Why Hollywood Studios is being rebuilt

[El Grupo]

Pheneix, thanks for the response. I agree that Disney didn't quickly arrive where they are today. Several years of cutbacks and limited additions in the parks and DTD has contributed to the bleeding.

From my perspective, Disney would probably have to ultimately spend billions over the next few years to return the entire resort to its former glory. This would include conducting necessary refurbs, replacing select attractions (or empty buildings that formerly housed attractions), and completing long-overdue expansions to each of the four parks.

IMO, Disney should establish a goal of overhauling the entire resort in time for the 50th birthday celebration and spread the investment over 9 - 10 years (assuming that Disney has an 18-month celebration and some attractions open later in the celebratory period).

In a sense, some of this seems to already be underway. It just doesn't look like it all falls under an overarching initiative. For example, DTD appears to be on track. The addition of Avatar will hopefully be a step in the right direction for AK (though I believe another land will be needed in the near future). Now, if Disney will just take action elsewhere. As many have posted, DHS obviously needs much attention. Then, there is Epcot. UoE and Imagination need immediate overhauls, the Soarin' film should have been replaced yesterday and Disney should push ahead with a new pavilion (e.g., Weather or Horizons revisited) to replace WoL. Add two countries and two attractions for existing countries, and that park could enjoy a tremendous renaissance. Let's not forget TL (much to do there). Add an E-ticket "mountain" to Adventureland (just a personal preference) to the mix above and TDO will have a reason to consider more DVCs.

A public commitment to such a project by Disney followed by real movement in the parks should be a tremendous boost for the resort.

With that all said, if Disney continued to be fairly complacent, the bleeding will continue. However, I suspect it will be quite slow and painful.

 

[Pixiedustmaker]

I come here because I am seeking/observing different opinions, perspectives, and also to debate. Debate is fun.

This comment is like a line from that 1995 Sci-Fi flick, This Island Earth, where the guy with the suspiciously massive melon on his shoulders says something like, "I admire your Einstein", with the implication that he is from outer space as one of the actors says something like, "You mean our Einstein."

This whole coming "here" to seek out different opinions and debating is fun kinda has that alien vibe to it. I guess they finally hooked up that Wi-Fi connection to Mars.

But if I want to surround myself with people who agree with me, that is easy enough for me to do in my real life.

Yes, I suppose if you're the grand puba on Mars you can order people around like that, and execute those who don't agree with you. Welcome to earth is all I have to say. You tipped your hand when you said:

Saves DHS from becoming irrelevant and gives them footing to maintain the 7 million/yr level they experience now and probably grow back to 9 mil/yr which is where DHS was cruising at before DAK opened.

Sorry, us earthlings know that DHS got 9.9 million guests in 2012. Nice try Mr. Martian.

This WDWmagic forum is full of . . . theme park amateurs! With their facts and truth seeking . . . they've seen through out plans! They are closing to figuring out that the DHS expansion project was nothing more than a carefully constructed charade, a cover for our human enslavement facility.

I must . . . observe them more to understand what it means to debate things. Debate is fun. We'll try again later.

 

[pheneix]

I sincerely hope you are not sober when you write these posts @Pixiedustmaker. I definitely am not, otherwise I would have ed off from the fun diversion of troll feeding a long time ago.

 

[Lee]

Really?
Is if necessary to go into the whole thing about how:
A) The attendance estimates for DHS are way too high
And
B) The attendance DHS does get is primarily early day "first clicks" by guests who leave the park by early afternoon after hitting the "must do's" and spending very little on food and merch?

Hasn't that been settled? Or has it just been settled for everyone -1?

Get's old explaining the same stuff all the time...

 

[NoChesterHester]

Really?
Is if necessary to go into the whole thing about how:
A) The attendance estimates for DHS are way too high
And
B) The attendance DHS does get is primarily early day "first clicks" by guests who leave the park by early afternoon after hitting the "must do's" and spending very little on food and merch?

Hasn't that been settled? Or has it just been settled for everyone -1?

Get's old explaining the same stuff all the time...

There is an obvious agenda being spread by that poster. We all need to stop replying.

 

[dlfan1313]

For what it's worth, Kevin Rafferty, said this afternoon, that no decision has been made about building Carsland in FL. I know he could be simply toeing the company line, but he seemed pretty sincere.

 

[Lee]

There is an obvious agenda being spread by that poster. We all need to stop replying.

Agreed.
It's late, I'm tired...
I'll leave the troll battles to the youngsters like Pheneix...

 

[Lee]

For what it's worth, Kevin Rafferty, said this afternoon, that no decision has been made about building Carsland in FL. I know he could be simply toeing the company line, but he seemed pretty sincere.

No, that is an accurate statement. At least in as much as the project and its scope haven't bend formally signed off on (to my knowledge).
Cars could get bumped to phase two, for all we know. It is, however, part of the overall plan for DHS that is moving through the approval process.

 

[Pixiedustmaker]

Really?
Is if necessary to go into the whole thing about how:
A) The attendance estimates for DHS are way too high
And
B) The attendance DHS does get is primarily early day "first clicks" by guests who leave the park by early afternoon after hitting the "must do's" and spending very little on food and merch?

Hasn't that been settled? Or has it just been settled for everyone -1?

Get's old explaining the same stuff all the time...

If the methodology for assessing DHS attendance, turnstile clicks, has been the same since the park opened (it has) then irregardless of your opinion of the accuracy of the absolute numbers, the trend is valid, and would lead one to logically conclude that DHS attendance is up. There is an important difference between precision and accuracy which is germane to this analysis. Precision relates to reproducibility, with regards to taking measurements in the same fashion, accuracy involves how close DHS estimates are to the target.

While it is not disputed that DHS numbers are up, I would also argue that there is no reason to believe that the turnstile clicks are less accurate, in terms of the picture of absolute number of guests in the park. DHS has had a certain historical visitation pattern, with increased attendance, there would be more guests in the park during hours of operation simply because of the increase number of guests and how they would be distributed over a given length of time.

 

[Lee]

We need that smiley of bashing your head into a wall back...

It is impossible to carry on a discussion with someone who insists on clinging to incorrect assumptions.

Good night, all...

 

[dlfan1313]

No, that is an accurate statement. At least in as much as the project and its scope haven't bend formally signed off on (to my knowledge).
Cars could get bumped to phase two, for all we know. It is, however, part of the overall plan for DHS that is moving through the approval process.

In answering a more open ended question about future projects, he, more or less, said no comment. When asked about Carsland, he gave this more honest (can't think of a better term) response. He did say that he was extremely excited about a project working it's way through the approval process. No other details though. Not even which resort.

 

[Pixiedustmaker]

No, that is an accurate statement. At least in as much as the project and its scope haven't bend formally signed off on (to my knowledge).
Cars could get bumped to phase two, for all we know. It is, however, part of the overall plan for DHS that is moving through the approval process.

If they wanted to make a decision about Carsland at DHS, they would probably first do an in-house feasibility study. This would utilize in part prior feasibility studies and expansion plans. It would include construction costs, and infrastructure improvements. Then another group would look at the market for such an addition, a benefits to cost analysis. It would be a lot of paperwork.

I think the big decisions are made by the brass, they farm out a lot of studies and projects, and when they decide to pull the trigger, they do if it makes fiscal sense in terms of the division, and the whole company. I wouldn't think there would be much of an "approval" process, per se, as its not like a sub-division of WDI is applying for a grant to build a Floridian Carsland. The feasibility study, not done by WDI I believe, might come up with a number which doesn't make sense in Orlando due to various changes or weather issues.

 

[Pixiedustmaker]

In answering a more open ended question about future projects, he, more or less, said no comment. When asked about Carsland, he gave this more honest (can't think of a better term) response. He did say that he was extremely excited about a project working it's way through the approval process. No other details though. Not even which resort.

I think approval process is a bit of a misleading term with regards to CapEx at Disney. If you're going to build a major construction project in a city which needs approval, then there is an approval process. Implying that if your application has all the i's and t's dotted and crossed then you get it. The city doesn't say that they don't have enough money to OK your project because of a deficit.

In terms of Disney, just because there is an "application" to build something new, even if the plans are legit, i.e. are feasible and guests would like them, it doesn't mean it will happen as the brass needs to OK money being spent on said project. There is a limited amount of money, and a lot of good ideas which often don't see the light of day because of finite resources.

 

[articos]

No, that is an accurate statement. At least in as much as the project and its scope haven't bend formally signed off on (to my knowledge).
Cars could get bumped to phase two, for all we know. It is, however, part of the overall plan for DHS that is moving through the approval process.

Correct on all counts.

 

[Pixiedustmaker]

In answering a more open ended question about future projects, he, more or less, said no comment. When asked about Carsland, he gave this more honest (can't think of a better term) response. He did say that he was extremely excited about a project working it's way through the approval process. No other details though. Not even which resort.

I don't think Disney would say, "no Carsland", even if they didn't plan on building one. I don't remember ever giving a 100% negative answer to anything. Sort of like how Apple employees shouldn't say, "No", in response to a question, but start with, "As is turns out. . . " It may very well be just diplomacy as they know fans in Florida are eyeing Carsland and wondering if it will be transplanted.

Sounds like the other project he is interested in isn't Carsland.

 

[pheneix]

I think approval process is a bit of a misleading term with regards to CapEx at Disney. If you're going to build a major construction project in a city which needs approval, then there is an approval process. Implying that if your application has all the i's and t's dotted and crossed then you get it. The city doesn't say that they don't have enough money to OK your project because of a deficit.

In terms of Disney, just because there is an "application" to build something new, even if the plans are legit, i.e. are feasible and guests would like them, it doesn't mean it will happen as the brass needs to OK money being spent on said project. There is a limited amount of money, and a lot of good ideas which often don't see the light of day because of finite resources.

I do admit that this is about as close to debating a Team Disney automaton as I am ever going to get. So I am going to bite the low hanging fruit.

Since you know so much about business. Compute these numbers:

Comcast 2012 free cash flow: $7.9 billion

http://www.cmcsa.com/releasedetail.cfm?ReleaseID=739834

Walt Disney Company 2012 free cash flow: $4.2 billion

http://thewaltdisneycompany.com/sites/default/files/reports/reconciliation_q4_fy2012.pdf

I don't even fracking care about talking about DHS overhaul plans or its attendance. Let's just drill this down to some basics:

Universal has shifted the paradigm in Orlando. Walt Disney World is in the process of changing its business strategy for the next five years, a strategy that @Tim_4 can capably and artfully describe and defend. That business strategy is no longer workable against a competitor who is spending more money on hard product than any other theme park operator in history. I would also add that Universal Orlando is spending this money competently and not in a wasteful way typical of a WDPR/WDI relationship. And with that said, let's drill this down to an even more simple bullet point that I will describe in case you are incapable of understanding the numbers I provided:

COMCAST CAN OUTSPEND THE WALT DISNEY COMPANY AND THERE IS NOTHING ON PLANET EARTH THE WALT DISNEY COMPANY CAN DO ABOUT THIS.

This is why Disney is screwed.

 

[pheneix]

More fun with numbers from the same reports:

Universal Parks and Resorts revenues from 2012: $2.1 billion. That all came from two theme parks in Orlando, a water park, ownership stakes in three hotels, and a small park in California.

WD P&R 2012 revenues: $10.3 billion. That income was derived from six theme parks, two water parks, four cruise ships, 30+ hotels that Disney owns in full, don't even care to elaborate more there is no need.

Universal is better at pulling cash out of its theme park operations than Disney. Another new reality that Disney needs to confront.

NOTE: WDC chose to present a data table that excludes international parks and resorts from 2012 revenues. The numbers I presented are from that data set but ARE an accurate comparison to Uni P&R revs as their reporting does not include foreign park licensing and royalties.

 

[WDW1974]

Common in a part of America that was last to receive the internet, no doubt.

Mama always said some folks are just born special, bless their hearts. And they're not all named Phil.
Ignorant folks can often be quite proud of their intellectual shortcomings regardless of how the rest of us view them.

 

[WDW1974]

There is an obvious agenda being spread by that poster. We all need to stop replying.

You think?!?!?

 

[articos]

A.) Would bury the park. DHS would be forever consigned to the under 5 million realm of annual attendance. This will force option C. Universal is going to kill them on value perception if DHS does nothing. Universal is going to kill them on value perception at all four parks in 2014, but MK is the tentpole of an Orlando vacation and will not have the floor swept out from under them as fast as at their other parks. However, if Uni is building a new E-ticket at IOA as well as Kong for USF in 2015, I don't see how MK doesn't suffer a noticeable decline in attendance as well.

B.) Would have more of a negative impact on attendance than doing nothing in the short term but would be in the service of a greater good.

C.) Saves DHS from becoming irrelevant and gives them footing to maintain the 7 million/yr level they experience now and probably grow back to 9 mil/yr which is where DHS was cruising at before DAK opened. However the combination of this plus Avatar at DAK is going to crush Epcot. MK also will be seeing significant declines by 2017 because of Universal Orlando pressure.

We didn't get here overnight. Disney chose to pile $2 billion resources into an IT program at the same time Universal piled the same amount of money into new rides. Disney won't be able to fix this overnight and I don't there is ANYTHING they can do to stop the "great rotation" of guests over to UO over the next two years. They're screwed.

Maybe in 5-7 years after WDC management either retires or is ousted we will be writing about the great WDW comeback story. But the next few years are going to be brutal. Especially with Disney making so many poor operational changes (re: MyMagic+) at the same time Uni is giving people what they want: new rides.

I think you're right about the next few years being tough on Disney in Orlando. They're having to adapt to competition in the market they've never dealt with before, and they're slow to turn the ship. One thing I'd hedge on though: I really don't think MK will see significant declines. As you said, MK is the benchmark, and I think that's the one park that everyone will continue to go to, regardless. I'd expect MK to continue to gain business as more people vacation in the Central Fl market, actually, but maybe not the large gains they have seen in the past. I don't think there will be a huge shift in pattern where people forgo Disney, I think Universal will gain days out of the Disney vacation, at the expense of DHS, Epcot, DAK, the water parks and the hotels. Some will switch their entire plan from only visiting Disney to only visiting Universal, but not the majority. It will take a while to really gain critical mass for people to look upon Universal as equal to the Vacation Kingdom.

Now, if we're still in the same situation in 2020, I think Disney's going to be in a world of hurt. But I think the numbers are being noticed, and they will have to react over the next 5 years, meaning new attractions coming online from 2015-2025. We'll see.