WDW Five Year Plan

[Galaxy Defender]

From now until a redo of EPCOT looks like a five year plan for WDW. I'm sure there is no official five-year schedule for Walt Disney World but it's a good number to work with.

WDW is in a potentially long term attendance decline. It has woefully neglected reinvesting in its parks while positioning itself as premium destination. This was bound to happen sooner or later. It is common sense that you can't keep cutting and neglecting and raising prices.

1. Is this what Disney needs to do to halt the decline or is all of this merely a first step?

2. Does Walt Disney World have the long-term will to fix the parks or will budget-cutting get in the way?

3. Will Walt Disney World keep its position as the primary choice of Orlando park visitors or will Universal catch up and possibly surpass them?

4. Are the the announced and rumored improvements to the parks what is needed or should they be going in a different direction?

Much of this has been covered in a variety of threads but it's rarely talked about as an overall strategy of Walt Disney World. I do feel that when you look at what WDW does in a broader context it makes more sense.

 

[Mad Dog]

1) Merely a first step. Years of neglect have caught up. It will take more than 2 major lands (Avatar & Star Wars. Toy Story underwhelms & barely counts as anything but a kiddie land) and possibly one or two other attractions, over a 5 year period to fix the problem...2) Tough to tell at this point in time. Presently, WDW appears to be in budget cutting mode. Only Bob Iger, if he wants to protect his legacy, can change this. Disney needs to drastically change course and also to change the WDW Executive culture. Only a major personnel purge can accomplish this (lots of heads need to roll), and a new emphasis on a customer "quality of experience at a reasonable cost" philosophy. ... 3) WDW will remain number one. But Universal will continue to make inroads into market share...4) They are a good start, but clearly much more needs to be done within the next decade.

 

[Parkscope Joe]

Cool I get to being an idiot online, my favorite thing!

1. Is this what Disney needs to do to halt the decline or is all of this merely a first step?

The decline is a harsher decline in attendance than expected without increases in guest spending. There's a point where the savings of having fewer people in the park (wear and tear, running fewer trains to save spending on maintenance, fewer CMs to corral and interact with guests, etc) but have each guest spending more would increase profits more than simply adding more and more capacity.

Problem is they are finding their hotels aren't being filled. Then they find out guests aren't spending more they're just factoring higher hotel and ticket prices into a fixed budget.

Fixing this in the short term would require Disney to go back to mass discounts, offer creative bundles, or stay course and not raise prices over the next few years. To halt the decline overall they need to do what Universal is doing: attractions and new experiences year over year over year.

That being said WDW is sort of "too big to fail", it won't just close down or be in risk of collapse, someone will come in to buy it. My personal theory is the cost cutting and WDI layoffs are the start of a selling of the parks, probably to a Chinese company.

2. Does Walt Disney World have the long-term will to fix the parks or will budget-cutting get in the way?

Right now? They don't have the long term ability to counter this. What they need is a whole management overhaul and to reassess the definitions of success for managers and VPs.

3. Will Walt Disney World keep its position as the primary choice of Orlando park visitors or will Universal catch up and possibly surpass them?

Disney has name, a retirement age demographic that loves their product and has retirement money to take themselves and grandkids, and capacity. Capacity is key; IOA tops around 35k and USF in the high 40s while MK goes into the 70s and 80s.

What I see Universal coming is a very strong second place in a new "long weekend" vacation strategy for Orlando. MK won't ever lose first place in my mind, but everything below that is up for grabs.

4. Are the the announced and rumored improvements to the parks what is needed or should they be going in a different direction?

Lets cover each park

MK- Problem is the other parks, nothing drives guests to them. MK has the classics, the characters, and the name. A strong three other parks is what MK needs.

Epcot- Attractions wise they need new attractions in WS to drive guests there earlier and a complete new slate of attractions in Future World. The nighttime show is good but old, a new one is needed once newer offerings open around the resort. Disney needs to look at each restaurant and see what is pulling their weight and what isn't. Morocco needs a overhaul that keeps it authentic but adds an appeal to guests beyond "there are reservations open here". Mexico, Italy, France, UK, and Canada are popular so anything else needs to be re-evaluated. Start new in FW for food outside of Sunshine Seasons. Additionally a full visual overhaul to Future World needs to occur as the last one it received was 16 YEARS ago.

DHS- Once Star Wars and Toy Story open the park still has many issues: a bad nighttime show, several out dated attractions and shows, a lackluster main entry area, and the whole Animation Courtyard fiasco. Assuming the Mickey attraction comes (sort of hope this goes into Animation Courtyard) Disney needs to refresh all the existing shows. BatB and LM can remain the same with updated effects, pacing, sets, costumes, and choreography. Fantasmic, IJ, and Disney Jr can be upgraded with new scenes and technology to better execute it's goals. Food needs a major refresh, especially ABC Commissary. There is no reason why Monster Sound is still empty.

DAK- Wait and see, can't tell as more than half of the planned refresh hasn't debuted yet. Besides RoL and Avatar Disney needs to look at Rafiki's Planet Watch for replacement. Dinoland needs help in general. I love Finding Nemo but the attraction needs a technology upgrade badly.


Anyway that's my dumb thoughts.

 

[shiekra38]

Epcot needs to be priority for them I think...Take away the Food & Wine and Flower & Garden, the park would be in trouble..

New rides in FW needed, new rides in WS needed

 

[Mad Dog]

Cool I get to being an idiot online, my favorite thing!



The decline is a harsher decline in attendance than expected without increases in guest spending. There's a point where the savings of having fewer people in the park (wear and tear, running fewer trains to save spending on maintenance, fewer CMs to corral and interact with guests, etc) but have each guest spending more would increase profits more than simply adding more and more capacity.

Problem is they are finding their hotels aren't being filled. Then they find out guests aren't spending more they're just factoring higher hotel and ticket prices into a fixed budget.

Fixing this in the short term would require Disney to go back to mass discounts, offer creative bundles, or stay course and not raise prices over the next few years. To halt the decline overall they need to do what Universal is doing: attractions and new experiences year over year over year.

That being said WDW is sort of "too big to fail", it won't just close down or be in risk of collapse, someone will come in to buy it. My personal theory is the cost cutting and WDI layoffs are the start of a selling of the parks, probably to a Chinese company.



Right now? They don't have the long term ability to counter this. What they need is a whole management overhaul and to reassess the definitions of success for managers and VPs.



Disney has name, a retirement age demographic that loves their product and has retirement money to take themselves and grandkids, and capacity. Capacity is key; IOA tops around 35k and USF in the high 40s while MK goes into the 70s and 80s.

What I see Universal coming is a very strong second place in a new "long weekend" vacation strategy for Orlando. MK won't ever lose first place in my mind, but everything below that is up for grabs.



Lets cover each park

MK- Problem is the other parks, nothing drives guests to them. MK has the classics, the characters, and the name. A strong three other parks is what MK needs.

Epcot- Attractions wise they need new attractions in WS to drive guests there earlier and a complete new slate of attractions in Future World. The nighttime show is good but old, a new one is needed once newer offerings open around the resort. Disney needs to look at each restaurant and see what is pulling their weight and what isn't. Morocco needs a overhaul that keeps it authentic but adds an appeal to guests beyond "there are reservations open here". Mexico, Italy, France, UK, and Canada are popular so anything else needs to be re-evaluated. Start new in FW for food outside of Sunshine Seasons. Additionally a full visual overhaul to Future World needs to occur as the last one it received was 16 YEARS ago.

DHS- Once Star Wars and Toy Story open the park still has many issues: a bad nighttime show, several out dated attractions and shows, a lackluster main entry area, and the whole Animation Courtyard fiasco. Assuming the Mickey attraction comes (sort of hope this goes into Animation Courtyard) Disney needs to refresh all the existing shows. BatB and LM can remain the same with updated effects, pacing, sets, costumes, and choreography. Fantasmic, IJ, and Disney Jr can be upgraded with new scenes and technology to better execute it's goals. Food needs a major refresh, especially ABC Commissary. There is no reason why Monster Sound is still empty.

DAK- Wait and see, can't tell as more than half of the planned refresh hasn't debuted yet. Besides RoL and Avatar Disney needs to look at Rafiki's Planet Watch for replacement. Dinoland needs help in general. I love Finding Nemo but the attraction needs a technology upgrade badly.


Anyway that's my dumb thoughts.

I agree 100%. Good points. :thumbsup:

 

[s8film40]

While there's a lot of good points being raised here I don't think Disney views their situation nearly as badly or objectively as we are here. They know Star Wars is coming, and there's probably a few in the company who think Avatar will be good. I think they'll just keep going as they are now. I think the big focus will be on reworking pricing and budgets to squeeze as much out as they can without putting out too much money.

 

[bob albert]

Yea really once star wars in finished people will be back in droves.

For anyone to even talk about universal to surpass Disney they would need the capacity to. Even with a 3rd park and double the hotel rooms, they wouldn't have the capacity.

And any idea that the main destination for number one amusement park brand in the would would be sold is not even worth speculating on.

 

[Galaxy Defender]

I see WDW having three big risks in the next few years above and beyond their current problems.

The first is hotel occupancy. High occupancy rates have been a source of Pride and strength for Walt Disney World for many years. This has kept guests on the property, along with Magical Express and MM+. Some rooms have shifted to DVC and others are rumored to be shut down in blocks to artificially inflate occupancy rates. WDW is a city. That city needs a healthy population to be profitable. Lower occupancy rates would kill profitability and significantly impact attendance.

The second risk is Universal having three parks that are better than AK, DHS and EPCOT. If this happens then vacations may turn into going to Magic Kingdom then to the Universal Parks. It would mean more people not staying on Disney World property. It would mean attendance declines for those three parks. It would be much harder and much more expensive to improve those three parks if they are on a long-term decline of attendance.

The final risk is that people start feeling that the magic is gone. If this happens then Disney World is just another set of parks to go to. There would be little reason to immerse yourself in the magic if the magic is not there. This would impact the hotels and Disney Springs, which would affect attendance.

All of this is easily avoided. But it means going back and spending the money that should have been spent over the past decade. It might mean meeting California Adventure level revamps of the parks. What Disney is doing is a great start, but more needs to happen and it needs to happen quickly.

 

[UniversalCityFL]

The decline is a harsher decline in attendance than expected without increases in guest spending. There's a point where the savings of having fewer people in the park (wear and tear, running fewer trains to save spending on maintenance, fewer CMs to corral and interact with guests, etc) but have each guest spending more would increase profits more than simply adding more and more capacity.

Problem is they are finding their hotels aren't being filled. Then they find out guests aren't spending more they're just factoring higher hotel and ticket prices into a fixed budget.

I appreciate your thoughts, but I have to say, a lot of what you posted seems to be inaccurate.

Here's the official Parks attendance/revenue report from this past quarter, posted August 9th, 2016:

Parks and Resorts revenues for the quarter increased 6% to $4.4 billion and segment operating income increased 8% to $994 million. Operating income growth for the quarter was due to an increase at our domestic operations, partially offset by a decrease at our international operations. Results were adversely impacted by the absence of the Easter holiday, which occurred in the third quarter of the prior year compared to the second quarter of the current year. ​

Higher operating income at our domestic operations was due to guest spending growth and lower costs, partially offset by lower volumes. The increase in guest spending was driven by higher average ticket prices at our theme parks and cruise line. Lower costs reflected decreases in labor and marketing costs from efficiency initiatives. Costs also benefited from lower infrastructure costs due to timing and a decrease in fuel costs. These decreases were partially offset by higher depreciation, labor and other cost inflation and costs associated with new attractions. The decrease in volumes was due to lower attendance, partially offset by higher occupied room nights. ​

So, revenue is up in the domestic parks, hotel occupancy is up, and operating costs are down. Slightly less attendance, but fluctuations are normal... it can't always be an increase.

So I'm not sure what's with all the hand-wringing. Everything is going pretty darn well.

 

[Galaxy Defender]

I appreciate your thoughts, but I have to say, a lot of what you posted seems to be inaccurate.

Here's the official Parks attendance/revenue report from this past quarter, posted August 9th, 2016:

Parks and Resorts revenues for the quarter increased 6% to $4.4 billion and segment operating income increased 8% to $994 million. Operating income growth for the quarter was due to an increase at our domestic operations, partially offset by a decrease at our international operations. Results were adversely impacted by the absence of the Easter holiday, which occurred in the third quarter of the prior year compared to the second quarter of the current year. ​

Higher operating income at our domestic operations was due to guest spending growth and lower costs, partially offset by lower volumes. The increase in guest spending was driven by higher average ticket prices at our theme parks and cruise line. Lower costs reflected decreases in labor and marketing costs from efficiency initiatives. Costs also benefited from lower infrastructure costs due to timing and a decrease in fuel costs. These decreases were partially offset by higher depreciation, labor and other cost inflation and costs associated with new attractions. The decrease in volumes was due to lower attendance, partially offset by higher occupied room nights. ​

So, revenue is up in the domestic parks, hotel occupancy is up, and operating costs are down. Slightly less attendance, but fluctuations are normal... it can't always be an increase.

So I'm not sure what's with all the hand-wringing. Everything is going pretty darn well.

Park attendance was down 4% domestically but up at DL. I have estimated due to these numbers that WDW was down 7-8% in attendance after being down 2% in Q1. DL also said they provided the increase in profits.

The numbers in the report are combined. DL is not happy with WDW and provided their rosy numbers to show they are providing all the good numbers. You can find more about this with links and quotes in the Attendance Decline thread.

 

[UniversalCityFL]

Park attendance was down 4% domestically but up at DL. I have estimated due to these numbers that WDW was down 7-8% in attendance after being down 2% in Q1. DL also said they provided the increase in profits.

The numbers in the report are combined. DL is not happy with WDW and provided their rosy numbers to show they are providing all the good numbers. You can find more about this with links and quotes in the Attendance Decline thread.

Got it - thanks for the clarification!