Do you hear that squealing noise coming out of Burbank?
That's the sound of Mouse House management stomping on the brakes. Slowing down (and -- in some cases -- shutting down entirely) some of the more ambitious projects that the Walt Disney Company currently has in the works. All because of what's been going on with Wall Street.
Mind you, Mickey's being very selective of what he's ratcheting back. That pricey pile of new motion pictures that Disney Studios head Dick Cook announced late last month? They're still all going into production. Why For? Because even in tough times, consumers will still seek out affordable entertainment. (Don't believe me? Then bone up on your Hollywood history. Especially the parts that discuss how well the studios did during the Great Depression).
But as for Disney's Parks & Resorts division ... That WDI-designed inner city entertainment complex that the Oriental Land Company cancelled on Tuesday may not be the only project that gets its plug pulled. There's lots of yet-to-officially-be-announced stuff in the works for the Walt Disney World Resort that has just been placed on hold. As WDW execs adopt a wait-and-see approach toward any further expansion / enhancement of that property. At least until these suits learn who won the next Presidential election and / or what sort of long-term impact the current economic downturn is going to have on Central Florida tourism.
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As you might imagine, the guys in Glendale (not to mention Magic Kingdom management) were disappointed to learn about Disney's decision to slow down development of a whole new raft of rides for WDW's oldest theme park. Particularly since these attractions were deliberately being designed to revitalize the Fantasyland section of that park.
"So what exactly has been placed on hold?," you ask. Well, for starters, the East Coast clone of DCA's "Little Mermaid" ride. When it's finally built, this $140 million attraction will be massive. The show building itself is supposed to be so huge that the Imagineers are actually going to have to move "Dumbo the Flying Elephant" out of the way in order to accommodate "Mermaid" 's enormous queue area.
Not to worry, though. Everyone's favorite flying elephant won't be soaring off into the sunset. Current plans call for "Dumbo" to be shifted 100 yards or so to the East. Where this spinner will be set down next to that new circus-themed Disney Vacation Club cart that's located to the left of Pooh's Playful Spot.
Other Magic Kingdom-related projects that have been temporarily sidetracked include a new Disney Princess gift shop which was to have been built right across the way from the "Little Mermaid" ride's exit. FYI : This new Fantasyland retail area is supposed to feature a "Princess and the Frog" theme.
Speaking of the Disney Princesses ... Another part of Fantasyland's facelift which may not happen now involves the retheming of one of the Magic Kingdom's original attractions. With "Snow White's Scary Adventures" being replaced by a brand-new "Beauty & the Beast" -themed dark ride.
"Snow White" fans shouldn't fret, though. Should this part of the Fantasyland revitalization plan actually go forward, Disney's first princess would still make her home in the Magic Kingdom. Snow would just whistle while she walked over to another corner of Fantasyland. Where the Imagineers plan on installing a family-friendly coaster which will take Guests -- via mine car -- through the Seven Dwarves' diamond mine.
Other Magic Kingdom projects that have been pushed back and/or put off include a possible retheming of Mickey's Toontown Faire. So that this section of the theme park would then more closely resemble the distinctive settings of that über-popular Playhouse Disney series, "Mickey Mouse Clubhouse."
So now that this Fantasyland facelift has quietly been placed on hold, what happens next? Well, from what I hear, Magic Kingdom managers have been told to batten down their financial hatches. Only spend what they have to (More importantly, what's already been budgeted for the coming fiscal year). Which is why the only projects that are still going forward are the redo of "The Hall of Presidents" (Which is due to close for a lengthy rehab on the 31st of this month) as well as Space Mountain's long overdue overhaul (This seven-month-long project should get underway sometime after the 1st of the year).
Hopefully by the time work begins in earnest on the retooling of that Tomorrowland thrill ride, Mouse House managers will have a better understanding of what's actually going on with the economy. And Walt Disney World can then make the proper adjustments to that resort's future plans.
But as of right now, virtually every ambitious project that the Mouse has in the works (be it that ultra-exclusive, super-expensive 5th gate that the Imagineers want to build at Walt Disney World and/or that "World of Disney" replacement the Company wants to open in Times Square) is up for review. And given the current financial conditions (More importantly, what's happening with Disney's stock price) ... The suits feel that it's prudent to hit the brakes in most of these situations.
Now please keep in mind that we're only talking about a postponement here. Not an outright cancellation. More importantly, that many of the attractions mentioned in today's article weren't actually due to open 'til 2012 or 2013 anyway. So as for Fantasyland's facelift ... That probably won't happen now 'til 2014 or 2015. And should the WDW Resort go through a rough couple of years, attendance-wise ... Well, those plans would obviously be revised.
So what do you think? Given what's going on with the economy right now, is it really wise for Disney Parks & Resorts execs to take a wait-and-see approach when it comes to enhancing / expanding WDW ?
You need to spend money to make money.
My mother, who isnt' an insider Disney geek, told me the other day:
"If Disney scales back their quality in times of financial hardship, what incentive will people have to come, and those who do come, to come back?"
If Disney keeps up the quality of their entertainment offereings and builds now while the economy is down, they will rake in money when the economy recovers.
There's no two ways about it: Money drives The Walt Disney Company. There are those who say "It's a business, it needs to make money" -- but it is a very specific KIND of business, and lately it has been bilking its consumers. This is the latest example. Disney has slowly allowed the formerly unassailable quality of its parks to erode, and to place financial concerns over pragmatic ones (like guest experience). That you even have to MENTION the Disney Vacation Club cart goes a long way to showcasing that.
Even as it scales back plans like this, it continues building DVC locations. As Jim might say, "Why for?" To ensure that Disney consumers spend the most amount of money while getting the least possible in return.
If it's true, as you state it is here, Jim, that Disney is slowing new construction on guest enhancements to wait out the economic storm, then its executives have both surely proven a lack of foresight and a rather suspicious concern about cash flow for capital improvements. My own suspicion, and its only that, is that the credit crunch is going to shortly hit Disney harder than most companies. There is no reason to slow spending for a company that, on paper, at least, is as healthy as Disney, unless ... it's not.
But more to the point, Disney has asked its consumers to "settle" more and more lately while continuing to raise prices across the board. How long can this continue? At what point will Disney consumers realize that they are getting shafted? It will be interesting to see how long that takes ... and what the damage is when it happens.
With the exception of "Mickey's Philharmagic", Fantasyland has always been underwhelming at WDW. I was really happy to hear that the Imagineers were planning on expanding on that section of the park - and am now disappointed to hear that they're apparently putting things on hold. It's penny wise and pound foolish IMO. With the new Harry Potter attraction being built at Universal, Disney would be plain stupid to keep the park static while fresh competition lures its customers elsewhere. Seriously, Fantasyland at WDW is tiny, cramped, uncomfortable (where are the shady areas for weary visitors to sit?) and bereft of any truly outstanding attractions (again, with the possible exception of Mickey's Philharmagic). If the new additions don't go through, it'll be a long long time before I travel halfway across the country to visit WDW again. I've visited twice recently in as many years, and I feel no great compunction to visit there again next year. Been there, done it all, bought my Mickey Mouse T-shirt.
It's not about what's best for the customer experience, or what's best for the company in the near or long term - it's all about hitting targets that trigger the executive bonuses.
Lesson #1 in Disney-speak
Postpone = Cancelled
There is no lesson #2.
Unfortunately, my family has started visiting WDW less frequently than we used to. We just don't see enough change between visits.
Let me get this straight... WDW shutters the Adventurer's Club in Pleasure Island because of the 'demand for more shopping venues' - and now they're postponing new development because of decreased demand?
Break out the torches and Frankenstein rakes (those handmade rakes only seen in the mob scenes of monster movies); we're storming the castle.
But seriously - if development plans are on hold, could Adventurers Club get a reprieve and brought back during high volume times (like Epcot's Wonder of Life pavilion, or MK's Timekeeper attraction)? Given the interest in AC's final days, a limited return of Adventurer's Club could keep assets in production (assuming the AC building remains shuttered until its eventual conversion to a dino forest cafe, or whatever), keep guest happy, and add to bottom line.
Hopefully, WDW execs will hold off the wrecking crews to consider an Adventurer's Club revival.
Also worth mentioning - in Tuesday (10/7) MiceAge column, Al Lutz comments on how Disneyland business has been stable over the last few weeks, and comments on some potential expansion plans - not only the DCA expansion, but possibilities outside of the parks:
Makes one wonder - is the DL business model that different than WDW?
Local DL visitors vs. US WDW visitors?
Al "Pollyana" Lutz vs. Jim "Chicken Little" Hill?
Or is Disney management unable to maintain a cohesive story from day to day?
I could find the answer myself with minimal research...but didn't Disney parks post some of their best profits ever the last fiscal year? It wasn't as if the last year was the best economic times either. I believe in being fiscally conservative in times like these, but cancelling things all together is a whole lot different than reassessign what the major needs are. I'm sure that Disney will recipricate this and lower the price in the coming years to meet the demands of the consumer.
"Makes one wonder - is the DL business model that different than WDW?
Local DL visitors vs. US WDW visitors?"
I think that's a big part of what is happening at WDW. This resort is the cash cow for Disney, and ther last time the companies share price was this low, Comcast wanted to buy them.
If the US economy doesn't pick up, they have to slow down, since a WDW trip is by no means cheap, even with there "value plans". There is also the fear that the global economy is slowing, which would put the brakes on the foreign travelers which have been coming in droves due to the low value of the USD.
It's prudent to wait for a little, to see how things shake out, but hopefully, they'll see enough traffic at the parks to warrant progress at a slightly slower pace (don't stop, just don't bite off so much at once).
I'll be there in April, and by that time, it will be easy to see what is happening with the economy and parks.
I also wonder, is Universal looking at slowing down Potter?
Personally, I'm still not convinced that the upcoming "what will you celebrate" promotion is what WDW needs right now in this tough economy. I think it will work great for the drive market like DL but I can't see families spending thousands of dollars to travel to Orlando to claim their free $70 value prize. Heck, there are plenty of free birthday meal/dessert promotions at restaurants in the their own backyards that most people won't drive 10 minutes to claim.
So far the cutbacks that Jim is mentioning havent been press released to the public so there is no inherent harm in the short term. However if Disney starts shuttering things or cutting back more entertainment (like the reduced Fantasmic schedule which has now been extended to April) then that will have an immediate impact on peoples vacation plans. Obviously they can not re-neg on the birthday promo but they need to plus it us a bit with additional discounts and entertainment. I realize that these items will not increase the bottom line but some revenue is better than no revenue. They need to invigorate guests to come now or plan to come in the next six months in order to get these tabled projects back in the budget pipeline.
I have no idea whether this is part of Disney's thinking or not, but I can think of some good reasons to take a brief pause during the economic uncertainty.
Basically, if we are in fact in for a recession as most people think, the next couple of years could be a very GOOD time for Disney (or anyone else) to be making large investments. Provided, of course, that they have the money.
The prospect of lower attendance would mean that you could get more done without disrupting the guest experience. Materials and labor will likely be considerably less expensive during a recession than during the subsequent recovery. And if state officials are sufficiently concerned (and how could they not be, with the impending end of the Space Shuttle program), they may well be inclined to offer tax breaks to anyone willing to make a substantial, job-creating and tax-base-expanding investment in the state economy. Wouldn't be the first time.
In that event, it might even be smart business to even try to expand current plans. After all, as I've heard it said recently, Disneyland couldn't have been built at any other time or place in history. The US economy is a large and complex animal that conceals all manner of perils and opportunities, even during recession. Under certain plausible sets of circumstances, there may be things that will be possible during the next couple of years that will not be possible at any other time or under any other circumstances.
Optimistic? To say the least. But one can dream, right?
:sigh: More of the same.....
Its the same ol' thing over and over. Economy is doing great (economic peak), Disney expands....problem is the expansion takes so long that it often opens up right in the middle or beginning of and economic trough (recession)...and whatta ya know...it doesn't do well as planned *cough* Euro-Disney*cough*....or if they are in a middle of a project and committed to it already....cheapen it down *cough*DCA*cough*....which costs them more money later to fix.
The price of building materials are droping.....city/state governments are facing budget shortages and unemployment, there willing to sign over the family farm in order to bring in extra tax income and create jobs. This isn't the time to halt expansion, this is the time to begin expansion, materials are less and little to no resistance government wise. Once the economic recovery occurs and people have income to spend, Disney will have all the reasons why people should go to the parks if they expand now. But hey...what do I know...
Disney has no reason to fear the bear market or slow economy.
I just returned from the WDW resort and I can assure you, even in mid-October, Disney was pulling in great attendance in the "off-season". Two cast members said that WDW no longer has an off-season. Lots of people from Europe were in Orlando due to the fact that the EURO equals USD $1.60, and the English Pound continues to do well, too. It's a steal for Europeans to come to Disney World. So the Mouse is not hurting.
I agree that you must spend money to make money. And Disney needs to spend the money, because as mentioned above, Universal's "Wizarding World of Harry Potter" at IOA is moving along quite well, not to mention the "Rock-It" roller coaster at Universal Studios.
A revamp of Fantasyland is sorely needed. Add the Little Mermaid ride, the Beauty and the Beast ride, and move Snow White (a different ride experience).
While the Imagineers and Mouse suits are at it, please do something with the now defunct "Wonders of Life" in Epcot, and add another country (with an attraction). There have been no major additions to World Showcase since Norway and Maelstrom--and that's been twenty years ago. Boy, Austrailia or Russia would be nice pavillions to visit, instead of encountering the annoying sound of drums in the "Africa Trading Post" and seeing the same old merchandise that can be found at Animal Kingdom or any other pin-trading station at WDW.
Oh yeah, build Beastlie Kingdomme at Animal Kingdom, too.
Jim, could you please write an article about the rumored "Villains" park? Nothing has been said about this topic in a while. Disney could easily travel in many creative directions with that theme, and I'd visit such a park without hesitation. Night Kingdom what take some more convincing, though.
In conclusion, thank goodness they are spending money at Disney's Hollywood Studios. TSM, now American Idol, and let's hope for the Monsters, Inc. roller coaster. As far as I'm concerned, they can do without a Cars attraction at DHS... and instead, revamp Autopia at the MK with a clone of DCA's future E-ticket ride through Radiator Springs. That would be sweet.
Any or all of these additions would be a nice way to enhance the "World" for MK's 40th birthday in 2011.
Tizzo and Lumen1179 bought up some great points. Building when times are tough not only disturbs less guests, but I feel that it would kick the attitude of "I'm broke and there's nothing new in WDW, so why would I want to go, anyway?" Disney will have guests every year, recession or not, so it should take advantage of the situation to re-earn consumer trust.
Also, why build new "shopping and dining experiences" when both your own and your customers' wallets are pinched? Just up the advertising budget - how long has it been since people heard ANYTHING about Pleasure Island and it's "New Years Day Every Day!" party? Bring people in the park in the first place, and they'll have a reason to spend money.
The Fantasyland construction sound worthwhile. I appreciate that it will be both preserving the past, as in Dumbo and Snow White, but creating new opportunities as well. You don't have to break the bank on an E-ticket to create good family entertainment. What's more, they're not based on new cash cows and trends, but rather, they are timeless pieces. Now, just get some healthy food into Fantasyland, and my toddler and I are there....
As for the Toontown Fair retheming, I am frustrated. While I like that you could still enter the area without having seen Mickey Mouse Clubhouse, I don't like that it's so specific to a television show. It comes off as a marketing scam to me. My 2-year-old watches no TV, only 1 Disney, Pixar, or Muppet movie a week, and I would like to take her to a Toontown Fair that isn't an in-joke. The theming works as it is; it's charming, endearing, and it gives a reason for everyone to celebrate. Disney's Hollywood Studios already has its Playhouse Disney sector, and I frankly enjoy the park without the additional branding.
In all seriousness, there needs to be an employment rehaulling in their Theme Parks division. Not only are creative minds stiffled in a "business first" atmosphere, but that same attitude alienates customers, from potential guests, regulars, and most noticeably, the Disneyana community. It is HORRIBLE business practice to ignore customers' feedback, even if it is often cruelly packaged. Like a PETA post or a Rita Skeeter article in Harry Potter, they need to read through the wording to find the facts - people aren't happy with the "business first" mindset of Disney. I had high hopes when Lasseter became a larger presence, but I've come to realize that he can only lead these horses to water.
Now where's Jim Henson when you need him...? I would have loved to see what that 10-year creative output contract would have done for the parks.
I'll keep coming to Disney because I love the parks, but I, as a consumer, would like to see that respect in return.