Cruise and Theme Park Operational Updates due to Coronavirus

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CPA here - positive contribution margin means they are covering variable costs but not fixed costs so losing money but not as much as if the parks were closed.
What would be some variable costs? Not covering fixed costs is interesting, you think that would come first. This is why I am not a CPA... but as a business owner fixed costs come first.
 
More bodies in the park means more sanitizing, more risk of exposure, heavier ride use, etc. They must know what they typically make from APs and feel that it's not worth it to burden everything else with extra bodies but not much more spend. But we're all just speculating!
that's an interesting point. I never thought of that. If that's the case consider me outraged and insulted that my $45 a month is not worth it for Disney :D In all seriousness though, I have given up, many years ago, to try and make sense out of Disney decisions
 
Agreed it was a mess waiting to happen, however it is pretty odd that this particular one in the series is the only one that has been vocalized as such a nightmare by so many people. It's so bad that people who didn't get selected have been going on shopdisney and writing 1 star reviews because they didn't get selected. Not just one or two people, but dozens upon dozens. And then Disney goes through and deletes the reviews, keeps the items off the site for a few days, puts them back on and the process starts all over again. Disney has been wiping the reviews for the last week now because there is such an uproar. There seemed to not be such chaos with the last 5 months of the series.

I mean is it due to the backlog of the release of this particular one that has caused this? While they worked out the MerchPass system? And was MerchPass created because the parks were shut down or was that always in the works?
I think people had a false sense of optimism with Merchpass. People were used to the issues with limited release items and getting bumped off the site, getting them in the cart but unable to check out, etc. But with this first use of Merchpass, I think a lot of people expected this would block resellers completely and basically everyone that wanted one would be selected for the lottery. It obviously wasn’t going to work like that. With the limited availability and multiple accounts it was still going to be a massive surprise to get selected. So people got more upset directly related to how optimistic they were to be selected.

And Disney absolutely should be deleting the reviews. People aren't reviewing the product, just the Merchpass and that shouldn’t be included on the items reviews. People just like to complain unfortunately.
 


More bodies in the park means more sanitizing, more risk of exposure, heavier ride use, etc. They must know what they typically make from APs and feel that it's not worth it to burden everything else with extra bodies but not much more spend. But we're all just speculating!

good point, but the only thing i'll counter with is they set themselves a certain number to hit capacity for a reason. I would think if they really didn't want to reach that number, they'd lower it. Not sure why they'd set a number, and go, well I hope we don't hit this number
 
I think it's moreso how AP are interpreting the park availability calendar as meaning Disney doesn't value them as much as a day or resort guest. Chapek said something to the effect of non local per person spending being MUCH higher than that of a local AP and therefore they are limiting AP attendance. I didn't listen to the call I only read the comments on the Q3 thread. None if it seemed (written, anyway) to be derogatory and I can believe that out of staters probably do spend more than locals...but maybe not if you count up how much money a local AP spends over the course of their AP. Who knows.
I can tell you as an out of state AP holder that I spend much more than I ever would if I were local. I spend thousands a year just on my room, then you have to look at food (since unless I bring food with me I'm eating out), and other spending. We have 4 trips over the next year and it's spendy, and I don't think any local AP holder would be able to, or want to, spend that amounta of money. Not saying I'm special for spending way too much on something that makes me happy, but I can see how as a company they would want to cater towards people who spend that kind of money vs. those who just pop in and possibly eat a snack or QS (or nothing at all) and leave.
 


What would be some variable costs? Not covering fixed costs is interesting, you think that would come first. This is why I am not a CPA... but as a business owner fixed costs come first.

Variable costs are things like labor, supplies, those types of things. Fixed costs are costs that they will have to pay regardless of if the park is open or not. To open you have to then start spending the variable costs so if you can't cover those it is cheaper to stay closed.

As an anology. You have a car you are financing. You have to pay your finance payment if you drive the car or not. That is a fixed cost. To drive though you now have to pay for gas and wear and tear which would be variable costs. If you were going to drive for uber and the payment you got didn't cover gas and wear and tear cheaper to just keep the car parked.
 
Direct labor is probably their biggest variable costs for the parks. Basically expenses you would not incur if you were not operating.

Right now sanitizer is probably a big expense too. lol.

Their other probably big cost is utilities. Yes there is a certain level of utilities they need even when "closed" but need a whole lot more to run all the rides and everything. A Launch coaster like RnR used a lot of power.
 
good point, but the only thing i'll counter with is they set themselves a certain number to hit capacity for a reason. I would think if they really didn't want to reach that number, they'd lower it. Not sure why they'd set a number, and go, well I hope we don't hit this number

I think they’d be happy to hit it if it was due to an increase in resort and day guests without APs. The three different buckets are pretty good evidence of this, IMO.
 
good point, but the only thing i'll counter with is they set themselves a certain number to hit capacity for a reason. I would think if they really didn't want to reach that number, they'd lower it. Not sure why they'd set a number, and go, well I hope we don't hit this number
It's not that they don't want to hit the number, it's that they want to hit the number with the "right" guests. This isn't meant to be offensive to local APs as I have family who are local and in the same boat. They are advertising in certain geographic areas and trying to pull guests in from those areas. There have been many perks for the Disney vacation taken away with potentially low park crowds being one of the few left. There have been reports of some people canceling already due to the increase in crowds the last couple weeks as opposed to the first week crowd levels. Disney does not want to let in local APs day of to reach capacity and potentially risk guests who are willing to pay and stay at their resorts cancelling their trips.
 
I think they’d be happy to hit it if it was due to an increase in resort and day guests without APs. The three different buckets are pretty good evidence of this, IMO.
yeah, an AP off site value is lower than AP onsite or regular day ticket. Keeps the parks with lower attendance, again, they might have set a capacity number real high but they knew they wouldn't hit it and they are fine with that. Wondering what would happen if they would hit that capacity for the 2 other buckets.
 
Variable costs are things like labor, supplies, those types of things. Fixed costs are costs that they will have to pay regardless of if the park is open or not. To open you have to then start spending the variable costs so if you can't cover those it is cheaper to stay closed.

As an anology. You have a car you are financing. You have to pay your finance payment if you drive the car or not. That is a fixed cost. To drive though you now have to pay for gas and wear and tear which would be variable costs. If you were going to drive for uber and the payment you got didn't cover gas and wear and tear cheaper to just keep the car parked.
Thanks! I totally get the concept of variable vs. fixed but was wondering how it would apply to the parks since I know so little about how that works. I assumed labor was fixed but see how that can fluctuate and became a variable instead.
 
I can't get it to work. I keep getting invalid code, both on my account and my DH's.

Edited to add that we both have unactivated APs.
I know some were able to get it to work with inactivated APs. But I’m not sure. I’d confirm they are linked to your Disney account on the MDE, and if worst comes to worst, call Disney and see if they can help.
 
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