It’s not that I’m mad, I’m just disappointed. Disney used to be the leader. They used to pride themselves on besting their competition when in reality, there was no competition. Disney was Babe Ruth, Michael Jordan and Wayne Gretzky all rolled into one. What made these athletes great was their own belief that they could fail. They still had an inferiority complex. Whether it was the coach that said Babe Ruth was too fat, that Michael Jordan was too short, or that Wayne Gretzky was too Canadian, the inferiority complex gave each of them the fuel to compete. Disney used to have that inferiority complex as well. There was something in the back of their mind that produced doubt. That doubt led them to competitive decisions that fueled growth for decades.

pic

During Michael Eisner’s reign he often asked, “Why are people leaving property?” This question led to a mentality that fueled the growth of the resort. Tourists and locals were spending time at Church Street Station, so Disney built Pleasure Island. The Seas pavilion was built because people were visiting Sea World. The number of hotel rooms increased dramatically because people were staying off property. MGM Studios was fast tracked for fear of losing guests to Universal Studios. Disney’s Animal Kingdom was built because people were driving to Busch Gardens in Tampa.

This mentality was great for growth but also had its pitfalls when corners were cut. In California, this approach led to a park where the “best” of California was built in the Disneyland parking lot. However, it took an investment of over $1 billion to make the park successful. Similar shortsightedness also existed in Florida when MGM Studios and Disney’s Animal Kingdom each opened with only two major rides. However, it wasn’t shortsightedness that ended this level of competition. What ended it was Universal’s Island of Adventure.

Universal Islands of Adventure
Universal Islands of Adventure

A little more than a year after Disney opened the Animal Kingdom, Universal opened Islands of Adventure. During development, word spread that Islands of Adventure would open with three world class roller coasters as well as a ground breaking Spider Man attraction. Disney was ready to react with additions at all four theme parks. When the doors opened for Islands of Adventure the rumors proved true. The Hulk, and Dueling Dragons were world class roller coasters and The Amazing Adventures of Spiderman was the most innovative theme park attraction in history. There was just one minor problem with all this: it didn’t affect Disney’s attendance at all.

It was at this time that the inferiority complex disappeared. Disney’s closest “competitor” built the greatest theme park ride to date in a park full of major attractions but theme park fans opted to return to their classic favorites at Walt Disney World. How could Disney fear any competitor at this point? They had no reason to believe that anything could disrupt the gold mine that was the vacation kingdom of the world.

For years, the “competition” struggled. They humbly accepted what little market share Disney had allowed them, and survived off the few guests that were looking for a day away from the resort. During this time, additions at Disney World were few and far between because they were deemed unnecessary.

pic

Disney began to believe that the theme park market had matured and the only responsibility now was to maintain their empire. This began the shift that Kevin Yee mentioned in a recent article. Disney stopped looking for more guests to enter the parks and began looking for those guests to pay more per visit.

While annual price increases typically mark the beginning of every summer travel season, that alone wasn’t enough to meet Disney’s profit targets. Disney looked at what the average guest spent on vacation and the question changed from “Why are people leaving property?” to “Where else are people spending money?” If a family was spending a fixed dollar amount on a Disney vacation, Disney wanted to make sure they were getting as much of that fixed dollar amount as possible.

pic

Several steps were made to ensure that more dollars were spent at Disney than in previous years. The Magical Express buses helped fill Disney’s hotel rooms, and Disney indirectly took profits from rental car companies and offsite hotels. Perhaps more importantly, it kept these guests on property and away from other theme parks. The Disney Dining Plan allowed guests to prepay for meals, once again keeping them on property while providing the added benefit of fixing food costs. These efforts accomplished exactly what Disney had hoped: an increase in spending per guest.

For years, this model worked because the “competition” was struggling to survive. Ironically, it was Islands of Adventure that again acted as the catalyst of change to the Orlando theme park landscape. The Wizarding World of Harry Potter proved that the theme park market in central Florida wasn’t mature, it was just dormant. With Harry Potter, Universal moved from “competitors” to competitors. Unfortunately, Disney’s inferiority complex is long gone and has been replaced by something wholly different. Whether it was replaced with arrogance or ignorance is unknown and unimportant. What is important is that it changes.

Repackaging what’s there can no longer succeed in the face of real competition. Disney needs to regain that fire that stems from their inferiority complex. They need to know they’re not the best in the business of themed entertainment anymore.

pic

Is it possible that we will we soon see the Universal parks pass the Animal Kingdom, Hollywood Studios and perhaps even Epcot in attendance? What do you think? Can Disney return to their old competitive ways or have they thrown in the towel?