Like most of you, we’ll all be taking the next few days to hopefully enjoy some time with family and friends. First as we celebrate the December holidays of the many religions of the world and second as we in the western world ring in a new year.
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.
Here is an interesting, but slightly off the wall finding I recently came across.
Many of you might recall the not to long ago announcement that Disney was partnering with several colleges and research institutions around the world. Well, if you’ve been waiting to find out more and think you have something to contribute, now might be your chance!
Disney has done two things on this initiative that have recently graced the web.
The first is the standup of the Disney Research website. Granted it’s little more than a single page with a copy of the press announcement on it from back in August, but it’s something I guess.
The only reason I found this page however, is because in the last couple of weeks Disney has posted a job announcement on the disneycareers.com website under Imagineering. Below I’ve copied the relevant bits, since I don’t know how long the announcement will be out there to link to.
Most of the areas they are looking for are generally what I’d expect, things like robotics, ops research, etc. But there are a couple of surprises too.
I mean, who would have thought that Mickey was into cryptography? That kind of stuff tends to get left to guys like this 3 letter agency. Trust me, they are smart people, but just a wee bit eccentric for the theme park and entertainment business… (BTW, I’m not implying that Mickey is working with said 3 letter agency. I doubt that honestly, it’s just such a strange oddity to me.)
Strange indeed.
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Research & Sr. Research Scientists & Postdocs
City
Glendale
State
CA
Position Type
Full-time
Requisition ID
183511
Research Opportunities at Disney Research, part of The Walt Disney Company
Disney Research, with research labs in Pittsburgh, Los Angeles, Salt Lake City, San Francisco, and Zurich (see www.disneyresearch.com for additional information), invites applications from outstanding researchers at all levels in the areas of:
AI & Autonomous Agents
Audio Processing
Computer Graphics
Computer & Sensor Networks
Computer Vision
Cryptography & Information Security
Display Technologies
Distributed & Parallel Computing
Embedded Systems
Human-Computer Interaction
Machine Learning & Data Mining
Materials Science
Mobile Computing
Multimedia Content Management
Operations Research
Radios & Antennas
Robotics
Speech Recognition
Video Processing
Applications should include an area of specialization, a curriculum vitae, copies of representative papers, geographic preferences or constraints, and the names and email addresses of three or more individuals who have been asked to provide letters of reference.
Candidates are expected to be able to initiate and conduct their own research on topics of relevance to The Walt Disney Company. Full participation in the global R&D community is required through publication of results, collaboration with universities, and participation in professional service activities. Candidates should have a strong record of achievement in applied research, excellent academic credentials, and an earned Ph.D. in their area of specialization. Work experience in the entertainment industry is preferred but not required.
The Walt Disney Company is an Affirmative Action / Equal Opportunity Employer and encourages applications from members of under-represented groups.
So the Disney Cruise Line sprang their big new, never before offer this morning… and when I read it this morning, all I could think was
bwah? Surely you jest!
But no, no jesting here. Up to 3 kids go free with two adults (you still pay fuel charges and taxes on them) for 3 night cruises. Interesting, but not INTERESTED.
Why you say? We’ll let’s see Mom and Pop, ‘if you pull your kids out of school for a Thursday and Friday to come and cruise they can go for free’. But I have a 1 year old, who hardly has to worry about school and grandparents on either side that don’t either. But we didn’t get anything from this deal.
Don’t get me wrong, I LOVE the Disney Cruise Line. The 4 day we took last year was one of the most relaxing vacations I’d taken in quite some time. And I WANT to go again, SOON! Especially on another 4 or 7 night cruise. I should have held onto that onboard booking we did with the 10% discount last year. But there are just a few things holding me back from booking again…
And it’s NOT time off from work … It’s flat out the price.
There are some decent deals on 7 night cruises for instance, with prices for the Western itinerary starting at around $700 an adult for Category 12. However, the difference between a Cat. 12 and the lowest price portal view room (that’s ocean view for you land lubbers) is a Category 9, with a per stateroom price that is over $1000 more! 10 Benjamin's, and the room is no different, you just get an outside room with a view.
I have to tell you, in my honest opinion, and I’m trying to be objective here, that Tom McAlpin and his crack team that run the Cruise Line missed the pier on this one. There is a FANTASTIC opportunity here to leverage the other P&R promotion ‘What Will You Celebrate?’ Other ideas like:
Maybe DCL’s bookings are holding up better than the ones at the Parks, which Tom Staggs reported the other day were off as much as 10% but have rebounded to being down only 6% since they announced the latest deals. That 6% down is still apparently enough to be indicative of drop at the other BU’s for the company. So much so that they are heavily contemplating layoffs across the company. Attendance is off only about 4%, which means that locals are still turning out pretty well as best I can tell.
Apparently there are still enough people who can afford to plunk down more than $2,500 to keep the discounts restricted to the weekly 3 nighters.
Something for the rest of us please???? I wanna go!
This has been sitting in my draft folder for sometime and even though the transaction is a little older now I believe, it just showed up again at Google’s finance page as a news link on Friday.
For most of use when we think of overseas expansion for the Disney Company, we tend to focus on the theme park business. After consideration for that, we might move on to the Studio’s of course, since today (just like in Walt’s early days I might add), the studio relies just as heavily on international receipts as it does domestic ones.
I think most people stop there in general. Maybe that’s because the studio and the theme parks were the core of what Walt created. Maybe it’s because they are the parks that so many people remember growing up with and therefore are the most nostalgically attached too.
Sure, there is Consumer Products. But let’s face it, we are so used to going to Wal-Mart, Sears and other outlets and seeing Mickey and Pals on everything from house wares to underwear that DCP I think get’s short shrift. That despite the awesome job that they do.
And there is the Internet Media Group (DIMG)… which has risen from the ashes of the almost disastrous ‘go.com’ days. Still not sure what Michael Eisner was thinking on that one…
I feel the most massive part of the company though is still out of limelight a lot, or at least as a single entity anyhow. I think people focus on Media/Networks through the lens of the individual brands more than as a portfolio of inter-related products. There are no castle’s, huge tent pole summer blockbusters or other tangible things that people can wrap their head around to associate many of the media parts with one another in the same way… and yet that’s exactly what Disney does. They manage media as a portfolio of assets, on a GLOBAL scale.
Walt knew that effective advertising was on of the key’s to the company’s success. Much has been written about the irony of the deal Walt cut with ABC that ultimately gave him much of the funding he needed to build Disney World and that today the Disney Company owns Cap Cities/ABC. It’s a good thing too, or we wouldn’t have some of the great talent in the executive suite that the modern day Mouse Company offers.
So given that the P&R, CP and Studio’s division of the companies in many ways already have worldwide penetration. Disney still lacks the same scope and breadth in media networks. Which is why I think Disney has continued to do just that. They own major stakes or have long term deals with media networks in China, Russia, Europe and now India through the recent acquisition of almost 60% of UTV Software Communications.
UTV bills itself as ‘India’s first integrated global and entertainment media group’. Sounds a bit like a Media/Networks portfolio for India no?
Which is why it should be no surprise then I think that Disney continues to expand their media network reach through quality local providers vice building it themselves (and running a high risk of getting it wrong). It should also come as no surprise that because of this ownership, Disney has a seat on the board of UTV as well.
If you are going to be a global company, then you need to have a plan for ALL your major businesses to be global. And that’s just what Bob Iger and Andy Bird (the head of Disney International) have been up to I think. Global reach. So just like in Walt’s days, when the market is doing bad in one economy, hopefully it’s doing better in another (the current mess excepted).
Disney’s stock price has made a nice little rally this last week to boot. It’s still WAY off it’s 52 week high in the mid-30’s, but it’s also up quite a bit from being in the high teen’s. If you’re looking to invest in Disney shares, now might be a good chance to get in. With gas falling, that HAS to be good news for the domestic parks.
Disney has a pretty good investor direct plan that you can use for very cheap.
It has been widely rumored/reported by folks like Jim Hill that the Pirate & Princess party held over the last couple of years at the Magic Kingdom in Florida hasn’t made much money (if any at all).
For the number of times that they’ve done it, I’d have a hard time believing that they weren’t making SOME money at it, else they’d have surely given up on it by now. Mickey’s no dummy, and rarely in my experience has Disney tinkered with something more than once or twice before mothballing something that just wasn’t working.
Some people have contended based on the crowds they’ve seen that there was no way Mickey could be making money for this hard ticket event. What most people forget in this analysis I think is the fact that on those days the MK is still open during the day for regular guests (usually until 6’ish).
So in my book there is very LITTLE extra money being paid out for what is mostly a profit making MACHINE for the P&R folks with these parties. Sure, the daily attendance may go down a bit due to park hours. And you’ll have a slightly different cost structure for things like added fireworks, a second parade and the mixers. However, you’ve just gotten a whole bunch more people to pony up more money ($40-50 bucks a head).
The staff was going to be there anyhow, regardless of the party. And Mickey still sells plush and trinkets regardless of how you paid to get into the park.
My bet is that the finance people at TDF have these events rigged for there is LOTS of upside, and very little downside… after all, if you control everything that’s in play, you can do that without much fear of downside risk.
The next question will be do they cut park hours on the day’s the parties would have been scheduled for? Labor is a variable cost remember, so every hour Mickey shaves off the clock probably saves him on average $10-$15 dollars an hour for all those people working in the park (since most of them are hourly employees, not salaried).
That adds up quick.
So if Mickey is opting to send Jack out to sea this time around, then attendance predictions must be soft enough to not overcome the slightly higher fixed costs of these parties. Which also means some of these predictions of completely unhinged bookings might have just gotten a little less murky…
UPDATE (12/4/08): Disney World just announced their latest discounts for most of January through mid-February. $49 for ALL Value resorts, $94 for Moderates and some various discounts for higher end properties like AKL. One trick here to note, these prices only apply SUNDAY through THURSDAY… I’d expect full freight prices for any Friday and Saturday night stays.
No word yet on further discounts at the cruise lines. My spot checking this last week has shown deals on category 12 state rooms, but nothing else… yet.
Well, I’m finally digging out from the semester and making some headway, which is more than I say for the both the market’s and the Disney Companies’ stock price after today… youch.
It looks like my 2008 will come to a close despite my best efforts with me, like most of you, being a guest at Disney Parks and not a Cast Member. We had some pretty solid leads, an interview or two, but just too many moving parts in the end to put it all together this year. Oh well, there is always next year. . . saying what Jim Hill has been hinting at in Florida doesn’t come true (only 35% occupancy in January??? Whoda thunk?)!!!
Makes me think of this door in Disneyland’s way cool Toontown (much better than the one in Florida me thinks).
I promised I’d give a brief synopsis of my recent business trip to California that afforded me most of a day at Disneyland. It was a Sunday the 16th, which was a night the park was scheduled to be open until Midnight. We got there a little later in the afternoon than we planned, but we were still in the front gate by about 4 in the afternoon.
The crowds were very light (here is a pic of Main Street):
Due to that, we didn’t wait in line for much of anything… in fact, the longest wait we had was for the Nemo submarine ride which was about 20 minutes. Space Mountain, Indy, The Haunted Mansion, were all less than 10-15 minutes.
Besides the smaller rides in Fantasyland, we rode just about everything we wanted to save the Matterhorn and Peter Pan (why does this ride always have HUGE lines???). Not open were Small World (missed it by a couple of days) and Roger Rabbit’s Cartoon Spin (which I missed not getting to ride if only for the queue!).
Fantasmic went off without a hitch (though I later heard they used a special lower level fireworks display) and the fireworks over the castle were cancelled due to fire concerns in the area. We had a light amount of smoke in the air as you can see in the picture above, but it wasn’t so bad that it was all you could smell.
I have to say one of the stand out attractions was The Haunted Mansion Very Scary Christmas overlay. I’d never seen it, so it was a real treat.
I can tell you after seeing it I see why Imagineering and Operations consider it not logistically feasible in Florida. The overlay mods are so extensive in fact, that you’d be hard pressed to know it was ever a different ride…
I won’t spoil all the details (I’m sure you can find them someplace else if you REALLY must know), but suffice it to say it really is well done.
So there you have it, a short, condensed trip report from the left coast.
Now if someone in Florida would just figure out how to make hot, fresh Churros like the ones in Disneyland I’d be set…
The Disney World Weather is:
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