As it opens new attraction, Disney prepares to cut capital spending

[Ian]

The hotels help a lot, WDW charges 2 or 3 times what offsite hotels pay and people choose to stay on property. These hotels help pay for a large portion of the things you mentioned. There's a lot more things to spend your money on at WDW than there are at DLR, I have no idea, but I would be the profit margin at both resorts are nearly the same.

Actually the margin on hotels is terrible. That's why they love DVC ... puts heads in beds, but all the overhead is shouldered by the owners. It's actually genius from a business standpoint.

The hotels are only there so they can sell you overpriced food and merchandise. They make a bit off of them, but they are certainly not the biggest money-maker for WDW.

They make the big money on the food and goodies. The mark-up on their food is insane and ditto the merch. They sell you t-shirts ... t-shirts ... for like $45.

Sounds kinda like Ralph Lauren lol

[March Hare]

Isn't that the beauty of DVC? All they need to do is sell it, Members take care of the rest. Disney would never just buy back a contract out of the goodness of their hearts, the only way they would get it back is through a foreclosure, and they can somewhat control that if they really wanted to.

The initial build is covered by the purchase pric, and upkeep is paid for through dues. If non-members top staying in themI assume they can just raise the dues.

The only real way out of the contract is just just let it lapse in 2042 (or whenever your contract expires).

I agree that the DVC properties that have been sold will be a constant cash flow but with every DVC they build they seem to sell them slower and less then they expect. So they run the risk of over building which would mean they would have to pay for the upkeep and that would take more money away from the parks. The resale could become another problem because of the fact that they do sell for so much less than Disney.

[DizneyFreak2002]

I agree that the DVC properties that have been sold will be a constant cash flow but with every DVC they build they seem to sell them slower and less then they expect. So they run the risk of over building which would mean they would have to pay for the upkeep and that would take more money away from the parks. The resale could become another problem because of the fact that they do sell for so much less than Disney.

I really think we are reaching over saturation... If the plans come to realization, then that means Grand Floridian (which is already in the middle of construction), Polynesian, and maybe 2 new hotels (on the site where the originally planned Venetian hotel was to be built and still possibly at Fort Wilderness, those plans aren't cancelled yet just delayed until other projects are done first)... And then, there is that rumor of a DVC attached to World Showcase (which I hate the idea and hope the talk is just that talk)... I don't want to leave out another tower at the Contemporary, but I really haven't heard much talk about that... Seems more like a blimp on the screen than something in the pipeline...

[PharmD]

The article does mention substantial reduction in spending but come one we are talking about 1 billion dollars. That's alot of dough. And if my memory serves me correct that's the most money spent in a 5 year period for Disney that I can remember. And all of that during a time that the economy has been <snip>. While I will admit that my last trip we did notice some slippage in the quality of the Disney experience, some minor cosmetic things in the room, Disney by far is light years ahead of Universal. I mean come on the quality and "atmosphere" at Universal can't even come close. The quality at Universal is way behind Disney and unless something catastrophic occurs I can't ever see anybody passing Disney. And in my book there is no better value than a Disney trip.

[Jared]

I really think we are reaching over saturation... If the plans come to realization, then that means Grand Floridian (which is already in the middle of construction), Polynesian, and maybe 2 new hotels (on the site where the originally planned Venetian hotel was to be built and still possibly at Fort Wilderness, those plans aren't cancelled yet just delayed until other projects are done first)... And then, there is that rumor of a DVC attached to World Showcase (which I hate the idea and hope the talk is just that talk)... I don't want to leave out another tower at the Contemporary, but I really haven't heard much talk about that... Seems more like a blimp on the screen than something in the pipeline...

That said, we still haven't reached the breaking point for DVC. A friend of mine, for instance, tried to book a room using her points to attend the Intercot 15th anniversary party in October. Everything was sold out pretty much everywhere, outside of a few undesirable rooms at Saratoga Springs.

Just saying.

[Mrs Bus Driver]

Well, honestly, what do you expect? They just spent $6 BILLION in five years in the U.S. $6 BILLION. That kind of spending cannot continue indefinitely. That's how companies go bankrupt. There has to be a balance of spending and return of investment.

None of us here can even fathom that kind of money, so who are we to moan and groan that this spells the end of Disney? That's ridiculous.

Look at your OWN household spending. I don't know about you, but if I have a month where I spend a gross amount over and above what is "normal", I cut back for a few months after that to bring everything back into balance. Companies have to do the same thing.

And, honestly, I don't understand any of the anger here. DIsneyland just completed a massive overhaul of DCA, and spent quite a bit of money at Disneyland park as well refurbishing and retooling Main Street and the Matterhorn. That park has finally gotten the attention it was lacking for a LONG time. For years and years, WDW got all the attention and it only makes sense that they want to build up the West coast parks to be more of a vacation destination. It stands to reason that WDW will have its turn with "improvements" in the coming years. They are already spending a fortune at MK, and I have no doubt that the final product will be worth the time and money spent.

And, as much as I agree that Universal is making a huge push to be competitive, I really don't think, in the long run, that they will outdo DIsney. They never have yet. The kind of money that they are spending to make improvements in the parks cannot be maintained. Universal has a history of opening attractions and then just letting them turn stale. They use movies for their rides that don't have "staying power" and the attractions become irrelevant rather quickly (in terms of theme park ride shelf life). I mean, come on. Look at how many rides have been "rethemed" at Universal over the years, yet the actual experiences don't change too much. Despicable Me is going to be IRRELEVANT 5 years from now, same as Jimmy Neutron. Shrek is kinda out, ditto Twister, Waterworld, Men In Black, etc. Universal doesn't even only use its own movie properties. Most of the rides are based on movie licenses obtained by Universal. Universal can make claims that they have "all new" this or that, but really, it's just replacing one movie franchise with another when they realize NO ONE wants to ride something based on a movie/show that NO ONE has heard of or cares about. Even the Harry Potter land was a RE THEME of an area at IoA that was a failure.

You can be as critical of DIsney as you want. On the other hand, when one tries to make claims that because Universal has done ONE thing right in it's park history by choosing a popular franchise with staying power and built a land to house it, and that makes them SUPERIOR in the long run, well, that's just short sighted.

DIsney will be fine. Universal will (probably) do well enough in the future to stay competitive. But, the truth is, DIsney doesn't HAVE to try as hard as Universal because they simply have a superior product and always have.

Disney is not always right. They make a LOT of stupid decisions. However, sometimes, they do hit the nail on the head and pull something brilliant out of their hats. Carsland is going to be popular for a LONG LONG time. That movie is already 6 years old and kids are STILL going crazy for it. Cars merchandise sales ALONE have made over $8 BILLION for Disney. That's what you call a winner.

Sounds like a lot of hating on Disney for what they are doing in CA. Why not replace the badmouting with a trip over there to see what it's all about? You might come away with a bit more appreciation with what Disney has done.

You said it better then I could. Disney isn't perfect but they finally fixed DCA and those guys in the front office want to keep their jobs so yeah they have to keep the investors happy. I know that I will eventually make a trip to CA and so will a lot of others. Win/win for Disney. And if you want them keeping up maintenance on the rides we all love so much (Splash Mountain comes to mind) then they are going to quit spending so freely else where. Okay my now I will get down off my

[Mrs Bus Driver]

Actually the margin on hotels is terrible. That's why they love DVC ... puts heads in beds, but all the overhead is shouldered by the owners. It's actually genius from a business standpoint.

The hotels are only there so they can sell you overpriced food and merchandise. They make a bit off of them, but they are certainly not the biggest money-maker for WDW.

They make the big money on the food and goodies. The mark-up on their food is insane and ditto the merch. They sell you t-shirts ... t-shirts ... for like $45.

Sounds kinda like Ralph Lauren lol

I expect high prices when I go to a resort. Yes that is the way they make money. Have you been to a movie lately. $4.50 for a box of .89 cent candy (and you know the stores are making a profit) and don't get me started on the cost of popcorn. All I'm saying is if you want to cut costs on a vacation bring your own food otherwise be prepared to pay. Yes they are a business and they are in business to make money. IF it costs too much or people are bored with it profits will go down and Disney will deal with it or go broke. Just my

[DizneyFreak2002]

That said, we still haven't reached the breaking point for DVC. A friend of mine, for instance, tried to book a room using her points to attend the Intercot 15th anniversary party in October. Everything was sold out pretty much everywhere, outside of a few undesirable rooms at Saratoga Springs.

Just saying.

Yep... just like we haven't reached the breaking point on the price of theme park tickets, but that day is coming too...

I think, the reason they put Fort Wilderness on the back burner is because they know Poly will be very popular and will sell well, and a DVC attached to the World Showcase would probably sell well too... A new resort is a little riskier...

You are right though, we aren't at that saturation point yet...

[DizneyFreak2002]

The article does mention substantial reduction in spending but come one we are talking about 1 billion dollars. That's alot of dough. And if my memory serves me correct that's the most money spent in a 5 year period for Disney that I can remember. And all of that during a time that the economy has been <snip>. While I will admit that my last trip we did notice some slippage in the quality of the Disney experience, some minor cosmetic things in the room, Disney by far is light years ahead of Universal. I mean come on the quality and "atmosphere" at Universal can't even come close. The quality at Universal is way behind Disney and unless something catastrophic occurs I can't ever see anybody passing Disney. And in my book there is no better value than a Disney trip.

I'll have to disagree... I used to bash Universal unmercifully... But they have for sure caught up to Disney and in some places surpassed them... And the next 5 years, Universal will be on more even footing with Disney... Just don't look at attendance, look at the big picture... Universal isn't the "six flags trash park" Disney fans think it is, or want it to be...

[Aurora]

I'll have to disagree... I used to bash Universal unmercifully... But they have for sure caught up to Disney and in some places surpassed them... And the next 5 years, Universal will be on more even footing with Disney... Just don't look at attendance, look at the big picture... Universal isn't the "six flags trash park" Disney fans think it is, or want it to be...

Totally agree with you here. Our first trip to Universal was in 2008 and we were pleasantly surprised by the rides, the atmosphere and the level of service. Went back last year especially for Harry Potter, stayed on site at the Royal Pacific, and again, loved everything. Not only that, but last year we felt the CMs at Universal surpassed those at Disney for friendliness and service.

We're now at a point where if we don't visit Universal at some point on our vacation, the kids will be disappointed. And that is at least one day (and a hotel night) we don't spend at Disney parks.

[Jared]

Totally agree with you here. Our first trip to Universal was in 2008 and we were pleasantly surprised by the rides, the atmosphere and the level of service. Went back last year especially for Harry Potter, stayed on site at the Royal Pacific, and again, loved everything. Not only that, but last year we felt the CMs at Universal surpassed those at Disney for friendliness and service.

We're now at a point where if we don't visit Universal at some point on our vacation, the kids will be disappointed. And that is at least one day (and a hotel night) we don't spend at Disney parks.

Absolutely. Objectively, there's no way you could look at Universal without concluding that it has caught up -- and in some ways surpassed -- what Disney offers in Florida. (This is not the case in California, and by all accounts, that will continue to be the case.)

Listen, I am a huge Disney loyalist. I don't really want to sacrifice a day at WDW for Universal. But there is too much good going on over there to be ignored.

That said, I may postpone my next visit until after Potter phase two is complete. Tickets there are expensive, especially since I already have the Disney annual pass. (I may not renew, however, as am I hoping to take a trip to Disneyland in 2013.)

[DizneyFreak2002]

Totally agree with you here. Our first trip to Universal was in 2008 and we were pleasantly surprised by the rides, the atmosphere and the level of service. Went back last year especially for Harry Potter, stayed on site at the Royal Pacific, and again, loved everything. Not only that, but last year we felt the CMs at Universal surpassed those at Disney for friendliness and service.

We're now at a point where if we don't visit Universal at some point on our vacation, the kids will be disappointed. And that is at least one day (and a hotel night) we don't spend at Disney parks.

And you are only one family taking one day out of your Disney trip... Imagine how many other families are doing the same, and maybe for 2 or 3 days?? And that is just for Universal... SeaWorld, LegoLand, Busch Gardens, even Kennedy Space Center pull people away for a day... I know people who take 2 days and head to the coastal beaches... Last year, Universal got 3 days from me... Sadly, SeaWorld didn't get any...

Universal is getting a massive make over... Comcast really truly believes in the parks... The money being reinvested will really make Universal a destination, especially once Potter expansion opens up... The two things they lack is a value and moderate hotel... At least one of those may be on the horizon though, with a rumored 4th onsite hotel and a water park which may be part of the hotel theme... Then say bye bye to Wet 'n' Wild...

I said it before, I'll say it again, Disney fans should want Universal to succeed... Universal's success is good for everybody...

[wdw_bound]

I'm going a little off track here.

I agree that Universal has done a wonderful job with TWWoHP and that someone there was very smart to get the rights to the attractions. And they are very smart to keep pursing Potter themed lands.

But the writer in me says that rather than the single most significant development in theme parks, JK Rowling created books that changed our cultural landscape in way that hadn't been done for a long time.

She got kids and parents reading and immersed in a world that was so real that people would show up at bookstores at midnight for the release of the newest edition. And the movies fanned the flames. There was and still is such an enormous in Potter, that Universal would have almost had to try to mess it up for it not to be a success.

Universal executed the ideas beautifully, but they executed JK Rowlings vision not Universal's vision. We wouldn't even by discussing in Universal is better than WDW if not for JK Rowling.

Okay soapbox away.

I absolutely agree with this!

Our DD was old enough to read the first book just before #4 came out. We read Sorcerer's Stone together, and I quickly became hooked, as did DH. Not only did we pre-order the rest of the series as soon as possible (and then stalked the UPS guy mercilessly), we actually ordered 2 each time because we couldn't agree on who (me or DH) should get to read it first. DD was equally hooked. One of the joys of having had DS so much later is that we ALL get to experience the joy of the story all over again, as he is just now old enough to read #1.

Thank you, Ms. Rowling, for creating such a wonderful literary franchise!

[Mousemates]

..... While I will admit that my last trip we did notice some slippage in the quality of the Disney experience, some minor cosmetic things in the room, Disney by far is light years ahead of Universal. I mean come on the quality and "atmosphere" at Universal can't even come close. The quality at Universal is way behind Disney and unless something catastrophic occurs I can't ever see anybody passing Disney.

My first thought when I read your statement was "I wonder how long its been since they spent time at Universal." I will agree that it isn't there yet, but I will disagree with "can't even come close"...especially when they have one of the most flawlessly themed, visually stunning areas in any themepark...not to mention that its signature ride has no rival anywhere in WDW.

WDW is still an annual trip for us...and likely will be for the forseeable future...but universal has genuine appeal for us to and we will likely be taking a day or two there every couple of years...and if my adrenaline junkie son had his way, the # of trips there would increase, while visits to WDW would decrease.

[Ian]

I expect high prices when I go to a resort. Yes that is the way they make money. Have you been to a movie lately. $4.50 for a box of .89 cent candy (and you know the stores are making a profit) and don't get me started on the cost of popcorn. All I'm saying is if you want to cut costs on a vacation bring your own food otherwise be prepared to pay. Yes they are a business and they are in business to make money. IF it costs too much or people are bored with it profits will go down and Disney will deal with it or go broke. Just my

I think you my have read my post without reading the post I quoted. The point had nothing to do with the price of snacks or t-shirts. It was a comment on the significant revenue streams for the parks when it comes to margin.

[Mrs Bus Driver]

I think you my have read my post without reading the post I quoted. The point had nothing to do with the price of snacks or t-shirts. It was a comment on the significant revenue streams for the parks when it comes to margin.

My apologies I went back and read your post. So sorry I miss read what you were saying.

[March Hare]

The article does mention substantial reduction in spending but come one we are talking about 1 billion dollars. That's alot of dough. And if my memory serves me correct that's the most money spent in a 5 year period for Disney that I can remember. And all of that during a time that the economy has been <snip>. While I will admit that my last trip we did notice some slippage in the quality of the Disney experience, some minor cosmetic things in the room, Disney by far is light years ahead of Universal. I mean come on the quality and "atmosphere" at Universal can't even come close. The quality at Universal is way behind Disney and unless something catastrophic occurs I can't ever see anybody passing Disney. And in my book there is no better value than a Disney trip.

While I am glad they spent the $6 billion on the upgrades. Most of that money was spent at DCA and not WDW which is where they have the most competition and yes Universal is a major threat. Your statement about minor cosmetic problems is an understatement, a missing hand is not minor nor is nonworking animatronics. I guess my problem is if they can spend $6 billion and not fix the "minor" problems then how are they going to get fixed when they cut spending. The fact that they can fix DCA where they have significantly less competition and leave WDW to get less of a referb. Lets face it Fantasyland is more of a face lift not a major new section like Carsland and the Avatar section of AK sounds like it is going to be a joke. So I do think Universal will catch up and surpass sooner then most people think as long as TDO continues to neglect WDW. I would like to know when good enough became good enough for Disney they always use to go above and beyond.

[Mrs Bus Driver]

Just want to add something I observed many years back at DL. It was the first time I took my kids there and it was while they were building DCA. What I noticed was that maintenance and up keep on DL was terrible. I was so disappointed by how bad it looked. Just didn't live up to my memories. However my kids didn't notice, they were just glad to be there. Any way it was a few years before I went back, first thing I noticed was how good DL looked. I can't say this for sure but I believe while they were working on DCA they made cut backs to DL. Don't know if this holds up or not but maybe the same is true for WDW and when the work is done else where things will improve.

[March Hare]

Just want to add something I observed many years back at DL. It was the first time I took my kids there and it was while they were building DCA. What I noticed was that maintenance and up keep on DL was terrible. I was so disappointed by how bad it looked. Just didn't live up to my memories. However my kids didn't notice, they were just glad to be there. Any way it was a few years before I went back, first thing I noticed was how good DL looked. I can't say this for sure but I believe while they were working on DCA they made cut backs to DL. Don't know if this holds up or not but maybe the same is true for WDW and when the work is done else where things will improve.

I hope you are right but the upkeep at WDW has been bad longer than the referbs have been going on. As a matter of fact they haven't even come up with a way to fix the yeti yet and that has been years. They seem to focus on the west coast more than WDW which should be there showcase. After all it was where Walt believed all his ideas could come to be.

[DizneyFreak2002]

Just want to add something I observed many years back at DL. It was the first time I took my kids there and it was while they were building DCA. What I noticed was that maintenance and up keep on DL was terrible. I was so disappointed by how bad it looked. Just didn't live up to my memories. However my kids didn't notice, they were just glad to be there. Any way it was a few years before I went back, first thing I noticed was how good DL looked. I can't say this for sure but I believe while they were working on DCA they made cut backs to DL. Don't know if this holds up or not but maybe the same is true for WDW and when the work is done else where things will improve.

DL went through that stage, you are correct... Want to know what it took to improve the park??? Canning the inept management team in TDA... Unless TDO gets the boot, things will not change...