Will making WDW seem more appealing to young urban professionals really be enough to turn around this resort’s merch per capita problem?

Jim Hill

16 years ago

Have you heard about this advertorial that the Walt Disney Company had placed in the March issue of GQ?

This 8-page spread (Which is loaded with pictures that fashion photographer Ben Watts took of a handsome family of hipsters cavorting at Walt Disney World) tries to sell WDW as this great place to play golf …

… or go race cars …

Only on the very last page of this advertorial does Mickey almost begrudgedly admit that Disney World also has theme parks & characters …

But — as the above photograph suggests — if you’re a young urban professional, you don’t have to let this lame family stuff cramp your style. You can still goof on the Mouse while enjoying a WDW vacation with your wife & kids.

So why is Mickey now targeting the too-cool-for-school crowd? To be honest, it’s because the Mouse wants these young urban professionals to bring their over-stuffed wallets down to Orlando. With the hope that they will then help shore up slumping merch per capita levels at the WDW resort.

For those of you who don’t know: merch per capita levels (at least in Disney’s case) refers to the average amount that your typical WDW guest spends on theme park tchotckes like t-shirts, autograph books, baseball caps, souvenir mugs, etc.

“And why is the Mouse suddenly so concerned about merch per capita levels at WDW?,” you ask. Well, for the past year or so, Disney World has been relying heavily on those “Affordable Disney” vacation packages to put heads in beds. But the only problem is … When you tell people that a six nights / seven days stay at a WDW resort for their entire family only costs $1600 … Well, that’s what they budget.

Consequently, over the past 15 months or so, Disney World has seen a significant drop in on-property merchandise sales. And while Disney’s 2007 Annual Report insists that WDW saw a 3% increase in per capita spending among resort guests … The merch side of that equation is a very different story. From what company insider have been telling me, folks who visit Disney World these days just aren’t spending as much as they used to on souvenirs.

To be fair, it has been almost a decade since WDW last had a truly popular product and/or promotion like pin trading to help drive retail sales at that resort. Which should be factored into this downward souvenir spending trend.

At the same time, given that WDW visitors haven’t responding all that enthusiastically to the “Year of a Million Dreams” promotion … Well, that means that there’s a ton of merch that features that YOAMD castle-in-the-clouds logo that’s still sitting on store shelves around the resort. Which means that these very same items will soon be sold at severely discounted prices at the Character Premiere Shops in the Orlando Premium Outlets & Prime Outlets International malls.

Now I know that it may seem odd to write an article about this one narrow aspect of the Walt Disney World Resort. But you have to understand that Mickey’s accountanteers take the whole merch per capita thing very seriously.

After all (According to these folks, anyway) that’s one of the main reasons that Euro Disney slid so quickly into the red once that resort opened back in April of 1992. EDL was meeting Disney’s initial attendance projections. The only problem was that Europeans weren’t loading up on Euro Disneyland merchandise before they exited that theme park. It was those lower-than-expected merch sales levels (plus — of course — building three too many hotels) that nearly drove that $3 billion project to the brink of bankruptcy.

And from what I’ve been told, the guests who are visiting Hong Kong Disneyland aren’t meeting the company’s initial souvenir sales projections either. Which is why the Mouse has had to make some adjustments to that project’s anticipated return-on-investment.

You see what I’m getting at? This whole merch per capita thing is a key component of the theme-park-as-a-money-making-machine equation. That’s one of the reasons that the Walt Disney Company feels so confident about moving forward with its yet-to-be-officially-announced Night Kingdom project. Because they know that merchandise sales at this niche park are going to be huge. Given that the WDW guests who actually visit this only-2000-people-per-night park will then load up on items that feature the DNK logo. So that they can then prove to friends & family that they’ve actually been to WDW’s newest & most exclusive theme park.

Of course, what’s kind of ironic about all this that these young urban professionals that Mickey is now attempting to lure down to Disney World with that GQ advertorial are the very same folks that the Mouse will be going after in 2011. Once Night Kingdom officially opens its doors and Disney then needs to recruit people with very deep pockets who will be willing to pay that steep $250-to-$300 per-person admission fee.

Or could pursuing the too-cool-for-school crowd now just be Disney’s way of priming the pump for DNK? Showing these oh-so-trendy types that a WDW vacation can actually be fun. Which would then make it that much easier for the Mouse to get these people (more importantly, their over-stuffed wallets) to come back to Disney World once Night Kingdom opens for business.

So what do you folks think? Will this advertorial actually persuade any young urban professionals to give Disney World a try? And will this hoped-for influx of big spenders really be enough to turn around WDW’s merch per capita problem?

Your thoughts?