WSJ: Even Disney Is Worried About The High Cost Of A Disney Vacation (gift link)

[JoeCamel]

I’ll believe Dollywood is serious about it’s parks when it figures out how to solve its hornet and wasp problem.

They would have to get rid of the cinnamon bread and that ain't happenin'

 

[flynnibus]

That was the stated target when they mailed out the early retirement buyout offer. It’s not unprecedented either, over 400,000 federal jobs were eliminated in the late 90s and it didn’t result in a downturn.

Over a period of nearly 7 years.. and with people landing softly from such job reductions.

That is nothing like what is being ran through now.

 

[BrianLo]

It's a regional park, designed to cater to young children, though.

The overwhelming majority of us will never set foot in it.

Seems like it's intended for people that may never make it to Orlando or at least won't while their kids are still young.

That's kind of the point of it, right?

If so, who cares what we think if we were never the target audience to begin with?

We’re in agreement because you definitely understand what it is and isn’t. Most people don’t.

There’s a lot of chatter from Universal adults who want to go from out of state to what is essentially two Dreamworks lands, a storybook circus and (if we’re incredibly lucky) a Seuss landing duct taped together.

It’s a very narrow audience and what I feel is a poor decision for the brand.

 

[DisneyHead123]

Disney killed the golden goose and it was just a matter of time till the tipping point arrived.

The first two generations after wdw open were converted into fierce brand loyalists. Wowed ans swooned, they regenerated with the next generation through the kids growing up and repeating the cycle.

Disney created ‘fans’ who would actually shape their lifestyle around wdw vacations. Borderline cult-like… and the reputation earned ensured a new feeder line of new recruits.

But in the 2000s they started taking this for granted. New waves of leadership focused on cashing in verse ensuring the cycled continued.

Then Disney started directly chipping away at the things that nurtured the loyalists. They started treating guests like “your dollars are replacable”. Disney basically stopped building brand loyalty and instead focused on capitalizing on the guest… even blatantly in front of them.

Defense like “everyone else does it…” highlighted exactly that. Disney was no longer different…. The cycle was broken and now Disney no longer had blind faith from their customers. People openly feel nickled and dimed. It’s every family for themselves….

So the armor is gone… you are exposed to just see how much you can land before customers give up on you.

Disney was coasting on it’s past reputation while not restocking the barn. Generational loyalty is gone. Wdw becomes more ‘one and done’… something people grimmice through to say they did it… but no longer join the cult.

It accelerates into a death spiral as disney monetizes more to sustain growth while doing little to indoctrinate new loyalists… and making its own barrier to conversion even taller.

Now sustaining growth is too hard… you are too big… defending your own price differentiation makes you too inflexible.. and it costs too much to keep innovating so you slumble and slow even more.


Disney’s turning their back on their brand loyalty and what created it killed the golden goose.

Disney turned everyone into park commandos… then monetized it and everything short of taking a dump… and then can’t find their way back to what actually created that kind of lifelong fan.

All empires eventually fall…

Or… alternate timeline… they become a more wholesome, imaginative version of Vegas for adults. I’m not especially fond of that idea (not diametrically opposed either) but I can see it. They want kids there but don’t want to hand out a lot of discounts in the form of kids eating and attending free (which would be the fairly obvious solution). It turns out that kids cost a lot of money, so no matter how you look at it, childless adults at the same income level as parents will have more disposable income in most cases. If the biggest priority is maximizing profits, then Disney will be marketing more to the “dual income no kids” couples as a matter of logistics.

That’s not the end of the world though. Honestly, kids today seem to grow up much faster and scoff at fanciful things as “babyish” by around age 7 or so. But (this is all totally anecdotal of course) the reverse also feels true - young and youngish adults of today seem increasingly enamored with the fanciful pursuits and fandoms that used to be reserved for kids. Nostalgia is a heck of a drug, but plenty of industries get by just fine without it.

 

[BrianLo]

In 2024 the experiences segment made up almost 60% of the OI for the Walt Disney Company. In terms of revenue, it was around 48%. The largest single driver of revenue and OI in the segment is Walt Disney World resort.

I’m not good at math…but those numbers seem like “a lot”

These numbers are not correct, I’m not sure where you are pulling it from.

Fiscal 2024 Experiences was about 37% of revenue.
-With consumer products pulled out it’s 32%
-With International experiences pulled out it’s 25%
Hence where I’m getting about 15% on WDW eliminating DCL and DLR. We can be generous and say 20.

BUT OI is indeed well over 50%. So I guess you could say the main reason the stock has value right now is parks, but the main reason it hasn’t expanded in the last 10 years are all the other aspects of TWDC.

For the record I don’t disagree with all of Len’s conclusions. Just more that the stock price isn’t being held back by WDW. Maybe only recently it’s being held aloft by it if OI is the only thing Wall Street prices around… which it most assuredly does not.

 

[MrPromey]

We’re in agreement because you definitely understand what it is and isn’t. Most people don’t.

There’s a lot of chatter from Universal adults who want to go from out of state to what is essentially two Dreamworks lands, a storybook circus and (if we’re incredibly lucky) a Seuss landing duct taped together.

It’s a very narrow audience and what I feel is a poor decision for the brand.

They just need to be super careful how they market it as it gets closer to opening.

I think this is a situation where they get one shot at appropriate level-setting.

But then again, I imagine "Universal adults" (ick - I have an AP and didn't know such a thing existed) should be more plugged in about the reality of it than we are.

 

[BrianLo]

This is a perfect example of creating nostalgic customers, Uni gets it, hook them young and you create a customer for life, nostalgia used to be Disneys main selling point, now they don’t seem to care beyond the next quarters financials.

This small Uni park is being built smack dab in the middle of what is soon be the most populous state in the nation, all those little kids that go to it will become loyal Uni guests rather than loyal Disney guests. It’s brilliant.

It’s not intended to be a new MK or IOA drawing 15 million guests a year, it just needs to draw a million kids from the surrounding cities every year to ensure IOA will have a loyal customer base decades into the future.

They are doing the same here in Vegas, building a permanent Horror Nights, it’s not meant to draw 10s of millions but if it can hook a million guests a year that will pay huge dividends in CA and FL.

I really don’t think they get it. Their destination parks are very poorly built around kids under five. They are building a cheap product that in no way represents their destination products offerings.

Dis is already in the Texas market with a product that is different, but still marketed to the same demo and is not cheap. DCL is a far better offering, albeit too expensive.

I actually don’t have a problem with the HHN offering in Vegas. I think that’s a smart ploy that represents but doesn’t degrade a seasonal offering. It also can be done well at the budget it will have.

Universal would be far better off spending that money on beefing up their destination offering to actually appeal to families.

Your assumptions on conversion rates I very much disagree with. You are not getting a 100% conversion rate to IOA. This is an out of market product. You are making “Universal Kids” customers. At best it’s a good product and we see a 50% conversion to a revisit and then within short order the family ages out. With DCL we see a 50% conversion rate for repeat cruises and the family in theory never really ages out. The conversion rate to IOA is optimistically a few percent points.

Besides, for all the chatter about how Disney cannot attract young families (which seems more theoretical alarmist than the actual demos we still see at WDW) are we really digging in that Universal Orlando in anyway is doing a better job with that demo? The other way Dis builds nostalgia far better than Comcast is with their more coherent DTC product. Peacock simply isn’t cutting it, they are still skating by on Netflix exposure.

 

[TP2000]

So many great comments here as I've skimmed over the past day or so.

All I can add is;

Two years ago, when I evacuated and took my tax money with me moved from Southern California to Utah, I celebrated by booking a stay at Amangiri, the Aman resort in southern Utah. I'd stayed at an Aman hotel in Tokyo before, and it was fabulous, so I wanted to try their Utah experience. It was stunning. Absolute perfection. Food, service, polish, amenities, spookily accurate attentiveness, extreme professionalism, bizarrely curated offerings, incredible architecture, excellent soft goods, impressive staff training and polish, EVERYTHING was perfection. (Not to mention the people watching by the pool was hysterical!)

And as a guy who spent many, many visits to WDW at the Poly in the 1980's-2000's, I was floored when I happily paid the Amex bill a few weeks later, still on an Aman high. I could have spent the same money and stayed in a Poly one bedroom suite and had dramatically lower service levels, dramatically lower operational offerings, noticeably inferior soft goods and amenities, all served up by a staff of CM's that too often seems like a sloppy amateur hour as they dream up new ways to tell you "No".

TDO, and Burbank, both have huge problems with their current Parks core products. These problems are at their most glaring at WDW because of its business model built around attracting, and keeping, customers on property for a week or so. Their entire Parks business model is collapsing under a decade or more of penny-pinching, and value-engineering, and App-based torture, and cheapened training processes and obviously lowered employee standards, with a big dollop of TDO bureaucracy and idiocy on top.

Sadly, they deserve this bad press. If anything, the WSJ was being too kind on them.

 

[BrianLo]

I get it regional parks aren't a place most of you step foot in. This nonsense of them being the worst of the worst and them hurting brands is ridiculous.

Not all regional parks are built equally, of course. I’d be modesty more on board if they were designing a Dollywood or Efteling instead of a Legoland.

The sheer refusal of the parent company to tap the family market is their downfall.

It’s just a very confusing segment they decided to go after. Instead of having a peeing match over declining linear assets like Sky, the company missed a bold opportunity to acquire Royal, which is now way out of their league.

Again I’m not saying the park will be bad I won’t judge that until I actually go many years from now merely that the “it’s for kids” argument is weak and offensive to actual kids

Take that one up with Universal. It’s literally in the name. “Universal Kids”. Not listening to what they are blatantly marketing it as was my original complaint that spawned this.

 

[GhostHost1000]

I’ll believe Dollywood is serious about it’s parks when it figures out how to solve its hornet and wasp problem.

I live somewhat near Dollywood. They have a lot of things they could do to make their parks better. They need way more indoor attractions for one and their food is mostly not very good as well. Their prices have gone up a good amount the last several years too, but it’s still what I would consider reasonable. Some of their attractions have really poor capacity (TN tornado, Firechaser, etc)