I heard some resort closing info today...

[Joeguitar]

I love how a bunch of trailers can cause such a stir on the Dis boards.

EXACTLY!!!

I read on Jim Hill's blog that there are parts for a 5th park in there!

 

[dreajoyanne]

My mom and stepdad are at POR right now and she was talking to a Guest Services Employee. He said that they were at 60% capacity for January which was good..... BUT he then admitted that 2 of the mansions are closed because of low attendance and to cut costs.....

I'm not sure if anyone else said this earlier, but I thought it was interesting.

 

[redrosesix]

While we're on the topic of people cancelling, operating below capacity, etc., thought I should add that many Canadians I know canceled their trip to WDW because of the exchange rate (we're paying about 20 percent more than we did last year). Even with the special offers, the exchange rate difference means we're just getting the same price as last year when you look at all the costs. Of the 25 girls who were supposed to be traveling with us to Twirlmania, there are now only 8, and of these we are the only ones still staying at WDW. But when I add in the number of people we know outside the baton club who have instead decided to go to Cuba or somewhere else this year...

It's a huge number of people! I actually only know 2 other families that are staying in WDW this year.

 

[CanadianGuy]

While we're on the topic of people cancelling, operating below capacity, etc., thought I should add that many Canadians I know canceled their trip to WDW because of the exchange rate (we're paying about 20 percent more than we did last year). Even with the special offers, the exchange rate difference means we're just getting the same price as last year when you look at all the costs. Of the 25 girls who were supposed to be traveling with us to Twirlmania, there are now only 8, and of these we are the only ones still staying at WDW. But when I add in the number of people we know outside the baton club who have instead decided to go to Cuba or somewhere else this year...

It's a huge number of people! I actually only know 2 other families that are staying in WDW this year.

I'm teetering on the edge of cancellation myself.. and in years past I was good for anywhere from 2 to 4 trips per year. This year.. looking like maybe 1 or zero.

 

[Peter Pirate 2]

My mom and stepdad are at POR right now and she was talking to a Guest Services Employee. He said that they were at 60% capacity for January which was good..... BUT he then admitted that 2 of the mansions are closed because of low attendance and to cut costs.....

I'm not sure if anyone else said this earlier, but I thought it was interesting.

Very interesting.

But I don't believe 60% occupancy with two mansions closed could be considered good by any historical WDW standard.

 

[Joeguitar]

Very interesting.

But I don't believe 60% occupancy with two mansions closed could be considered good by any historical WDW standard.

I wouldn't think so either.

 

[doconeill]

I'd need more context as to what the "60%" meant (including or excluding the closed buildings), and "good" (good in relation to late January historical numbers? Or good in relation to expected numbers due to the downturn?)

 

[dreajoyanne]

From what my mom said, it sounded like he was just trying to convince her that everything was still at the typical occupancy. BUT the 60% was not including those mansions that they had closed.

Although, I spoke with my mom this morning and she said that although the parks aren't packed, they aren't desolate either.


However, she did say that a lot of the snack carts and counter service restaurants are closed for "refurbishment." Although there isn't anything visibly happening inside of them.

 

[redrosesix]

Although, I spoke with my mom this morning and she said that although the parks aren't packed, they aren't desolate either.

I think there are a lot of people staying outside WDW this year -- not just the Canadians that I know. The special offers at WDW are great, but some of our group are paying $39 per night, with complimentary breakfast and a kitchenette (the hotel doesn't usually charge that rate, it's just a very deep discount) Wondering why we're staying at WDW when we could pay that rate? My daughter has asthma, and since she didn't have any problems at ASMusic last year I'm going with what I know -- small price to pay to avoid an asthma attack.

So this might account for that many people visiting the parks.

 

[M-I-C-K-E-Y]

My mom and stepdad are at POR right now and she was talking to a Guest Services Employee. He said that they were at 60% capacity for January which was good..... BUT he then admitted that 2 of the mansions are closed because of low attendance and to cut costs.....

I'm not sure if anyone else said this earlier, but I thought it was interesting.

I am left to wonder what the "profit point" (for lack of a better term) might be for the resorts? Is it worth their while to take 50% of rack rate for a room, just to fill it (and get folks to the parks, shopping, dining...)? How about 25%? Less? I keep thinking that there must be a dollar amount that they could justify, that would benefit their bottom-line.

In addition to offering a deep discount on room rates, they might also consider offering DVC members a discount at non-DVC resorts, to lure them in, so to speak. Right now, it costs 16 points for a weeknight at POR, but only 8 points at OKW (studio). They could fill a huge number of rooms by offering DVC members "specials" or deals - perhaps as low as 5 points per night at POR or other "slow" resorts. Why not - and why not offer such deals "on the fly," to fill those rooms? Once again, it gets folks in the gates, spending money...it's at least worth a try, instead of closing buildings at resorts.

Surely there's execs at Disney who ponder such things...?

 

[doconeill]

I don't think you'll see them discounting rooms for DVC members at all. Unless the DVC resorts become popular enough for CRO to rent out the resulting rooms at their premium price in exchange for the non-DVC room given to the DVC member, its a total loss on the room income (other than the $95 fee, and we don't know where that goes).

I'm sure they have a LOT of data on how much guests spend on things OUTSIDE the resort (thanks to KTTW cards) that I'm sure they have a zero-point in mind for discounting the rooms already. They may be willing to take a slight loss on the resort side in order to make up the income on the ticket/merch/food side.

 

[redrosesix]

This discussion made me think about whether there are lower costs associated with having repeat guests ie. people who know the ropes and arrive at WDW with their ADRs made etc. Maybe one of the reasons why WDW offers the bounce back offers.

When I think about how much more I know now compared to the first time I checked into a Disney resort (like how to get to MK from the resort), I realize that there must be a lot more labour cost associated with first time guests.

As for the number of guests needed to keep the hotel running, I think it is basic first year economics: they have to cover all of the variable costs (housekeeping, power, etc) as well as some of the fixed costs (pool heating, landscaping, etc.) in order to keep a resort open.

 

[Chuck S]

I am left to wonder what the "profit point" (for lack of a better term) might be for the resorts? Is it worth their while to take 50% of rack rate for a room, just to fill it (and get folks to the parks, shopping, dining...)? How about 25%? Less? I keep thinking that there must be a dollar amount that they could justify, that would benefit their bottom-line.

In addition to offering a deep discount on room rates, they might also consider offering DVC members a discount at non-DVC resorts, to lure them in, so to speak. Right now, it costs 16 points for a weeknight at POR, but only 8 points at OKW (studio). They could fill a huge number of rooms by offering DVC members "specials" or deals - perhaps as low as 5 points per night at POR or other "slow" resorts. Why not - and why not offer such deals "on the fly," to fill those rooms? Once again, it gets folks in the gates, spending money...it's at least worth a try, instead of closing buildings at resorts.

Surely there's execs at Disney who ponder such things...?

There would be no point in offering DVC Members a discount - at least on a point stay - at a non-DVC resort. Points legally have no cash value. DVC would have to rent a DVC resort room for cash to pay WDW Resort Operations for the room. In theory, though it works invisibly to members, you are reserving a DVC Room with your points, DVC then turns that room over to CRO to rent to offset the cost of the non-DVC room. If they can't fill POR rooms with cash discounts, we'd also have to believe that they wouldn't be able to rent the DVC room for cash to recoup the cost.

They could offer DVCers a cash discount to stay at POR, but I would expect them to exhaust every other discount opportunity first, like FL residents and AP holders.

 

[M-I-C-K-E-Y]

Whatever it is that they're doing doesn't seem to be working. Florida residents don't seem to be filling those rooms... Perhaps they need to think outside the box.

 

[CanadianGuy]

Very interesting.

But I don't believe 60% occupancy with two mansions closed could be considered good by any historical WDW standard.

It is not. No matter how you do the math... including or excluding the closed rooms.. 60% is well, well, WELL below the norm at Disney.

I wouldn't think so either.

And that sir is why you are a smart guy!

 

[doconeill]

They could offer DVCers a cash discount to stay at POR, but I would expect them to exhaust every other discount opportunity first, like FL residents and AP holders.

Since DVC usually negotiates those discounts, and they just reworked the points to try and keep DVC members in the rooms on weekends, I don't see any discounts for non-DVC rooms on the horizon - why make it easier to conserve points with cash stays when you are trying to keep your own rooms full?

 

[Chuck S]

Since DVC usually negotiates those discounts, and they just reworked the points to try and keep DVC members in the rooms on weekends, I don't see any discounts for non-DVC rooms on the horizon - why make it easier to conserve points with cash stays when you are trying to keep your own rooms full?

I didn't say they would, or even should. I was replying to a post about offering non-DVC resorts at greatly discounted points per night. The point of the post was that they could offer a cash discount, though unlikely, but basically they could not offer a point discount because the cost for the non-DVC room must be recovered by DVC.

 

[andrewilley]

I am left to wonder what the "profit point" (for lack of a better term) might be for the resorts? Is it worth their while to take 50% of rack rate for a room, just to fill it (and get folks to the parks, shopping, dining...)?

It's not just a case whether an individual resort is profitable per se, but the wider picture of how to get more people into the parks paying admittance, buying food & merchandise, etc.

Andre

 

[M-I-C-K-E-Y]

It's not just a case whether an individual resort is profitable per se, but the wider picture of how to get more people into the parks paying admittance, buying food & merchandise, etc.

Andre

Exactly!

 

[doconeill]

I didn't say they would, or even should. I was replying to a post about offering non-DVC resorts at greatly discounted points per night. The point of the post was that they could offer a cash discount, though unlikely, but basically they could not offer a point discount because the cost for the non-DVC room must be recovered by DVC.

I wasn't questioning what you said - it was a rhetorical question. I agree with what you said. I was just pointing out that giving DVC members cash discounts on non-DVC rooms (the second part of your post) is very unlikely at this point.