Yahoo News: Economic downturn hits Disney, shares slide--discounts coming.

[dpic]

LOS ANGELES (Reuters) – The global economic downturn hit Walt Disney Co's quarterly results harder and faster than Wall Street expected, with the company on Thursday reporting a sharp decline in hotel bookings and softness in advertising revenue at its networks.
Disney's shares slid 9 percent in extended trade but recovered a bit after executives announced plans to discount stays at Walt Disney World to stimulate bookings in the first half of 2009.

Yahoo News

 

[doubletrouble_vb]

I vaguely recall someone saying that Wednesday would be a great day to deliver bad news. Maybe Disney heard that as well...give something of a negative estimate into the general sell off on bad numbers combined with post election speculation...with any luck maybe the stock won't be as badly beaten up as would be if you reported that news in a vacuum.

 

[mitros]

Nertz! I was hoping with a dowturn in the economy, there would be more manageble crowds at WDW. I am so sick of the unending mobs of people......

 

[doubletrouble_vb]

Nertz?

I never could figure out why Disney thought they needed ever more people staying on property. This seems like one of those laws of diminishing returns things...for quite a while it was the customers getting the diminishing returns now it looks like its going to be Disney. If they were smart they'd shut down a hotel now for renovations.

 

[CandyMandy]

Right now, the lead story section of the Drudge Report features a bleak looking picture of the Hong Kong DL Sleeping Beauty Castle, with a loney-looking Robert Iger in front of it. The headline below reads "GRUMPY, SLEEPY, SLUMPY: BAD ECON HITS DISNEY". Click on it and you get sent to the Yahoo News story cited above.

In addition to the resort discounting (advance bookings through June 2009 are apparently down 10%), the story states Disney Management is "looking for ways to cut costs company-wide." Iger is quoted as saying "significant savings will be delivered."

My predictions: reduced park hours, less frequent (and possibly scaled back)entertainment and tighter staffing.

 

[Mouseaholic!!!]

Right now, the lead story section of the Drudge Report features a bleak looking picture of the Hong Kong DL Sleeping Beauty Castle, with a loney-looking Robert Iger in front of it. The headline below reads "GRUMPY, SLEEPY, SLUMPY: BAD ECON HITS DISNEY". Click on it and you get sent to the Yahoo News story cited above.

In addition to the resort discounting (advance bookings through June 2009 are apparently down 10%), the story states Disney Management is "looking for ways to cut costs company-wide." Iger is quoted as saying "significant savings will be delivered."

My predictions: reduced park hours, less frequent (and possibly scaled back)entertainment and tighter staffing.

Candy Mandy - your predictions are right - they have already begun. Layoffs are coming and they will be agressive --- DH is a 30 year ABC employee and apparently ALL Disney cost centers will be hit hard.

Who on earth is surprised about this? Those who are...must not have been watching the news since September.

 

[CandyMandy]

Candy Mandy - your predictions are right - they have already begun. Layoffs are coming and they will be agressive --- DH is a 30 year ABC employee and apparently ALL Disney cost centers will be hit hard.

Who on earth is surprised about this? Those who are...must not have been watching the news since September.

I hope your DH gets through this O.K. - I haven't read anything else yet about staff cuts, but given the service levels at WDW (at least in my opinion) have already been dropping over the last several years, if they tighten belts much further there it will definitely begin to really damage guest satisfaction.

 

[mitros]

I hope your DH gets through this O.K. - I haven't read anything else yet about staff cuts, but given the service levels at WDW (at least in my opinion) have already been dropping over the last several years, if they tighten belts much further there it will definitely begin to really damage guest satisfaction.

I feel that guest satisfaction has already begun to deteriorate. Far more bodies at WDW over the last few years and far less in the way of Cast Members. I'm sure, like many other industries; top heavy on the executive side, short changing the customer service side.
And those phony-baloney executives are going to find themselves on the unemployment line if there are not enough Cast Members to help the guests.

 

[Terese]

I just got back from WDW yesterday after having spent the week there. If there's a slump, there certainly was no evidence of it last week. We've gone down there several times in November, and have never run into the kind of crowds we saw last week!

 

[mitros]

I just got back from WDW yesterday after having spent the week there. If there's a slump, there certainly was no evidence of it last week. We've gone down there several times in November, and have never run into the kind of crowds we saw last week!

Yea. Disney is just making excuses for laying people off.

 

[ShellyLynn3630]

We went in September and the crowds were very manageable. I mean on a Friday we won Dream Fast Passes at the Magic Kingdom, but we really did'nt need them!!!!!!!!!!! But then most kids were in school, except the for the ones whose parents took them out for free dining like us.

 

[CandyMandy]

I just got back from WDW yesterday after having spent the week there. If there's a slump, there certainly was no evidence of it last week. We've gone down there several times in November, and have never run into the kind of crowds we saw last week!

I think you are measuring things too early.

How so? WDW is for most guests an "advanced planning" type of destination (yes, there are the last minute types, but they are minority). So I suspect most of the people you saw there last week booked back in early 2008 or even a year ago or earlier. I.e. all/most of the major costs for the trip (air, hotel and tickets) had already been paid for long ago (pre mid September financial meltdown) so those with those ressies didn't feel a deep need to cancel (or didn't want to eat cancellation penalties).

So again because of advance bookings there is lag element to the impact of the economic turndown in terms of WDW guest levels. I suspect things will appear to stay "normal" through the holiday season and perhaps even early into next year (which will lead during that time to all sorts of posts here about "what downturn?").

But but the end of the first quarter '09, I fear those reports will evaporate.

 

[zulemara]

I think you are measuring things too early.

How so? WDW is for most guests an "advanced planning" type of destination (yes, there are the last minute types, but they are minority). So I suspect most of the people you saw there last week booked back in early 2008 or even a year ago or earlier. I.e. all/most of the major costs for the trip (air, hotel and tickets) had already been paid for long ago (pre mid September financial meltdown) so those with those ressies didn't feel a deep need to cancel (or didn't want to eat cancellation penalties).

So again because of advance bookings there is lag element to the impact of the economic turndown in terms of WDW guest levels. I suspect things will appear to stay "normal" through the holiday season and perhaps even early into next year (which will lead during that time to all sorts of posts here about "what downturn?").

But but the end of the first quarter '09, I fear those reports will evaporate.

I agree

Maybe if they cut some executive bonuses they would save some cash! Of course they can't do that when there are so many working families at the bottom of the barrel that can be laid off

 

[Mouseaholic!!!]

I agree

Maybe if they cut some executive bonuses they would save some cash! Of course they can't do that when there are so many working families at the bottom of the barrel that can be laid off

I agree Candy and Zule -

Remember earlier this year when we were predicting the changes in the airline industry and people were not willing to listen? Well, come September when they began to cancel flights and shuffle people - there was plenty to complain about.

Yesterday USA Today reported that there are going to be more flight cancellations beginning after the holidays because of a downturn in reservations.

Take a look at Disney's stock price right now. That should be enough of a indication that things are not all that great in Mouseville.


People see what they want to see - even if it's not based in facts.

Oh well.

 

[manning]

And those phony-baloney executives are going to find themselves on the unemployment line if there are not enough Cast Members to help the guests.

There should be a law passed requiring those execs should be kept employed ....cleaning the park restrooms!!!.....with a toothbrush

 

[mitros]

There should be a law passed requiring those execs should be kept employed ....cleaning the park restrooms!!!.....with a toothbrush

Why give them a toothbrush? Let 'em use their tounges!