"But its results narrowly beat Wall Street forecasts and shares rose."
"Disney said the recession led visitors to spend less money in its theme parks, though U.S. attendance was even with last year because of heavy discounting. Parks and resorts operating profits fell 50 percent to $171 million, while revenue dipped 12 percent to $2.41 billion."
But those dollars are representative of all parks worldwide. Meanwhile in Orlando ...
"Attendance was down 1 percent at Walt Disney World in Orlando, Fla., but up 2 percent at the Disneyland parks in Anaheim. Spending per visitor to the U.S. parks fell 6 percent overall."
That is a HUGE contrast to Universal's 20% drop.
I think Disney has done a good job of squeezing as many "pennies" as possible out of each visitor regardless of the world's financial woes. Keeping attendance up is key, and even as in park spending goes down, Disney has done and is doing all it can to stave off disaster. I am sure they will be fine in the long run (especially with UP coming out later this month to provide some much needed income).
Universal seems to be taking it on the chin right now, but I wonder how much of that is just a willingness to take their lumps and emerge with a series for new A-list attractions (Rockit & Harry Potter) next year when (God-wiling) the economy has stabilized or even improved. Once folks start thinking they have some disposable income again, will they head to Universal to try the "new stuff" and shorten their Disney stay or (perish the thought) even skip it all together?
The results are not a suprise. All in all, they are doing much better than they thought, but like everybody else, is at a loss.
as for the parks, Bob noted that there was a significant loss in net profit, because of all the 7 nights for the price of 4, 2 for 1, and free birthday ticket promotions, however, these promotions have been a driving force in keeping attendance stable...so as for this quarter compared to a year ago, they are making less money (less spending on food and merch and staying off-site are factors too), but attendance is either up or stable at all the parks for this down season, at least domestically
As for Universal's drop by 20%. Sure some of that is the economy but some of that is construction too. That was one of the things that drove us to Disney this year knowing that things would be torn up and some things closed.
If things do start to swing back up next year in the economy plus all the new attractions, I am sure Universal will have rediculous numbers to the positive.
Both parks will be fine. Nothing will change with them being the top parks that people flock to. Universal will get a much needed boost but always be that scrappy #2 to Disney. Which is great. Any market needs a strong #2. People like to think the big guy isn't running away with it. :)
Easter, a big vacation period, was in the first quarter last year, this year it was in the second.
The press have a great way of making things look all gloom and doom to sell more copies.
Next quarter results will be about how the economy is recovering because the parks were up 20% over last year, yadda yadda yadda.!
Attendance during Spring break -- not a part of this quarterly report -- was very healthy. It's better than expected performance last quarter and potential for a rebound this quarter is certainly a tribute to Disney's marketing smarts.
Regarding traffic at OIA the silver lining is that it is keeping airfares down. A roundtrip ticket from Philly to Orlando is less than $200. Jet fuel prices are also much lower than last year which could also help keep ticket prices low.
Also there is regional traffic -- less costly for consumers -- and Disney's ongoing free on your birthday promotion.
Further (as Jim Hill reported months ago) Disney's reservation center threw up red flags about 2009 in January of 2008. They caused the company to implement immediate cost cutting measures -- including reductions in BOH management and executive staff and the national consolidation of departments like payroll. They braced themselves for the storm.
This is going to be a rough summer for the Florida parks but compared to its competitors Disney shouldn't fare too badly.
It's good that they are keeping people in the parks, but the other number of interest is the 50% decline in income at the Disney properties. That's a lot of money. They are giving away the gate to get people in the door. They have compensated for that loss a little by making cuts. Still not the best sign in the world for Disney.
The question I've always had is this...how much can Disney cut without compromising that "magical" guest experience? People are likely not spending as much money inside the park as they once were, and many obviously wouldn't have come if there wasn't a good deal. Keeping attendance flat isn't a bad thing, but at what expense will it be worth keeping attendance at that level? It seems that they now have to play the game that all of the seasonal parks have to play every once in a while...balancing attendance with guest spending. As of now, they are losing that game...not because they are inept, but because Disney is so big, and it needs a ton of money to run their operation at a profit. Unlike most regional amusement parks, they are an expensive destination vacation, and they rely on their guests shelling out big bucks. They aren't built for that kind of game.
Disney's strength has always been in the quality of their product, and if they panic and throw that out the window with massive cuts, then they will be treading on thin ice with some of their customers...namely the repeat ones. There is a park across town that is opening a whole new themed section and a new roller coaster, and another park down the road that just opened up their own blockbuster roller coaster. Universal is taking it on the chin attendance wise, but what do their financial numbers look like? I'm also pretty sure that the new attractions coming up will help to restore some of that attendance.
Disney isn't in the greatest of positions right now, but they just have to weather the storm and take some lumps. Sacrificing quality shouldn't really be an option, but we all know what happens when businessmen are in charge
Think about it: 42 or so white dudes and the one black dude and HE SPEAKS. Not to mention that he is very popular all over the world so I see this attraction being VERY POPULAR now. I remember the days where Bush was applauded/booed and there were few people in the show!
Orlando Sentinel April 9, 2009: "No recession to see here: Walt Disney World’s flagship park, the Magic Kingdom, has apparently hit maxiumum capacity several times this week. On Tuesday, for instance, the park at one point had to stop letting any guests in at all because it was so full. Disney’s other three theme parks remained open, though the parking lot at Disney’s Hollywood Studios also filled up that day, forcing visitors there to park in the Epcot lot and ride a bus over to the Studios. There have been several reports from parkgoers that the Magic Kingdom hit capacity again yesterday."
And while I think you are splitting hairs (both statements express optimism about Disney's prospects -- one does not say things look dire while the other says things look rosy) I'll concur that the May 6th post is a bit more understated than "Disney is poised to have a big summer." But I hardly think the distinctions between those two post represent a change that can be described using the word "dramatically."
As for your noting that my original post reported "Disney profits down 46%," you seem to ignore the part were I indicate that park revenue dropped just 12% and that "those dollars are representative of all parks worldwide" and not just WDW -- which is the topic of discussion.
Also you didn't remember to mention the rather optimistic spin of my original post -- which noted that while "Attendance was down 1 percent at Walt Disney World in Orlando" the drop seemed insignificant compared to other parks (specifically the 20% drop at Universal).
And I do think there is every reason to believe that WDW will have a strong summer -- based upon the Spring break crowds and the success of its aggressive marketing campaign.
In other related news. Jason Garcia at the Sentinel is reporting profits down at Inbev parks. An excerpt:
Business at Orlando-based Busch Entertainment Corp., whose chain of theme parks include SeaWorld Orlando, Busch Gardens Tampa Bay and eight others around the country, slowed significantly during the first three months of the year, according to financial results released Thursday by its parent company.
Global beer giant Anheuser-Busch InBev said its U.S. entertainment business generated $181 million in revenue during the three months ending March 31. That is down 18.3 percent from the $221.6 million in sales rung up at the division during the same period a year ago, before Belgian brewer InBev merged with the St. Louis-based Anheuser-Busch Cos.
A-B InBev provided few other details about its theme parks, which accounted for only a sliver of the conglomerate's $8.1 billion in worldwide revenues during the first quarter.
Long term trend or not? Dust off that crystal ball and have a look.
If they post the kind of loss in the summer like they did the last quarter, then they have a serious problem. People say...that's not possible, but I say it is. Given the amount of discounts and freebies they going with at the moment combined with the trend of guest spending, it's very possible that the attendance increase will only lose them more money because of their costs. If that becomes a trend, then it will be just as damaging to the future. Damaging to future attractions and their time frame, damaging to the quality of experience because of less staff...etc. It will make the recovery process longer for them. People say what if they don't come...but they should also be saying what if they do?
By the way, a little birdie told me that Universal may be interested in purchasing the A-B parks....just words mind you, but think about the concept of that happening.
I Respond: Could you please define what you mean by "a serious problem?"
Because I'm kinda giving credibility to Forbes perspective (04-09-09)
"'The Mouse Is No Louse - Buy Disney' The Disney name is one of the world's most recognized brands across all of its major business segments," says George Putnam, editor of the Turnaround Letter. "While the company's financial results have been hurt temporarily by the global economic weakness, we believe it is well positioned to prosper again when economic conditions improve."
Mr. Potter Writes: By the way, a little birdie told me that Universal may be interested in purchasing the A-B parks....just words mind you, but think about the concept of that happening.
I Respond: Considering what Mr. Clark just posted (reporting an 18.3% drop in revenue at the A-B parks) and the fact that Universal has less than a year to re-work almost a billion dollars worth of debt, that bird doesn't seem to be making much sense. I could be wrong but I don't believe Universal is going to buy another park that's losing money. I've posted that here before -- which means if I were to claim that I believe Universal is seriously considering buying the A-B parks I would be (ahem) "dramatically" changing my position.
Universal Orlando lost almost $17 million during the first three months of this year, as the two-park resort was hurt by a deep recession, unfavorable holiday timing, and expensive interest payments.
The operating company for Orlando's No. 2 theme-park resort, Universal City Development Partners, revealed in a regulatory filing today that it lost $16.5 million during the three months that ended March 29, as attendance slumped nearly 20 percent. That was down from a $1.8 million profit during the same period a year ago.
Universal's operating profit, which strips out one-time expenses such as interest payments, totaled $6.8 million for the quarter, down 72 percent from a year ago.
The resort's financial performance was hurt by the timing of the Easter holiday, a busy travel period that fell in March last year but in April this year. When the resort's results were extended through the first four months of the year -- negating the impact of the Easter shift -- Universal said its operating profit was down just 13 percent from a year ago.
Fast forward to Saturday morning 9am Busch Gardens. Hot 95 degree day. Crowds were moderate. Things are looking grim for the Clydesdales. They are down to only 4 at BG and the donkey, Spirit, that used to keep them company is now the personal property of Hilda, a trainer at the stables. Spirit's new home is in her backyard. InBev is phasing out the horses at Seaworld also as I learned yesterday. Seaworld is down to only 3. So if you are a fan of the majestic Clydesdales, better get over to see them soon before the stables are empty.
TH, I'm just saying that Disney may be cutting too deep for their own good with their discounts. Losing money on customers is just as bad as not having them. Not discounting as much might have lost them some customers temporarily, but they would have come back. I would just hate to see them mortgage the future (timeliness of attractions and improvements and maintaining high standards) to prop up an already high attendance number...which isn't always a full indicator of a park's profitablity. I think that they could have made just as much or maybe even more off of fewer customers.
If in-park spending stays down even with the discounts, and Disney continues to offer those same discounts during peak season, they could actually lose more of that profit because operating costs will go up. The less money Disney makes over time, the longer it could take for that next "uber attraction", which I think Disney will need to return to pre-recession numbers. With the competition's new and future offerings and Disney's lack thereof, they may find some of their customers traveling elsewhere in Orlando even after the economic storm has passed.
Of course that's my opinion... and paired with a token it may get you on the subway. I've been known to throw out a crazy idea now and again. I understand that Disney is trying to keep attendance up, I just don't think they need to keep 30 million people coming through the gate to survive, especially when keeping attendance flat knocks their profit down that much.
All being said, it's a hairy time to be in the theme/amusement park business, and I think even more so to be a destination such as Disney. I'm sure that decisions these days in the boardroom are tougher than ever.
Universal is logically going to take a slightly bigger hit at this time due to their multiple projects. Those developments suck up capital and reduce the number of guests, who may not want to deal with construction walls or prefer to wait till the new attractions open. All Universal needs to do is weather the storm, until Harry Potter opens in a year or two, and they will be fine.
I firmly believe that, if the economy was good, Universal would buy the Busch parks. At this time, it is impossible for them to do it. They would need a partner to even conceive of it right now.
On the other hand, Disney is wrapped up in image.
I am personally not the biggest fan of Jay Rasulo. IMHO, Mr. Rasulo doesn't give a darn about the artistry and craft of a theme park. He prefers simple concepts that can be easily sold to the masses. He likes pre-packaged events like "Year of a Million Wishes" and "What Will You Celebrate". It is why attendance numbers appeal to him.
As a life-long fan of Disney, I am troubled by the lack of big announcements from Disney for the 40th anniversary. They still have a couple of months, so I hope Star Tours 2 is not the extent of it.
One plus to come out of the recession is the removal of some of the bureaucracy in WDW management. I can only hope this will mean that WDI will have an easier time getting some of their projects approved. Looking at how many nails were pulled just to get the Space Mountain refurbishment okayed, was a bit painful. Hopefully, less cookie cutter copies of Anaheim attractions will be on the docket.
Look, both Disney and Universal will be fine. Most of the above was just personal ranting. Disney could pretty much sit on its' hands for the next decade and still be number one. It is practically a rite of passage for most families. However, if I had to bet on which company has the biggest future potential, I would go with Universal.
As I have mentioned here before (ad nauseum) I am currently working as a project manager for a subcontractor building the new Peabody Tower and convention center on International Drive. Right now available, large commercial projects available to bid are few and far between.
What do I mean by this? Well, the contract I am working on now is worth $25 million. The contract was signed in 2007. Contract opportunities for commercial construction companies have become so scarece, our company is bidding $14,000 jobs at Kennedy Space Center and the renovation of the Tequila Bar at EPCOT.
As a result, for fundamental, basic construction (rehabbing stucco, removing damaged drywall, rehabbing air conditioning and plumbing) Disney can "buy hard" -- hammering down pricing provided by a desparate community of contractors.
Disney has been able to get work done at a fraction of the cost. And that's exactly what they have been doing.
They upgraded about 200 rooms at Caribbean Beach. They did about a dozen rooms at the Boardwalk Hotel and are currently coordinating work on a ton of rooms at Dixie Landing and Port Orleans. There also remains the build-out of the remainder of Pop Century.
A scaffolding salesman I deal with has just formulated a quote to provide access (scaffolding) to do exterior work on the back of Cinderella's Castle and on the building elevations along Main Street USA.
Again this represents BASIC CONSTRUCTION. No special effects or engineering. No expensive fabrication of ride vehicles and programing of ride systems. The advantage is that the company maintains the quality and integrity of its facillities -- and by contracting this work in such a competitive market they will complete it for a fraction of what it will cost after the economy rebounds.
Frankly that does not surprise me all that much. It makes sense not to try and build an attraction that will be up-staged by the SONIC BOOM of Harry Potter.
The executive staff at Orlando International Airport lost two senior directors and two department directors in recent staff cuts.
The Greater Orlando Aviation Authority released documents Thursday detailing staff reductions made April 27-May 9 that eliminated 50 employees through layoffs and voluntary departures.
The moves cut the agency's top staff by 17 percent. GOAA, which runs both Orlando International and Orlando Executive Airport, retains Executive Director Steve Gardner, three deputy executive directors, three other senior directors and 11 other directors.
Overall, the agency has shed at least 80 positions, or about 12 percent of the 693 jobs it had at the end of its last fiscal year, on Sept. 30, 2008.
My quick read of the tea leaves shows passenger traffic way down at OIA, layoffs at the airport and, likely, lighter than normal summer crowds at the theme parks.
Disney's marketing team is still in there throwing punches! It's this type of aggressive promotion that filled the Disney parks over Spring break.
Over to Disney Boardwalk for lunch at ESPN Zone. Crowds light there as well at 12:30. Nice leisurly lunch and walk back to Epcot. Those of you who are familiar with how packed Epcot can get would have appreciated all the open space and short lines. Rarely have I seen Epcot so uncrowded. Had a moment to chat with a cute cast member in a Guest Relations uniform proudly wearing her "I represent Brazil" ribbon. She related that the crowds are down this day, 35,000 was her estimate. At peak Epcot can pack in at least 85,000 people so that may give you an better idea of the crowds. She told me that last Christmas Day Magic Kingdom packed in 90,000 folks. That's one reason why I avoid Disney Christmas Day.
Anyway, moral of the story here is that crowds were down this 95 degree sunny Saturday in June at Epcot.
Trend for summer? Could be.
Some years back while attending a meeting at another theme park operation in Orlando, I was told by a VP that their parks needed to welcome 8,000 guests to break even.
I'll be in all four WDW parks this weekend. I will report back.
Then I talked to my other FB pal who reported that Star Wars weekend at DHS was also busy.
Timothy (2:10 PM): How busy was DHS last weekend?
Tina (2:10 PM): huh?
Timothy (2:11 PM): Disney Hollywood Studios
Tina (2:11 PM): oh it was busy yesterday had no idea it was star wars
It's looking like a good summer to experience lighter than normal crowds at Disney theme parks here in Florida.
I respond: Time will tell, but let's not forget, spring break (Easter holiday) ocurred later in the calendar year. All those reports of Disney parks closing their gates to capacity crowds will be credited to the third quarter. But (as the article indicates) because people are spending less, revenues may well be of the mark. That is not to say, however, that Disney will not meet its own forecasts or Wall Street expectations (standards which they actually met in the second quarter).
William Clark writes: All those discounts like buy 4 get 3 free and free Disney Dining Plan will have a negative effect on the bottom line when viewed against last year's earnings although Disney should succeed in preserving market share.
I respond: Those discounts were in place since last year and the loss in revenue in the second quarter (which did not gain the benefit of Spring break (Easter holiday revenues) resulted in a loss of just 12%. And remember that was 12% WORLDWIDE not just the Florida parks.
William Clark writes: It's looking like a good summer to experience lighter than normal crowds at Disney theme parks here in Florida.
I respond: Based on what? Anecdotes? While any prediction regarding third quarter attendance relies on rationalization and conjecture, I think there is every reason to be confident that (all things considered) Disney will meet or exceed expectations. First, because the hotel promotions have proven to keep people coming through the gates. Second, because there are the ACTUAL RESULTS OF THE PREVIOUS QUARTER. From the story that started the thread:
"Disney said the recession led visitors to spend less money in its theme parks, though U.S. attendance was even with last year because of heavy discounting."
Meaning just because revenue was down does NOT mean there were fewer people in the park. Even Mr. Clark notes: "All those discounts like buy 4 get 3 free and free Disney Dining Plan will have a negative effect on the bottom line when viewed against last year's earnings..." Exactly! The discounts are the reason behind the drop in revenue and NOT a decreasing number of guests.
Airport traffic down substantially (12.8%) at OIA resulting in layoffs at Orlando International.
U.S. Department of Labor unemployment report for May 2009-9.4%. 20 year high.
Disney stock trading at $23.59, off from 52 week high of $34.85 but above 52 week low of $15.14
1700 people laid off at Walt Disney Company, 1400 in Florida.
Crude Oil trading at $71 a barrel.
Firsthand eyewitness accounts of smaller crowds at Disney parks. (Also known as "anecdotal evidence.")
Well, looks like Disney is fighting some pretty strong headwinds. Could this result in lighter than normal crowds at Disney parks this summer?
Yeah it could.
Is it likely to?
Will Disney meet it's own and Wall Street's lowered expectations on revenue and profit?
Likely yes, but even that remains to be seen.
(Edited for Spelling)
Many days have I spent waiting in long lines at sick packed Disney parks. Had a great time too don't get me wrong. Given the choice though I'll take lighter crowds and more rides with less hassle over fighting my way out of Magic Kingdom through massive throngs of people at the conclusion of Wishes.
First off, we spent 6 days at Disney, Sun-Fri. Sunday at AK crowd was good sized but the longest we waited was 55 mins for Kilimanjaro Safari. Everest was at 70 mins mid-day but we rode first thing and waited only 20 mins. The rest of the rides were all under 30 mins. The week day visits (Mon-Thur) all avg'd out to be about 70 mins at most mid-day for the top rides. RRC at DHS was at 110 mins at one point but even that subsided. Most rides were 30-50 mins at most. Even Toy Story was 40-50 most of the day topping out at 70 mid-day.
Friday was another story at DHS. The crowd was super packed. 95 degrees and waits all 70-110 mins for the top rides. We left around 2 pm. Just wasn't worth it in that heat.
I don't know what is normal for this time of year but that's what we observed. We spent 1.5 days at each park to fill out the 6 days and got to ride most everything we wanted. Missed out on a few at Epcot but that's mostly because we didn't know our way around and the heat slowed us down.
We didn't do the Universal parks but did stop by City Walk Sunday night for dinner and a movie. The place was a ghost town. One of the parking garages were completely closed down. We walked right into Hard Rock and got seated for a party of 6 at 5 pm. Never had that happen before. And at the theater, we were one of only 4 families watching a 7:45 show of Pixar's Up.
All in all, the stores were all stocked, restaurants did not have long waits at all.
Now here's something to contrast against...we went to Cocoa Beach on Saturday and the place was a madhouse. It was like Spring Break in June. Part of it was the launch that got cancelled I am sure but Ron Jon had people coming out it's ears, traffic was terrible, all the food joints were packed, and the beach was full. Totally different feel from the parks.
More details to come in the trip report but I thought I would offer the observations on crowds and such.
Then there's my CM friend who reported last Friday's projected attendance at MK to reach 44,000. Then there's my DVC friend who reports that the MK is "always crowded." Then there's my DHS friend who echoes Mr. Neal's reports about DHS during Star Wars Weekend.
That anecdotal evidence sure seems to fall in WDW's favor.
And (again) the full to capacity crowds reported over Spring break fall in the third quarter. Orlando Sentinel: "No recession to see here: Walt Disney World’s flagship park, the Magic Kingdom, has apparently hit maximum capacity several times this week. On Tuesday, for instance, the park at one point had to stop letting any guests in at all because it was so full. Disney’s other three theme parks remained open, though the parking lot at Disney’s Hollywood Studios also filled up that day, forcing visitors there to park in the Epcot lot and ride a bus over to the Studios. There have been several reports from park goers that the Magic Kingdom hit capacity again yesterday."
And there are reports about the success of Gay Days last month -- also a third quarter event. Orlando Sentinel: "Despite the ongoing recession, attendance at this year's Gay Days is expected to be up, and the Gay Days Expo is scrambling to find space for exhibitors. Alexander-Manley estimated that the expo — in the Royal Plaza Hotel, part of Disney World's hotel plaza — will be about 10 percent larger than last year's."
I'm telling ya, don't be surprised to find out that while revenue for the third quarter might be down from the previous year, attendance might actually be (gasp!) a bit higher.
Considering the success the company has enjoyed in the face of tough economic times and the preponderance of anecdotal evidence, I find it more than reasonable to make the argument that WDW attendance during the summer of 2009 won't be (ahem) "light.”
Then again, I could be wrong. :o/
Consider this excerpt from Jason Garcia Orlando Sentinel June 10 2009:
Tourist-tax revenues will plummet 18 percent in 2009 and not fully recover for several years, Orange County budget officials said Tuesday, adding the drop will affect everything from tourism promotion to the $1.1 billion plan for downtown arts and sports venues.
If the drop actually is that steep, it would be the worst fall-off in tourist-tax receipts ever, easily eclipsing the 12.6 percent decline that followed the Sept. 11, 2001 terror attacks.
Hmmm.. if memory serves, Rod Johnson of the Greater Orlando Aviation Authority recently likened the steep drop off in air traffic at OIA to the period following 9/11 as well.
That leaves the question of how these "super packed" crowds are getting here and where are they staying?
Disney magic or Figment of Imagination?
Disney can pack the park as full as they want, but they are heavily discounting hotels, and if guests aren't really buying stuff, eating at the restaurants...etc, then attendance actually means very little. In fact it would make it tougher because higher attendance also means higher operating costs. If guests are spending money, then great. Does anyone have any numbers or educated guesses (aka visual data)
Cocoa Beach was packed because it's the beach...aka low cost vacation. Grabbing a hotel for a few days on the beach in places like Cocoa or Daytona is a cost effective alternative for Florida residents (and others as well) to shelling out at Disney. The name of the game this year is budget vacation or staycation. Disney doesn't really fit into either of those categories.
While on the subject of Orlando, how bout the Magic coughing it up. It went exactly like I said it would. Howard was contained and the shooters went cold. I've one word to sum it all up...clank
Use these hypothetical numbers. Let's say in previous years 10 million tourists came to Orlando. Let's say 5 million visit Disney, 3 million visit Universal and 2 million vist Sea World.
Suddenly the economy goes south and the number of visitors drops 30% to 7 million.
5 million can still go to Disney while only 1 million go to Universal and 1 million go to Sea World.
And, again, while those numbers are hypothetical, the fact that the Universal park attendance dropped 20% in the second fiscal quarter while the WDW parks dropped only 1% in the same quarter demonstrates how the scenario is viable.
So fine, the number of passengers drops -- but those that arrive are still going to Disney. And while the tax revenue from off-property hotels has dropped, the Disney hotel discounts keeps heads on beds.
Further, you ignore the reports of high crowds during Spring break -- causing the parks to close to capacity, and the multiple reports from visitors saying the parks are busy.
And while you offer statistics about unemployment, oil prices, and Disney stock prices (which has NOTHING to do with attendance) you have yet to offer a single prognostication from any business analyst or credible, objective third source that claims the summer attendance of 2009 is going to be "light."
And I'm not looking at this through rose-colored glasses. I imagine that attendance will wane in late August and early September, pick-up in November and December and then (come next January) WDW may be looking at a VERY HARSH second fiscal quarter.
(Edited for spelling and correcting fiscal quarter)
Greater Orlando Aviation Authority reports 12.8% drop in air traffic at OIA, a drop of this magnitude last seen after 9/11.
Sentinel reporting record drop in tourist tax revenue (18%) in Orange County, comparable (in Jason Garcia's words) to 9/11.
Oil rising, again.
None of this will have any relevance to Disney attendance you say.
Gay Days will make the difference.
"Super packed" at Disney, Swan and Dolphin booked full.
Okay, I can only offer my opinion based on what I have seen personally.
Epcot was light last Saturday and believe me I've seen the place packed.
It's a good time to experience lighter than normal crowds at Disney this summer.
Is Orlando on the convention blacklist?
Business travel to Central Florida is expected to decline 11.2% this year according to the Orlando/Orange County Convention & Visitors Bureau.
The Sentinel further reports:
According to a spokeswoman for the Walt Disney World Swan and Dolphin Resort, the hotel had been courting a Department of Defense conference which would have generated 5,000 room nights. The Dept. withdrew it's offer without giving a reason.
The full article can be viewed on the front page of today's Orlando Sentinel or on the Sentinel's web site, orlandosentinel.com
And I think Derek's point about purchases within the parks was dead on. Our kids got into the pin trading thing while we were there. And we saw almost NO ONE with them on. And all the pin trading places were all fully stocked with every kind of pin, lanyard, and such you can think of. There were no lines at the check outs and I saw a lot of people come in, look, and leave. And the counter service places were all much busier than the table service places. However we didn't wait long for any of them.
In contrast the ocean front restaraunt we ate at in Cocoa had a 2.5 hour wait. Which further backs up the cheaper beach vacation assessment.
Lastly, we always stay offsite at a condo we found a few years ago in a nice community off of 192. And out of the 60 units, probably only 20 or so were being used. 192 was still pretty busy but very manageable compared to past visits.
So the real recap I think would be:
- Crowds and attendance are up at Disney compared to other parks.
- Universal and Sea World attendance is significantly down.
- Universal most likely due to the construction of new rides and areas.
- Overall Central Florida tourism is down. Layoffs and flight volume relfect this.
- Disney is ok for now but how long can they keep this up? TH's point about a rough Q2 2010 is probably dead on.
But just to be clear, the so-called "blacklist" references only federal government conferences (subhead reads: "Tourism officials worry government has travel ban on leisure destinations.")
It's a good time to experience lighter than normal crowds at Disney this summer.
The defense rests. :)
From Mr. Clark's quoted Orlando Sentinel article: "Orlando's convention-and-meetings business has been reeling for months from corporate cutbacks and negative publicity that followed the federal government's bailout of large financial-service companies last fall."
Months, eh? And yet attendance at WDW was only down 1%?
You took issue with it, repeatedly.
I offered quite a few facts to back up my prediction since that time.
I still stand by my prediction as stated.
Direct verdict for the defense.
Take your issues up on appeal Mr. Creative.
I had to laugh when Mr. Creative mentioned his FB pal, a DVC member, who "gets around and sees what she wants to see."
I suspect Mr. Creative does as well.
When the numbers are unveiled, I'm betting that any drop will be as insignificant as the one in the second quarter -- determining that attendance at the parks could not accurately be described as "light."
One would assume that you are considering the fact that WDW attendance dropped a mere 1% in the second quarter (although Easter break came late and in spite of the fact that [as your own article pointed out] convention traffic was suffering for months).
Contentions you have never once addressed directly.
I was also amused at you crowing about the Dolphin losing 5,000 room nights (nights they were courting -- not reservations that were cancelled. Considering the fact the the hotel in question has over 1,500 rooms the quantity of nights lost that you have brought up represent less than 1% of the total room nights available over the year. Further, you never give the date of that particular convention. Meaning if it was slated for next September then it would have exactly ZERO impact on the summer attendance at the parks.
But (typically) I imagine you won't respond to that directly.
Just like you ignore the capacity crowds at Easter (that will be reported in the second quarter results on July 30th). Just like you ignore the marketing success that held Disney attendance to a mer 1% drop in the second quarter -- while Universal dropped 20%.
But why not cut to the chase. I predict that the third quarter results for attendance at WDW will be equal to or greater than the same period last year. Of course I could be wrong.
Are you willing to predict that Disney will report lower attendance this year than the same quarter in 2008?
Attendance means nothing if guests don't spend money. Until there is evidence of that happening, I don't buy that Disney is doing ok.
The year isn't over for Disney yet, but they can't keep going at this pace. They have no new attractions coming up, and cutting back is the order of the day. They are giving themselves a chance by getting people in the gate, but I don't think it's working like they hoped, and I think they are doing more long term damage in their attempt to maintain that massive attendance number.
If you predict a rough future ahead for Disney, then how can you defend the shape of the company? Unless economic conditions change relatively soon and people once again start shelling out their kidneys during their visit to the Magic Kingdom, Disney is on a crash course with reality. The company is a master of illusion with their rides. I think that their "success" this year is also an illusion...at least so far.
Tomorrow, my son and I are hitting all four WDW parks.
Stay tuned kids!
Today (6/18) I visted all four of the theme parks at Walt Disney World. And having visited each of the parks, I wanted to take the opportunity to inform the dads and moms that they should NOT plan a trip to WDW under the illusion that crowds this summer will be "light."
Before noon today the wait time at Big Thunder Mountain was more than an hour. As of 4 PM the wait time at Toy Story Mania was just shy of two hours. Soarin' was more than two hours. The line to get photos taken with the characters from Pixar's 'Up' would have (easily) surpassed 45 minutes.
When you read the missives of TPI posters who advise "It's a good time to experience lighter than normal crowds at Disney this summer" be skeptical. Be aware that when you are dropping the considerable cost associated with a WDW vacation, (based upon today's volume) the crowds you will see will be significant -- not "lighter than normal."
You want lighter crowds, go visit Universal! ;)
Second let us consider the crowd level at Hollywood Studios on Sunday, June 21 2009.
Tower of Terror was a walk on at 2pm, 3:30 and 6pm. Cited as evidence is a direct firsthand account by the defense. We submit; Dan was nowhere to be found that brutal 95 degree day but we did speak with Bill, Mike, Jason, Darius, Kayleigh and my man, Chinese Charlie. All report a walk on in the afternoon. Leigh Anne, who looked absolutely adorable in her bellhop uniform, loaded us into a nearly empty elevator at 6pm.
Hmmm... no Fantasmic that Sunday night either.
Nice chocolate chip cookie at the Writer's Stop. Watched a Silly Symphony cartoon while sitting on the sofa, enjoying a cold Dasani water.
Know what else?
Crowds were lighter than normal this hot summer Sunday.
Want to hear my prediction?
It's a good time to enjoy lighter than normal crowds at Disney this summer.
Challenge to Mr. Creative:
I will be at Magic Kingdom this coming Sunday June 28 along with my beautiful wife. Hall of Presidents passholder preview.
I get there at opening, 9am.
Care to join me and settle this?
We can even ride Jungle Cruise.
But then I am wondering why I should actually write that, because I am not sure whether or not you can actually read. Because if you could read you would have responded to this from a previous post:
>> But why not cut to the chase. I predict that the third quarter results for attendance at WDW will be equal to or greater than the same period last year. Of course I could be wrong.
Are you willing to predict that Disney will report lower attendance this year than the same quarter in 2008? <<
At of all my years working there it has natutally low wait times. The ride has a very high ride capacity and the name actaully scares people sot to do the ride! The ride is more popular during the morning to about 1pm where everyone eats and use there fastpasses on RnR Coaster and Toy Story Mania.
Also I wasnt working that day! Did you ask for me?
No relief for hotels as summer approaches.
Orlando area hotels experienced their worst May in more than two decades last month, struggling to fill rooms amid a nationwide travel slump.
Through the first five months of the year, average occupancy is down 11 percent compared with 2008.The average price for a room dropped 11.3 percent.
"I don't think any June, July or August is going to be able to bail us out," said Scott Smith, a lodging instructor in the University of Central Florida's Rosen College of Hospitality Management.
The full article can be viewed in the business section of today's Orlando Sentinel as well as online at orlandosentinel.com
The weight of the evidence is becoming overwhelming Mr. Creative.
In any event this discussion is proving to be a fool's endeavor.
I strongly suspect that Mr. Creative is intentionally providing false and misleading information. No amount of evidence can change that. Only Mr. Creative knows his own motives and I don't believe that they are altruistic.
13 to go...
And pointing to reports in Orlando regarding poor hotel sales doesn't count for much either. The place is GLUTTED with hotels. Plus that doesn't take into consoderation the Disney resorts which aren't in Orlando. People that are staying at condos like we did. I have other friends that stayed at a time share. Or people vacationing in Cocoa or Tampa that will drive over for the Disney parks.
Airport Traffic + Orlando Hotel Sales does not = Disney Attendance
Air traffic volume at Orlando International down 12.8 percent.
Tourist tax receipts in Orange County down 18 percent.
Hotel occupancy in Orlando area down 11 percent in May.
Business travel down 11.2%.
Florida unemployment rate in May 10.2 percent, National rate 9.4 percent
Yet you would have us believe that none of this affects Disney attendance?
Fact is these cold hard numbers are having a serious effect on Disney.
This is the inescapable conclusion supported by the overwhelming weight of the evidence.
Appeal denied with prejudice.
BTW, the groupers and loaders there are indeed very efficient. I remember when Aaron was working there, he would try to creep us out before the ride. That's always fun. I think he's been promoted though because we saw him in a white shirt and tie over at Aerosmith.
Can you tell I go over there frequently? LOL.
Anyway, you guys do a great job over at the Tower and I want you to know that we appreciate your efforts. Thanks!
I Respond: Notice how the article references ORLANDO hotels and not DISNEY hotels. Specifically, the article notes "In some parts of Orlando, hotels filled fewer than half their rooms last month. North Orlando, for example, had an average rate of 44.1 percent." Just to remind Mr. Clark, Disney is SOUTH of Orlando (Chuckle)
And here's an article from the Orlando Sentinel that Mr. Clark did not reference (also from June 23, 2009):"Disney earlier this year stopped accepting bookings for the popular promo -- which has...
(HERE IT COMES)
... HELPED DISNEY WORLD PROP UP ITS ATTENDANCE BUT AT THE COST OF PROFIT MARGINS."
Please Note: I readily ADMIT Disney's profits will continue to suffer. This discussion is about whether or not park attendance will be LIGHT -- as Mr. Clark has asserted.
Mr. Clark writes: I strongly suspect that Mr. Creative is intentionally providing false and misleading information.
I respond: Of course he writes this without identifying any SPECIFIC information that he can PROVE is "false and misleading." Can you please be specific Mr. Clark?
But the interesting thing about Mr. Clark's posts is that while he will quote economic stats, spin newspaper articles and offer up anecdotal reports HE HAS COMPLETELY FAILED TO STEP UP AND ADDRESS MY SIMPLE CHALLENGE:
>> I predict that the third quarter results for attendance at WDW will be equal to or greater than the same period last year. Of course I could be wrong.
Are you (Mr. Clarkl) willing to predict that Disney will report lower attendance this year than the same quarter in 2008? <<
Let's see if he dodges the challenge ... a THIRD TIME.
But we did see packed parks on Sunday and Friday with excessive wait times. So they are definitely doing well.
So is the ecomony effecting Disney. Yes, in some way, it has contributed to a possibly lighter crowd. How much lighter? We don't know. Our only data is based on the subjective observance of many people. The newspapers print what they want. I hardly would call that reputable these days. Market reports, companies personal quarterly reports, and such are generally much more concrete.
Is the economy effecting Disney as bad as it is Universal? Obviously not. Universal is posting some really bad numbers. Construction, economy, better Disney deals, staycation, pick one.
Mr. Clark, your argument would be far more interesting if you would present Disney data to predict the parks' welfare instead of it's neighboring city. I find your inability to respond directly to challenges posted by other TPI members poor forum behavior. You seem to be a pot stirrer and not a contributor to the community. But I detect a hint of sarcasm and wit from time to time so maybe you mean all of this in jest and just execute it all very poorly. :D
This just in from the Kansas City Star: "....LIGHTER....USUAL...CROWDS....FUN...."
I hope that clears up the matter completely!
BTW, Disney is west of Orlando not south. Notice how the signs say I-4 west?
The reason for the drop first these ;ast couple of days is becuase of the heat. We are trying to keep the "Horton" open as much as possible because of the heat outside plus the the natural friction that the ride creates. So the engineers wanted to let the heat escape as much as possible. Just to let you know the "Tower" chooses your drop sequence when the elevator reaches the "Star Field" doors. You will notice a hiccup or a pause in the ride when the "Tower" finally decides.
I'm glad Arron did get a leg up and I know BIll and Leigh Anne very well and they do do a great job there and the rest are new CP's and cant get a feel yet on them.
I don't think that you can.
Because all available evidence shows lighter than normal crowds at Disney.
Profits will be in the toilet, although Disney should remain profitable. I can certainly understand why you don't want to discuss profits.
Also did you notice how Disney did not sell even one new DVC membership during the previous quarter? Not one.
Yeah, I am quite comfortable stating that crowds are down, way down, from last year.
Do us all a favor and provide some references, some actual evidence, something besides your own delusional opinions.
Can you do that?
Nope. I don't believe that you can.
Mr. Creative states with authority that Disney is "SOUTH" of Orlando.
Mr Neal doesn't have a clue as to anything. No wonder he pays a small fortune to come here.
In any event, as I previously stated, this discussion is a fool's endeavor.
The lines at Prowler on Father's Day went from Kansas City to St. Louis down to Oklahoma and back; my friend, B.S., waited 17 hours. My DEA pal, a CIA member, confirmed this. 4 little green men from Mars also concur. :)
I respond: So now my credibility is being called into question?
Could Disney bring back its 7-for-4 hotel deal later this year?
Posted by Jason Garcia (Sentinel's Theme Park/Tourism Reporter) on Jun 23, 2009 9:34:43 AM
Could Walt Disney World bring back its seven-for-four hotel-night promotion later this year? One analyst thinks so.
Disney earlier this year stopped accepting bookings for the popular promo -- which has helped Disney World prop up attendance but at the cost of lower profit margins -- and replaced it with a free dining offer that travelers can book until late July. But Richard Greenfield, an analyst who follows the Walt Disney Co. for Pali Capital, wrote in a recent post on the firm's research blog that "we sense" that the free dining promo has not been as successful as the hotel discount was.
The seven-for-four travel window runs until mid-August; the free dining travel window is from mid-August to early October.
"We suspect Disney will need to go back to a 7 for 4 or better promo in the near future to sustain attendance levels" for the final three months of 2009, Greenfield wrote. The final three months of the calendar year are also the first three months of Disney's 2010 fiscal year.
Greenfield added, "Our thesis remains that without a notable pick-up in the economy, Disney will need to significantly discount pricing in 2010, further pressuring margins…or experience a substantial decline in attendance given how much vacation share they took within the Orlando market over the past year and how many vacations they have pulled forward by aggressively discounting."
It seems, Mr. Clark, you unfounded accusations related to my credibility says more about your integrity than it does mine.
When the numbers are released, I predict that the third quarter results for attendance at WDW will be equal to or greater than the same period last year.
Based upon his assertion that crowds will be "lighter" this summer, is Mr. Clark willing to predict that Disney will report lower attendance this year than the during same quarter in 2008?
It's a simple enough proposition. I realize I may be wrong, but I am willing to stand by that prediction.
What say you, Mr Clark?
Blogs you list as evidence? Blogs??
Yeah, Disney crowds are lighter than normal this summer. Without question. Can I be any clearer than that? Lighter than normal.
I stand by my all of my statements, in full.
And here's the KICKER! Check out Mr. Clark's post on this thread on May 8, 2009 at 11:17 AM where he also uses Mr. Garcia as a source!
Mr Clark writes: "Can you address the fact that you stated with authority that Disney is "SOUTH" of Orlando?"
I Respond: Yes. Your claim that WDW is west was based upon his (chuckle) claim "BTW, Disney is west of Orlando not south. Notice how the signs say I-4 west?" For the federal interstate highways (highways with the red, white, and blue shields -- like I-4), even numbered highways run east/west and odd numbered highways run north/south.
Mr. Clark writes: "Yeah, Disney crowds are lighter than normal this summer. Without question. Can I be any clearer than that? Lighter than normal."
I Respond: Sure you can! Simply answer this question "yes" or "no": Do you believe that Disney's quarterly report covering the results of the third fiscal quarter will report a drop in attendance compared to the third quarter of 2008?
I might be clueless but that right there is downright hilarious! :D LOL
The Jury has found Mr. William Clark guilty of pot stirring. We sentence him to 24 hours of It's a Small World, 8 hours riding Jungle Cruise with the same CM, and finally to live under the hat at DHS for 1 week explaining to everyone it's place in theme park history as one of the greatest central elements of theme park design! Case closed!!! :D
As to whether Disney is "SOUTH" of Orlando as Mr. Creative insists or whether it is west of Orlando as it actually is...well, know what? It's west.
In any event, it appears that Mr. Creative uses his own "facts" evidence and atlas.
I offer, as proof positive, the simple facts.
You are indeed entitled to your own opinion but you are not entitled to your own facts.
But know what?
When I am walking onto Aerosmith without much wait, Tower of Terror without any wait, Test Track with 20 minute wait, Mission Space no wait, Pirates of the Caribbean with 15 minute waits, Dinosaur, Everest 20 minutes at best, I will take some measure of comfort knowing that, in your own mind, you have stood there waiting 2 hours.
Have a great summer at Disney if you can find it.
"Who is more foolish, the fool or the fool who follows him?"
Walt Disney World
Tokyo Disney Resort