If you were torn between booking that Disney vacation first and hanging on to see how much moola you get for Christmas before committing, then Mickey delivered an early Christmas present this week. Most of the deals, at least the ones in Florida anyhow, that were set to expire last week have had their booking windows extended into January. Some of them have been extended WAY into January.
The big Buy 4/Get 3 promotion now has a booking window that ends on January 24th (that’s a little over a month more than the previous close of December 20th).
The room only discounts have a window that now closes on January 4th. This deal must be pushing booking up a little however, because the number of eligible days has narrowed considerably to mostly January through mid-Feb. Post mid-Feb. through the end of the offer in early April the prices have go up considerably, so people must be booking March break trips.
Likewise, the Cruise Line continues to carry over several value priced rooms for almost all cruise lengths for Category 12 rooms.
So we’ll have to see after the first of the year where Disney ends up with forward looking bookings, but my guess is that they’ll be off 3-5% year over year in terms of occupancy. What they DON’T tend to discuss however is what the average room rate is year over year, and with all the promotions going on I’d say that has to be much softer than last year.
In other financial news this week past Disney’s stock was downgraded to neutral or perform by several analyts. The Reuters article make’s it look as if this is based as much on comparison to the sector as it is based on the underlying fundamentals, but there is no doubt that the stock has been trading in a new channel about $10 off this last summer’s highs.
On Thursday Disney also sold $1 Billion in 5 years bonds priced at a 3.375% over comparable treasuries. 5 year treasuries closed at 1.35% on Friday, so that means Disney borrowed $1 billion at somewhere around 4.725%, give or take a little. That amounts to about $43 million a year in interest, or $214 million over the life of the issue.
If your looking to tie up some money for 5 years, then those bonds might be a pretty good call. There is some upside treasury risk comparatively speaking (treasuries can’t go much lower after all), but I doubt that 5 year notes will get back to anything resembling 5% yields anytime soon.
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