Yet Another Cutback Returned!

[Another Voice]

“[Fast Pass] is a non-revenue generating Perk for the WDW guest. It cost quite a bit to develop and even more to implement and staff. Yet, its only return is in visitor goodwill.”

Actually, no.

Fast Pass was cost justified on the additional traffic to shops, restaurants and other attractions the process was supposed to generate. In the bluntest of terms – if people are standing in line they are not out spending money. Having 6,000 guests waiting in line for two hours at ‘Pirates’ doesn’t add anything to the bottom line.

While it was assumed that many guests would use the “extra” time to visit other attractions, it was also assumed that many would also browse through nearby shops, have a quick meal or down a Coke. In reality, most people simply go wait in other lines and far fewer are spending additional money. You can also notice how the initially enthusiasm (and expansion) of Fast Pass has dramatically tapered off over the last year.

While opening capacity sensitive revenue generators can be seen as undoing cut backs (“Look Mommy, another place to spend money!”), the true guest goodwill comes from services that provide the visitors with enjoyment without such a blatant grab for money. The tangible you-get-what-you-pay-for feel is better suited to Las Vegas and tacky carnivals, not a Disney park. While I enjoy bar-b-que, I would much rather watch the submarines prowling through their lagoon once again.

 

[kenjean]

Add our name to the list of former Disney resort guests that won't stay on-site now that EE is eliminated. We loved it because of our young daughters. I would be curious to know how many people with small children made use of EE, I think those are the people that benefited the most. It seems that to get an accurate count of people that took advantage of it would be easy to find: take the gate counts for the early entry period and subtract out the reservations for character breakfasts at that time.

A note on fastpass, we were in Animal Kingdom Sunday and noticed that fastpass had been added to Premivial Whirl. Now there's a good use of new technology. BTW, while we were in Dinorama the games were completely empty.

 

[barreloflaughs]

FastPass drastically eliminates such inhuman suffering. And its free.

Small point here....instead of "free" howzabout "included in the price of admission". I'll be quiet now.

carl
barrel of laughs

 

[JeffJewell]

...the mandate of "four FastPass rides per park by..." some date that slips my mind, at the moment? I believe, at the time, there was no little consternation at the idea of putting FastPass on both Maelstrom and the Land's boatride.

It doesn't seem that many folks realize this about using FastPass: it absolutely guarantees that you will wait longer to ride than you would if you'd just get in the line (there are small windows of exception to this rule near the beginning of the day).

By putting all the most popular rides on FastPass, by limiting the number of FastPasses available to you, and by inflating the amount of actual time you wait to go on those rides, Disney keeps vacationers in their parks longer. FastPass was a much cheaper way to accomplish that goal than adding an expensive "must-do" ride.

It's true that some knowledgeable guests can milk FastPass for all it's worth, just like some knowledgeable guests do with every other aspect of Disney.

But FastPass was not installed to ensure adequate degrees of separation between the 'Scoop party and moist Waconians. If the numbers didn't say that FastPass would result in more P.L.U.S.H. (Pockets Loaded? Unload Some Here) sales and less time for guests to jump over to IOA, and all this at the lowest possible capital outlay, it never would have happened.

This was not a Magic decision, this was a Money decision.

Jeff

 

[larworth]

FastPass

I think they saw FastPass as a potential win-win situation. It had the potential to both increase guest satisfaction and add revenue. The latter was obviously an important consideration given how many times spend/guest and FastPass has been used in the same sentence. It sounds like it has done both, to varying degrees.

It is interesting to think about overall guest satisfaction ratings. The enlightened group that uses it surely enjoys more attractions per day than those that don’t. I can see why they are positive. The group that doesn’t has to be getting less value, but it just isn’t as obvious to them. I mean you can’t say these people aren’t interested in doing the rides or they wouldn’t be standing in 60 minute plus lines.

Changes in Perks

I don’t expect them to knowingly give away value. I’m sure they assume every perk they provide generates enough positive goodwill somewhere to eventual pay for itself. However, the purchasing decisions here are pretty complex, and there must be hundreds of services/costs someone thinks generates a return, that in reality does not. If an analysis can indicate otherwise, than they should make adjustments. I’d rather have them reinvest these costs into another service/perk that was more valued by more customers.

I also don’t think you have to listen to too many conference calls to understand that Disney has been squeezing the Parks to deliver better and better profitability. They’ve been on a pretty OPEN cost cutting mission for a couple of years now. If the parks were underperforming assets, and too much value was being given away, that would be one thing. It’s when the longterm best interest of the parks might be being compromised to compensate for other shortfalls that I get antsy.

Unfortunately, we don’t have much hard DATA to go on. We have their stated strategy (watch the cash, flow), our lists, and some very broad unit results. We have to be careful about jumping to too many conclusions, but we do know Park Division profitability has been steadily rising. Operating margins in 1994 were just under 20% (not shabby). By 2000 they were over 24%. On a macro level costs have increased at a slightly slower pace than revenues.

In 2001, margins dropped to 23.7%. An underperforming DCA and 9-11 were some big negatives, and it was understandable they would tighten the belt further to try to mitigate these impacts. In fact, if we look at Q1 results (full 9-11 effects) margins were only 13%. No, they weren’t in danger of going out of business, but a big hit. It will be interesting to see Q2 results in a couple of weeks. Remember, they have trumpeted that once attendance returns margins will be even higher than before.

 

[JeffJewell]

FastPass, especially at Epcot and AK, allows you to spend more time exploring the non-ride attractions such as Pangani or Morocco, during time which you would otherwise be waiting in line staring at walls

...I agree that this is a fringe benefit of FastPass (you have a good memory... I suspect you're tossing me a bone mentioning Morocco specifically). But I'm a person who has never seen IOA, Universal Orlando, or SeaWorld (unless, of course, "SeaWorld" is what grew out of an Orlando area park called "Marineland," circa 1972).

I just think it's a little naive to declare that this fringe benefit eked out by nuts such as ourselves is the only reason, or even the main reason, for FastPass' existence, is all. It's the people who thought they could hit the "biggies" in the morning and then ride Spider-man all afternoon who now "have" to stay longer to see what they wanted... you and I would have still been there, anyway. Being able to take tiger pictures (I'm a Jungle Trek man, myself) instead of staring at walls is only a benefit if you're at all interested in taking tiger pictures, in the first place (and besides, it makes the details and pre-show elements now present in some queues like Dinosaur and Kali River Rapids just something you fly by... how long until those details are cut as non-value-added expenses [and those cuts defended on the "bottom line" basis by the same folks who once pointed out queue theme elements as something Magical Disney had over their competitors]?).

Hey, if they raised ticket prices by an order of magnitude, I personally might be able to find some good in it (I'd still be able to make a trip, every now and then, but an awful lot of people wouldn't, anymore... one-tenth the crowds might just be worth a five-hundred dollar ticket), but it could still be accurately described as a "blatant grab for money."

In the same way as saying "Primeval Whirl is an off-the-shelf ride exhibiting minimal Pixie Dust" does not mean that no one can ever possibly enjoy riding the thing, saying "Fast Pass was cost justified on the additional traffic to shops, restaurants and other attractions the process was supposed to generate" does not mean that no one can ever possibly benefit from using the system.

Jeff

PS:

Very nice work Jeff

Thank you. Words are fun.

 

[Another Voice]

Basically what Jeff said…

Disney did not sink millions and millions into Fast Pass just so that the Scoop family might enjoy the gardens at the China pavilion. Its primary goal was to get people out of the lines because a) people don’t like waiting and b) they don’t spend money in line despite all the tests of the wandering drink & snack sellers. Certainly if the goal was simple to “improve guests satisfaction” all that money would have gone into creating Fire Mountain, Beastly Kingdom, and other MAJOR crowd pleasing attractions.

The intent of the project has turned out to be different than the actual results – people want to go on rides more than they want to shop. That isn’t a problem with Fast Pass, it’s a problem with the current management’s mindset that view customers as nothing but mobile wallets looking for places to spend money. If the typical guest can outsmart the spreadsheet builders, then all is good and right with the world.

It is still interesting that “business motives” is used only as a rationalization for the latest budget cut, but that all other activities are made out the be some sort of charitable gift bestowed upon us by a benevolent corporation. From its outset Fast Pass was meant to be a profit making operation, both by freeing up guests to spend money and by improving the guest experience. Out here, FP is marketed to counter the public’s second reason for not visiting Disneyland – the lines.

And pending the final tests here as well, you’ll see all the various ways in which “premium Fast Passes” will be used to generate more money through vacation package sales, ticket upcharges and other incentives. Yes, Fast Pass does increase a guest’s satisfaction level. And they are expected to pay for that one way or the other.


P.S. – the money issue isn’t with the parks, it’s with the company. Mr. Larworth, check out the returns from the Studio group (somewhere between 4% and 6%).

 

[DOPEY44]

Whats bad about standing in line? Rather stand an hour than be at work for 5 minutes!
Why is everybody is such a hurry?
Look around.
Talk to people.
The money spent on Fast Pass systems should have been put into entertainment.
You want to generate money: with a third of the people in line, the parks capacity
could go up, and each one paying $50 to get in.
Guest have been able to do the parks in one day rather than two. You should want to
keep the guests in the parks for as long as you can. Thats how you generate $$$$.

 

[Galahad]

It is still interesting that “business motives” is used only as a rationalization for the latest budget cut, but that all other activities are made out the be some sort of charitable gift bestowed upon us by a benevolent corporation. From its outset Fast Pass was meant to be a profit making operation, both by freeing up guests to spend money and by improving the guest experience.

Yes. So decisions about what to add should be dependent on sound business analysis. Even in the "good old days" (whenever that was) Magic was not being created at the expense of profit but as a vehicle for profit.

But.

Certainly if the goal was simple to “improve guests satisfaction” all that money would have gone into creating Fire Mountain, Beastly Kingdom, and other MAJOR crowd pleasing attractions.

Having a great new E-ticket attraction won't improve guest satisfaction if the less obvious issue of people movement is ignored in the process. Guest experience depends on the whole package right? If I can't get onto Fire Mountain and still have time for lunch my guest experience won't be all that great.

 

[raidermatt]

This has to be one of the most bizarre "discussions" I've seen on this board.

Does it really matter whether the primary reason for FP was increased guest spending or increased guest satisfaction? Before putting it in, Disney felt it would do both. What is wrong with that? As Larworth said, it was a win-win situation. That is a good thing.

And clearly, they still think it has some value in at least one of those categories, since it is attached to the 21st century's crown jewel of E-tickets, Primivel Whirl.

If AV is right, and it doesn't impact revenues like they had hoped, does this mean it's inclusion with PW was solely for the pleasure of the guests? Nah, couldn't be.

While I want new E-tickets as much as anyone, I'm happy to trade one for Fastpass. Bottom line is it saves our group time in some of the longer lines. For us, the main benefit is we hit a few more attractions than we would have otherwise. Maybe we do shop a little more, I don't know, but what I do know is that we are much happier with FP than without it.

Does it keep some guests in the park longer? Maybe, but I could swear that I've read several recent posts that say Disney does NOT really want us in the parks, but instead want us leaving to go to DD. But now, the logic is reversed to say those guests don't go to DD, but instead get in their cars and drive to Universal? Which is it? Do they want us in the parks or not?

BobO- I wasn't quite clear on what your point was. Could you be a little more descriptive?

 

[larworth]

Thanks for the tip Mr. Voice. I did take a look at the performance of the other divisions.

(OI/Sales)
Margin..........Historical..................First Quarter

25-30%......Cable Properties
20-25%......Parks Division.................Cable
15-20%......Consumer Products.........CP
10-15%......Broadcast (ABC)..............Parks
5-10%............................................Studios
<5%...........Studios..........................Broadcast

I knew that 13% 1Q result for the parks was really bad. They'd be the same position as ABC use to be.

OK, so not new news. However, if we all want to have a real interesting discussion we ought to look at cash flow history (since that is the new mantra). It does make you pause and think a little.

 

[JeffJewell]

My guest experience is better

I spend more time

allows me more time

...ahh, we're back to the ever-popular "if I like it, then it must be Magic--with a capital em, trademarked and copyrighted."

Point being, the mindset behind FastPass was precisely the mindset behind Pop Century: get more money out while putting less in.

I made this point (to no great success, I assure you) about the All-Stars: gigantic iconic theming with little or no connection to Disney is a poor direction for Disney. Oh, the cyber-beatings I took for such suggestions! But to describe the All-Stars, without mentioning exactly what the icons are, is to describe Pop Century. To prefer one or the other is a question of whether or not you like the icons they picked: a personal preference issue.

Similar point here: FastPass is the result of an effort to get more money out of the same number of pockets while avoiding making any capital investments in the park. Whether or not you find the silver lining in FastPass, this should set off some alarms about what investments in their future Disney cares about making.

If you want to enjoy using FastPass, or staying at the All-Stars, that's swell: I've done both, myself. But just as Pop Century took the blueprint of the All-Stars and turned it into something almost no one likes, you shouldn't be surprised when the FastPass blueprint gets turned into something almost no one likes. It's inevitable.

Jeff

 

[Bob O]

Kenjean my family loved EE when are kids were small. Going to the MK during EE was great!!! Rides like Dumbo/Snow White/Peter Pan could be done with no waits several times, which is a godsend as kids are even more impatient than i am. You could also get great photo's of the charachters without everybody swarming and people in the backround who you didnt know!!! It was the best part of our day!!!!
I also think fastpass was created more with the idea of people spending money on food/trinkets than guest satifaction even though they did realize it would get get guests reaction. I dont really care for FP as i think it does make alot of lines longer and benefits the lazy at the expense of the commando's(im in that group) who will get to the park as early as possible to ride their favorites with little to no waits. Im glad though that at least disney does do the right thing and doesnt charge for it like Six Flags does!!!
dopey44 you might like standing in line and find it enjoyable but i dont!!!! And while fastpass may save waiting on one line it will lengthen the wait on numerous other lines.
riafermatt i would much perfer E-ticket rides/shows than fastpass!!! I could get alot more enjoyment out of a e-ticket ride/show than fastpass as i dont go when the parks are busy and lines are long. But the loss of EE truely diminshes the amount of time i have in the parks and the total enjoyment my family can have and why i wouldnt stay on site without EE. And why true magic is FOTL access when staying on site at Universal!!!!

 

[raidermatt]

JeffJ, maybe I'm missing something, but I just can't follow your analogy.

To me, the only similarity between PC/AS and FP is in your opinion about the motiviation, profits.

Profits and guest experience are not mutually exclusive, are they?

I can understand your view that PC and AS do not enhance the guest experience, and lack the Disney "show", quality, themeing, whatever.

But forgetting whether or not it generates profits, FP DOES enhance the guest experience of anyone who chooses to use it, and it does not decrease it for anyone who chooses not to use it. (Unless someone thinks the kiosks are tacky or something?)

Again, the motivation to make profits can still produce things that enhance the guest experience. I understand the frustration involved in believing that Disney management feels the guest experience should only be improved when it can be tied to proifts. However, that does not mean that such decisions do not improve the guest experience, as FP has.

The problem comes when moves clearly do not enhance the guest experience, like the removal of EE, for example. Those decisions are debateable, but I just can't see FP being in the same vain.

 

[Bob O]

Raidermatt If somebody goes to wdw and isnt aware of fastpass and doesnt use it then it can be a negative as they wait in longer lines. When i have used fastpass(granted slow times of the year) it was nice for that ride but i did think it made other lines longer and benefited people who come to the park later in the day(if FP is still avaible)
thedscoop from my experience(numerous times) the people i saw going to EE were riding rides and not eating!!! Few stores are open and few rest. So the people i saw went solely to ride the rides to avoid lines and the experience of being at the park with few people which is a great experience. When i went for EE my family didnt eat any breakfast but ate a early lunch and on thise days only ate 2 meals rather than 3. I believe EE was initially started to boost hotel occupancy rate which will make wdw more money, but they gave the people who used it a true perk, whats a better perk for a family with kids to ride dumbo with little or no wait, rather than at mid-day waiting maybe a hour or more!! With EE i felt i was getting true value out of my hotel experience, i was at the park earlier but it didnt result in any extra park purchases which is different i believe from FP which is intended to get you out of lines into shops/rests.

 

[Another Voice]

Again, the intent behind Fast Pass (make more money) can be different than the result (I go on Space Mountain more). There’s nothing wrong with a plan that does both – actually it’s kind of what I hope for. It’s actually rather nice for Disney to come up with something that makes a trip to WDW more enjoyable instead of just more expensive. I also secretly hope that there remain a few good people with The Company. In my hopes, I see someone who thought FP was a great benefit for the guests and then fudged the spreadsheets just to get the project approved.

The only reason the goal of Fast Pass is important is because it will help us understand The Company’s next moves. Since it is not generating the revenues they want (according to rumor), something will have to be changed to make the financials works. You can see already by the suddenly halt to any new Fast Pass installations. If FP was done soley for the guest satisfaction then why wouldn’t something like ‘Dumbo’ get it? That is the one line that most people complain about (even a 30 minute wait with a small child can be torture). Knowing the thinking behind the FP concept you can see why that will never happen.

Already in Anaheim special Fast Passes have become part of the vacation packages. Perhaps this concept will be expanded; an extra $50 and you get 5 FP’s a day up front if you stay on property. That would be a major benefit to staying on property and might book a few more hotel rooms. See, the money thing again.

Believe me, not a lot happens in Disney that isn’t directly tied to revenues.

 

[Bob O]

thedscoop I like EE more than Fast pass because it was a true and genuine perk for staying on site at a wdw property. It was a pure benefit for paying the higher price of staying on site and it was well worth it IMHO to be at the parks 1 1/2 hrs before they opened to the public, to get on alot of rides with no waits and see the characthers with no crowds and get decent pictures. It was a perk that made disney money and also benefited the guest if they chose to use it. Fast pass can save you some time on a few rides but it lengthens the wait on all of the other fast pass attractions and if guests arent aware of how the system works they can get really screwed.

 

[JeffJewell]

...the reason I brought up the All-Stars and the Pop Century was to draw a parallel between the All-Stars and FastPass. I really don't think there can be much reasonable debate that the All-Stars were an attempt to cash in on the Disney name while avoiding the level of theming and detail (and associated expense) historically synonymous with that name. Despite the fact that the _intention_ was to cash in, quite a few people made the point that they personally wouldn't be able to stay on-site without the All-Stars. And there was enough "to" the All-Stars where they could justify a obvious reduction in Disney Standards.

The next logical step, from a business standpoint, was the Pop Century. Long-time posters/lurkers might remember, during the dark days of the All-Star Wars, some posts describing the likely next level of "Super Value" resorts. Compare some of those posts with some current posts suggesting that the PC makes the A-S's look like moderates, in comparison. Turns out that the canaries back in that coal mine had a valid point.

Same thing here. Despite the fact that the _intention_ of FastPass was to cash in, quite a few people make the point that their personal vacation is better now than without FastPass.

Fair enough.

But do you honestly think that FastPass is the last stop on this road? It's not. Do you believe that you'll be able to find the silver lining in whatever follows FastPass? Maybe, maybe not, just like there are still a few people who say they see "Disney Magic" in Pop Century.

There's an enormous difference between setting out to thrill and amaze the guest and ending up making some money along the way, and setting out to make all the money you can and ending up making some guests happy along the way. Money was always the grease that kept the machinery of the Magic going, but there is an enormous difference between defining your vision and making Roy go out to find the money to make it happen, and defining your budget and forcing the Imagineers to cut down a vision to fit under it.

If you want to justify Disney's decision making on the basis that the world has changed, we're a commoditized, lowest common denominator, Wal-Mart society, and Disney is just doing what every other business is doing to survive, I've got no problem with that.

But you can't reasonably make the argument "Disney is just doing what every other business is doing" and still talk about there being a "Disney Magic" anywhere but in your head.

I fully admit that this is a prime example of the "slippery slope" phenomenon, and everyone is going to define the exact point of "going too far" in a different place. The quote in my sig is there to make the point that, to at least one world-class aesthete, Disney was already taking the cash-it-in road about the time Walt Disney World first opened. In the interest of avoiding the personal preference issue in defining the point of "going to far," I typically take the hard line of "it's a bad idea to even dance on the edge... if you believe there's anything 'Magical' about your company."

Eisner might very well be an extraordinary businessman, but I have yet to see any evidence that he believes there should be anything Magical about what his company produces; as long as it produces money.

And again, "not that there's anything wrong with that." Just get off of calling it Magic, okay?

Jeff

PS: I got so far afield that I forgot I wanted to address the EE point. To my knowledge (this won't be the first time I've been up front about the 90-98 years being those of which I have the least first-hand Disney knowledge, so I'm open to education on this point), EE was designed as a perq for on-site visitors; one of the Magic Touches that made WDW resorts "worth" three or more times the price of equivalent hotel rooms just across the Interstate. It was an attempt to gain market by offering something the competition could not offer: that's a sound business strategy, based on making your product quantifiably more than it was before, and more than the competition can offer.

Although I've occasionally wallowed in what the loss of EE has meant to me personally, I've tried to base my public arguments on that aspect of EE: staying on-site is now quantifiably less than it was last year at this time, and there is one less Magic Touch making on-site stays more attractive than their off-site counterparts. This is a risky business strategy, based on the hope that the savings of making their product measurably less than it once was will be more than the loss of the business from those folks who actually notice the difference.

 

[Peter Pirate]

...it was well worth it IMHO to be at the parks 11/2 hours before they opened to the public.

I've stated this already, but this is one of the problems they had with EE Bob...It WASN"T just a perk for Resort gusts as anyone could & did show up. The solution to preventing this would simply cost more money...

...You can see already by the suddenly halt to any new fastpass installations.

Rather than thinking there is evil behing the perceived stoppage of fp additions, it seems to me they have just already hit the attractions that they've intended...Look PW got fp and it is brand new. Dumbo is a slow loader & fp would just make it impossible as a walk on, IMO.

With regard to the notion that fp has increased line waits, I generally disagree...Perhaps to the family or group who just can't figure fp out it could cause longer waits, but then the uninformed are generally spinning their wheels at the parks anyway...But by using fp judiciously it is way easier to see more & especially do the eticket atractions than it was before.

EE still sees like a no brainer to figure out. While certain segments, like brother curling really miss the advantages, the cost/benefit for continuing it probably wasn't even close. I do predict that something will return but it will certainly have a cost attached to it. As for offering fp as a part of Resort packages, I can't see this happening in any big way at all... Safari Steve has already warned us of the intracacies of this system and the problems all of the unfactored 'freebies' would have. I don't believe Disney will cut off its nose to spite its face...

 

[larworth]

The premium hasn't gone away, it just exists at different price points. There have been some great deals offered off-site, as well. I assume Disney pricing actions have a ripple effect on much of the market, with hotels adjusting their rates to maintain a certain differential they think is needed to compete.

It would be interesting to see how this differential has changed during this most recent period. Has it remained fairly constant, or has it shrunk?