Investors looking for return on investment from Disney's "billion dollar bracelets"

Posted | Contributed by Jeff

Investors have been keenly waiting for financial evidence that the $1 billion investment is paying off. Disney’s parks business has lately been a good one — operating profit climbed 17 percent last year, to $2.33 billion — but the company’s spending on the project has dented margins at its flagship property here. Underscoring its importance to the company, analysts have peppered Disney executives with questions about the system in recent conference calls.

Read more from The New York Times.

Jeff's avatar

Lord Gonchar said:
I know you know what you know, but there's no way the current implementation is all they plan on doing with this.

I didn't suggest otherwise. What I'm saying is that the intent is not to have anyone ever have to plan everything up front. They've said as much in email marketing.


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

Lord Gonchar's avatar

Not yet, at least.

The fact that you now reserve three rides ahead of time is already a leap in that direction. How many pre-reserved FastPasses combined with having to reserve meals ahead of time before you're essentially planning most of your stay in advance?

Shades of grey.

Last edited by Lord Gonchar,

Semi-tangential, but on the topic of a fifth gate:

I don't think there will ever be a fifth gate in Orlando. The point of new gates is to consume more of a guest's vacation time. But, the four they have already more or less completely fill a typical domestic family vacation---and those are getting shorter, not longer. A fifth gate will only cannibalize some subset of the other four.

On the other hand, capacity additions to the existing parks makes sense, provided they still think they can grow the market. But, they are doing that---New Fantasyland, the Pandoraverse, and whatever they end up adding to Studios, be it Cars, Star Wars, or some combination.


Jeff's avatar

Planning at most two hours of stuff compared to your whole day is quite a leap. No one wants that. Not even the Disney sheep are going to fall in line with that.


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

super7* said:

5. Almost every ride is a fast pass ride now, even the high capacity ones. Which means rides that did not have long waits or where the line never stopped in the past (that you could enjoy while waiting for your fast pass ride) potentially have longer waits now because there are fast passes being used on them.

This!

Epcot is the offender here.

LostKause's avatar

Magic Kingdom trip report in 40 years:

...After exiting from the Haunted Mansion with my family, a creepy, static-filled female voice echoed from all four of my family's brackets in unison. She said,

"Visitor number 3003, 3004, 3005, and 3006, please advance to the Splash Mountain My-Magic line for you designated ride time. You have six minutes to reach your destination. Please note that guest 3003 is not tall enough for this attraction and will be asked to stand in the the holding area while the rest of your party experiences the attraction. We apologies for any inconvenience, and we thank you for visiting Magic Kingdom."

After we exited from Splash Mountain 90 minutes later, we received similar instructions for our designated meal time at our pre-requested food stand. The allotted time was 30 minutes for the line, and 25 minutes to eat. I previously ordered the cheeseburger meal four months ago and they did not allow me to change my mind, which I was okay with because it is expected in this day and age. Little Billy had to eat much faster when we realized that our meal time was almost over and our table would be needed for the next party.

Little Billy was feeling sick, so he did not get to ride the next ride on the itinerary, which was Dumbo. The wait was previously stated four months ago to be thirty minutes, but we were pleasantly surprised that it only took 25, and after we rode Dumbo, we had an extra 5 minutes to walk to our next attraction...

This does not sound like fun at all. lol

Last edited by LostKause,
Lord Gonchar's avatar

Jeff said:

Planning at most two hours of stuff compared to your whole day is quite a leap. No one wants that. Not even the Disney sheep are going to fall in line with that.

You know how people make big bucks selling info about what days to visit what parks, and traffic patterns, and when to visit which attractions and crap like that?

People want to be sure they're going to get to do the things they want to do while on their big Disney vacation. They pay money to third parties for that piece of mind.

Why wouldn't Disney capitalize on that?

People would certainly book 10 or 12 FastPasses to 'guarantee' their day. And 10 or 12 each day to 'guarantee' their vacation.

LostKause said:

Magic Kingdom trip report in 40 years:

Lots of Hyperbole

This does not sound like fun at all. lol

And if you think that's even close to how 'booking your day in advance' would be, then it's no wonder it doesn't seem feasible to you.

Seriously. FastPasses have what? A one hour window?

The parks are open 10 or 12 hours or whatever. Seems pretty flexible to schedule a ride window for each hour. Add the resauarant reservations that people already make 6 months in advance and book a character meeting or two and suddenly, you've booked your whole day and it's still pretty free-flowing and organic and no more restrictive than a FastPass is currently.

On top of that, they can use the system to 'encourage' behavior. Stay on property for more/better FastPass opportunities. Stay at a better resort for even more. Visit the less crowded parks on any given day and have more chances to reserve ride times than if you visit parks that are more popular and crowded. Choose a pre-designed FastPass package and you'll get more reservations than choosing a la carte - the thrillseeker package, the lazy day package, the new rider package, etc (and the beauty part is that it's essentially a pre-designed itinerary of FastPasses that push people in pre-determined patterns around the park)

You're issuing crowd control and upsells disguised as a premium service. It's genius.

And that's just the crap I got off the top of my head. Imagine what Disney really has planned for this thing.


slithernoggin's avatar

^What he said.


Life is something that happens when you can't get to sleep.
--Fran Lebowitz

Tekwardo's avatar

Putting 2billion towards a fifth gate isn't really a good investment when they don't even keep their fourth gate open late yet.

Plus it does nothin for families that want to enjoy time at gates one and two.


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Jeff's avatar

Lord Gonchar said:
People want to be sure they're going to get to do the things they want to do while on their big Disney vacation. They pay money to third parties for that piece of mind.

Why wouldn't Disney capitalize on that?

People would certainly book 10 or 12 FastPasses to 'guarantee' their day. And 10 or 12 each day to 'guarantee' their vacation.

Except they won't, because they have data that proves out they won't. The people who have to plan every minute of their vacation are not "normal," nor are they anything even remotely resembling a majority.


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

But isn't there a lot of room between planning every minute of your vacation and 3 FPs a day?

Jeff's avatar

Of course there is. What's your point?


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

Just there is room to expand what they are doing/offering now with the system without getting to the point of planning every minute of your vacation.

And even 12 FPs in a day wouldn't really be planning every minute of your day. There would be time in between to see another attraction, grab a snack, people watch, shop, etc.

Last edited by GoBucks89,

Someone said earlier that it will likely be 5-10 (or more) years until we are fully able to step back, have an “ah ha” moment, and see the full scope of the project, and I agree.

I believe with the massive amount of data they are now able to, and are going to continue to collect, how someone vacations at WDW will probably be a lot different, and for the better in 5-10 years. Some things you may notice, a lot you will probably not.

Ultimately, every investment has to have an ROI, and in this case, I truly believe that Disney is going to use the data they collect to drive more visitation, longer length of stays, increase in-park spending and upselling galore. It is all going to drive revenue in somewhat shape or form.

Here is one small “for instance”, that may or may not have anything to do with NextGen, but I found it interesting. When I was in the Magic Kingdom a few weeks ago, around 10am, I received an e-mail inviting me to participate in a lunchtime fast pass for Be Our Guest at 1pm. Now who is going to turn that down? And $45 later, by wife and I had a delicious lunch at Be Our Guest, which I believe is the most expensive (and probably highest margin) counter service restaurant in the MK. Disney created an upsell right there, and also optimized the capacity of the restaurant.

We got that same email, inviting us to FastPass lunch anytime in the next 3 days. We were delighted because we had tried for dinner there but it was sold out and we didn't want to wait in line for lunch. So we got to go.

We reckoned it was on account of it being a relatively slow week and thought they might be extending the offer to resort guests. It loaded to our bands, though, and the band was how they found us at our table. So, maybe they were trialing a reservation system to determine if it should be implemented for lunch.

I remember vising Disney World back in the three park days. We had 4 or 5 days to do the parks. The first three days were one day per park. Then, the last day or two, we did the favorite attractions a second time. The first three days there, it may be easy to plan the days out a bit. When you get to the last day or two, its going to be quite a bit more difficult to pick which rides the kids are going to want to do again.

Lord Gonchar's avatar

Jeff said:

Except they won't, because they have data that proves out they won't. The people who have to plan every minute of their vacation are not "normal," nor are they anything even remotely resembling a majority.

Good. Because at no time did I suggest planning every minute of your vacation.

Right now people visiting Disney book dining reservations 6 months out. They're reserving three rides a day and I'm sure most plan which attractions they want to hit while there (when is a different story, to be fair)

I'm not sure why it seems like such a leap to add more FastPasses to the preplanning. You think that if suddenly tomorrow Disney offered 5 or 6 FastPass+ picks in advance instead of three that people wouldn't do it? People with three FastPasses and a dining reservation have essentially preplanned 4 hours of their day. Even on a 12 hour day that's 33% of your day. It's already not an inconsequential amount of preplanning happening.

I do sincerely love that you're pointing to 'the data' again (you do love your data), but that was exactly my point. It's a system for modifying behavior. If Disney can essentially guarantee in advance that you'll see the attractions you want with minimal effort and wait - people will bite. (and I bet people who aren't wondering if they'll really get on Ride X or not spend more time in shops and are generally more satisfied). Like I said, there's a solid third-party market that already exists trying to help visitors do this - it's not some completely alien concept. Feels like a painfully obvious logical exstension, really.

Heck, they're already doing it reactively (see the two posts above mine - they're changing people's plans on the fly) so it only makes sense that they could do it proactively - influence your visiting habits/style before you ever step foot on Disney property.

0g said:

When you get to the last day or two, its going to be quite a bit more difficult to pick which rides the kids are going to want to do again.

Another key is that no one is making you book anything in advance...they're just giving you lots of incentive to. Also, the ability to change reservations to some degree is part of the system, is it not?

I still don't know why pre-planning most of your day instantly equates to such rigidity for some of you guys. There's a lot of play in a series of hourly windows. I don't see it much different that someone coming here and asking the best route to take to hit all of the coasters at CP or SFMM in a day.

Oh God! They went into the park with a general plan to hit the things that are important to them - they must be having a horrible time!


Jeff's avatar

I never said they wouldn't expand to more passes, I said your suggestion it would lead to 100% planning isn't gonna happen. The six month advance dining reservation is an edge case and a minority (and very much a Le Cellier thing). The subtext of your argument seems to be a future with no minute unplanned, and I don't see that happening.

As for modifying behavior, yes, they're absolutely doing that. There is some really cool stuff going on with that. There are also limits to the extent it will work because people are what they are. They have a pretty good idea of what that point is, too.


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

Bakeman31092's avatar

Lets remember that there are different types of vacations. Going to a theme park, especially for the first time, is not meant to be relaxing. Granted, if you've been to Cedar Point 100 times then you're not as likely to get bent out of shape that you only got to ride MF once instead of 5 times, but if you're new to Disney and you're about to drop $2000 on a 4 or 5 day visit, then there's already some built in "pressure" to experience as much as possible. You're looking to get a bang for your buck, and that is measured by how many rides you ride and how many shows you take in. I'm not discounting the value of the theme park atmosphere with all the sights and sounds and how nice it can be to just get away and go someplace fun, but seriously, if you go to a park for the first time, you're going to be disappointed if you don't get to ride much. Ultimately, that's why we go, right?

If I have the opportunity to plan every single ride, show and meal for an entire trip, I would jump all over it if it meant I would never have to wait in any lines and I would get to maximize my experience for the money I spent. And you know what? If the itinerary is too stressful, then don't follow it. Do something else. You don't have to stick to the schedule; this isn't boot camp.

Going to a theme park is an activity, and it isn't very relaxing. You're walking and standing pretty much all day, seeking experiences that you put in a heightened state, not a relaxed state. That's part of the package. So if planning ahead meant that I could maximize the thrilling and exciting experiences while minimizing the walking and standing and waiting in line then I'd be all for it.

If you're looking more for a go-where-the-wind-takes-you kind of vacation, then an all-inclusive ocean-side resort is probably your cup of tea. That's the type of vacation that's more for relaxing, where you can eat, take a nap, wake up and go for a swim, eat some more, take another nap, and basically do whatever you want at your leisure.


Jeff's avatar

Bakeman31092 said:

Going to a theme park is an activity, and it isn't very relaxing.

You're doing it wrong. :) I know people go nuts with this stuff, like zombie enthusiasts, but I'm still not convinced that's "normal" or "average." As my friends have been visiting the area the last 9 months (I've seen more people I know in this time than the last 9 years!), it's my observation that they tend to not have any expectation of doing "everything." Those with younger kids are even more picky with how much they expect to do.


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

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