Are Disney World's recession worries starting to recede ?

For most of 2008, WDW officials knew that 2009 was going to be a real challenge for the Resort. Which is why -- as far back as July -- they began putting cost containment measures in place. Doing whatever they could to lower Disney World's operating costs (i.e. cutting Fantasmic! back to just two performances a week, eliminating character dining at the Liberty Tree Tavern, etc.).

But then in October of last year, Disney Parks & Resorts execs got some scary, scary news. Due to what was happening on Wall Street and the continuing credit crisis, WDW's advance bookings had fallen off precipitously. And unless something was done and fast, the Magic Kingdom (which can hold 65,000 - 67,000 Guests on its busiest days) might see weekdays in January of 2009 where its attendance level would fall into the teens.

This was why Disney Parks & Resorts rolled out that Buy-4-Get-3-Free promotion back in early November. Which seems to have done just what the Company had hoped it would. Given that -- during the first 10 days of January -- the Magic Kingdom saw weekday attendance levels in the 30,000s.

Mind you, the people who are visiting the Resort this month aren't spending nearly as much on souvenirs as WDW officials would like them to. And some of the cost containment measures that Disney World decided to put in place last year are now having a pretty significant impact on Operations at the Parks (EX: Dinner-time business at the Liberty Tree Tavern has fallen off by almost 2/3rds now that character dining has been discontinued). But that said ... The news coming out of Lake Buena Vista these days is still lots better than anyone ever anticipated back in late October / early November.

Which is why -- very quietly -- Walt Disney World has begun thawing out some previously frozen projects. And -- no -- I'm not talking about those "Pirates of the Caribbean" -themed rooms for Disney's Caribbean Beach Resort. Despite what's been going on with the economy, that retheming project (which will eventually involve 384 rooms in the Trinidad South Village section of this hotel) never stalled out or even slowed down. It just kept moving forward. In fact, the first 32 of these "Pirates" -themed units were supposed to be ready for occupancy by this Friday. However -- due to some continuing construction problems -- this first set of POTC rooms will now most likely not be available to Guests until sometime early next week.

Let the rebranding begin ! Copyright Disney. All Rights Reserved

No, I'm talking about WDW's family suites project. Which will involve taking those half-completed buildings on the Legendary Years side of Disney's Pop Century Resort and then turning them into two, three and four-bedroom units where entire families can stay together during their Disney World vacations. Just this past week, contracts were signed to begin the clean-up / preparatory phase on this construction project. Which will involve sending survey teams into this long-empty structures to identify where repairs need to be made. More importantly, what walls need to come down.

Now keep in mind that Disney is doing this work in early 2009 because the Company genuinely believes that -- by mid-2010 (i.e. when the first of these family suites buildings will actually be ready for Guests to occupy) -- that the economy will have made a strong enough recovery that there'll actually be demand for these types of rooms on property. And as the economy gets stronger & stronger, more & more blocks of rooms at Disney's Pop Century will be transformed into family suites. Until this entire WDW hotel can then be rebranded as Disney's Animation Inn and Suites.

"And how exactly did Disney Parks & Resorts execs determine that it would now be okay to go forward with the Legendary Years project?," you ask. The Mouse gets its information from a variety of sources. Which include:

• The airlines (Which let WDW officials know how full their flights coming into Orlando are)
• Off-property hotels & resorts (Disney has sources at many of these properties which then shares their daily & weekly occupancy rates)
• The Resort's own attendance projections (Based on data that's been gathered since Walt Disney World first opened back in October of 1971, given what's going on with the economy as well as historic trends, the Magic Kingdom will see attendance levels in the 50,000s over the coming Martin Luther King Day weekend)

So taking all of this information into account, WDW's recession fears seem to be receding. Though -- that said -- the Mouse still isn't taking any chances. Which is why -- while Disney World has its Buy-4-Get-3 promotion in place to lure stateside visitors during the first half of 2009 -- the Resort is promoting a completely different vacation package overseas. With the hope that free dining will be enough to convince international visitors to come to WDW in the fall.

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Speaking of dining ... Given the impact that removing the characters has had on advance reservations for the Liberty Tree Tavern, it's anticipated that WDW officials will soon see the error of their ways and eventually allow Mickey & pals to return to this Magic Kingdom eatery. But as of right now, managers are still insisting that reservations at that restaurant have fallen off not because the characters are gone. But -- rather -- because of the economy.

And speaking of the economy ... It's important to note here that -- over the past few months -- Disney World's traditional booking window has changed. Where once Guests used to book their WDW vacations six months in advance, now (in order to take advantage of attractive vacation packages like the current Buy-4-Get-3-Free offer) people are booking trips just two & three weeks out.

Consequently, there are those within the Disney organization who are cautioning that things may not in fact be as good as they seem. That just because theme park attendance & advance bookings are up for the month of January ... Well, that then doesn't automatically mean that this pattern will hold going into February and beyond.

But the sharp pencil boys, the folks at Disney Parks & Resorts who drill down into the raw data, who actually keep track of trends ... They seem to have enough encouraging info in hand to allow work to begin on Pop Century's long-abandoned Legendary Years section. So that small bit of construction news ... That's a good enough reason to have some hope, don't you think?

Your thoughts?