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  • our economy vs. Disney's plans to spend

    Ridicule me if you must for I merely skimmed the board for similar threads. my question is simple: will a ressetion ruin Disney's plans for DCA?

  • #2
    Re: our economy vs. Disney's plans to spend

    Whether there is a recession or not, if Disney doesn't do something to DCA they might just as well close the doors to that park. I could be wrong, but I don't think this so called recession will put a hamper on what Disney wants to do with DCA.

    A recession? Emptier parks?! Now that could be rather enjoyable. hehe
    "This would be a great place if we could only get rid of all these people." WD

    "Women are the best judges of anything we turn out. Their taste is very important. They are the theatergoers, they are the ones who drag the men in. If the women like it, to heck with the men." WD

    Individuality is a great thing....as long as we think alike.

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    • #3
      Re: our economy vs. Disney's plans to spend

      Originally posted by bloodnswash View Post

      A recession? Emptier parks?! Now that could be rather enjoyable. hehe
      Just image the fantastic cut backs Disney would make. I'm just saying low attendance may be nice but it could cue managers to at least cut back park hours which leads to less hours for disney cast members.

      there are many things that Disney might do if the economy becomes really unstable in the future...lets talk about it1

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      • #4
        Re: our economy vs. Disney's plans to spend

        I am not sure what the context of the thread is. If you are asking if a recession would force cutbacks to the DCA project, probably not because they have allocated the necessary funds. If you are asking if Disney would use the recession as an excuse to cut back the DCA fund, then most likely. While the local, and possibly national, economy may head into a recession... there is always the international market.
        "Happiness is a Low Water Level"

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        • #5
          Re: our economy vs. Disney's plans to spend

          The thing you must remember about economic slow downs and recessions are that when someone losses money, someone gains money. Right now the U.S. dollar is equal to 1.45 Euros, which means European buying power is at an all time high. So in other words, California is now the new Mexico for European tourists, what used to be an expensive American vacation is now 1/2 price. If tourists from the United States slack off from visiting Anaheim, the European tourists will take their place due this place being such a good travel bargain. On the flip side, since the dollar is so worthless now, foreign companies will be buying more American companies. I was listening to a radio station in Europe this week and an advertisement came on stating since property in California has been devalued and the Euro is so strong, that "now is a great time to purchase California tourist real estate." So even if the bottom falls out of the U.S. economy, the Europeans will be here spending money and buying up all the cheap real estate they can get their hands on.
          http://chrisaustx.smugmug.com

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          • #6
            Re: our economy vs. Disney's plans to spend

            It's not a recession, it's greed that has already ruined "plans".

            What some people call "plans" I call P.R.

            Take a look at the Winter Castle.....remember the original press release, way back (in the Spring?).

            Disney has the best PR people in the world.

            The economy has abosolutely nothing to do with it. If anything, during a bad economy, that's the time when people flock to Disney the most...to forget.

            Only, Disney doesn't feel the need to meet expectations.

            They only need to get you through the gates. Once they have you there, nothing else matters. ---People will still keep coming.

            They'll build an adequate (and I mean just adequate) World of Color. That will get people in to DCA, and keep them there longer.

            They really don't need to do anything other than that. It's really smart business, in a way. This is what is taught in Business Schools, you don't expend more capital than you need to. And, they aren't going to go out of their way when they know people will still flock to the Parks no matter what they do.
            2007 Photos:
            http://s530.photobucket.com/albums/dd345/Pisceslibra/Disneyland%20Christmas%202007/?start=all
            More 2007 Photos:
            http://www.flickr.com/photos/pisceslibra/sets/72157606706412381/
            2007 UPDATED Trip Report:
            http://micechat.com/forums/showthread.php/trip_report_photos_dec_2007-102026.html
            2006 Photos:
            http://pisces.smugmug.com/gallery/2307689/11/120769200#120769200_T5KyJ

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            • #7
              Re: our economy vs. Disney's plans to spend

              In the 1957-59 recession, Disneyland saw a loss of attendance and revenue, this is one of the reasons why so many attractions were added at the park during this time period (monorail, Matterhorn, Alice in Wonderland, Columbia) , to get people to come to Anaheim and spend money. In the 1982-1985 recession, the park added a "new" Fantasyland and tried to lure people in whom were in the area for the 1984 Olympic games, nevertheless, Disneyland lost money and had terrible attendance numbers until the 1985 30th anniversary celebration. In the 1987-1991 recession, Disneyland once again saw terrible attendance numbers and Toontown was added to bring people in the park. During the good economic times of 1998-2000, the cheapness of DCA was touted as a sure bet to get tourists to visit Anaheim. But during the recession of 2001-2003, the attendance numbers for Disneyland/DCA were terrible and this is why the electrical parade and the Tower of Terror were added, to lure in tourists. When things got better in the economy in 2005-2006, Disneyland saw the highest attendance numbers since 1995, a year without a recession. Yes the numbers at Disneyland will be a bit lower in a recession, but the European tourists will now take up the slack and Disney is counting on this.
              http://chrisaustx.smugmug.com

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              • #8
                Re: our economy vs. Disney's plans to spend

                Are we talking about a cyclical recession or a structural one?

                After the atrocious policies of the federal government over the last seven years, the national debt, particularly, puts the entire world in a precarious position.

                Disney can influence the marketing environment for the better by explaining to the general public, through outlets like ABC News, how these policies jeopardize our economy and our national security.
                Last edited by PragmaticIdealist; 11-10-2007, 10:05 AM.

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                • #9
                  Re: our economy vs. Disney's plans to spend

                  Originally posted by Sir.Mouse View Post
                  Ridicule me if you must for I merely skimmed the board for similar threads. my question is simple: will a ressetion ruin Disney's plans for DCA?
                  NO. Not ruin. A simple recession may cause some changes in the plans, probably centered around material costs and availability and the impact to purchasing power, but the money is allocated and will be spent. The question is how can they best leverage the funds during a recession?

                  Even in a substantial recession, the attendance may drop, but not enough to curtail plans. A good investor will continue through it because there is a boom on the other side, and if you are well-situated with new attractions and capacity to handle the attendance glut, it will net out to be a tremendous gain.

                  Long term thinking and investment - not short term worry about a slight economic downturn -will pay off in future dividends.





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                  • #10
                    Re: our economy vs. Disney's plans to spend

                    Originally posted by Sambo View Post
                    The question is how can they best leverage the funds during a recession?...

                    Long term thinking and investment - not short term worry about a slight economic downturn -will pay off in future dividends.
                    vary true. forgive me, I'm still trying to understand government and economics and so on...but i have to say that the responses to this post have been vary insightful. thanks

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                    • #11
                      Re: our economy vs. Disney's plans to spend

                      Durring the last big reccesion(in the late 70's to early 80's) Disneyland still continued with its' plans to build Big Thunder Mt......but even more impressive than that they continued with their plans to build Epcot.

                      Of course they did tweak a few things to help keep the money flowing.......like forcing eveyone who came into the park to pay to ride all the attractions....whether they wanted to or not.
                      Waiting for Godot Micechat.com

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                      • #12
                        Re: our economy vs. Disney's plans to spend

                        Originally posted by Sir.Mouse View Post
                        Ridicule me if you must for I merely skimmed the board for similar threads. my question is simple: will a ressetion ruin Disney's plans for DCA?
                        You're silly! There you go, I just wanted to ridicule you

                        It all depends on how deep a recession. Look at Japan in the 1990s. Many theme parks lay abandoned in that country due to the 90's Asian downturn.

                        Originally posted by techskip View Post
                        I am not sure what the context of the thread is. If you are asking if a recession would force cutbacks to the DCA project, probably not because they have allocated the necessary funds. If you are asking if Disney would use the recession as an excuse to cut back the DCA fund, then most likely. While the local, and possibly national, economy may head into a recession... there is always the international market.
                        I'm unsure of Disney's actions in this regard, but "allocated" doesn't necessarily mean real dollars put aside in a bank account. More likely it means that a portion of expected future revenues have been budgeted (earmarked) over the next several reporting periods to be spent on upgrades.

                        If Disney saw a downturn in attendance the beancounters would be running all over the Parks looking for spending to cut. And they usually go for big ticket items first (wages, capital expenditures).
                        Disney FAQ#275: What is DCA?
                        DCA stands for Disney Construction Area. All the Cast Members are themed with hard hats and steel toed boots.

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                        • #13
                          Re: our economy vs. Disney's plans to spend

                          Originally posted by monotonehell View Post
                          You're silly! There you go, I just wanted to ridicule you

                          If Disney saw a downturn in attendance the beancounters would be running all over the Parks looking for spending to cut. And they usually go for big ticket items first (wages, capital expenditures).
                          yeah that though entered my mind and this thread. are minor cut backs necessary in order to sustain plans for the future. and Will phase one of the DCA expansion take longer than envisioned?

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                          • #14
                            Re: our economy vs. Disney's plans to spend

                            Originally posted by Sir.Mouse View Post
                            yeah that though entered my mind and this thread. are minor cut backs necessary in order to sustain plans for the future. and Will phase one of the DCA expansion take longer than envisioned?
                            First rule of construction contracting:

                            It ALWAYS takes longer than envisioned.

                            The only real exception to that is if you build in financial reward for completing to specifications and satisfaction ahead of schedule. Along with that are penalties for NOT completing on time.





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                            • #15
                              Re: our economy vs. Disney's plans to spend

                              tis true!

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                              • #16
                                Re: our economy vs. Disney's plans to spend

                                Originally posted by monotonehell View Post
                                I'm unsure of Disney's actions in this regard, but "allocated" doesn't necessarily mean real dollars put aside in a bank account. More likely it means that a portion of expected future revenues have been budgeted (earmarked) over the next several reporting periods to be spent on upgrades.

                                If Disney saw a downturn in attendance the beancounters would be running all over the Parks looking for spending to cut. And they usually go for big ticket items first (wages, capital expenditures).
                                My point, and the point that I see resonating on here, is that a recession would not necessarily contribute to lost revenue at the park. This is mainly due to an ever increasing global tourism market. A weak U.S. dollar would be an incentive for international tourists to vacation. If the recession continues and begins to contribute to industrial collapse and massive layoffs then that would cause a problem, specifically if it is a massive local job loss as in the early 90's. Disney most likely would not be affected unless it is a large scale continued recession, but they LOVE to cut corners so I am positive they would use a recession as an excuse to cut back across the board!
                                "Happiness is a Low Water Level"

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                                • #17
                                  Re: our economy vs. Disney's plans to spend

                                  Originally posted by PragmaticIdealist View Post

                                  After the atrocious policies of the federal government over the last seven years, the national debt, particularly, puts the entire world in a precarious position.
                                  The federal government spending is part of the problem but also we consumers using real estate to fund vacations, cars and other toys is part of the problem.

                                  Taking money out of one's house to buy a jet ski or a harley is not advisable. I read in the WSJ that in California, 1 out of every 3 cars is financed through a home equity loan! Not mine!
                                  --
                                  http://www.bewaterwise.com

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                                  • #18
                                    Re: our economy vs. Disney's plans to spend

                                    I agree that if Disney does see a significant downturn in revenue due to a recession, that management would change the spending plan for the DCA upgrades.

                                    The reason is that if they keep spending as they planned when business was very good, they will reduce their net income which will cause the stock price to drop.
                                    --
                                    http://www.bewaterwise.com

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                                    • #19
                                      Re: our economy vs. Disney's plans to spend

                                      Originally posted by ravencroft View Post
                                      The reason is that if they keep spending as they planned when business was very good, they will reduce their net income which will cause the stock price to drop.
                                      Those are assumptions that may or may not follow. Spending in a recession doesn't necessarily reduce net income, as there are multiple revenue streams not just one. Reduction in net income does not necessarily cause a drop in stock price as stock price is based on many factors - including investor confidence.





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                                      • #20
                                        Re: our economy vs. Disney's plans to spend

                                        Originally posted by techskip View Post
                                        I am not sure what the context of the thread is. If you are asking if a recession would force cutbacks to the DCA project, probably not because they have allocated the necessary funds. If you are asking if Disney would use the recession as an excuse to cut back the DCA fund, then most likely. While the local, and possibly national, economy may head into a recession... there is always the international market.
                                        A recession, terrorist attack, change in the international markets, etc. would all have an impact on a business like Disneyland. Capital expenditures (DCA upgrades for example) are based on assumptions relating to revenue and profit growth related to the improvements - if the underlying assumptions change, the projects could change as well. You saw this with 9/11 - all around the country projects were put on hold or cancelled due to the immediate change in the economic environment.

                                        For the DCA capital project - there is not a pile of cash sitting somewhere for the project, it is part of the company's capital expenditure forecast. If business changes, that budget will be reduced and projects can be cut/changed as required as money shifts to the highest priority projects.

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