Paying the $3 Billion Price Tag for FASTPASS+

Written by Kevin Yee. Posted in Walt Disney World

Tagged: , ,

Published on July 16, 2013 at 4:00 am with 34 Comments

The latest test of MyMagic+ (and its FASTPASS cousin, FP+) will start next week, involving guests at Bay Lake Tower–in other words, the DVC crowd. Disney may well get different feedback from this population than it got from the last test, which stressed visitors who come a little less frequently.

More and more rides now sport FP+ entrances (and they say “Disney FASTPASS+” rather than “Disney’s FASTPASS+”, which matches the moves by the company mostly on the West Coast so far to brand slightly differently than the past decade has done, by removing the possessive format).

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FP+ is not the same thing as MyMagic+ even though they are used interchangeably by some fans. FASTPASS+ alone is not costing all that money. But let’s assume for the sake of argument that it is. Can they still recoup their investment?

A backlash about FP+ is growing in some corners of the online communities. For many, they resist the idea of having to plan out STILL MORE of the vacation that far in advance. Restaurant reservations may have started this trend, but now it’s gone even further. I can completely see this complaint and line of thought. After all, as a local visitor, I seldom plan even a day in advance. That said, there really are folks in the world who prefer a vacation that is planned out. Consider the very highly-rated Disney Cruise Line experience. A DCL vacation is pretty planned out in advance. All you do during the vacation is show up and experience what you pre-selected, AND MANY PEOPLE REPORT THIS IS AMAZINGLY RELAXING. All the guesswork is gone, there is no stress, and they simply show up. It’s pretty clear that WDW wants to harness that same sense of all-encompassing, pre-planned, all-inclusive vacation for the “land” as well as for the “sea.”

All the moves in recent years have gone in this direction. Resort mugs, if you buy them, gives you length-of-vacation free soda (just like on DCL). Your room was paid for before you arrived. Your food is included in the cost of your vacation (if you bought the DDP). Really, the only part DIFFERENT in WDW versus DCL was the fact that on DCL, your shore excursions were decided and scheduled long before you got there, and at WDW you had to employ strategy while on your vacation. The move to FP+ will erase that last remaining difference. Now WDW really will be just like DCL in tone and feeling for those who stay on Disney property the whole time and buy the pre-planned everything. All-inclusive, here we come!

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A key component of the criticism has been to focus on the price tag. $3 billion, many people grumble, to fix a system that currently isn’t broken. Well, I do think it’s at least SLIGHTLY broken. There are many families who don’t know how to fully exploit the FP system, which means the tickets stay available longer in the day for the families who do know the tricks. There is an imbalance here; the FP system “works” because there are lots of families who don’t know they should be using it. In other words, the super-benefits of the past 14 years have largely come at the expense of those who don’t use it–and some of THEM aren’t coming back. Disney, as a company, can’t afford to lose this segment. They have to keep the once-a-year visitor (and once-per-decade visitor) happy just as much. So the current FP system had to morph into something else.

The new FP+ system will “flatten” the playing field somewhat. There will be less advantage to knowing the system well or to being a frequent visitor. I’m always something of a long-term thinker, and even though this means my advanced-knowledge advantage will go away, I’m in favor of things that keep the infrequent visitor happy, because this encourages Disney to build more rides for said infrequent folks, and I benefit as a result.

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But there is a crucial shift underway here, and I’ve not seen it discussed online before. Disney is moving AWAY from a certain business model and indeed an entire mindset. In all the years of being in the amusement park industry, Disney has pursued a model that rests on a single assumption: building new stuff drives new attendance, which will drive additional profits. Think of it as “build it and they will come.” That model is now being updated. The new model essentially aims to maximize profits from those who do come, almost as if to assume that people are coming anyway, and we can therefore focus on squeezing every last dollar out of those who come. This is obviously dangerous. What if people sense the attitude shift and stop coming in droves?

But I think they won’t sense it. FASTPASS+ is a riddle wrapped in a mystery to most of them. They will see the smoke and mirrors but not the magician behind it all. In other words, they will see the “DCL benefit” (all-inclusiveness) without seeing the “profit motive” behind the move. At its core, the entire NextGen initiative is about changing the way the company creates money. In the past, the point was to build more rides and attract new audiences to pay admission. Now, the paradigm has shifted. The point now is to squeeze profit out of those who are already coming. And the method by which it will happen will be completely invisible to most users.

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The focal point is almost certainly going to be the concept of upselling. Sure, you can buy a basic ticket to WDW. You don’t HAVE to buy the RFID pass and reveal your information. But if you *do* want to personalize and customize, the world is without borders! You can make ride reservations two months in advance (presently four rides, up from the test previously which allowed three rides). You can have Talking Mickey Mouse offer personalized birthday greetings to your young child. You can have the Small World dolls say something to YOUR daughter, singling her out on the boat full of strangers. You have to pay for the signature experiences in the parks (and some people will). As for those ride reservations, we don’t know full details yet but it seems obvious they are going to be differentiated by package. If you’re an annual passholder, perhaps you get twenty of them per quarter. Maybe you’ll get four per day if you stay at an All-Stars Resort. Will you get six per day if you stay at the more-expensive Polynesian? (Probably). Disney has long been in the hotel business rather than the theme park business, and FP+ promises to VAULT the company priorities further in that direction. The focus will be on “heads in beds” and with the lure of additional ride reservations, the full-price deluxe resorts will be hard to pass up for some infrequent visitors.

Let’s circle around now, finally, to the issue of finances. Disney hasn’t disclosed precisely how much this effort will cost, though a New York Times article in January estimated $800 million to $1 billion. We’ve heard from articles with inside access that the true price tag is closer to $1.5 or even $2 billion. The program isn’t even active yet, so I would not be surprised to see it cost even more when all is said and done (that would match other projects of this scale, in fact). So for the sake of making a point, let’s assume it’s super-expensive. Let’s use the figure of $3 billion. We can still see a way for Disney to recoup that money.

Let’s say that only 17 million people visit Walt Disney World per year (it’s more than that, but this is the MK attendance figure, so let’s use it as a baseline). If you get each of those visitors to pay $10/day more in 2014 than they paid in, say, 2011, then you’re making $170 million more per year. If you do that for 20 years (pretending that inflation didn’t exist), you’re at $3.4 billion dollars after twenty years.

If you were Disney management, would you approve a $3 billion investment that would return $3.4 billion in twenty years at a minimum? You might. You would at least pay attention to the numbers. $10 per person, per day in additional spending isn’t really that much money. If you convince people to spend more for the “better” hotel (and more FP+ tickets) then you’ve already made your money back. Anything extra is gravy. All those packages and character experiences you can sell now? Pure profit on top of all that.

But the reality is that few Disney execs will wait 20 years. They may be looking at numbers for 10 years, or even for five years. If the latter, they would need to generate four times that much per person–$40/day extra. At these numbers, it’s looking a little less likely that FP+ alone and upsold hotel rooms would recoup ALL of that, so they may end up depending somewhat on those upsold character experiences. Or accessories to go with your MagicBand, which they’re already starting to sell.

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The recent news about RapidFill mugs at Disney’s resorts is part of this. The new RapidFill mugs are RFID-enabled “length of stay” soda/coffee mugs that will replace existing refill stations. Translation: your old mug from a previous vacation will not work to turn the soda machine on. If you want soda, you’ll have to pay for it on your current trip. This is another example of Disney enhancing profit not by “creating something new” but by “leveraging what’s already there.” This is the new paradigm of thinking, and the shifted mindset. Instead of “build it and they will come,” the operating metaphor now is “since they’re coming anyway, let’s maximize what they spend with us.” This is surely going to backfire with SOME of the heretofore audience. The question is how large is that audience with which it will not resonate?

Time (amortization) and increased guest spending (on the MARGIN, not “new” spending by “new” people) provide a simple, short answer for how Disney expects FASTPASS+ to pay for itself and generate future profit. Big Data is here to stay; Disney is merely the latest company to find a way to leverage it.

Free Online Class: Fairy Tales

Some of you know that my “day job” is in Higher Education. Among the classes I teach is one on Fairy Tales, with focus on Disney, Grimms, and Perrault. This college class is now available to the general public, and it’s completely free! There’s not even a book to buy for the class!

The class is a massive open online course (MOOC) and is administered through canvas.net – it’s free to sign up and take the class! It’s a four-week course starting on August 5.

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Here’s the schedule:

Week 1 – Cinderella
Week 2 – Snow White and Sleeping Beauty
Week 3 – Rapunzel and the Frog Princess
Week 4 – Little Mermaid and Beauty and the Beast

The class was built to expect about two hours of engagement/interaction (“work”) per week, so it’s not meant to overload the participants with chores and duties. In that sense, it’s less rigorous than my regular college classes. The class doesn’t have any required (synchronous) meetings; you do the work whenever you want within the week.

This course does not have a completion certificate – you’d be taking it just for the fun of it. There aren’t any papers or projects. While the class does offer quizzes and discussion boards, there isn’t really a rigorous process to “pass” the course since there isn’t a certificate offered anyway.

The class is, however, experimental in a different sense: it’s got game elements in it. We added badges and group competition, as well as Easter eggs, throughout the class. Each group is named after one of Walt’s seven dwarfs–it works a lot like the Harry Potter “house” competition, where individuals can earn badges for the whole group. This should be fun!

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Please feel free to sign up and spread the word. I can’t wait to share with you what these fairy tales used to mean and how they’ve been changed for modern audiences!! Sign up here: https://www.canvas.net/courses/fairy-tales-origins-and-evolution-of-princess-stories#enroll_form 

More information and updates

Kevin Yee is the author of numerous independent Disney books, including the popular Walt Disney World Earbook series and Walt Disney World Hidden History. Readers are invited to connect with him online and face to face at the following locations:

 

About Kevin Yee

Kevin Yee is an author and blogger writing about travel, tourism, and theme parks in Central Florida. He is a founding member of MiceAge and has written numerous books about Disney parks (see http://bit.ly/kevinyee).

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  • jcruise86

    Thanks, Kevin!

    I’m a planner, but it seems like a mistake to spend so much on this while NOT also spending money on upgrading more attractions, parks and the resort’s transportation. Some software companies must looooooove Thomas Staggs & Bob Iger. EPCOT and the Studios seem like they are stagnating, bolstered only by promises. Busses are not imaginative–they link Disney World to NEern & MWern inner-city commutes. Three of the moderate resorts could be upgraded with trains connecting them to very nearby resorts. Even the ability to get to one park on a different, special ride would be a plus, like the Wilderness Lodge’s boats to the MK.

    I’d love WDW to be connected by a system of bike paths with bike pick up and drop off stations at the resorts and parks. And maybe even covered rain rescue stations along the long stretches where riders could be picked up by busses. Bike riding would help overcome the image of Disney parks that has been ridiculed on Saturday NIght Live and South Park.

  • Eric Davis

    It is just crazy to think of what 3 Billion could buy us… 2 DCA expansions… 3 Animal Kingdoms…

    • Or 1 Tokyo DisneySea!

      While I’m all for technology and easy planning . . . it is absolutely ridiculous for Disney to be wasting this amount of money when they are at the same time getting further and further behind Universal on the excitement scale.

      Name one announced WDW Disney project that is more exciting than Wizarding World Diagon Alley? Avatar? NO! And nothing has been announced yet about Star Wars or even Monsters Land (though they could be soon).

      Disney is making a HUGE and very expensive mistake. Not only do I NOT want to plan all of my vacations in hyper-detail months in advance, I’ll be punished if I don’t because all the folks who do will eat up all the reservations and FastPasses. Yuck! Plus, I don’t want Disney collecting all that data on me.

      There is a point at which a beloved company jumps the shark and loses its mojo. Disney may be getting close to that. There is only so much squeezing you can do of your loyal customers. There is only so much you can charge. There are only so many cuts you can make. There is only so far you can tread from what people want and expect you to be.

      Iger is pushing so much synergy with a total disregard for Disney history that the shark may be jumped sooner than folks think. Especially if the competition starts being more Disney than Disney itself. Someone needs to tell remind Iger what happened to Eisner before he does some very serious damage to the company (and his legacy).

      • Haven

        I have to agree with all the comments above. It is interesting how just a handful of years ago we were discussing how lazy Disney had become, especially under Pressler, and then things were resurrected and we got Carsland and a cleaner park back, but now it seems they are in fact “jumping the shark”. It may already be happening too, as I mentioned in a post just the other day, I just booked my family trip to Knott’s Berry Farm for Labor Day week because it was 7 times less expensive than the Disney packages for the same nights/days…SEVEN times cheaper!!. All we wanted was some rides, some funnel cake, fun easy rides for my mother who is recovering from breast cancer and Knott’s seemed easier and more affordable than Disney right now. Makes you wonder how many other families are thinking the same way already. I don’t need a Blade Runner universe style Disney where everything is so “connected”, just give me the park experience I grew up with and some new rides once in a while.

      • StevenW

        I think you’re missing the term “jumps the shark”. If anything FASTPASS+ is irrelevant to whatever decline in quality in the park. Instead, FASTPASS+ will emphasize the limitations of the park’s attractions and offerings. It will stretch to the limit of the parks’ capacity and ability to serve customers.

        Without Fastpass+ to remind them, they will continue to carry-on as if nothing has changed.

        I think they are aware of the lack of attractions. There’s a reason for the rumors of Carsland, Star Wars Land, and Avatar Land.

  • Tielo

    Thank you Kevin for this insightful article.
    Just a few thing I would like to add. During 9-11 visits to WDW came almost to a stop, except for the timeshare guests. They already paid for their vacation and kept coming (at least most of them). Some of them even went cross country by car. After that Disney started expending their DVC enormously.
    When having guests pay for an experience before they come (food, hotel, park entrance and extra’s like photo pass and other offerings) it doesn’t feel they are spending money during their vacation. By taking away the components that are related with money (cash and credit cards) you also don’t feel you spent money when you actually do. The last test confirmed that told a Disney executive. Think only how fans will want to accessorize their handcuff. Only that money will go an enormous way for paying for that 3b.
    The only problem Disney is facing now is Universal Studios Orlando and to a lesser extend Sea World who are building like crazy and seem to do every thing right. Kids and adults love Harry Potter and the amount of merchandise and food sold are astronomical. If you take in account all the licensing costs Uni is to pay to Warner, composer and musicians and of course J.K. Rowling it still leaves them a huge profit and even after 3 year visitor numbers are rising. Now their original park is getting on steroids with the very successful Despicable Me ride, the inexpensive but also successful creation of the Simpsons mini land, the addition of the amazing E ticket ride Transformers and the summer 2014 opening of the Harry Potter London extension it looks like Disney is going to miss at least one but probably 2 days from visitors that want to experience all of that (and more fun things the parks have to offer).
    I hope Disney will react on this and will start building again. Yes their visitor numbers have probably reached a saturation point but they need to keep their visitors happy, not by pulling the last dime out of their wallet put to keep Walt’s dream alive of a park that will never be finished.

  • Disneyphenom

    A trip to Walt Disney World always seemed to take a lot more planning than a trip to the Disneyland Resort — which was part of the reason that my family never even attempted making a trip out that way (that, and we lived right down the street from Anaheim).

    We’re currently in a more central location between the two parks, and had been contemplating a WDW trip with our 4 year old — but with all of the information that I hear about MyMagic+ and Fastpass+… it doesn’t even sound like it would be enjoyable to visit WDW with things so structured. Yes, that may “make it feel easier” for some people, but families with children can’t overly structure the day the way Disney seems to be encouraging.

    Good thing that the Disney parks don’t have a lot of families with kids visiting. Oh, wait.

  • poohmeg

    There’s no way a company like Disney would be looking at a 20-year return on investment in something like this – they wouldn’t have even considered it if it weren’t expected to be a profit enhancement within the next 3-5 years. And the implementation cost is only a small part of this type of system – the ongoing software and hardware maintenance is the real expense. So they have a pretty good idea that it will be MUCH more than $10 per person per day in additional spending. I think Tielo nailed it above – the real goal is to separate people from devices they associate with payment (cash, bank cards), and get them to spend money in a way that makes it feel like a game, so they don’t realize how much they’re spending – if you look at studies (or even think about your own experience on a cruise or at a resort with room/cabin charging), spending in every category goes through the roof in that scenario.

  • MainSt1993

    While I disagree with a lot of your analysis, I think your sentiment is correct. WDW is attempting to use technology to change the way people vacation. Reading your article reminded me of my former company, who is stubbornly trying to change the way people shop through technology in spite of all the evidence that tells them it’s not working. Tech works when it is something the people want; when it improves your life in some way. When you have fancy tech but your product is out of date and crumbling, the people won’t come.

    I live in DC now, and have dozens of amazing restaurants within a few blocks of my house. A number of them belong to celebrity chefs. A few days ago I was looking at the Epcot menus and was appalled. There are shamefully so few authentic experiences anymore. Case in point: teriyaki chicken and California rolls do not represent Japanese cuisine, yet that’s about it for the Japan pavilion.

    WDW seems to have accepted its role as the dumbed down version of a Disney resort, encouraging and emboldening the dumbed down version of visitor that frequents it which only encourages management to keep dumbing it down. Before we know it, Disney will have the grandest state carnival in all of America.

  • Swice

    I don’t blame any company for trying to make make money. I’m a Disney shareholder, so I DO want the company to make money. BUT, it is really getting to the point of turning me off.

    We are “semi-regular” visitors. We own Marriott timeshares, so we will always stay off property. Since we’ve “been” to Disney World many times, we don’t feel compelled to spend EVERY day at a park. We will break up our park days with rest (hee-hee), resort pool time, and exploring Orlando (great science museum I might add). But Disney is starting to signal to me that they really don’t care about me. It’s harder (and MORE expensive) to buy non-expiration multi-day tickets, the parking fee keeps going up, hard ticket events in which I can’t use my non-expiration tickets for (Christmas) and it’s hard to get restaurant reservations.

    We’re going back to Orlando in a couple of weeks and for the first time, we plan NO Disney days. We’re going to Sea World instead.

  • Mousecat

    While Disney begins a program to ration experiences so that it benefits the company and to reduce the need to build anything else, Universal is following Walt’s play book. He believed you needed to create spaces where people wanted to be. Then build a high capacity, memorable attraction to define the space, add in secondary attractions to reinforce the theme, and then make a bundle if money with stores and merchandise exclusive to that area that create a sense of urgency to buy.

    The result: Disney’s dominance in Florida will slide. I suspect that the wake up call will come when IOA’s attendance surpasses one or two Disney parks. Steve Burke at Comcast knows more about theme parks than the guys who run Disney and it is beginning to show.

    Great anaylsis as usual Kevin. Love your articles.

    Sam
    http://Www.samlanddisney.blogspot.com

    • jcruise86

      Good post, Mousecat!

  • StevenW

    Your said “The new model essentially aims to maximize profits from those who do come, almost as if to assume that people are coming anyway, and we can therefore focus on squeezing every last dollar out of those who come.”

    Huh? I thought your article was well written, but I really don’t agree that Disney has changed its model at all. They still have the same model of building new attractions to attract new guests and also to maximize profits. In fact, the building of new attractions have lagged. They have done way too much to maximize profits by building out its resorts/DVC properties at the expense of having new attractions and building out its transportation like its monorail system to move guests more quickly to their destination.

    The new model should be less park hopping to ensure guests are not using their time inefficiently shuffling from one park to another. This means they must add more attractions to each park. Perhaps they should move to the Disneyland/DCA model of having parks right next to each other. Epcot/DHS should be the new pair of parks to focus on. In the future, build the fifth park right next to Animal Kingdom to utilize the combined resources of both parks.

    With Fastpass+, I see it merely as leveling the playing field to improve customer service. And it should be combined with the dining plan to make it more like the Disney cruise service. One stop reservations!!! But as I see it, it didn’t go far enough. Thus, the name Fastpass+ is rather limiting since it didn’t include DINING and SHOWS and SPAS.

  • Marketing = providing perceived higher value to the customer in exchange for higher profits to the business.

    • DLFan1995

      “Marketing = providing PERCEIVED higher value”. The intent SHOULD be that marketing = providing insight into ACTUAL higher value.

  • eicarr

    As long as they keep it to WDW and the new communist China parks that’s fine. I know activists in California and France will have a field day with it. However, this is good fit for WDW, so when guests run out of ride reservations they’ll look elsewhere and visit the new bowling alley and chain restaurants/stores while waiting to sign up for a Disney timeshare(didn’t people figure those out in the 80’s?). At WDW they’ll have a better return on investment outside the theme parks, and the new pre-planned days will help allow for that.

  • Attic Haunt

    A very informative article, as usual. I will be interested to see what the DVC test group says about it. Please do a follow up if you can.

    Oh, I am also looking forward to your online class. Just registered 😉

  • scarfan

    “The new model essentially aims to maximize profits from those who do come, almost as if to assume that people are coming anyway, and we can therefore focus on squeezing every last dollar out of those who come.”

    As someone who went as an adult for the first time to WDW in 1999, I already had that feeling from Eisner’s poor experience choices and focus on higher profits that had already marred my experiences. Epcot in particular is a sore spot since I felt that with the exception of a few interesting attractions, it was lacking that specialness others tell me they feel. Granted, I live in NYC, so multi-cultural experiences near each other is something I already know here, but I also don’t drink (another heavily mentioned experience there) and Innoventions felt like an amazing way to have me pay for Infomercials being shoved in my face. The early closure of Future World certainly did not help my experience there, and the heavy reliance on dine-in restaurants was surprising to me.

    Animal Kingdom’s lack of attractions and cheap feel of the Dinosaur area didn’t really help. Fortunately (the then MGM) Hollywood Studios and Magic Kingdom weren’t as overbearing to me, but I certainly spent far less than I would have if I was enjoying myself the entire time I was there, and I couldn’t help but feel the overriding profiteering feel for much of my visit.

    The strange part is that over the last 13 years, not much has really shown up to entice me back over Universal (though the hard ticketed but amazingly decorated Halloween Horror Nights has drawn me back four times there in those intervening years), and as a male, I’m hard pressed to think of the Princess Meet and Greets and the BOG restaurant as a big enough pull over Harry Potter, Despicable Me, Transformers and the Simpsons Ride. Even without the extra costs of HHN, those attractions certainly seem to be getting interest from all walks of life vs. the more limited appeal of the Meet and Greets and the restaurant (as amazing as it sounds, it’s not enough to make me want to make a special trip there).

    Expedition Everest, Star Tours 2, and Test Track 2 help, but just don’t feel like enough just compared to those 4, and those are all spread out over 4 parks (at the extra $$$ for extra days or park hopping). I hope the rumored Avatar land is more than the edutainment C ticket ride we saw rumored, and maybe some new Star Wars, Pixar, or Marvel related attractions start being discussed soon. Right now, they look like they aren’t really working hard at giving people reasons to come back more often, and it’s a disservice to the Imagineers who make the magic and the fans who want them to keep being successful.

  • DLFan1995

    “Let’s say that only 17 million people visit Walt Disney World per year (it’s more than that, but this is the MK attendance figure, so let’s use it as a baseline). If you get each of those visitors to pay $10/day more in 2014 than they paid in, say, 2011, then you’re making $170 million more per year. If you do that for 20 years (pretending that inflation didn’t exist), you’re at $3.4 billion dollars after twenty years.”

    The problem with that is, unless Disney demands that additional $10 from EVERYONE, UP FRONT, they won’t get it. As prices go up, additional spending would probably decrease. So they would probably get an average of $5 a person (assuming that even half would increase their spending) which would ruin their plans.

    And, as we have learned, they’d expect that additional $10/person spending just to keep up with inflation (and of course Disney isn’t satisfied with just keeping up with inflation, so they’d expect it to be $20/person)

    • StevenW

      Getting money UP FRONT is the idea!!! You can’t use Fastpass+ without buying a package or staying at DVC or the resorts. Not only will you pay more at higher than inflation rates, you must buying their ticket/dining packages whether you use them or not. Any additional spending in the parks is a bonus. It’s like a cruise ship where you pay everything up front and you enjoy the inclusive package.

  • TCadillac

    Reported $800M to $1B investment to infer $3B for the sake of analysis seems like quite a stretch. I get what the article is trying to say about a new corporate strategy to generate profit but these financial figures seem kind of bogus just to prove a point.

  • chesirecat

    It is a nice article Kevin, but I think Disney will be making their money back rather quickly, my analysis:

    WDW gets about 48 million guest visits to the parks, but the number of unique visitors is less because, obviously, some people stay more than a day, so maybe 30 million or so unique visitors.

    I would estimate that NextGen costs about $750 to $900 million . . . but this is for rolling out the whole program to ALL the Disney parks worldwide. Disney has 126 million guest visits annually, so WDW is about 1/3 of that number, give or take, and will shrink when Shanghai opens, yes costs for NextGen at WDW are slightly more because you’ve got more gates and hotels and stuff, but you also can do the whole resort at once.

    I would estimate that MagicBands/FP+ at WDW costs about $250-$300 million. If 30 million unique guests spend an extra 20 bucks (over the course of the vacation), then Disney gets back their money in a year, considering taxes and other costs.. (The early reports are that MagicBand/NextGen is a huge success in terms of the money Disney is making). Disney is also hooking younger generations with tech, which makes sense. MagicBand started, in part, because an exec noticed a person giving up on buying a hat in Adventureland because of a long line at a shop. He realized that if guests could quickly buy stuff, they’d buy more stuff. $19.95 for a hat isn’t much for somebody who has already committed to a WDW vacation, but such purchases help WDW’s bottom-line.

    Plus, there are also labor savings with the tech, and less time in lines means less aggravation. Disney spends $1 billion a year on park maintenance (not new rides), this new infrastructure relieves pressure by automating some duties, and makes some machinery obsolete.

    I won’t comment about the situation with ride capacity at the Magic Kingdom, but the fact that they recently doubled Dumbo’s capacity, and added an omni-mover Fantasyland ride kinda hints at this issue. Adding a new land to AK will help with the crowds, though the project might have hit the skids temporarily.

    A likely scenario for a major build at WDW involves Iger leaving in 2016, Avatarland quietly cancelled, and a re-evaluation of resort needs, guest capacity at that time. Then, maybe in 2017-8, you’d see those bulldozers for another WDW project post New Fantasyland. Of course, MagicBand/FP+ will mean more profits for WDW, and this is a good thing for aficionados who want new attractions as having more money to lure guests into the world’s biggest human trap built by a mouse is a good thing.

  • ChrisFL

    Although I haven’t been on a Disney Cruise, I understand the business model and have seen similar systems. At first glance, it seems like it would be a good idea to bring it to the parks…but theme parks are a MUCH more complex entity.

    Cruise Ships have a much more limited number of experiences and guests, and most of those experiences aren’t subject to closures, bad weather or other problems.

    The mere fact, as you stated that there is still a large group of people who don’t plan their vacations and DO want to make last minute trips to WDW means that Disney is creating overwhelming favoritism for those guests, and we don’t yet know what percentage of FP+ will be taken WELL BEFORE the park even opens every day.

    The other part that stinks is to make this new FP+ system SEEM to be useful, they’re adding it to lots of attractions that never previously had FP, or needed it, because they were low attendance or high capacity attractions. They’re trying to make something out of nothing and hoping guests are too stupid to notice.

  • holierthanthoutx

    My main problem with this article is the flawed comparison to the Disney Cruise Line. On a cruise, you have no choice about which island to experience on which day. You have no choice about what time of day to go on an excursion. Of course it’s stress-free, because there is no planning involved. The ship will stop at Castaway Cay on the day it stops there, and you can’t alter that. There are almost no variables to affect your choice of activities.

    Pre-planning a vacation at WDW is a completely different experience. Disney doesn’t tell you which park you must visit on which day. Disney doesn’t tell you that a particular park excursion starts at one specific time. You have to make these decisions yourself.

    For these experiences to be even remotely similar, you’d have to be on a cruise in which you could steer the boat to any destination you wish, at any time. It’s an “apples and oranges” comparison, which invalidates the entire discussion.

  • Big D

    We’ll have to wait and see exactly how Disney handles this. I don’t see them offering different amounts of fastpass reservations with different hotel levels because I think that would generate too much bad publicity. Disney’s whole goal right now is to get people to stay on property the whole time and not go to Universal or Sea World. That’s why it only costs $2 to make your ticket a 7-day ticket instead of a 6-day, because then you’re looking at $2 for one more day at WDW, or almost $100 to to go Universal or Sea World. My guess is that the fastpass reservations will work one of two ways:

    # 1 The longer ticket you buy, the more reservations that you get per day. So a 1-day ticket gets 3 reservations per day, a 4-day ticket gets 4 reservations per day, and a 7 day tickets gets 5 reservations per day.

    # 2 You purchase reservation packages the same way that you purchase the dining plan. There are three levels just like the dining plan: classic (3 res / day), plus (4 res / day), and deluxe (5 res / day).

  • TDSTOM

    “(pretending that inflation didn’t exist)” But guess what, it does exist! And guess what else? 3 Billion is across the entire resort, but yet you only use the MK attendance figures.

    So your numbers are way off. They can recoup that investment in as little as 4-5 years with ticket prices going up, et. al.

    If you’re gonna make an argument, as least *TRY* and get some of the numbers right.

    So unlike you Kevin.

    Thomas

    • Kevin Yee

      My numbers are “way off” to prove a point. Even if you took the WORST possible scenario (using MK as the WDW attendance, using $3 billion rather than 800 million), you can see that WDW will recoup the money in short order no matter what.

      And when you re-add inflation BACK into the mix, yes, that means the recouping happens even faster.

  • socalkdg

    I’m excited with the oppurtunity to plan out my complete vacation at WDW. Its a huge investment of money for a 7-10 day vacation for a family of 4, so having everything setup and ready to go once you get there is a big plus, and that includes FP.

    The number being thrown on this site with the story and its comments varies from $700 million up to $3 billion. At issue as well is if it applies to one park, on destination (WDW) or all Disney destinations. Seems like it would have made the most sense to use a number somewhere in the middle, i.e. maybe 1.5 billion, and then looked at the complete resort, WDW, to calculate if this will be profitable or not.

    Lastly, I think everyone agrees WDW needs a new land. Pretty sure Disney realizes this as well, and that the money being spent on tech doesn’t mean we won’t be getting something dramatically new, instead we will be getting both.

  • GrumpyFan

    Simplification is the name of the game, at least for WDW. The size of the place is a blessing and a curse. For many, it’s too big, too expensive, and too confusing, and they leave broke and too angry, vowing to never return because they don’t feel it was worth the money. So, what to do?

    It may be further down the road, but I believe part of this massive “boondoggle”, as many are calling it now, is a plan to create “automatic” or pre-planned vacations tailored to the guest experience. This is no secret, really. They’ve written (and so have I) about it in more than one patent for the project. It’s not likely this will solve all the complaints, but it should help, at least for the first time visitor.

  • Kevin,
    Thanks for writing this. It touches upon many issues that have been upsetting me for the past few months. The “paradigm shift” is very real and it seems short sighted. You talk of the days of yore when attendance drivers were new attractions, but that still happens. It’s just not happening in Walt Disney World. The Wizarding World of Harry Potter and Cars Land were both huge attendance drivers. Sure, you could argue that Harry Potter “repackaged” Dueling Dragons and Flight of the Unicorn, but not in the same way Disney is currently doing.

    I was driving home today and came up with an idea for my next column and it largely focused on this shift in philosophy. I really believe it isn’t a shift in philosophy, but rather the Orlando executives not knowing any other way. They can’t push for new attractions because that costs money, but repackaging what’s already there can work wonders. They’ve been successfully doing it for years because the competition was so fickle. Now that the competition has changed they don’t know any different. They’ve forgotten what made them great in the first place.

    • Tielo

      If you mean by repackaging: The replacement of Horizon with the awful Mission to Mars, the re Imagineering of Journey into Imagination, the Honey I shrunk the audience replacing Captain EO (or it’s reverse), the Ellen’s Energy Crisis makeover, replacing Alien Terror with Stitch, putting Nemo tv screens into the Living Seas, replacing the bakery with Starbucks, replacing Skyway with Tangled toilets, replacing Jules Verne with Monster ‘comedy’ club, replacing the AK boat tour with nothing, Replace 20.000 Leagues with the Little Mermaid, re imagine the animation studio building tour into the empty asb tour, repackage the beautiful view when you enter the Disney Studios with a ugly hat and loud music offerings that doesn’t fit the area, then I’m not very excited. Yes Universal did great by re theming 2 rides but they also added a well themed street and very detailed stores and restaurant and toped it of with a huge new cutting edge magical ride.

  • ChrisFL

    One more comment I wanted to add….and this was kinda mentioned in the article I believe…

    This is what it all boils down to…the whatever Billion dollars spent, the mymagic, fp+, etc.

    Is Disney doing this to add more guests to their parks? If the answer is “no”, then the only possible reason to spend that much money is that they want to squeeze more money out of their existing clientele base….like sponges.

    I don’t want to sound harsh about it, but that’s basically what it sounds like.

  • horizonsfan

    I might be able to accept FP+ begrudgingly since I know there will be a way to still maximize our time at the parks (there are smart people on the Internet who study it). What really bugs me is what this means in terms of Disney’s focus on efficiency and maximizing profit over attractions. That’s the part of this article that really bugs me and makes me wonder if I want to plan so many trips to Disney World with my family. I’d rather go to California due to the ease of getting around and better atmosphere, but four plane tickets from Missouri is pricey.

    The recent examples of Harry Potter at IOA and Cars Land at DCA show the huge attendance gains (and subsequent food and merchandise profits) that come from putting in new attractions that people want. I just don’t see why Iger and the other top brass don’t see that this is what people really desire. Top-notch attractions and service are what built the company’s reputation. They may be able to keep the stock price high for a while, but eventually even the less frequent guests will catch on and choose Universal, Sea World, or other locations. Brand loyalty is not the same as it was even 10 years ago. If Disney doesn’t keep up with the tide and offer something new, people will eventually just skip it. We’re already seeing it with anecdotes about long-time Disney fans deciding to bypass the parks on their latest trips. This will only continue if nothing big is announced at D23.

  • ParkerMonroe

    Some people just expect that if you’re paying more you must be paying for quality. Consistent (and agressive) price increases was something consistently Michael Eisner referred to as “Price Integrity”.

    The FastPass+ system really is just a re-telling of an old (and highly debated) sales strategy.

    Salesman #1 is working his butt off. He’s making a lot of money but working himself ragged; constantly drumming up new business, providing quality, and making sure the current customer base is happy.

    Salesman #2 is also highly profitable but not nearly as busy. He too is always on the lookout for new clients, provides a quality product, and consistently keeps his current client base happy. What’s his secret? He just charges more.

    Salesman #1 argues that if he charged more he would lose customers!

    Salesman #2 argues that it’s worth losing customers if you’re working half as hard and making more money.

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