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

[ChipNDale79]

Ohh, and yea... unless it is a DVC project, WDW has NOTHING in the can after new Fantasyland... (other than maybe Avatar)..

Sure they do, the great FastPass + system, where we are going to be scheduling our bathroom breaks in advance soon.

[AgentC]

AgentC, you say Universal didn't create their own world, they created JK's world.. True.. And what a world she created (not perfect, but WOW)... Let me ask you, people want a Star Wars land right??? Whose property would that be based off of??? Surely not Disney's since they don't own nor did they create Star Wars... If they ever did a Star Wars land, they would have to recreate George Lucas' vision, not their own... I have no doubt it would be great, but let's not mistake here that Disney would be creating their own world... They won't...

BTW, JK wanted Potter in Disney... She went to Disney... Disney all but had the rights wrapped up... UNTIL, they refused to build HER WORLD... They wanted one little attraction tucked away in one of their theme parks... She wanted her world to be brought to life.. She also wanted control over her own property (don't blame her, I'd want control over what I created too)... Disney, nah, they wanted no part of that... I remember vividly that Universal execs all but conceded Potter to Disney while they looked toward Lord of the Rings... In fact, one of their upper managers was on record saying Disney beat them on Potter... Then, a week later, BAM Universal had it...

.

I think I conceded that didn't I? Maybe just not very well.

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.

Yes, the Universal executives made the right decision doing what JK wanted and Disney should have (or at least in my opinion should have.)

And I would be fine with Disney creating someone else's world or creating their own world. Just sometimes people take JK out of the equation on TWWoHP.She is a writer who I immensely respect and a very important part of TWWoHP, so I wanted to give credit where credit was due.

[Ian]

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.

I agree with Nat on this. Did anyone really think they'd plow another $6b into the parks after this burst of development? Come on ... they can't keep spending at this rate. They have to have some down time to reap the benefits of the money they've invested in the parks.

We can endlessly debate whether they will or not, but that's the way they're approaching at and at least from a pure business standpoint it's the correct approach.

Seeing them raise the bar should make you feel confident that the Disney parks will not settle for their parks becoming "stale."

Eh ... I don't agree here. DL and WDW are worlds apart (no pun intended) in terms of their approach to spending and guest sat. I don't think you can take what does/does not happen in DL and translate it over to WDW. It's a totally different leadership team with very different priorities.

[BrerGnat]

Eh ... I don't agree here. DL and WDW are worlds apart (no pun intended) in terms of their approach to spending and guest sat. I don't think you can take what does/does not happen in DL and translate it over to WDW. It's a totally different leadership team with very different priorities.

Fair enough. Perhaps TDO will take a page out of the book that Glendale is working from, and stop with the "Interactive this and that" garbage and actually develop something worthy of financial investment.

[Jared]

[QUOTE=Ian;2275340]I agree with Nat on this. Did anyone really think they'd plow another $6b into the parks after this burst of development? Come on ... they can't keep spending at this rate. They have to have some down time to reap the benefits of the money they've invested in the parks.

We can endlessly debate whether they will or not, but that's the way they're approaching at and at least from a pure business standpoint it's the correct approach.
I generally agree with you here, Ian. I don't think we cannot expect Disney to spend the sort of money they spent at California Adventure anywhere else, at least for the foreseeable future. Anybody who thinks otherwise is fooling himself.

But I can ignore the fact that Hollywood Studios desperately needs a DCA-style makeover. Or that Animal Kingdom needs to be finished. Or that Epcot's Future World is a freaking train wreck. I can ignore all of that if Disney would just keep what they have working. I don't consider that unnecessary or "extra" expenditures. That's the cost of doing business. Whatever capital Walt Disney World has to spend at this point should go toward making sure that 99.9% of guests who float through Splash Mountain see it at an appropriate show quality. That goes for every attraction in the park.

[DizneyFreak2002]

Sure they do, the great FastPass + system, where we are going to be scheduling our bathroom breaks in advance soon.

Ohhh you... I'm going to have to preface each post with BE PREPARED TO BOOK YOUR BATHROOM BREAKS 180 DAYS OUT... LoL...

[DizneyFreak2002]

Sure they do, the great FastPass + system, where we are going to be scheduling our bathroom breaks in advance soon.

I think I conceded that didn't I? Maybe just not very well.



Yes, the Universal executives made the right decision doing what JK wanted and Disney should have (or at least in my opinion should have.)

And I would be fine with Disney creating someone else's world or creating their own world. Just sometimes people take JK out of the equation on TWWoHP.She is a writer who I immensely respect and a very important part of TWWoHP, so I wanted to give credit where credit was due.

Maybe I missed ya saying that... And you are right, they do take JK out of the equation... I try to give Universal credit for building HER world... I sometimes fail at that...

So, yea, i agree with you.. JK does deserve the credit...

[Ian]

But I can't ignore the fact that Hollywood Studios desperately needs a DCA-style makeover. Or that Animal Kingdom needs to be finished. Or that Epcot's Future World is a freaking train wreck. I can ignore all of that if Disney would just keep what they have working. I don't consider that unnecessary or "extra" expenditures. That's the cost of doing business. Whatever capital Walt Disney World has to spend at this point should go toward making sure that 99.9% of guests who float through Splash Mountain see it at an appropriate show quality. That goes for every attraction in the park.

I agree, but TDO does not. And you know why as well as I do ... because people keep showin' up and they keep forkin' over the big bucks to do so.

They may ramp up spending again and try and address some of those issues you mentioned, but they'll spread the costs out over a long period of time so it's not unpalatable to the Wall Street types.

[DizneyFreak2002]

I agree with Nat on this. Did anyone really think they'd plow another $6b into the parks after this burst of development? Come on ... they can't keep spending at this rate. They have to have some down time to reap the benefits of the money they've invested in the parks.

We can endlessly debate whether they will or not, but that's the way they're approaching at and at least from a pure business standpoint it's the correct approach.

Eh ... I don't agree here. DL and WDW are worlds apart (no pun intended) in terms of their approach to spending and guest sat. I don't think you can take what does/does not happen in DL and translate it over to WDW. It's a totally different leadership team with very different priorities.

Honestly Ian, I don't think anyone here is expecting 6 billion to be dumped yearly... The 6 billion HAD to be spent to fix the mess that DCA was from the start...

The issue really should be HOW they are spending it, and HOW they are going to spread out what they spend... Again, DL has two huge E-tickets getting green light and a 3rd huge project (a rumored 3rd gate) darn near close... So, say they spend 1 billion or even 1 and a half billion, how much is going to be allocated to WDW for expansion/growth?? Nothing... DL is getting the wonderful toys... WDW??? more DVC.. Which further proves how they view WDW... As a real estate investment... The theme parks??? A necessary evil they can continue to dumb down because people drool over peanuts imbedded into the walkway...

[DizneyFreak2002]

Fair enough. Perhaps TDO will take a page out of the book that Glendale is working from, and stop with the "Interactive this and that" garbage and actually develop something worthy of financial investment.

No.. TDO will never take a page out of the playbook in Glendale unless Glendale drops the hammer on them, like they did with Fantasyland and Star Tours... TDO's funding is going all to NextGen (data mining is all this NextGen is) and the interactive queue garbage... THAT is how their money is being spent.. Oh and more DVC... The only way TDO will change is by cleaning house...

THIS is why WDW fans are becoming jaded, and ARE jaded... Has nothing to do with negativity... Has everything to do with poor poor management... And Walmarting (some people even say toddler-a-zation of WDW, I'll stick with Walmarting) over the last 10 years...

[Aurora]

Shhhhhh can't tell this to WDW fans... They won't believe you... Wait, you quoted an article?? Got to be proof Rasulo said that, right??? I mentioned this last week as I have a Tweet from Jason Garcia himself saying Rasulo said this and was told there was NO WAY Rasulo would ever say something like that...

WDW is now the real estate arm of the company... If it isn't a DVC project, then it is nothing... And forget Avatar... Budget has already been cut and the scope of the project has been watered down... Meanwhile, down the street in Universal, major things are being fast tracked... MAJOR THINGS...

Rest on your laurels WDW... you'll soon find out you are WAY behind the game and can not catch up....

Nit-picking a little here, but what you actually said was:

"Jason Garcia has mentioned that Jay Rasulo is on record saying after FLE, NO MORE MONEY SPENT ON U.S. theme parks... I did confirm that with him via twitter.. Jason Garcia writes for the Orlando Sentinal and was in a conference with Rasulo when Rasulo uttered those words..."

And in the article it stated Rasulo said "We should be coming down substantially — substantially — in domestic spending." The rest of the article guesses it will spend $1 to $1.5 billion in domestic parks in 2014.

And at end of article, another analyst says "I don't think there is any messaging from above, from Bob Iger or Jay Rasulo, that somehow the parks need to hold back on spending," he said.

I'm surely not tearing my clothing and putting on sackcloth.

[joonyer]

What's the biggest difference between Universal/IOA and Walt Disney World?

Land. Universal has very little land surrounding its theme parks in Orlando. WDW already owns tens of thousands of acres in undeveloped land surrounding 4 of the most famous (their current condition notwithstanding) theme parks in the world.

If Universal wants to increase revenue/profits in Orlando, its best option is to add new attractions, and make their parks more popular.

But the most cost effective option for Disney to increase revenue/profits at WDW is to sell land. Since they don't want to actually part with title to the land, thus avoiding the tacky development of the property by third parties (a la DisneyLand), they are renting it instead. Thus the proliferation of DVC properties. Expect more of the same in the future. It's easy and makes huge profit margins compared to investing in really expensive new attractions.

On the other hand, What does DisneyLand and California Adventure have in common with Universal Orlando. You guessed it; very little land surrounding the parks. Disney has no other choice but to invest in the parks themselves if they want to increase revenue there.

I don't know if it was exactly what Walt foresaw when he chose to buy so much land in Florida, (I know he wanted to avoid tacky cheesy over-development across the street from the parks), but the current management certainly sees gold in that there swamp!

[Jared]

I agree, but TDO does not. And you know why as well as I do ... because people keep showin' up and they keep forkin' over the big bucks to do so.

They may ramp up spending again and try and address some of those issues you mentioned, but they'll spread the costs out over a long period of time so it's not unpalatable to the Wall Street types.

You're right, Ian, but wouldn't you agree this is a shortsighted approach? Eventually, people will take notice. It started with the crazy diehard fans, then the relatively normal repeat visitor. Eventually, if this keeps going the way it's going, there will be a time when even Mortimer M. Mouse, first-time visitor from Estonia, is disappointed by the offerings.

I still say that maintenance and upkeep are the cost of doing business. Whether the Walt Disney Company wants to be in the theme-park business (in Florida anyway) is up for debate.

[DizneyFreak2002]

Nit-picking a little here, but what you actually said was:

"Jason Garcia has mentioned that Jay Rasulo is on record saying after FLE, NO MORE MONEY SPENT ON U.S. theme parks... I did confirm that with him via twitter.. Jason Garcia writes for the Orlando Sentinal and was in a conference with Rasulo when Rasulo uttered those words..."

And in the article it stated Rasulo said "We should be coming down substantially — substantially — in domestic spending." The rest of the article guesses it will spend $1 to $1.5 billion in domestic parks in 2014.

And at end of article, another analyst says "I don't think there is any messaging from above, from Bob Iger or Jay Rasulo, that somehow the parks need to hold back on spending," he said.

I'm surely not tearing my clothing and putting on sackcloth.

Semantics... You know and anyone with common sense would know they HAVE TO spend money to operate the parks... The NO MORE MONEY is for anything new and any expansions, thus, keeping WDW stale and stagnant.. I thought that would go without saying...

[Ian]

You're right, Ian, but wouldn't you agree this is a shortsighted approach?

I believe it is, yes. But then again I don't have an MBA. I think I have decent business sense, but maybe these guys know more than I do. I've never run a theme park. I've never run a hotel. I seriously don't know if I'm right or wrong.

Maybe their plan is to tightrope walk the line between just good enough and just bad enough so they can milk every dime of profit they can out of the place without getting to the point where people stop coming.

It's not the way I'd run the parks and I think out in Tokyo OLC has proven that doing it the right way still works, but then again I don't know if OLC is publicly held and has to answer to shareholders.

[Aurora]

Semantics... You know and anyone with common sense would know they HAVE TO spend money to operate the parks... The NO MORE MONEY is for anything new and any expansions, thus, keeping WDW stale and stagnant.. I thought that would go without saying...

Possibly true, but I'm still not wringing my hands; the reason is that the whole thing didn't sound much like a long-term plan, but a reaction to the amount of spending they HAVE done in the last few years. And whatever the Avatar expansion turns out to be (which at this point is anyone's guess), it's still something.

Maybe their plan is to tightrope walk the line between just good enough and just bad enough so they can milk every dime of profit they can out of the place without getting to the point where people stop coming.

I have to admit, I think this is their plan, because the parks have been the company's profit fall-back for several years.

There are many people on these boards who would say they shouldn't be spending any more money on expansion anyway, and would point to the Yeti as the company's ultimate symbol of neglect and need to spend money on maintenance.

In any case, the crowds still keep coming. And I'm planning our next trip.

[waymickey]

Nothing... DL is getting the wonderful toys... WDW??? more DVC.. Which further proves how they view WDW... As a real estate investment... The theme parks??? A necessary evil they can continue to dumb down because people drool over peanuts imbedded into the walkway...

peanuts and giant footprints.

What's the biggest difference between Universal/IOA and Walt Disney World?

Land. Universal has very little land surrounding its theme parks in Orlando. WDW already owns tens of thousands of acres in undeveloped land surrounding 4 of the most famous (their current condition notwithstanding) theme parks in the world.

If Universal wants to increase revenue/profits in Orlando, its best option is to add new attractions, and make their parks more popular.

But the most cost effective option for Disney to increase revenue/profits at WDW is to sell land. Since they don't want to actually part with title to the land, thus avoiding the tacky development of the property by third parties (a la DisneyLand), they are renting it instead. Thus the proliferation of DVC properties. Expect more of the same in the future. It's easy and makes huge profit margins compared to investing in really expensive new attractions.

On the other hand, What does DisneyLand and California Adventure have in common with Universal Orlando. You guessed it; very little land surrounding the parks. Disney has no other choice but to invest in the parks themselves if they want to increase revenue there.

I don't know if it was exactly what Walt foresaw when he chose to buy so much land in Florida, (I know he wanted to avoid tacky cheesy over-development across the street from the parks), but the current management certainly sees gold in that there swamp!

I think this is the bottom line. DVC makes money and you can not go very far in any park or resort without seeing their Kiosk asking you to buy.

I am a Disney fanatic however the past three trips left me a bit sad. I am not interested in Universal so my money will be probably spent on a Disney Cruise. No fastpasses/ x-passes, no long lines, no DVC Kiosk asking me to buy, but still Disney.

[joonyer]

. . . . I am a Disney fanatic however the past three trips left me a bit sad. I am not interested in Universal so my money will be probably spent on a Disney Cruise. No fastpasses/ x-passes, no long lines, no DVC Kiosk asking me to buy, but still Disney.

Actually, I think they DID have a DVC kiosk on the last cruise I went on.

[Ian]

Actually, I think they DID have a DVC kiosk on the last cruise I went on.

Confirmed ... they definitely have DVC kiosks on the cruises!

[waymickey]

Confirmed ... they definitely have DVC kiosks on the cruises!

well glad I missed it then. Seems every time I walk past one in the parks i get a sales pitch. Kinda like when you see the kiosks in the mall and they want to put some miracle cream on your hands and you can't find a a place to hide so you walk by as fast as you can looking the other way... That is how I feel when I see them in the parks.