite of Pandora and DHS 2.0, which is a rather frightening reality that Disney should have confronted before blowing $2 billion+ on their stupid nextgen project. But like I said, its their money.

Thank you very much for this info. I can't say I'm surprised about Disney expanding on Star Wars. It sounds like an Iger type of deal - undervalue actual Disney creations (like Lion King) despite their proven, ongoing appeal, and make use of the unnecessary acquisitions. And yet look at the Muppets - bought with a lot of fanfare, but not much of a return on the dollars spent, if any. As for Lucasfilm - frankly, I think the Star Wars expansion you describe will definitely help DHS's attendance numbers, at least initially - but the heat is still at Universal Orlando. That Hogwarts Express attraction has me foaming at the mouth to ride it, and I didn't even like the Potter books all that much. As for Pandora - that does zip for me. I can't believe the Disney suits still think that's going to be any kind of boost to DAK. How I wish TDO and Disney would TRY to come up with an ORIGINAL attraction that doesn't have any ties to movies or whatever - but I suppose those days of innovation are over at Disney. And that is so sad...

 

[G00fyDad]

I hope that they don't get rid of the Sci-Fi restaurant. It's my favorite.

My wife will straight freak out! That may be a tipping point for her. I haven't seen her so mad since they decided against putting Mickey and Minnie's houses elsewhere and just destroyed them. If they get rid of SciFi then it may take a heck of a lot to get her down there again.