Foreign Currency and Disney World

It’s being rumored by several sites throughout the World Wide Web-o-sphere that Disney World isn’t looking to good for future booking right now.  Disneyland is off too, but that’s old news at the moment since Bob and Tom talked about it at the 3rd quarter conference call back in September. 

What IS new is the possible realization that future bookings in Florida aren’t holding up as well as they let on or knew at the time.  So that either means that their average forward booking for a vacation in reality is only about 3-4 months (hence Mr. Staggs saying something to the effect that ‘through the end of the year bookings were in line with last year’), OR the model isn’t holding up in current economic conditions and people are cancelling more future vacations than usual (Disney is pretty lenient on their refund policy if you think about it, offering a booking for a very modest down-payment and only requiring full payment 45 days out).

I’d also offer as part of the discussion the following: in the last month, the greenback has strengthened considerably against almost any foreign currency you can name. 

Here are some important examples (prices are American $1 to units of the foreign currency from Yahoo Finance):

Country/Region	August 1st  Conversion	November 3rd Conversion	Change
Canada	1.02 Canadian	1.20 Canadian	+17.65%
Euro Zone	.64 euro	.78 euro	+22.88%
Japanese Yen	107.67 yen	98.70 yen	-8.33%
U.K. Pound	.51 pound	.63 pound	23.53%

 

So as you can see, in all but the Japanese Yen case, the dollar has strengthened significantly in the last 3 months.  That means that anybody coming to the US from those areas, on average, just took a 20% haircut to their money (seen another way they get 20% less greenback that they were 3 months ago).

So chances are, it’s not JUST U.S. booking that may be off, but international ones too…  we’ll have to wait and see, though I don’t expect that to be addressed much on weeks conference call either.