Written by Kevin Baxter
Published: June 11, 2004 at 1:09 AM
Walt Disney World has been basking in an improved economy, but is the resort doing as well as Eisner claims? The resort's hotels are offering $30 discounts on Budget hotels, $60 on Moderate hotels and $85 on Deluxe hotels to Florida residents between July 5 and August 28. Meanwhile, Universal is not offering any discounts and bookings are up by double-digit percentages over 2003.
So, is WDW hurting? Considering the discount covers WDW's busy summer season, this is certainly a sign. As I mentioned earlier this year, just because WDW attendance is up, it doesn't mean hotel attendance is up. And the hotels are where WDW makes the vast majority of its Orlando profits. With the film division doing so poorly this year, Michael Eisner's promised 30% increase will have to come mostly from the parks. This could be interesting.
SUCKING IN HOLLYWOOD
Orlando Sentinel - Jun 9
Speaking of the film division... Eisner's expected negotiating problems with Miramax's Weinstein brothers are ramping up quite nicely. The contract between the two is supposed to be up in 2009, but a stipulation allows Disney to renegotiate in 2005. So Disney is starting to renegotiate. Surprise! At issue are Miramax's rising budgets and the Weinsteins' salaries. Which is extremely rich coming from a company with skyrocketing budgets - The Alamo, Brother Bear and Home on the Range to name three recent budget busters - and skyrocketing salaries - Eisner, natch.
Still, there is something that might hurt negotiations even more: Eisner's mouth. Another surprise! Eisner claimed publicly that Miramax has been unprofitable three of the last five years. I find that a little hard to believe since there have been a lot of big movies out of the studio in the past few years, like the Spy Kids franchise, the Scary Movie franchise, Chicago, the Kill Bills, etc. But Eisner's Number One Flunky Bob Iger piped up to agree with his bossman. Another major surprise! The best part is Iger's comment that pair aren't "applying current accounting rules." You know, those rules that allow Disney to claim every film as unprofitable, except at shareholder meetings. Even better is Iger's belief that "our side of the story is a rather credible side." He THINKS? RATHER credible? Strong words, no?
Anyhow, the Weinsteins got the last laugh as a spokesperson challenged Disney to sell Miramax back if it was so unprofitable. Which no one believes Disney wants to do. If Disney decides to play hardball with the Weinsteins, the brothers could simply walk away from the company and start another studio, essentially ending any future for Miramax. Plus, analysts believe there is little money to be made, but lots of credibility for credibility-challenged Disney. What happens to the film studio when yet another creative force races away from the fold?
SUCKING IN PARIS
Orlando Sentinel - Jun 10
Euro Disney just got a lifeline it desperately needed, but it may be like curing cancer with Bactine. Disney itself is being forced to help out the company, as well as the parks it owns 39% of. With Disney's help, three French banks will restructure the theme park company's debt and Euro Disney will have to sell more shares of stock. Evidently this is not a perfect solution since Disney itself may be expected to buy as much as $120M worth of the new Euro Disney shares, making them a much bigger partner in the failing resort. How much this will hurt Eisner's proposed 30% profit increase is unknown, but owning more of this loser certainly won't help.
SUCKING TO BE DONALD
NY Times - Jun 10
Although the Paris parks are suffering, they appear to be the only ones even remotely interested in Donald Duck's 70th birthday. While nothing major occurred at Disneyland Paris, at least SOMETHING occurred. I haven't heard of a single peeps about Disney's second-biggest icon - supposedly - in the stateside parks.
SUCKING IN VEGAS
NY Times - Jun 10
In a surprise move, Tony-winning underdog Avenue Q will open in Steve Wynn's new lavish Vegas resort next year. Most Broadway shows do the National Tour thing after a healthy New York run, but Q's producers wanted Broadway-like venues for the show, which aren't common in most cities. Instead of a cavernous hall, the show will open in a cozier 1200-seat theater for an open-ended run. How long it will last is up for debate, but the show does bring something entirely original to Las Vegas, and originality has proven to be a winner there. Add in adult themes and songs with titles like "Everyone's a Little Bit Racist," "The Internet is for Porn," "I'm Not Wearing Underwear Today" and "If You Were Gay" and this could become the alternative for adults who don't want to look at boobies for entertainment. (BTW, "It Sucks to Be Me" - the source for this Flume's title - is another song from the show.)
As if that wasn't enough news for Vegas aficionados, Wynn Las Vegas promises a whole lot more when it opens. Not only will the hotel feature yet another free spectacle outside - Wynn was the man behind The Mirage's volcano, Treasure Island's pirate battle and Bellagio's fountains - but another intriguing show inside. Franco Dragone, who directed Cirque du Soleil's Mystere and O extravaganzas - both in Vegas because of Wynn - as well as Celine Dion's Caesar's show, will be directing a new show for WLV also. The showroom, a 2000-seater, will be spherical in shape and will somehow have water above, below and around the audience. The show itself will take place within 40 feet of every single seat in the theater. It looks like I am going to have to spend a long weekend just at this hotel!
As for WDW, of course it does have more hotels. But that's half the point. WDW has periodically had upwards of 90% occupancy during summer. UO is breaking attendance records at its parks AND hotels. WDW was bragging about attendance records at its parks for Spring Break but is apparently having problems at the hotels. Including the budget level hotels, which should definitely be crammed this summer. They've oversaturated their own market. WDW needs to permanently close one or two hotels or turn them into timeshares or things are going to be extremely dire during the upcoming slow season.
First, as has already been mentioned, it might be interesting to note that the three Universal on-site hotels COMBINED have FEWER rooms total than Disney's newest value resort, Pop Century, has alone. So although Disney perhaps has saturated the market with too many hotel rooms and must face that problem, it does not surprise me that Universal feels that the occupancy at their three resorts is at a satisfactory level that no ADDITIONAL discounts are required at this time. Perhaps their bookings are up double digits from last year...but I know that Disney's hotel bookings are up a lot too. I'm just not sure by what percentage, but with as many rooms as Disney has vs what Universal has, even a double-digit increase at Disney hotels could still leave enough rooms to be filled in by Florida residents using this discount offer. One could even take another angle and thank Disney for making an offer for FL residents like this.
Second, although Universal is not offering as significant discounts to Florida residents as the new Disney offer does, all Florida residents can still get 10% off room rates to all 3 hotels at Universal. With rates for garden views at say the Hard Rock Hotel being around $300 a night in July, that is a 30 dollar savings for Florida residents.
Third, one must take into account the other discount "packages" offered if you stay at a Universal on-site resort, and its a pretty good one. That is stay four nights at one of the resorts and get, yes, two FREE adult length-of-stay passes to visit both Universal parks. So let's say you use just two days of the four your pass entitiles you (and spend the other two days at neighboring parks like SeaWorld, Wetn'Wild or Disney, but then spend your nights at a Universal on-site hotel)...that is over a $100 savings...and this is open to EVERYONE, not just FLorida residents.
Not to mention the many other offers used primarily to show increased attendance numbers at Universal parks such as the buy 2 days get another 3 days FREE, etc. To say Universal does not rely on discounts, be it for Florida residents or all tourists, is a bit far from the truth.
Just out of curiosity, as much as I often enjoy these Blog Flumes, are they primarily based just on Disney's mis-steps? How come the recent LA Times article about GE being "shaky" over keeping the Universal parks, which brought to light the fact that Universal Orlando has been a money loser since at least IOA opened, was never covered in these editorials? Such things that were mentioned in that article is that the Universal Orlando resort is still in over a 1 billion dollar debt and have only been increasing upon that debt load for several years, including another 100 million lost in the past two years alone. According to that article, the resort hasn't made a profit in years. And funny enough, one of the main reasons for continuosly losing money that was given was the over-use of discounts. I would say that it unfortunately sucks to be Universal theme parks as well.
The fact of the matter is, if Universal Orlando loses money, it doesn't affect GE all that much. Most of that debt is carryover from building IOA and CityWalk, so it is to be expected. Plus, much of that debt has remained due to Vivendi's decline. GE can actually restructure that debt and make it much less of a burden. But the most important thing is that UO makes up less than one percent of the GE/NBC/Universal empire, while WDW makes up about 30 to 40% of Disney's. So filling hotel rooms is important.
Furthermore, the fact that UO's very expensive hotels are filling up while WDW's budget hotels are not is EXTREMELY telling. Forget the fact that UO has alleged specials year-round, meaning they aren't really specials (WDW, unlike DLR, rarely offers specials, which is another sign) since it seems Universal never sells rooms at the rack rate. Mostly, it means a lot more people are apparently willing to pay more to be close to the Universal parks than they are willing to pay LESS to be near the Disney parks. This story affects Disney's profits, attendance and Universal's increasing threat. Should I have ignored it?
When Disney does something of worth, I will cover it. What exactly have they done recently that is so spectacular? If you want to put on the blinders, there are plenty of sites that will welcome you with open arms (and closed minds). If you want a site that doesn't kiss ass, then stick around.
However, do you you have to be, at least from my perspective, so defensive in your reply and correction of my mistake? I simply asked a question and was mistaken. I guess my tone in that questioning sounded rude from the manner in which your correction was given. I didn't mean it that way, and if you perceived it that way, I'm sorry. I have no personal vindetta nor am I creating a "conspriacy" toward you and admit that I don't live and breathe theme parks or this site. For me, reading about theme parks is just a fun hobby and, usually, a stress reliever. I realize that the three or four times I have ever posted in response to your articles have been faced with much anger and hostility because I either questioned what was written or gave a differing opinion, and for some reason it seems as though you believe that I just want to pick a fight. And although, in this case, I still believe the fact that Universal on-site hotels have fewer rooms total than Disney's Pop Century hotel has alone is noteworthy on how each resort is able to fill up their supply, I don't mean to pick a fight like the one that is transpiring. I will continue to read your articles and other things at this site because I do find them interesting and different than rosy outlook many other sites give. However, if need be, I will no longer submit posts that offer differing opinions or questions on the content of the Blog Flumes so as to not create unneeded tension that seems to exist between you and me. I think we just got off on a bad note and it keeps on snowballing, hopefully all can be forgotten and no hard feelings.
I agree with Mike (not to pile on you), but I also got a defensive reaction from you once (one of my few post). I love this site and visit it at least once a week. It is the only theme park site I visit (as I think it is the best). Most of us are not out to make you look bad, please think about that before giving us our 'whoopins that we probably deserve :) Cheers! No offensive friend.
How could anyone draw such a conclusion?
Is Disney stock in the teens yet?
Matt, if this was the first time you had gotten on me about something, I would think my reaction was overblown. But it isn't the first time, is it? As I recall, I made a mistake in an earlier column since I didn't know about a semi-recent change in the Universal/DreamWorks distribution deal and you totally jumped down my throat over it. You were even told, by someone else, that you were being rude. Yet here you go with another rude comment on this thread and accusing me of something I didn't do. Should I have taken it differently?
I'm usually not rude to people I don't think deserve it, but you apologized, which definitely makes you a bigger person than some of the people on this site who shall remain brainless... I mean nameless! Just be a little more professional and I will return the favor. I'm actually not so bad.
I don't believe that I accused you of anything in this series of posts either. I simply asked a question on whether or not the focus of these articles are usually just about Disney's mis-steps or not. Instead you accused me of trying to insinuate that you are part of some anti-Disney conspiracy, when I never even said that and its something you got out of that question by yourself for some reason (perhaps because I can somewhat remember that in my inappropriate reaction to your reply towards my inquiry in the Shrek article, I suggested that it was written for no other reason than to make Universal shine?) I thought it was an honest enough question, but I guess what you remembered about me was negative and for some reason thought I had a much bigger agenda from that question, of which I assure you I didn't.
So, now that I think we've got everything squared away, keep up the interesting articles Kevin and let's let, as they say, bygones be bygones. :)
In fact, what bothered me the most was that you basically misunderstood my article. Yes, Universal no longer distributes domestically for DreamWorks, BUT I did clarify that DW uses Universal's distribution machinery. But the article was titled "Did Shrek 2 Put the Nail in Disney's Coffin?" and the obvious focus of my article was that Disney cannot compete domestically with other studios, whether they be Sony, Warner Bros, Universal or DreamWorks. Had I realized the newer terms of the Universal/DreamWorks agreement, the article would have changed little. I would have simply pointed out that DreamWorks, a studio that has its own problems of late, can still market better than Disney. But I'm not really sure how much of that is DW and how much Universal's "machinery" is relied upon. Still, as this is a theme park site, the focus would still have been upon Universal, which can fool enough people to see any of its films, simply because a deal with Universal would be more likely to get Pixar characters into a theme park. Sony could sell the films better than Disney too, but that doesn't get us new rides now, does it?
As for you not accusing me of anything... You wrote "Just out of curiosity, as much as I often enjoy these Blog Flumes, are they primarily based just on Disney's mis-steps? How come the recent LA Times article about GE being "shaky" over keeping the Universal parks, which brought to light the fact that Universal Orlando has been a money loser since at least IOA opened, was never covered in these editorials?" Does that not accuse me of focusing on Disney's problems while ignoring Universal's? Disney is in the news a lot more than Universal, and most of the time it is bad. I don't ignore good Disney news unless it is boring or a puff piece. Even then, I sometimes cover puff pieces if a press flunky says something completely over the top. Those are often better than actual news.
Yes, sometimes I get defensive. But this site, which doesn't kiss Disney ass like so many others, has gotten many people who do and cannot tolerate a single anti-Disney comment ever seeing the light of day. (One of whom can be found in this thread!) So when someone new comes along and appears to be throwing out the same tired crap about how much I hate Disney (I own a DLR AP and went to WDW in March, that's how much I hate them), I responded how I always have. Maybe I should have made sure that wasn't your purpose first, but old habits die hard. Sorry if I acted too hastily in this thread, but you hit on the two things I really don't like. Stay away from them and I'm not that venomous. I have other targets.
Again, I still meant nothing rude about my question in this series of posts about the topics covered in these articles. I admit that I've usually just read through your articles for a while now without ever reading or posting a comment or realizing that you were accused of some anti-Disney thing before by some other posters. I'm not sure how you should have taken that question, but I was sincerely asking an honest question because I thought the Universal Orlando news seemed more signifant than Florida resident discounts to WDW hotels, and I made an honest mistake of not remembering you mentioning it. And, as you said, since I suppose Disney tends to be in the news more, it does seem like more negative Disney stuff is covered moreso than anything else. That was my only intention and not to insinuate or accuse you of anything else. I had/have no hidden agenda, and I hope you'll just believe that.
Alright, I think we've beaten this thing to death, so I think I'll call for a truce, ;)
"Tourists consider Walt Disney Co.'s resorts among the best upscale hotels in the nation, according to a survey by Consumer Reports magazine. Disney, Embassy Suites and Harrah's topped the list of hotels with room rates ranging from $80 to $150, the magazine said."
A lot of this depends on where you are, too. $150 will buy you a good room in WDW, but I don't think it will get you one in UO. And it would get you nothing more than a hole in NYC. Meanwhile, Harrah's was mentioned, and you CAN get a real 4-star room in Tahoe from them. No Moderate hotel in WDW is anywhere near 4-star. And we won't even get into the as-far-from-upscale-as-you-can-get All-Star or Pop Century resorts. Once again we are given a factoid that really has little to do with anything when put into proper context.
(And, Robert, I think an earlier comment shows that some people aren't finding the Column Archives. And what happened to the News archives? I can bring that stuff up if I search, but I can't find an archive page.)
I also laugh at the fact that people actually call it "SoCal."
Best wishes from those of us laughing in "CenFla."
And why is SoCal so funny? Is LA funny too? SF? I guess only cool places get nicknames. Like SoHo or TriBeCa, except our cool places are way bigger!
You can find older news and trip report articles by using the drop down selection menu in the middle of the news page. Just select the combination of article type and theme park that you want. Otherwise, use the search box at the top of each TPI page.
There's no single page listing all old news articles, 'cause that would put a huge burden on the server to generate and serve. But the new column pages use much less server and database oomph, so as I change the news and trip report pages to that new system, I'll consider adding a full archive page for them.
I RESPOND: (Chuckle) Regardless of "why" it's humorous it isn't nearly as funny as someone who is terminally defensive.
(THC Braces himself for the inevitable punch)
Sending much love from CenFla!
Beats "O'do" any day, I say.
Besides, I didn't invent SoCal, so why the hell would I get defensive? I honestly could not comprehend why someone would be so moronic to find something so innocuous funny. Especially since it has certainly been called that in movies, on television and in the written from before I wrote it. If not, then I am copyrighting it and everyone needs to pay me from now on!
But then I'm wondering about this from someone who thinks Disney maintaining a stock price well below where it was a couple years ago is a good thing. From someone who thought the new Harry Potter movie would be the movie that would scare all comers this summer. From the person who thinks Disney's cheapquels are a spectacular idea, no matter how they clearly contributed to Disney Animation's demise. From a buttkisser who shows up only when he has found news which he thinks makes his butt of choice - that belonging to Michael Eisner - look good and plays the Invisible Man wheneven Disney does something lame, like after any movie they opened this year or after Eisner's no-confidence vote or after anything about ABC or ABC Family is mentioned on this site.
OR from a person who can't understand why SOCAL, an area that gets millions more tourists than Orlando (which already has a wretched nickname, Robert... remember O-Town???), would be an expensive place to stay. You can't get it if people aren't willing to pay it. Which brings us right back to WDW, doesn't it???
So what does that leave for an excuse now? That SoCal shouldn't cost more than Orlando? That Comfort Inns are so scummy that they can't charge the same as the cheap closets they call rooms at the WDW Value Resorts? That you simply don't understand anything about the hotel industry? Oh wait, that one would be understandable.
No! I got it! You are dumb BECAUSE I am defensive! I'll have to work on that...
Getting back to the original point (well, one of them, anyway), the price range T Holland quoted Consumer Reports declaring "upscale" was accurate, maybe, in 1994. But it way short of the mark in 2004. Unless, "upscale" is CR's code for "slightly better than average, but hardly worth writing home about."
There is a larger story here in the fact that the U.S. dollar has a completely different value in a community like, uh, Southern California than it does in a place like Cincinnati or Indianapolis. We're planning a trip to Cincinnati this summer (Laurie's family lives there, otherwise that's a city I'd never consider visiting), and I am amazed by the hotels one can book for under $100 a night.
On stock prices, again, video poker pay tables have just as much to do with determining Disney's long-term service to its customers as its daily stock price. And video poker pay tables are a far more accurate indicator of investment performance. I ran screaming away from Kellogg and the consulting business because I wanted nothing to do with the scam that is short-term stock analysis. Please, let's give that a rest. If you must mention it, please do it with the caveat that only long-term trends matter and even then, stock price is a trailing indicator of performance.
I am positive WDW is doing well this summer. But WDW isn't doing as well as they should. That is something we need to keep an eye on. Maybe they have mismanaged the resort by having too many hotel rooms. Maybe they have mismanaged by not offering enough newer attractions. Maybe Universal and SeaWorld are taking away even more of their customers, which Disney lost due to cheapness.
It will be interesting to see the attendance numbers this year. I wouldn't be surprised to see major gains from Universal Orlando, SeaWorld, MK and Epcot with minimal increases at the two problem parks - AK and Disney/MGM.
Universal's got three on-site hotels for two parks. And Disney has, what, over two dozen on-site hotels, plus the hotel plaza, for four? I gotta believe that over-supply factors into the equation on the Disney side in a way that it does not for Universal. Not that this excuses Disney, indeed, one can argue this is a strike against its management and business planning. But I think it is worth noting.