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Monday Mouse Watch : The Winter of Disney's Discontent

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Monday Mouse Watch : The Winter of Disney's Discontent

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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.


Wave "Goodbye" to Minnie Mouse, as she and all of the other Disney characters
who currently appear at the Liberty Tree Tavern will disappear as of January 5, 2009.
Copyright Disney. All Rights Reserved

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.


Copyright Disney. All Rights Reserved

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 1700+ rooms being redone in a "Finding Nemo" motif this year and 400 units receiving a "Pirates of the Caribbean" -themed makeover next year. 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?

Your thoughts?

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  • The ironic part of all this is that one of the very first policy changes that Team Eisner put in at Disneyland was the elmination of the outside concessionaires--firms with long ties to Disneyland going back to creation such as Carnation ice cream, Pendleton Mills woolen clothing, etc. etc. The theory THEN was that while it would mean Disney would have to pick up the payroll costs, they could make more money owning the store than leasing it. Times change.

    Of course, some of the exits by outside vendors have been voluntary on the vendors' parts--notably the $4 million loss that the Robert Mondavi Winery folks took when they gave up on their piece of DCA (as did, a bit afterwards, the Wolfgang Puck restaurant empire.) And as we all know, hard negotiations are going on with Cirque du Soleil re. more favorable terms from the Mouse to stick around.  Couple that with the fact that the Virgin Megastore and Planet Hollywood locales at WDW are quickly becoming the LAST outposts of those once-proud brands (other than P.H.'s Las Vegas store in the Caesar's mall) and the pullout of Cheesecake Factory from DisneyQuest a while back, and....well....the times they are a-changin'.

    As for the Ft. Wilderness reno (which also includes new pool goodies like a water slide and more general landscape updates) that may actually still be a good thing for the Mouse. On the one hand, as Jim notes aptly, the price of fuel is going to keep a lot of RV'ers garaged for a while. On the other hand, those with mega-rigs are probably better situated to endure the rigors of a $1k fill-up AND, by virtue of their heavy investment in huge 45-foot diesel pushers that range from $250k to $750k or more, they tend to be those more committed to the RV "lifestyle" than the smaller rig drivers.

  • I'm thankful Disney is upgrading Fort Wilderness and hopeful that they won't back out of it to save money, now that times have gotten tougher.  They've gone for the deluxe campground market at Fort Wilderness, but have left it with old fashioned pools, no slides or hot tubs, and almost all small back-in sites that are next to impossible to get those big rigs into.  These upgrades will preserve their ability to charge "Disney" deluxe prices for the campground and as JohnWayne points out, keep the big rig owners--who are less sensitive to these economic times--coming.  They also need to get a counter-service food option in there, as lots of campers like the dining plan and don't want to cook on vacation, but see the lack of onsite counter-service as a reason not to buy it.

    Actually, I wish Disney would create a second campground somewhere on property.  Let Ft. Wilderness be the deluxe campground (with the Hoop Dee Doo, the pony rides, boats to the Magic Kingdom, etc.) and set up a second one that's the "value" resort answer to camping.  Lots of people are signing onto the camping board these days and looking for less expensive ways to stay on property, here's an easy way for Disney to get their Disney vacation dollars, too!

    Sue in Texas

  • I, for one, welcome the reduction in character dining.  I feel it's getting out of hand, and personally try to avoid it when possible, so I'm glad there'll be one more option.  Most of the characters are good about letting the guest set the level of interaction, but a few push it.  =)

  • Do you have the survey results somewhere, Jim? Because to say that either (a) people who actually go to character dining love it, or (b) people who go to the parks love to see the characters, does not automatically translate to: All people who go to the parks want to see more character dining.

    I imagine there are plenty of people out there who love the characters but do not want to spend the extra money to see them for 30 seconds at their table while they eat.

  • There may be people who like the characters but do not want to spend extra to see them - but I would be surprised if prices at the Liberty Tree came down because of this change.

    For me, this is a loss because it was yet another way for my family to enjoy Liberty Square and the characters at the same time. There were not many venues to keep the attention of a five-year-old in this land before - and now there is one less.

  • I'm pretty much annoyed with Disney right now they are hurting for visitors.  The quality of the parks has been declining over the past few years.  There seems to be a lack of focus from their marketing teams.  And per the latest check on prices for vacation packages it doesn't seem like they are doing very much to attract visitors, prices are more expensive then they have ever been and seem to be going up, up, up....  Coupled with the expense of having to fly from NY to Orlando with your family.....

  • Well, my wife and I are going to make a reservation at liberty tree before it closes! We love the character dining, so we're saddened to see one go.

    I like the new name for wide world of sports...makes sense to me.

  • I agree, I can't imagine that Disney will lower the prices even though the characters will not be at Liberty Tree Tavern.  I can see both sides of this coin.  I can tell you that people are absolutely clamoring for character dining but the Magic Kingdom is very lacking in non-character table service dining compared to the other parks.  In my opinion Tony's is fairly bland and no one goes to the Plaza Restaurant, let alone even knows that it exists.

    As a side note, Disney also announced last week that that the Garden Grill in the Land Pavilion at Epcot will no longer be open for lunch after October 6.  This could be the start of a trend.

    Moving on to Downtown Disney.  It's been stated before but the problem with dining at Downtown Disney is that too few restaurants participate in the Disney dining plan.  Unless they stipulate that new non-Disney owned restaurants participate in the dining plan then the plan for more dining is doomed to fail.

    While I am a fan of the Comedy Warehouse and the Adventures Club I think that they have run their courses in Downtown Disney.  Someone on this site had a great idea last week to move the Adventure's Club to the new Animal Kingdom Villas.  I also propose that the Comedy Warehouse should be re-located to a Vacation Club property.  DVC members are exactly the type of people that frequent these clubs on a regular basis.  Why not move the comedy club to one of the two empty theatres at Saratoga Springs (they were part of the defunct Disney Institute but the buildings sit there unused).  Or move the comedy club to the Boardwalk.  How many people actually use the dancehall on the Boardwalk outside of convention and wedding groups?

    The other problem that exists with Pleasure Island is that it's an ISLAND!!! And a hilly island to boot.  If Disney is serious about improving traffic flow they need to re-attach the island to the mainland and remove the hill by the Adventures Club and Comedy Warehouse to make it more pedestrian and stroller friendly.  Of course, when all is said and done though they need to find the right mix of retail and dining.  Why not a dinner show (like the High School Musical type show that Jim mentioned months ago) to attract families with tweens.  The ESPN Club would be a great replacement for Disney Quest or Virgin Megastore but I don't see that happening now that the sports complex will be re-branded as ESPN Sports Center.  I think Disney would see that as to "conflicting" even though at already exists on the Baordwalk.

    I am excited by the possibilities but I am sure that I will be disappointed with the final results.

  • I for one am happy that there will be fewer character dinings because I am a parent of a four year old who is frightened of costumed characters to the point that she will throw up (it happened to us recently).  "Human" characters she's fine with... costumed characters... NO.  So, it gets kind of tough to find a family restaurant that does not have characters walking through it (my eight year old never had a problem with costumed characters, but my youngest does).

  • I love the characters, but thank goodness they are getting rid of them at another sit-down eatery.  Character meals should be special occasions; my last trip, we had trouble finding restaurants that we wanted to eat at that DIDN'T have character dining and over a 10 day trip, having your meal constantly interrupted gets so old SO fast.  Folks are right that I doubt the prices will drop either, but at this point I am happy to pay more just to not have to snuggle with Pluto again.  That's pretty sad.

    I do have to admit that I'm pretty furious about the Sara Lee cake thing.  The chefs at Disney were good when it came to those little cakes.  Not fall-over phenominal, but those were some good cakes and worth the money considering it was a theme park.  That they're now charging $21 for what is essentially a Wal Mart cake is pathetic, especially as I doubt they will be telling anyone that is what they are getting.

    Some cost cutting measures for the parks make sense, others do not, and others could but just really need to be reevaluated.  I'm all for closing Pleasure Island, except for the Adventurers Club.  I see no reason at all that the rest of the island could not be restructured as Disney envisions and the AC be the main "destination" on that part of the strip, much like Quest and Cirque fill this role in other areas.

  • $21 for the birthday cake is ridiculous.  The character meal at Liberty Tree Tavern was one of our favorites.  I hope our trip in December works out as it will be out last time eating there.  

  • By the way, all....regular readers will remember the discussion prior to this PI-specific recent talk regarding the general decay of retail and merch. sales in WDW as a mirror of the "real world" outside it. Some pooh-pooh'd (no hunny pun intended) this, said it didn't matter, said the WDW merch and retail and the Disney Stores were immune and, re. earlier notes, that comparisons with other resort destinations such as specifically Las Vegas were also not relevant.

    For your further exploration/consideration, the following stories may help give context:

    http://online.wsj.com/article/SB121540139050031905.html?mod=fpa_whatsnews

    That's a Wall St. Journal story about the rise in retail vacancies at malls across the USA and what it's doing to the commercial real estate universe.

    http://www.independent.co.uk/news/world/americas/down-and-out-in-las-vegas-860513.html

    And THAT is a story from the UK about the economic downturn in Las Vegas and how it is affecting the economy.

    Sooooooooooooooooooooooo.... as much as I still think closing AC and CW is really, really boneheaded, the overall issue of "downsizing" and reducing service (such as the no-lunch at The Land restaurant--probably a reaction to the fact that people on economy-and-high-fuel-cost-motivated shorter, cheaper trips don't want to spend 1 to 1.5 hours having lunch when there are attractions they "must see" on their visit---and what will that mean to the World Showcase more "leisurely" dining spots? I shudder to think of it.)  makes sense.

    The BIG question to me is this: Once the beancount-obsessed Disnoids figure out how much they "save" in sheer dollars of payroll and expense by these moves, will the fact that they're degrading the potential "magic" experience matter to them when, as they surely must, economic times improve?  Those of us who KNOW what "used to be" and what has been lost may be outnumbered by those who know no better and think, in comparison to the real world, that the diluted-but-still-Disney experience is "superb" regardless. That is the really sad thing, don't you think?

  • No, I don't really think its sad that the average family that doesn't monitor Disney fan sites won't have any idea what they're missing.  They're going to go and have a great time while the rest of us brood about what's gone and what's missing.

  • John Wayne, I'll give you credit where it is due.  I was little skeptical of your April 16 article regarding Las Vegas, but in the last 2 weeks I have seen several articles supporting your claims about effects that the ecomony is having on Las Vegas.  Specifically that Vegas is very nervous about the loss of thousands of air seats (USAirways) at a time when they need business the most with several mega-resorts and projects like City Center coming online.  This is an equally valid concern with the lost of air seats to Orlando (Delta) and future projects that Disney, Universal, Seaworld, et. al. have in the pipeline.

  • Thanks Pudge, and to further your statement re. airlines:

    I happen to have a brother who is a senior Captain with a major airline. He flies internationally for them, mostly to South America out of the southeast (trying to keep things semi-anonymous, but y'know... a little thinking will figure out which carrier(s) we're talking about here--smile) He flies the 757/767 on those routes. He just got word that the company is going to swap those routes over to the 777. Whyfor? Because they are moving the 757/767's to DOMESTIC flights. Whyfor? Because they are getting rid of so many 737's and MD-80's. WHYFOR? Fuel efficiency.....BUT....because the CAPACITY of the 75/76 platform is LARGER than the planes it is replacing, it allows them to cut BACK on the FREQUENCY of flights to domestic destinations. The age of 12 flights a day between X and Y and there always being a seat on "the next plane" if you get bumped is passing into history. There will be 4 flights, not 12, and they will be larger planes and, because of the scarcity of seats caused by the counter-effect of fewer flights even WITH bigger, more fuel-efficient (both engine-wise and gallons-per-passenger-mile-wise) planes, they'll be full, too.

    That's bad news for tourist destinations because when you couple the fewer-flights-between-city-pairs issue WITH the hub-and-spoke nature of our airline traffic system, well, the family that wanted to go to WDW from Tuesday thru Sunday night because Dad had that week off and needed a few days (the first Sat/Sun/Mon) to recoup, fix stuff around the house, pack, whatever....those folks may be out of luck if the cut in fights on all segments of their hub-spoke journey from, say, Kansas City to Orlando, means they can't come home on Sunday 'cause everyone wants to and the flights are sold out and they can't leave 'til Thursday because there's a mid-week convention in the mid-point in their trip..........

    So even if they DO indeed go to WDW, maybe it will be for a day or three fewer than in bygone days, and all those lost days/hotel-nights/passport-days/breakfasts/lunches/dinners/shopping hours mean SERIOUS compounded revenue losses to the Mouse and others, too.

    As for Las Vegas....always remember that while they get huge tourism from all over and the airport seems to NEVER stop growing, the biggest part of Las Vegas's year-round weekend-in/weekend-out business is driving up the I-15 from the greater Los Angeles area (which is why I NEVER drive to/from there from here on a Friday or Sunday, btw.)  Soooooooooo...throw in my $75 fill-up that used to be a $35-fill-up and even on a tank to get there, one to toodle around town, and one to come home with enough for Monday's commute.....Well, 3x $35= $105. 3x$75=what USED to be the cost of the hotel room for that weekend. Are we gonna sleep in the car?  Multiply THAT by the 8-10 million people who live from Santa Barbara to the Mexican Border and would make that trip on average 2-3 times a year.......and you see the problem.

    Once again---just like with the expanded 45-foot Class-A 50am service spots at Ft. Wilderness, the folks with the bucks will be there anyhow, and the Wynn hasn't got too much to worry about. But for the lower-priced or median-priced places (and the shows such as all the older Cirque shows which used to get repeat business but which people will now say "Hey, we saw that, let's not go again 'cause we need gas for the ride home.") it is trouble time.

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