Eye Drive > Eye DriveRooms to grow
For several years there's been a battle within the Walt Disney Company. People at the highest level are constantly squabbling, desperate to determine Mickey's destiny. But this epic in-house war may finally be over. And it appears the accountants may have won.
The debate: Should the Mouse strive to be the No. 1 entertainment company in the world, constantly trying to top itself and lead the industry ... or should it just make money? These may not sound like mutually exclusive goals. But some folks at corporate headquarters seem to think so, and they've been doing all within their power to see the company has the right priorities.
On July 9, Michael Eisner sent out a faux folksy note to cast members worldwide in which he mentioned that he'd recently presented his latest five-year plan to the Disney board. Four days later, he announced he was changing Walt Disney Attractions president Paul Pressler's job title. Pressler -- an ambitious young executive at the Mouse House -- now will serve as chairman of the newly named Walt Disney Parks and Resorts.
The news sent a wave of terror roaring through Imagineering, the folks who actually design new rides and shows for the theme parks. Sure, Pressler has a history of putting cost before creativity; in Eisner's eyes, that's what makes him a great executive.
But what most frightens Imagineers is the title shift. The difference is subtle but significant. "Attractions" just covered things like the theme parks, Disney Quest and the ESPN restaurant chain. "Parks and Resorts" signals that the Mouse now considers its hotel business to be just as important (if not more so) to its bottom line as its theme parks.
As recently as five years ago, Disney considered its parks to be the most important asset on its Central Florida property. But somewhere along the line, the Mouse concluded that the profit the company pockets from park admissions ($41 a head) is nothing compared to the cash a hotel room can generate ($85 to $3,500 a night).
This is the real reason behind the lopsided construction boom currently going on at Walt Disney World. Work on new attractions for the theme parks is virtually at a standstill, while construction workers are frantically throwing up two huge new resorts. After all, when Disney's Animal Kingdom Lodge opens in April of next year, the Mouse will be able to charge guests $200 and up for rooms that overlook a pseudo-savannah. A year later, Disney throws open its Pop Century Hotel, with its 5,760 rooms going for the relative bargain rate of $90 a night. Yet even with that moderate price structure, this place will generate huge wads of cash.
In his note to cast members, Eisner bragged that when these two new hotels open, the Walt Disney Company will operate 30,269 hotel rooms in the United States. This makes the Mouse one of the largest hotel companies in America.
Nowhere in this note does Eisner mention how Disney plans to fill all these new hotel rooms. Which -- given the meager assortment of new rides and shows Mickey's currently thinking of installing in Orlando -- is understandable.
Want a peek at what Disney will be offering guests who come down for Disney World's upcoming 30th anniversary? Would you believe a ferris wheel for Disney-MGM and a new parade (maybe) for the Magic Kingdom? That, plus a few new carny rides for Dinoland U.S.A. at Animal Kingdom, is the current extent of the Mouse's plan for the 16-month long celebration. Mind you, Disney's still hoping its bargain-basement birthday bash will draw record crowds to the resort, helping to fill up those 7,000 new hotel rooms.
The Imagineers caution that -- by building those rooms instead of new rides and shows -- Eisner's putting the cart before the horse, and that without any significant added attractions to lure guests back, Disney may have trouble filling the rooms it already has.
But the accountants truly believe this is the proper path to be on. To their way of thinking, there's really no need to add large new, cutting-edge attractions -- a view that, given the increasing competition, may be short-sighted.
Someday soon, Disney may find itself in the awkward position of having thousands of guests spending the night in its Orlando hotel rooms, only to have these same folks drive off Disney property in the morning looking for an alternative to the tired old shows they've already seen a million times at Walt Disney World.
Which isn't exactly what the Mouse had in mind when it began this building boom.