Think We're in a Recession? Head to Disneyland.

[ROBONICS95]

SmartMoney.com

Think We're in a Recession? Head to Disneyland.
By Donald Luskin Published: August 8, 2008

I'VE JUST SPENT two days with friends and family in Disneyland, "The happiest place on Earth." Based on what I've seen, it ought to be called "the most crowded place on Earth." It was mobbed. Packed beyond capacity.

There's simply no way this country is in a recession with people spending money like mad amusing themselves at Disneyland. I've been coming here frequently for years, during good times and bad, having grown up in Southern California. I've never seen crowds like this. Not here, not anywhere — not even on the Tokyo subways.

There were times when the streets of the Magic Kingdom were so thickly thronged with human bodies that one simply couldn't move. Rides were breaking down. Restaurants and snack vendors were running out of food. There wasn't enough staff to get people properly loaded onto the rides that were working. It was bedlam.

It actually would have been a miserable experience, if we hadn't lucked out and been given a rare and highly coveted "Dream Fastpass," a plastic badge you wear around your neck that lets you bypass the hours-long lines at the most popular rides.

Sure, when I wrote here several weeks ago that I didn't see any evidence of recession during my trip to a high-end Hawaii resort, I opened myself up for criticism that I wasn't really looking at the typical vacation experience of ordinary middle-class people. But this is different.

Disneyland is definitely a middle-class destination. People drive to it, paying high gasoline costs. They travel to it, paying high airfares. And park admission is costly. So is food in the parks. And all those souvenirs. If these were hard times, the park would be empty. I've seen it like that before. It's not like that now.

This isn't just a fluke of the couple days I happen to have been here. It's well reflected in Disney's (DIS: 32.50, +0.17, +0.52%) better-than-expected earnings this quarter.

You hear every day that the American consumer has been clobbered by high food and energy costs, and falling home prices. Some stores are reporting poor sales. The Bennigan's restaurant chain has declared bankruptcy and Starbucks (SBUX: 16.69, -0.23, -1.35%) is shutting 600 stores. There must be a recession in this country.

No, I don't think so. There's essentially no macroeconomic evidence for it. And while you can point to Bennigan's as an example of a victim of recession, I can point to Disney as an example of a beneficiary of a healthy economy.

More at the link...

[MasterGracey]

I beg to differ. This has been the slowest summers at the parks since 2005. In the last three years it would have been unheard of to find Space Mountain at a 20-minute wait on a Saturday. Or when would a new, heavily-promoted ride like Toy Story Midway Mania open to a summer with only 30-minute wait times?

That's not to say that the parks have been dead -- but please -- "mobbed"? "Packed beyond capacity"?

Hardly.

[pussnboots]

Oy. Denial isn't just a river in Egypt...

[hollywood1939]

Sounds like a typical summer day but like MG said, I'm sure there isn't much of a difference to tell between 40,000 guests and 50,000 guests from a guest stand point. From the numbers on paper, however, that's where they notice it.

[BC_DisneyGeek]

I don't think a busy day at Disneyland in August tells us anything about the economy as a whole. Seems like a simplistic way to justify an already-formed viewpoint.

[PrincessY]

According to Disney people (from TDA Bldg., not park CMs) who come into my store, attendance is down 9%, but spending is up due to Europeans spending with our weak dollar.

[larasound]

Originally Posted by BC_DisneyGeek

I don't think a busy day at Disneyland in August tells us anything about the economy as a whole.

Can't say it much better than that.

[goldenstate5]

Originally Posted by MasterGracey

I beg to differ. This has been the slowest summers at the parks since 2005. In the last three years it would have been unheard of to find Space Mountain at a 20-minute wait on a Saturday. Or when would a new, heavily-promoted ride like Toy Story Midway Mania open to a summer with only 30-minute wait times?

That's not to say that the parks have been dead -- but please -- "mobbed"? "Packed beyond capacity"?

Hardly.

Er, I don't know. I was just there this past Sunday and Monday, and boy howdy it was packed, especially on Monday. Midway Mania never left a 60 minute wait time from what I saw. So there's both a weekend and a weekday that I experienced, and both were awfully busy. It's probably not indicative of the state of the economy, but it does make you think that if we were in a recession, how the hell how people affording all of this?...

[Aladdin]

This is what I learned from the article:

Don't hire Donald Luskin as an economic analyst.

[sailerm]

Toy Story Midway Mania open to a summer with only 30-minute wait times?

I would hardly use DCA wait times as a barometer of the economy, but I wouldn't hire Mr. Luskin as an economist either.

[sediment]

If every guest were paying those days he went to enter Disneyland, I might agree with the writer.
Probably around 50%, though.

[whamo]

Everybody knows the attendance at Disneyland is down. It may appear robust to someone who hasn't been there when it's like a giant sardine can. It's bad logic. Even the freeways are easier to negotiate in Southern California these days. If you're rich, inflation is no problem. If you're stuck at the same salary as prices jump, you feel the pain. Obviously, this guy isn't feeling it.

[Uncle Bob]

Yeah, I have to agree, this was one ignorant article. Sighting DL as being so busy when even Disney's own earnings reports say that income from DL is down from last year. Pretty stupid. Additionally, it's well known that regional entertainment often does better on a bad economy as people stay close to home rather than travel far. Also, during a weak economy people tend to look for value and tend to be more willing to spend on established brands that are recongnized for delivering quality, they don't just stop spending money, nobody said we're in a depression. DL is an extremely unique experience that I actually think delivers a high level of entertainment for the money. This I've seen the park so much slower in the past is a pathetic arguement, when clearly this guy doesn't know anything about the industry which he is using to defend his arguements, and the other changes to ticketing media and park offerings that more directly effect how busy the park is compared to the past. A good ecomomic analysis would tell you that DL had always been more resistant to the state of the economy then one might guess. This is not any proof that we're not in a recession, or at least have been for about the last year.