Economy and WDW

[WDW1985]

With the downturn in the economy, and WDW obviously hurting because of it, I was wondering how significant an impact a 3-5 year recession would have on the theme parks? Would they drastically alter current operations? Would sponsorships fail causing ride closures? Even though WDW has weathered previous recessions, this one seems to be a little bigger and will most likely have a bigger impact. Now with the world economy tanking I would imagine foreign tourism will be low as well.

Just wondering what everyone thinks?


WDW1985

[Ian]

Well first off, bear in mind that even if we did have a 3-5 year recession, we're already close to a year and a half into it. This recession "officially" started in November of 2007.

But to more directly answer your question, I would say yes ... if this recession really continues on for another 18-24 months you'll see some pretty drastic cutbacks and changes at WDW.

Although it remains to be seen how this recent restructuring announcement will affect that. That alone may occupy most of their time and cost-cutting efforts for the next year.

[lockedoutlogic]

Well first off, bear in mind that even if we did have a 3-5 year recession, we're already close to a year and a half into it. This recession "officially" started in November of 2007.

But to more directly answer your question, I would say yes ... if this recession really continues on for another 18-24 months you'll see some pretty drastic cutbacks and changes at WDW.

Although it remains to be seen how this recent restructuring announcement will affect that. That alone may occupy most of their time and cost-cutting efforts for the next year.

I agree and would also add that the main problem with recessions at WDW is that it pulls the plug on any capital improvements of note - generally speaking.

So not only does it take them 5+ years to agree on what to put into a park.....now there will be no large budgets available to do so while Disney plays the welfare card

So now if and when the money returns it will take significant time to dust off the plans and get the ball moving again...

Then it takes around 5 years to build anything...


That's the real problem....and suspension of capital funding stagnates the parks for the better park of a decade.....as we saw 2 major developments in the ten years from the opening of rock n roller coaster.....everest (built in disregard to financials because of AKs steadily diminishing attendance) and Midway Mania

[GrumpyFan]

That's the real problem....and suspension of capital funding stagnates the parks for the better park of a decade.....as we saw 2 major developments in the ten years from the opening of rock n roller coaster.....everest (built in disregard to financials because of AKs steadily diminishing attendance) and Midway Mania

There's probably some truth here, but there were a few other "major" developments over the last 10 years. 2001 saw the Animal Kingdom park and Lodge. In 2002, they added Chester & Hester's Dino-Rama and 2 small rides to AK. In 2003, they opened Mission:Space which was pretty major, in my book. They also opened Pop Century in 2003. Then in 2004 they opened another resort (Saratoga Springs). In 2005, they opened Soarin'. So, they haven't exactly sat on their laurels.

I agree that the current economy will probably impact any great expansion in the foreseeable future, but I think there's more to it than just the current economy. Disney is in the midst of a major renovation project out west, practically re-building and theming an entire park, DCA. That project in itself has a lot of capital tied up, regardless of the economy.

It does appear though, that for now, WDW has no immediate "major" plans (that we know of). Will this hurt them in the long run, maybe, and maybe not. It's really hard for us to know. It certainly doesn't seem like a smart move, esepecially considering what the competition is doing right now. Both Universal and Sea World are gearing up for this season with 2 new major attractions, and then Uni has another major attraction (Harry Potter) that will be going live later this year or next year. The question remains though, will there be enough visitors to help any of them this year?

[lockedoutlogic]

There's probably some truth here, but there were a few other "major" developments over the last 10 years. 2001 saw the Animal Kingdom park and Lodge. In 2002, they added Chester & Hester's Dino-Rama and 2 small rides to AK. In 2003, they opened Mission:Space which was pretty major, in my book. They also opened Pop Century in 2003. Then in 2004 they opened another resort (Saratoga Springs). In 2005, they opened Soarin'. So, they haven't exactly sat on their laurels.

I agree that the current economy will probably impact any great expansion in the foreseeable future, but I think there's more to it than just the current economy. Disney is in the midst of a major renovation project out west, practically re-building and theming an entire park, DCA. That project in itself has a lot of capital tied up, regardless of the economy.

It does appear though, that for now, WDW has no immediate "major" plans (that we know of). Will this hurt them in the long run, maybe, and maybe not. It's really hard for us to know. It certainly doesn't seem like a smart move, esepecially considering what the competition is doing right now. Both Universal and Sea World are gearing up for this season with 2 new major attractions, and then Uni has another major attraction (Harry Potter) that will be going live later this year or next year. The question remains though, will there be enough visitors to help any of them this year?

I'll give you Soarin'....though it was relatively "cheap" because of no R&D...just construction costs up front

But the others are exactly what I'm talking...all those projects were hatched in the 97-2001 boom period at WDW....which was the most profitable time in its history by Disney's own admission....2004-2008 looked to the average observer to be in that same ballpark though....

AKL was already decided long before....as the animal kingdom resorts were built throughout the 90s with the park in mind. AKL was well under construction in 99...as it opened in April of 01...with botanicals and animal habitats that take forever to culture

POP was started in 01 as well....approved 2 or 3 years before...and was such a reach that they essentially had to pull the plug on it....as evidenced by the concrete hulks covered in anoles and moss in the "legendary years"

Horizons was demoed in 99-00....Mission:Space was long in the works in the period i'm talking about

Chester and Hester was a complete cheaply constructed response to Animal Kingdoms steadily plummeting numbers.....featuring off the shelf (very un-disney) rides bought from european carny/ amusement park suppliers......I defy you to find someone at Disney who doesn't acknowledge this (you won't find one). It was also completed start to finish in about 4 months....which makes it a bandaid by default in Disney terms....like portopotties or extra ice cream carts

Saratoga was a completely pathetic project to exploit a failed location by amassing as many cookie cutter block and steel units as possible around badly reused "service" buildings to exploit an irresponsible period in american spending (if you want to see the fallout....just check the top 6 stories on your local news every night). Saratoga also was conveniently cheap....i mean "genius"....because basically no groundwork had to be done and it had full underutilized spa and golf facilities already there....and happens to be next to marketplace..."where the real money is made". It also basically has no theme.....another way to basically cut the corners. And it flooded the DVC membership ranks by about 40,000...or 1/3rd of the current WORLDWIDE total. And yes....I have a deed with the name on it....and couldn't be happier!!!

Well....that takes care of all that.....

My point is that a year or two hiccup in travel...and this one may be 4 or 5 if you believe all those "economists" (what do they know?)....grinds the wheels of development to a halt and that machine is very hard to get moving again.

This could mean no new development and reinvestment (i'm talking a freakin replacement for Indiana Jones or Stars Tours....not 2 new parks and 6 new hotels here) for perhaps a decade

It's a gloom and doom thought.....but it has far too much basis in recent history to ignore

And to make matters worse....development (other than DVC....which really shoudn't be consider WDW because they don't follow the same rules) was already halted basically for a billion dollar complete redoux of California Adventure....again....documented

What's gonna happen when the dust settles from that?

A word of advice.....get used to meet and greets and TTA.....they're gonna have to do

I'm glad Universal and SeaWorld have things coming out.....
because i'm gonna have to try something new at some point in the next 5 years.....and i don't think disney will need to provide. They pretty much set the market and rule it with a disinterested iron fist.