Disney World Resorts Struggling

[BrightMorningStar]

They cannot close DVC resorts without extensive consultation with and the permission of the owners. That would be extremely costly without even considering the lawsuits that might occur.

There is verbiage in the contract that protects Disney. We read it with a lawyer friend before we signed the paperwork. We read through that verbiage again before selling our contract 10 years later. There is no lawsuit that Disney would lose if they fold.

 

[Upatnoon]

Disney theme parks made $2.1 billion in profits in its first quarter, yet some people still think Disney is somehow struggling.

 

[HokieRaven5]

However, I would imagine there would be some decline in on-site hotel reservations. They took away the perks and raised the prices, and several have become run down. There needs to be more incentives than bus travel between parks to pay higher prices on-site. Need the dining plan back, magic hours, and magical express. Also enticing discounts.

They took away a lot of the perks during FY21. During that time occupancy was 42% of the available days at the domestic resorts. For FY22 domestic resorts were occupied for 82% of available days. For reference in pre-Covid times the resorts operated in the 80-90% range.

Won’t see any factual information on overall domestic hotel occupancy for most of this year until next February when the FY23 annual report comes out.

Thus far none of the discounts they have offered have been anything of substance to me. Even the dining card offer for this summer is barely better (in some cases worse) than the room only discounts.

 

[JASBE06]

Disney theme parks made $2.1 billion in profits in its first quarter, yet some people still think Disney is somehow struggling.

Just because they made profit doesn't mean they don't have debt due at a later time. Accounting for receivables and cash they still are short more then 70 billion this year. The stock has a p/e of 56. Disney is not doing well.

If they are in that bad of trouble offering discounts on rooms that they just increased the rack rate seems silly. People want more bang for their buck. They need to do more then just make rooms cheaper that are still expensive

 

[squirk]

A completely unsubstantiated rumor from unverifiable sources (allegedly from a competitor) making outlandish, if not patently absurd, claims.

Why on God’s green Earth was this thread selected as the “Thread of the Day” featured on the main DIS site?

 

[DreaGirl]

Math would show that. I just tried to help a family plan Disney, and Art of Animation was over $300 for any date they could do, planning many months out. Swolphin was similar. That family is going to do more days at Universal because Disney is so expensive.

That's why we cut days off our trip and moved from our usual Boardwalk to Pop. We had originally planned 8 nights at Boardwalk, then thought we could do 8 nights at POFQ, then decided on 6 nights at Pop.

We couldn't justify the price of Boardwalk, and the bus stop situation at FQ scared us away. So, Pop it is. Next trip we are skipping Disney and doing Universal. Express included and being able to walk to the parks is hard to beat. I tried to talk the rest of the party into it this time, but Guardians and Tron were calling them.

 

[bloomcruisers]

We stayed at WDW resorts for decades. Last stay was Feb 2020 and still included free parking since the reservation had been booked before the change. Since then, costs have gone up at a ridiculous rate and all discernible on-site perks have been eliminated, other than the availability of resort to park transportation. And since we drive, that is a negligible benefit. And we don't stay deluxe so no extra evening hours. So...we've stayed offsite since and have been quite happy. We have no plans to book WDW resorts stays in the future. I'm pretty sure we are not the only park-going family they have lost.

 

[RoseGold]

They cannot close DVC resorts without extensive consultation with and the permission of the owners. That would be extremely costly without even considering the lawsuits that might occur.

I mean, sort of. But we gave our vote to Disney, oops.

And Disney did close DVC resorts, even when they weren't legally required to, like VGC, which was closed a long time after nearby hotels were open.

DVC could sell resorts or close resorts for sure.

 

[squirk]

We stayed at WDW resorts for decades. Last stay was Feb 2020 and still included free parking since the reservation had been booked before the change. Since then, costs have gone up at a ridiculous rate and all discernible on-site perks have been eliminated, other than the availability of resort to park transportation. And since we drive, that is a negligible benefit. And we don't stay deluxe so no extra evening hours. So...we've stayed offsite since and have been quite happy. We have no plans to book WDW resorts stays in the future. I'm pretty sure we are not the only park-going family they have lost.

They’ve made it pretty clear that they don’t mind losing people like us, who visit on a regular basis.

We don’t spend as much in the parks anymore because we‘ve been-there-done-that with the souvenirs, tchotchkes, signature dining, upcharge experiences, etc.

If we can be replaced with a new family that will break the bank with on-site spending, they don’t care if we walk.

I just wonder if there is a tipping point where this eventually backfires - when enough of us repeat customers, having been treated shabbily, tell their friends and family members “WDW used to be great, but now, it’s not really worth it for what they are charging.”

There are a lot more of us veterans out there than newbies. Is there a point where our collective “bad word-of-mouth” actually starts to curb the attendance of the “once-in-a-lifetime” or “once-every-five-years” families that Disney covets so much?

 

[Brian Noble]

I just wonder if there is a tipping point where this eventually backfires - when enough of us repeat customers, having been treated shabbily, tell their friends and family members “WDW used to be great, but now, it’s not really worth it for what they are charging.”

Disney is a marketing machine, so I'm not sure how much a group of disaffected former customers can move that needle. On top of that, "it's too expensive" is not necessarily a negative. That's because there is a certain swath of the US for whom a Disney trip is a class status marker of aspirational consumption.

Add to that the folks for whom a visit with Mickey is a childhood rite of passage, and Disney can probably afford a few of us shouting on the street corners.

 

[squirk]

Disney is a marketing machine, so I'm not sure how much a group of disaffected former customers can move that needle. On top of that, "it's too expensive" is not necessarily a negative. That's because there is a certain swath of the US for whom a Disney trip is a class status marker of aspirational consumption.

Add to that the folks for whom a visit with Mickey is a childhood rite of passage, and Disney can probably afford a few of us shouting on the street corners.

I hear you, but then I think about the recent reversal on the parking, and the increase of # of days at the lowest-prices ticket tier.

Iger said in the latest earnings call that they recognized that some of their pricing initiatives were “alienating” to consumers and that the parks were not as accessible as they should be to enough economic demographics.

He later said that they did this because they were “paying heed to what we were hearing.”

They didn’t have to do or say any of that. They could have told us disgruntled rabble to go scratch, and kept things exactly as-is.

Whether they threw us some chicken feed just to shut people up, or if they picked up early signs of some price resistance or brand damage (or both), it doesn’t seem like they can or want to adopt a “damn the torpedoes” approach here.

 

[FastPasser.]

I guess it’s more accurate than a bus driver

Hey, my info was usually accurate......maybe.

 

[Moliphino]

We stayed at WDW resorts for decades. Last stay was Feb 2020 and still included free parking since the reservation had been booked before the change. Since then, costs have gone up at a ridiculous rate and all discernible on-site perks have been eliminated, other than the availability of resort to park transportation. And since we drive, that is a negligible benefit. And we don't stay deluxe so no extra evening hours. So...we've stayed offsite since and have been quite happy. We have no plans to book WDW resorts stays in the future. I'm pretty sure we are not the only park-going family they have lost.

Free resort parking is back, at least. But yeah, I haven't been at all since 5/2021 and have no plans to return in the near future.

 

[Johtull12]

Just because they made profit doesn't mean they don't have debt due at a later time. Accounting for receivables and cash they still are short more then 70 billion this year. The stock has a p/e of 56. Disney is not doing well.

If they are in that bad of trouble offering discounts on rooms that they just increased the rack rate seems silly. People want more bang for their buck. They need to do more then just make rooms cheaper that are still expensive

Disney's long-term debt as of December is 45b. Fox acquisition was the killer, it added 19b. Then two years later unexpectedly having to borrow $11b to weather the coronavirus storm they peaked at $54b in June 2020. They have slowly been paying it down since. Sounds like their priority is to accelerate that payoff given cutbacks, restructuring, and announcements of box office sure things like Toy Story and Frozen sequels.
We'll see

 

[Brian Noble]

Iger said in the latest earnings call that they recognized that some of their pricing initiatives were “alienating” to consumers and that the parks were not as accessible as they should be to enough economic demographics.

He later said that they did this because they were “paying heed to what we were hearing.”

They didn’t have to do or say any of that. They could have told us disgruntled rabble to go scratch, and kept things exactly as-is.

As it happens, I just finished reading the transcript, and he did say that. He also said this (typos due to Seeking Alpha):

So, we are going to manage capacity very, very carefully. Some of that, by the way, has enabled us to essentially shift mix to – from annual pass holders to people who may come just once in a lifetime or once. They tend to be good customers of ours because of their per cap spending when they are there. That’s really helpful. Some of the things that we put in place to manage basically annual pass holders was done to help us manage capacity without having doing too much damage to the bottom line.

I view the comments you mention as more about extending back down into lower ranges of the socioeconomic strata, rather than pricing them out. There is no change at all about APers vs. "the family from Denver," yet somehow Bob 1.0/3.0 is able to say it in a less antagonistic way than Bob 2.0 did.

And lets not forget: even though Bob 1.0/3.0 said that he thought the recent pricing changes were a mistake as if they were all Bob 2.0's fault, he was also the one at the helm when parking charges happened in the first place.

 

[BrianL]

As it happens, I just finished reading the transcript, and he did say that. He also said this (typos due to Seeking Alpha):



I view the comments you mention as more about extending back down into lower ranges of the socioeconomic strata, rather than pricing them out. There is no change at all about APers vs. "the family from Denver," yet somehow Bob 1.0/3.0 is able to say it in a less antagonistic way than Bob 2.0 did.

And lets not forget: even though Bob 1.0/3.0 said that he thought the recent pricing changes were a mistake as if they were all Bob 2.0's fault, he was also the one at the helm when parking charges happened in the first place.

That last part though speaks to the difference in Iger vs. Chapek management styles. Iger let his people have a lot of auntonomy, so Chapek had a lot of free reign. Chapek ont he other hand micromanaged so it all came from him. Now, Iger certainly could have not had Chapek there to begin with or at least overruled him if he thought real mistakes were being made. Chances are though that f the bottom line looked good at the time, then there was no desire to do so. Iger's not all that different, but it i absolutely true that he communicates it WAY better than Chapek did!

 

[Brian Noble]

I’m not sure he gets credit for undoing it but no blame when it was done in the first place.

 

[thanxfornoticin]

I’m not sure he gets credit for undoing it but no blame when it was done in the first place.

Yea, funny how short memories can forget/overlook some things.....

 

[Caseheidi]

Have to admit last time we did WDW we stayed at and Air BNB. Saved us a tone of money as we had a large group (11), and paid per night what our family of three would in a moderate. And had so much more space.

 

[squirk]

As it happens, I just finished reading the transcript, and he did say that. He also said this (typos due to Seeking Alpha):



I view the comments you mention as more about extending back down into lower ranges of the socioeconomic strata, rather than pricing them out. There is no change at all about APers vs. "the family from Denver," yet somehow Bob 1.0/3.0 is able to say it in a less antagonistic way than Bob 2.0 did.

And lets not forget: even though Bob 1.0/3.0 said that he thought the recent pricing changes were a mistake as if they were all Bob 2.0's fault, he was also the one at the helm when parking charges happened in the first place.

I 100% agree that Bob 3.0 is getting a bit of a hall pass on Bob 1.0’s decisions that Bob 2.0 implemented (admittedly, poorly).

I also agree that 3.0 was pretty plain on that same call in saying that they like those “families from Denver” more than the AP’ers.

I guess my larger point is that 3.0 doesn’t appear to need to be conciliatory at all. Yet, he’s clawing some stuff back. Just PR? Or an awareness that they are at the cusp of scaring away more people than they hope to bring in? I don’t know, but I am interested in seeing what’s next.