Some interesting comments in this article . . . thought I’d share for discussion!
Here is the link: Jim Hill : Monday Mouse Watch : The Winter of Disney’s Discontent
But I cut and pasted below! :happy:
Monday Mouse Watch : The Winter of Disney’s Discontent
With late 2008 / early 2009 projected to be an extremely challenging time for the WDW resort, Mouse House managers are already getting aggressive about cost containment. Jim Hill details some of the changes that are now being made around property
It’s been 10 days now since WDW officials revealed that they plan on closing the Pleasure Island portion of Downtown Disney. And while PI fans remain up in arms about this decision (To date, over 4800 of them have already signed that online “Save the Adventurers Club” petition) … I think it’s important that people see the forest through the trees here.
I mean, yes, it’s sad that the 300 people who currently work at Pleasure Island will soon be losing their jobs (Though Walt Disney World Casting will be working with these PI cast members to place them into similar roles around property after September 27th). But at the same time, it’s important to understand that the closing of this part of Downtown Disney is just one of a number of cost-savings measures that Mickey is now putting into place in anticipation of a projected slowdown at WDW this fall & winter.
Take – for example – Liberty Tree Tavern dropping character dining as January 5, 2009. Mouse House officials will tell you that they’re making a change at this Magic Kingdom eatery because the Guests specifically asked for less character dining. Which (pardon my French here) is total BS.
According to the company’s own surveys, people who visit Disney Parks & Resorts absolutely love the characters. It’s one of the main reasons that they hold the Disney Parks in far higher regard than all of the other theme parks out there. The many opportunities that Guests have while they’re on property to interact with the characters.
So – if anything – WDW visitors are asking for more character dining, not less. So why then is the Magic Kingdom cutting character dining at the Liberty Tree Tavern? It’s simple, really. By taking Mickey, Minnie, Donald, Goofy & Pluto out of that restaurant, Disney will no longer have to pay those 10 cast members who portray the characters at Liberty Tree Tavern each night.
More to the point, once this change is made, Guests will no longer linger at the Liberty Tree Tavern like they used to (So that they can then get their pictures with the characters and/or have their kids collect Mickey & Co.'s autographs). So with fewer reasons to dawdle over dinner … Well, that’s going to allow this restaurant to cut its table turn time. Which will then allow the Liberty Tree Tavern to seat a few extra guests every night.
So – by cutting the costs involved with having characters in that restaurant as well as seating a few extra Guests each night – this change will (in theory, anyway) make the Liberty Tree Tavern a much more profitable eatery.
Finding new ways to cut costs as well as increase profits … That’s Mickey’s new mantra. Particularly since Mouse House managers are anticipating that – what with the higher costs of jet fuel & heating oil – far fewer Guests will be flying on down to Disney this winter. Particularly from those crucial WDW feeder markets like Chicago, Philadelphia and Boston. Where people will now be using the income that they once set aside for vacations to help heat their homes.
This is why – in anticipation of these coming tough times – Disney’s being proactive. They’re instituting all sorts of cost savings measures around property these days. Doing everything from limiting the amount of overtime that’s available to WDW cast members to removing some of the less popular / more expensive items from the menus of the resort’s buffet restaurants.
Mind you, WDW’s restaurants aren’t the only business unit that are being pressured to help make up this anticipated financial shortfall. Managers all over property are being urged to come up with new ways to cut costs and/or increase cash flow. Which is why over at Disney’s Wide World of Sports complex (soon to be rebranded as the ESPN Sports Center), Guests who used to be able to park for free should soon expect to pay $5.00 to leave their cars in the paved portion of that lot (though parking in the unpaved lot in the very back of the Sports complex will still be free).
Every possible avenue for cost cutting / increasing revenues at the resort is now being explored. Take – for example – the birthday cakes that you can request at WDW’s sit-down restaurants. These six inch beauties (Which Disney charged $12.50 for) used to be baked right on property over at the Contemporary and the Boardwalk.
Well, no longer. In order to save money, the Mouse has now farmed out production of WDW’s birthday cakes to Sara Lee. Which Disney is using an excuse to jump the price of these cakes from $12.50 to $21.00.
Okay. I know. Some of the stuff mentioned in today’s article seems kind of ridiculous. Greedy, even. But let’s remember that Walt Disney World isn’t actually some magical fairyland. But – rather – a business. More importantly, a publicly held company with stockholders that expect to get a return on their investment.
Which brings us back to the closing of PI. You see, one of the main reasons that Pleasure Island is being closed down / renovated is that this part of Downtown Disney wasn’t really living up to its financial potential. By only being open from 7 p.m. to 2 a.m. … Well, that’s only 7 hours that those nightclubs could be making money for the Mouse. Now contrast that with the rest of DTD. Which is open 10 a.m. to midnight. That part of this dining, retail and entertainment district is open to WDW Guests 14 hours a day. Which is why Downtown Disney is second only to the Magic Kingdom when it comes to the amount of cash that it generates for the company.
So these changes that are now in the works for Pleasure Island … They’re really about getting this portion of DTD to live up to its full financial potential. More to the point, by filling all of these newly open spots on PI with third party contractors, Disney will now limit its risk as well as increase profits.
You see, in order to set up shop at Downtown Disney, a new tenant must first front the cost of all design & construction work on their new store or restaurant. They must also agree to pay rent as well as hand over a certain portion of their daily receipts to Disney. And the beauty part of this arrangement (at least from the Mouse’s point of view) is that the people who’ll be working at all of these new shops & restaurants won’t be on WDW’s payroll anymore. So it’s the companies who actually run these establishments who’ll then have to pay these employees’ salaries, cover their health benefits, etc.
“So what’s Disney going to do with all of the cash that it’s now saving through these cuts & cost containment moves?” Well, believe it or not, the company will be taking this money and aggressively reinvesting in the WDW resort. Doing things like redecorating the rooms at Disney’s Caribbean Beach Resort (With 900 units recieving a “Pirates of the Caribbean” -themed makeover and 300 rooms being redone in a “Finding Nemo” motif. Which will then give Disney an on-property response to that uber-popular Nickelodeon Family Suites by Holiday Inn hotel over on 536). With an eye toward the future, when the credit crunch & the fuel crisis are finally over. And people will once again be thinking of a Disney World vacation as something they can actually afford.
Mind you, not all of the future plans that Mickey makes for the WDW resort wind up paying off. Take – for example – those renovations that were recently made to Disney’s Fort Wilderness Resort & Campground. The Mouse spent tens of millions of dollars on expanding campsites & widening roadways all over that campground. So that Fort Wilderness could then be able to better accommodate those enormous Class A rigs that campers had been favoring lately.
This was – of course – before before the price of diesel fuel hit $5.00 and people then began dropping these 45-foot-long mobile homes like hot rocks.
Which will make it difficult for Disney to get a quick return on its recent reinvestment in Fort Wilderness. But – then again – you can’t always have your $21.00 cake and eat it too.
But what do you folks think? Can you now understand why Disney has to be proactive about cost containment, given the tough times that lie ahead for the WDW resort? Or are you more bothered by the idea that many of the changes discussed in today’s article aren’t temporary? But – rather – permanent changes to the way Disney World will do business from here on in?