More on Mickey goes to Washington

The folks at WDP&R (that’s Walt Disney Parks & Resorts) released more details and pictures about their plan to build a hotel in the Washington DC area late yesterday.

Here are some excerpts with some commentary and a link to the full site/info at the bottom:

Jay Rasulo,Chairmen of WDP&R and Milton Peterson, Chairmen of Peterson Companies  Copyright Disney
(That’s the Woodrow Wilson Bridge in the background looking at Rosalie Island across Smoots Cove)

 

Picture of National Harbor
Copyright Disney

Layout of National Harbor
Copyright Disney

Location from Virtual Earth (Downtown DC is about 10 miles due north)

So here are a couple of things I find interesting about this release.

1.  It’s not anywhere close to mass transportation, and about 10 miles or so due south of the downtown Washington, DC area.  In fact the complex is in Maryland, not in the District of Columbia at all.  It does have pretty good access to the Washington Beltway as you can see.

That means you’ll have to take a bus or taxi to get to any of the DC area attractions.  (I used to live in the DC area, so it’s not a trivial issues frankly.)

2.  Read this line from the press release again CAREFULLY:

Disney is CONSIDERING using the 15-acre site overlooking the Potomac River in National Harbor, MD as the location for a resort hotel for families and others visiting the National Capital Region.

My emphasis added.  Disney bought the land at $11 million, but apparently the press release gives the impression that they have an OPTION to build, not a REQUIREMENT.  That’s a very different spin, and this one from the Mouse itself!

The full details are on the Disney website here.

Swinging into summer…

I’ve been a little slow in updating the blog log as of late.  As we slip into the summer months, things will probably only stay that way.

My life in some ways parallels the Disney organization as whole.  This blog is a part time hobby, done these days between chasing a 2 year old, trying to finish a master’s degree (my second), and helping run a large division of an engineering organization with over 200 people and over billion dollars in revenue.  Disney has me on scale, but then they have 60,000 people in Florida alone, so I don’t fell TOO bad for them!

The modern corporation is the master at timing and media management, and of course Bob Iger and crew are no different.  All of the talk about layoffs and downsizing has quietly faded into the background, no doubt on purpose.  That doesn’t mean the people who are out of work are any less out of work, just that the company has been happy for a while to be out of the spot light.  No doubt by design.  For the folks in Florida, the summer is as good as on autopilot:  let the chips fall where they may.

I was VERY interested today to learn that Disney has essentially all but announced their next off property hotel move in addition to the one in Hawaii as part of the DVC resort there.  The Washington Post reports today that Disney has acquired the 15 acres of the 300 acre National Harbor development just outside of our nation’s capital.  

So Jay Rasulo continues his move to broaden Disney venues and reach into places where families travel and where a name like Disney can be a trusted place to stay.  We can’t say he didn’t warn us, and for those of you who’ve wanted Jay’s head on a pike, I guess you’ll just have to get over it.

Likewise, Disney Gossip is reporting movement on the unfinished half of Pop Century, citing a rumor that says the new part will model after the family suites at Pop and be called Animation Inn. 

We’ve stayed at Pop a couple of times, as well as All Star Music and Movies a couple of times each as well.  Disney has always said that they’d build out the rest of the Pop resort when the market was ready.  I can’t help but wonder if they wish they’d done it sooner?  The current budget shoppers would have filled 2 Pop Century’s over I think. 

If you’ve tried getting a reservation at one of the Value resorts over a weekend in the next several months, you know what I mean!

Play-by-play of Q2 Conference Call

Sorry I didn’t get this up sooner, car accident on the way home kept me from getting home in time to listen live, so this is from the re-cast which you can listen to on the Investor Relations website at http://www.disney.com/investors.

The prepared comments were short, taking up only 11 minutes of the 1 hour. The rest was open to questions.

Bob and Tom from New York:

Bob prepared remarks -

• 2nd quarter performance off as expected, with the Studio’s taking the largest year-over-year loss off over 20% from a already weak last year
• some stabilization of business, but no firm predictions yet in sight of overall large improvement
• continue to move to media online
• joining Hulu.com as an equity partner that helps combat piracy and doesn’t believe that it will impact current distribution methods or windows
• treating online media as a ‘not going away’ opportunity
• Media Networks (ABC, ESPN, etc.) continued to do well (Ed: they actually improved and made a 2 gain over previous year quarter)
• Studio performance off, but hoping to stay with strong slate going forward.
• UP! to be the first animated feature to open the Cannes film festival
• Parks & Resorts staying focused on keeping numbers up (which it has) to the loss of margin (Ed: the quarter was off 12% from the previous year quarter and the margins of course were worse than past)

Tom prepared remarks -

• Studio Entertainment off, with a large amount from home entertainment
• Q3 also to be tough for Studio
• WDW attendance off only 1%, Disneyland up 2%, but overall guest spending is off 6% despite Easter being in a different quarter this year over last
• Room occupancy at WDW increased to 89% from 88%, but per room spending was down 17%
• 69% occupancy in California, off 14% from last year, with per room spending off 6%
• International parks are essentially flat as a whole from what Tom said
• DVC continues good sales, though off from credit market issues and other one time incomes from last year (Old Key West extensions, etc.)
• Room reservations are on par to slightly ahead for the rest of the year due to promotions (Ed: in other words, expect those line to continue!)
• Consumer Products was up in revenue but down in income because of the soft consumer market, especially at the re-owned Disney Company Stores
• Ad revenue is still off, with the window from booking ads to the actual broadcast getting smaller

Highlights from the questions -

• Restructuring European operations
• Bob views being in the online space as a better option than to NOT be in that space. This despite the fact that monetization (i.e. making money) isn’t as robust as the traditional modes of DVD, etc.
• Interesting that they don’t consider Internet methods to be cannibalistic to other methods because the age demographic seems to be different than the other methods (i.e. internet is younger), and these online groups also consumer MORE media than the others.
• Will continue to offer a variety of methods to distribute media, left in general to each business unit. Hulu.com for instance doesn’t cover ESPN or many Disney Channel shows. Likewise, will continue to provide TV (i.e. ad supported), streaming (i.e. ad supported) and sell through product (i.e. iTunes). Long term they expect these to all make money.
• No projected changes for offers at the Parks, especially until the existing ones end at WDW in Q4 (i.e. July, August, September of this year).
• Attendance seems to be doing better at Hong Kong and they feel good about making progress
• Bob mentioned a brief discussion about the framework with the Shanghai government and that they await word from the central Chinese government.
• There are now 93 Disney Channels around the world!

So there you go. Not pretty, but not a continued ‘bottom falling out’ situation. Bob mentioned that they feel many of the business parts are starting to stabilize, but there are several that are still challenging.

As for those of you who are park dwellers like we are, there is a new promotion coming at some point to Disneyland to get attendance and hotel bookings back up (probably more towards hotels I'd guess).

WDW is basically baked into whatever it’s going to do through the end of the fiscal year and bookings are inline to slightly above last year, so no new deals coming there and expect attendance to stay high (i.e. crowded).

No new news about Disney Cruise Line or Disney Adventures nor anything about DVC.

Disney Cruise Line Offers Disappear & JOBS in Florida??

Things have been pretty quiet on the Disney corporate front lately.  That’s strange in many ways, and of course it leaves guys like me who are following the business side and trends not much to talk about. 

Tomorrow is the big day for the quarter of course.  Disney’s stock lately has been up big since it’s March 9th low at $15.59, closing the day at $22.86.  That’s a $7.27 move in less than 2 months, or 46.6% increase.  $3 of that move has been in the last week alone.  And a boo-yah to you Jim Cramer…

I don’t expect the numbers out of tomorrow’s call will be all that fantastic.  They won’t be horrible, but not necessarily good either.  We started pointing out some of that evidence lately with the offers that Disney is making both here and abroad to keep up attendance.  Free food is longer than last year and they are already announcing deals well into the late fall months, presumably in an attempt to get people to lengthen that booking window some.

There ARE a couple of other interesting anecdotes as well.  For one, Disney Cruise Line has quietly done away with it’s ‘Special Offer’ rates page that used to show the minimum price for upcoming cruises, typically category 12 for 3 and 4 day ones, and category 11 for 7 day ones.  The Florida residents one is still there, but not the general public one.

I presume the ‘deals’ are still there, but now they aren’t advertised on a single page like the used to be, at least not for now.  That’s how I scored an October 4 day cruise for 2 adults without trip insurance for under $800.  Maybe that’s why it’s gone?  Maybe it will return?  Who knows.

Second, something's shaking in Florida at least, though it’s hard to say exactly what at this point.  I do know over the last 2 weeks or so, new job openings have SLOWLY started to trickle out onto the web.  This is especially true for Parks and Resorts online, where if you have a programming background the Mouse is still looking for you.