Published: December 1, 2008 at 12:42 PMIn... our trip in June to WDW is booked and paid for. Still keeping an eye out for decent airline ticket prices (YEAH RIGHT!) and haven't bought tickets to Universal Studios yet. I'm wondering what attendance will be like as well.
With as bad as our economy is right now, there sure were lots of people out spending money like crazy on Black Friday. Perhaps it just hasn't really hit yet...
Published: December 1, 2008 at 1:23 PMGut check time for me and my family means no major theme park trips next year whatsoever. The only amusement park I will visit is Worlds of Fun which is exactly 15 minutes from my house. And the only time I will visit is in May when the company I work for (if I still have a job in May) funds a company picnic to WOF.
I am holding on to what little I have, hoping for an upturn in 2010 and some sweet deals from the House of Mouse when they are completely desperate.
Robert, will I lose my coveted TPI Membership if I only visit one park next year?
Published: December 1, 2008 at 3:25 PMWow this is getting serious...but i think they have to realize that january is a down time for them and with the economy there will be less people. now when it gets to summer and if it is still under 50 is when they need to worry
Published: December 1, 2008 at 7:25 PMJim is leaving out some critical information in his piece. While reservations are only at 35 percent, he fails to mention what the normal reservation rate is. How much of a drop off are we dealing with here? 20 percent? 50 percent?
Published: December 1, 2008 at 8:13 PMOrlando parks....Disney included, would be the wiser to prepare for a down year. The economic crunch has gotten to people's retirement, but it will soon start hitting more people's wallets. When credit card companies start clamping down hard on their cardholders, than the people who continuously rely on them will find themselves in a pinch as well. Black Friday sales may have been ok, but A) It's one day out of the shopping season, and B) I think that many are still living like nothing is going to happen. People talk about bailouts, but I highly question how effective they will be...given the fact that we seem to be simply throwing money at the same people who got us into this mess.
If(when) the economy really dives, I think that a lot of people may ditch the higher priced Orlando vacation in lieu of a low cost getaway or a staycation. Bottom line, Disney is expensive. Even the cheapest of Disney getaways is expensive, especially when compared with the regional amusement parks around the country, many of which offer far more attractions and an entertaining couple of days worth of activity for about the price of a one day admission to one Disney park. I'm not trashing Disney, I'm just saying that they aren't cheap, and the international travelers won't save them forever.
If I'm Disney, I'm looking beyond my hotel reservations for next year. That's a good start, but it would be wise to examine everything, from the deals on tickets to food and gift prices, and all the other little experiences they offer. It may or may not be a necessity to cut prices in those departments, but I'm sure that the last thing Disney wants is for people to not spend money inside their park. The same goes for Universal and Busch. If the economy continues it's trend, they simply won't get away with some of those prices.
Published: December 1, 2008 at 8:28 PMI think the key metric for this year and next will be market share. Forget about revenue and operating income. They're gonna stink. But you must hold on to your market share, even as the market as a whole contracts. And ideally, you will increase your market share, positioning yourself for big profits when the market does expand.
Published: December 1, 2008 at 8:37 PMAnd let's also remember... market share is a zero-sum game. If you increase it, that means someone else has lost some.
While it is nice to see the Orlando parks working together on marketing, let's not forget that they are trying to take that market share from other vacation destinations. Some of which, one presumes, will fight back with increased marketing as well.
The relevant analogy for the 2009 economy is one of my favorite dark-humor stories: Two hikers walk into the path of an angry bear, deep in the forest. But instead of slowly backing away, the first hiker calmly opens his backpack.
"What are you doing?" the second hiker whispers, through clenched teeth.
"Putting on some running shoes," replies the first, while slipping on his Nikes.
"What are you doing that for?" screams the second, as the bear charges. "You can't possibly outrun a bear."
"I don't have to outrun the bear," the first replies. "I just have to outrun you."
Published: December 1, 2008 at 10:03 PMBelieve it or not we are actually in the middle of trying to decide if we should just book a trip for around February at WDW or go ahead and buy into their vacation club. We may be one of the few that is actually thinking of doing this. DVC has offered us some nice deals on the new Contemporary Vacation Club resort but then again, we are looking at the buy 4 get 3 free. It is a tough choice but one we are probably going to have made by the end of this week. We really want to take one more trip during the least crowded months before our son goes to kindergarten in August. We also are planning another trip to the Smokey Mountains for next year and will probably hit up Dollywood.
Published: December 1, 2008 at 11:34 PMThat's a tough call. I wonder if Disney will be offering DVC deals soon, too.
Published: December 2, 2008 at 3:12 AMWhile Robert is correct that (at least on paper) the success of one park canabalizes another, when national and international travelers come to Orlando to see a new "gate-crasher" attraction (i.e. Universal's Potter) they will tend to go down the road and spend at least some time at another park (be it Disney or Sea World).
I believe the next 18 months are going to be brutal for Orlando's own Big Three (Disney, Sea World and Universal).
Having said that, it seems reasonable to believe that Summer/Winter 2010 has the potential to become the beginning of a rennaisance among the Orlando parks -- with Potter opening at Universal, likely new attractions at Disney.
In the meantime, watch for all the attractions to ramp up aggressive marketing for local guests (like the Disney birthday and hotel promotions, drop layoffs and (perhaps) early retirement offers on employees and negotiate corporate partnership arrangements.
Published: December 2, 2008 at 7:49 AMIt will be interesting to see if Sea World and Universal have better years simply because of their new coasters. At the very least, locals would be more apt to go to those parks. I wonder if Disney is making a mistake with all of their cutbacks and by not having any major attractions opening next year.
Published: December 2, 2008 at 12:14 PMI agree with TH that Harry Potter will grow the theme park market. But there is a lot of time between now and then for grave damage to parks' bottom lines.
Published: December 2, 2008 at 1:17 PMI guess if we had anything worth seeing around our parts, we might consider a "staycation" too, but we don't so we choose to travel abroad. As long as we can afford it, we will continue to do so. I think that's what it comes down to for most folks who choose to go and for those who can't.
If we were at a point where we had to start looking at cutbacks in our own budgets, definitely we wouldn't be making these same kind of trips.
Published: December 2, 2008 at 5:14 PMHey here's another cosideration.
Last year the Disney Cast member Main Gate Passes had black out dates. For example, the WDW cast members could not sign family and friends into the Magic Kingdom during the entire month of July.
Wonder if Disney will (or has) decide(d) to waive that restriction this year. Fact remains, cast members with friends in the park will drop a little dough.
As for the rough ride that the Central Florida parks are going to experience over the next 18 to 24 months, I would advise the marketing teams to focus on an amended version of the political cliche from the 1992 Clinton campaign: "It's the local travelers, stupid."
Published: December 2, 2008 at 7:04 PMWhat are local travelers? If you're an Orlando local, why would the attractions want you to travel?
Published: December 3, 2008 at 8:55 AMI find it funny that Disney's volume is down for hotel bookings. I have checked several other home rentals sites taht I keep bookmarked and they are tracking at around 75% booking through February. Seems the home owners are catching on to the ecomony trends sooner and faster than Disney lowering their prices and offering very competitive deals. We have always gone down that route. You get a lot more for your money that way. Looks like the economy is waking a few other people up to that fact as well.
There are just too many other better deals out there for lodging. The 4/3 offer is good but I ran the numbers and it was still cheaper for us to stay off site at a nice hotel or condo.
We are waiting to book our Disney trip in June until we can see how things fall out in the next few months. There has to be some deals in the works.
Published: December 3, 2008 at 10:43 AMI suppose it is cheaper to stay off site, but we just like being on site for our entire vacation(s).
As far as waiting to book until you see if Disney has any special offers in the coming months, we had booked our trip already and when they advertised the 4/3 deal, I called right away to see if we could be switched over to that deal and we were, with no additional fees. If something else comes up that is in the same timeframe as the deal we're in, I'm sure I'll be calling them back again.
Published: December 3, 2008 at 12:43 PMAgreed on focusing more on the immediate region. The passholders and those within a few hours will become valuable commodities in the next couple of seasons. As for market share, the parks with the new attractions will succeed the most. Universal stands to gain market share with the Harry Potter attractions. A new Busch Gardens coaster will also help in that area. Unless this whole mess goes on (and it just might) for a long time, I don't think that the Orlando market will be a survival of the fittest kind of thing, at least for the big guys in the area, because they are all quality parks.
I do forsee more discounts and perhaps a drop in ticket prices altogether. If one of the parks does get into trouble, they are bound to start a "price war", causing admission fees to drop everywhere...just as they have increased everywhere. Disney has the added advantage of discounting their hotels, but that will only go so far until they start taking losses. With all that the Disney hotels offer, the profit margin for them can't be that big even without economic troubles. They can only go so far with discounting hotel rates, unless they want to sacrifice a little of that Disney quality of experience.
The park with the decided advantage in Orlando right now is Universal. The Harry Potter project...as much as I loathe it, will be big, and may be the thing that gets them through the lean times without too much harm done. They have the advantage of offering hotel rooms, yet don't have as many to fill as Disney does. They are able to offer a more complete experience in a shorter, less expensive amount of time than Disney can.
In short, the size and scope of Disney, which has made them a lot of money in recent years, could be a huge disadvantage, because maintaining those large numbers and profit without cannibalizing some things will be next to impossible in the coming months.
It really is gut check time for Orlando parks, because soon the money won't be flying around as much. I think that most of the seasonal parks will be just fine, because they have the advantage of the staycation (provided they use it), and the good ones know how to run a tight ship and operate (and sometimes thrive) in subpar economic conditions. I guess my theory will be put to the test.