Maybe a long-term closure is better for Members...

[Brian Noble]

It occurred to me today that:

• It's hard for me to imagine operating the Parks under any form of social distancing.
• Some form of at least intermittent social distancing is likely necessary until herd immunity takes hold.
• Herd immunity isn't going to happen until a vaccine is developed or a sizeable fraction of the population has "earned" immunity by being sick, and probably recently so.
• Most folks are saying a vaccine takes 1.5 years to develop, test, and scale up. Even if we started in January, we are talking mid-Summer 2021.
• Getting everyone sick quickly seems to require over-running our health care system; probably not a good idea.

So, it is at least possible that the theme parks will not open for a long time. Cedar Fair, a company that operates mostly seasonal parks (Knott's is year-round, but none of the others are) has extended all of its 2020 Season Passes through the end of 2021. I don't think they do that unless they are writing off most of the 2020 operating season, and that doesn't end in most places until late October.

If the Parks are closed, how many people want to go to WDW? Even a DVC owner might think twice. Yes the lodging is "paid for", but transportation and food aren't.

On the other hand, if the resorts are mothballed for say, six months (or longer), there might be real cost savings in operations and those savings can be passed on in the form of lower dues. Looking at OKW's resort budget, and rounding a bit:

Administration & Front Desk: $0.82
Housekeeping: $1.50
Member Activities: $0.24
Transportation: $1.09

That's almost half of annual Dues. Forgo collection of some capital reserves (because there is no wear-and-tear) and a closure might well result in real savings to Members in the form of rebated/credited Dues. Some of that isn't going to be pure savings, there is probably some administrative work that still has to happen, but there might be other costs that go down to balance that: utilities would go down, and the management fee is a percentage of operating costs IIRC.

So, the question is: would you feel differently about a long term closure with points expiring if (a) the theme parks were closed anyway and (b) you'd get a non-trivial fraction of your dues rebated?

 

[Ms.Minnie]

I don't know if Disney as a company could survive with long term closure of the theme parks. My first concern would be for the solvency of WDW / Disney not about my points.

 

[The Prophet]

Maybe good for some DVC owners. Any savings will not be much
Not good for the 43K folks that were employed by Disney
Not good the the Orlando area, which depends on tourism
Not good for Disney shareholders. Reportedly Disney is losing $3M per day
Not good for any ancillary businesses that have Disney as a customer

This list goes on and on ...

 

[Grumpy by Birth]

Not good for Disney shareholders. Reportedly Disney is losing $3M per day

$30M per day!

 

[The Prophet]

$30M per day!

I was never a good typist

 

[Brian Noble]

Maybe good for some DVC owners. Any savings will not be much
Not good for the 43K folks that were employed by Disney
Not good the the Orlando area, which depends on tourism
Not good for Disney shareholders. Reportedly Disney is losing $3M per day
Not good for any ancillary businesses that have Disney as a customer

This list goes on and on ...

All good points and perspective, particularly with regard to the Cast Members. But, $30M a day is in the context of a company that earned $11B in FY19; they can go an entire year at $30M/day before wiping that out and just getting back to zero. I don't know what the balance sheet looks like off the top of my head, but they can likely weather a fairly long storm, longer than most can.

 

[SpaceMountain77]

I don't know if Disney as a company could survive with long term closure of the theme parks. My first concern would be for the solvency of WDW / Disney not about my points.

In a recent online article, which, I believe, was published by Forbes, an analyst stated that a domestic parks closure beyond September 1st could bankrupt the company. Moreover, the closure of movie theaters is having a significant negative effect as well. Last year, as of December 10th, Disney possessed 36.7% of the domestic market.

 

[CarolMN]

All good points and perspective, particularly with regard to the Cast Members. But, $30M a day is in the context of a company that earned $11B in FY19; they can go an entire year at $30M/day before wiping that out and just getting back to zero. I don't know what the balance sheet looks like off the top of my head, but they can likely weather a fairly long storm, longer than most can.

Maybe they are more worried about being taken over by APPLE, AMAZON or some other large conglomerate and being spun off "in parts". I'd rather that not happen as I can't think of any viable "take over" scenario that would benefit Members.

 

[Ms.Minnie]

In a recent online article, which, I believe, was published by Forbes, an analyst stated that a domestic parks closure beyond September 1st could bankrupt the company. Moreover, the closure of movie theaters is having a significant negative effect as well. Last year, as of December 10th, Disney possessed 36.7% of the domestic market.

I was going to include cruise lines and movies in my original comment but changed my mind since that wasn't part of the original question. I agree this could be really bad for Disney as a company and in my opinion worse then me loosing my points.

Maybe good for some DVC owners. Any savings will not be much
Not good for the 43K folks that were employed by Disney
Not good the the Orlando area, which depends on tourism
Not good for Disney shareholders. Reportedly Disney is losing $3M per day
Not good for any ancillary businesses that have Disney as a customer

This list goes on and on ...

Never mind, I was going to say $30M per day but I see that someone else already did and you confirmed it was a typo. Sorry for jumping on this...

 

[DougEMG]

It occurred to me today that:

• It's hard for me to imagine operating the Parks under any form of social distancing.
• Some form of at least intermittent social distancing is likely necessary until herd immunity takes hold.
• Herd immunity isn't going to happen until a vaccine is developed or a sizeable fraction of the population has "earned" immunity by being sick, and probably recently so.
• Most folks are saying a vaccine takes 1.5 years to develop, test, and scale up. Even if we started in January, we are talking mid-Summer 2021.
• Getting everyone sick quickly seems to require over-running our health care system; probably not a good idea.

So, it is at least possible that the theme parks will not open for a long time. Cedar Fair, a company that operates mostly seasonal parks (Knott's is year-round, but none of the others are) has extended all of its 2020 Season Passes through the end of 2021. I don't think they do that unless they are writing off most of the 2020 operating season, and that doesn't end in most places until late October.

If the Parks are closed, how many people want to go to WDW? Even a DVC owner might think twice. Yes the lodging is "paid for", but transportation and food aren't.

On the other hand, if the resorts are mothballed for say, six months (or longer), there might be real cost savings in operations and those savings can be passed on in the form of lower dues. Looking at OKW's resort budget, and rounding a bit:

Administration & Front Desk: $0.82
Housekeeping: $1.50
Member Activities: $0.24
Transportation: $1.09

That's almost half of annual Dues. Forgo collection of some capital reserves (because there is no wear-and-tear) and a closure might well result in real savings to Members in the form of rebated/credited Dues. Some of that isn't going to be pure savings, there is probably some administrative work that still has to happen, but there might be other costs that go down to balance that: utilities would go down, and the management fee is a percentage of operating costs IIRC.

So, the question is: would you feel differently about a long term closure with points expiring if (a) the theme parks were closed anyway and (b) you'd get a non-trivial fraction of your dues rebated?

DVC resorts need to open as soon as they are allowed to. If parks remain closed longer, so be it. And if Disney refuses to open the DVC resorts when they are allowed to, they should be either sued or replaced as the management company of the DVC resorts.

Personally I'm not sure I would want to travel across the country just to visit the resorts, but others may.

 

[dismedvc]

DVC resorts need to open as soon as they are allowed to. If parks remain closed longer, so be it. And if Disney refuses to open the DVC resorts when they are allowed to, they should be either sued or replaced as the management company of the DVC resorts.

I thought the were currently required to close as well, and asked on another thread if DVC was required to close the resorts.
However, since hotels, including resorts, are considered essential services, Disney has always been allowed to keep the resorts open.

I think they made the correct decision to close, but it does not appear that was required.

I am sincerely asking this because I honestly do not know. Hotels seem to be classified as essential services, so they do not have to close.
Looking at Hilton Head hotel closures, I came across an article that said Disney "voluntarily" closed its Hilton Head Island resort. Other time shares (for example Marriott's Grande Ocean resort, where my in-laws own) are still open, although members checking in there will be subject to social distancing guidelines.
Does Disney voluntarily closing its Hilton Head resort impact the potential compensation for members who will lose points because Disney closed their Hilton Head resort even though it appears they were not required to do that?
Is that the same case in Florida? I know Disney had to close the parks, but did they have to close the hotels/DVC resorts?

Again I do not know, but would like to hear from members of this board who have expertise in this area.

P.S. For Dis board members who have read my previous posts, sorry for violating my two week "time out"

 

[The Prophet]

I should add that I am from the metro NY area and have zero interest in going to WDW until the governor lifts the mandatory 14 day quarantine order.

 

[DougEMG]

I thought the were currently required to close as well, and asked on another thread if DVC was required to close the resorts.
However, since hotels, including resorts, are considered essential services, Disney has always been allowed to keep the resorts open.

I think they made the correct decision to close, but it does not appear that was required.

My assumption was that they were under a mandatory closure in Florida.

 

[Maistre Gracey]

And don’t forget about your friendly travel professionals that bring all the good folks to WDW !!!

 

[Donna M]

We will be going to WDW even if the parks are not open because it's warm down there in the winter and they are beautiful resorts. Rarely do we go into a park for more than one day now, if that.

I believe the parks will open as soon as the governor gives the green light, maybe not all of them and with a lot of social distancing, masks, virtual queues and whatever they come up with. Florida is opening the beaches, I think they will be moving faster than we expect. I just hope it goes well for everyone.

Parts of Shanghai have opened already.

 

[Heather07438]

As the DIS reported Iger said, “But we know when it ends that we will have things for the public to enjoy and to escape to, maybe in ways they will appreciate more than they ever have." He also added that people need to be realistic regarding “the size of this and the impact of it all.”

I think he's setting guests up to accept the WDW experience will be different for a while but it'll still be worth a visit. Manage your expectations is going to get a new meaning. If we ever needed some family time at WDW, it is soon. It can still be a valuable trip even without all the bells and whistles.

We're still taking our DVC trip in January, even with reasonable limitations to the full experience.

 

[dismedvc]

My assumption was that they were under a mandatory closure in Florida.

Glad to see I was not the only one who thought that.
I posted the question in a thread, and got my head bit off with comments such as: just because its legal does not make it right.
No one directly responded to the thread by answering the question I asked.

Note: the original title of the thread was: "Was DVC legally required to close its resorts?" Evidentially by using the word legally I stirred up a lot of passion, so I edited the title and deleted the word legally.

 

[Brian Noble]

I posted the question in a thread, and got my head bit off with comments such as: just because its legal does not make it right.

The Orange County order listed "Hotels, motels and other housing providers" as essential services, so they were exempt from the order, and could legally remain open. I presume timeshares would be considered "other housing providers" by that language.

The Florida statewide order includes "Hotel, motel, other commercial lodging establishment workers" in the list of essential services. Again, I presume timeshares would be considered "other commercial lodging" and so would be exempt.

It does not appear to me that Disney was legally required to close the DVC resorts. I don't know that that's equivalent to dereliction of duty on the part of the management company suggested by this:

if Disney refuses to open the DVC resorts when they are allowed to, they should be either sued or replaced as the management company of the DVC resorts.

 

[New Mouse]

As the DIS reported Iger said, “But we know when it ends that we will have things for the public to enjoy and to escape to, maybe in ways they will appreciate more than they ever have." He also added that people need to be realistic regarding “the size of this and the impact of it all.”

I think he's setting guests up to accept the WDW experience will be different for a while but it'll still be worth a visit. Manage your expectations is going to get a new meaning. If we ever needed some family time at WDW, it is soon. It can still be a valuable trip even without all the bells and whistles.

We're still taking our DVC trip in January, even with reasonable limitations to the full experience.

I think if prices are dropped accordingly guests would be fine. Unfortunately Igers MO has been charge more give less for his entire tenure.

 

[cm8]

I think if prices are dropped accordingly guests would be fine. Unfortunately Igers MO has been charge more give less for his entire tenure.

Exactly, they had no issues raising the prices of literally every.single.thing. Maybe they can use some of that to provide us with the experience we prepaid for. I’m an **AP too and the 2x’s increases for the last 3? years gave no consideration to the ones being charged.

I couldn’t care less about how much they’re losing.They didn't care how much they were charging for experiences that were once free and or just saw an increase. They just saw $$$$$. Maybe just maybe, they will go back to treating us as guest and not another $$$$$.