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Are Disney World’s recession worries starting to recede ?

Jim Hill

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:

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.

Copyright Disney. All Rights Reserved

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?

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