Excuse Me, “Legacy Fans”? We Might Just Be Disney’s Only Way Forward.

[wabbott]

You know, I can't help but wonder if you are on to something there that even the Disney execs don't see. Disney stockk prices are pretty poor right now, even though every analyst under the sun is rating them a buy. Disney execs keep trying to appeal to shareholders by talking about how they are milking every last dime from guests. But maybe the reason Disney stock is underperforming so much is that legacy guests like us are selling down our stock. I actually have a meeting with my broker next week and I plan to decrease my holdings of Disney stock. Customer goodwill and loyalty is part of the stock value, and someone at Disney needs to remember that quick.

I'm a stockholder who is a "legacy guest." And you better believe I pay attention to which board members I vote for or withhold when the annual meeting rolls around.

 

[donaldbuzz&minnie]

"Good will" is an accounting term. Although normally considered during a sale, "good will" refers to an actual intangible asset. It refers to the value of a company beyond what can be measured in things like bricks and mortar. It's the intangible value of a company that "legacy fans" are talking about as it has first dribbled, and is now pouring out of the Disney parks. Once gone, good will is extremely difficult, and maybe impossible to recover.

Maybe Disney executives have gotten to the point that they care only about their own paychecks and are completely indifferent to the long-term prospects for the company they represent. But I wish they could see that those of us who have loved and valued trips to Disney parks for a long time might have a point. As I see it, they are eating the seed corn, and may someday be amazed at how quickly the "magic" fades into a generalized, startling indifference.

 

[DCLMP]

We also need to take into consideration the huge numbers of foreign travelers coming to disney. They have waited a long time to get to disney. I imagine a lot of the crowds are now due to that. But what happens when this type of international travel calms down? Right now disney is very happy but I wonder if this will all hold out. I know it's very expensive for international travelers with the cost of flights, even with their perks for traveling here. Just a thought about what might occur later when all the "revenge" and international travel cools off.

I doubt it since they just discontinued the testing. We are still one of the few countries requiring vaccines.

Exchange rate is awful for international travers. With the energy crisis, soaring inflation and collapse of the Euro and pound I doubt there will a lot of European travelers. Asia is even worse off. Just got off 11 night DCL cruise in Europe and their might have been a handful of Europeans if that.
International travel isn’t anywhere close to what it was in 2019. Airlines cut a lot off flights and haven’t restarted them yet.

 

[triciambe]

I think folks are really underestimating two things:
(1) Sure, Gen Z young adults may not care much about Disney NOW, and maybe would rather globetrot etc. But when they have kids, and those kids grow a few years and start watching TV, they are going to see a Disney World commercial and beg mom and dad. And even though Mom and Dad think it will be cheesy and lame, they will go to Disney World, and there they will see the magic in their children's eyes, and their wallets will gush forth with cash. As long as people keep having kids, Disney knows the "favorable guests" who come for expensive splurge trips will keep on coming.
(2) International visitors--now that getting to the USA is easier than in Covid times, Disney may be banking on the fact that even if its domestic audience tapers off a bit, that'll be offset by travelers from outside the US, often with a lot of money to spare.

I am definitely "unfavorable/legacy" these days. I have DVC, I know all the price-saving hacks, I budget out my trips, I don't get suckered in to paying for dessert parties. But I am well aware Disney would do just fine and dandy without me.

Plus, I did a totally non-Disney vacation this summer with my kids. And guess what? I paid MORE than a typical Disney trip (prices are intense everywhere now), and I had a worse time in so many ways that had me saying "this wouldn't happen at Disney." From getting the wrong room category without enough beds because they double-booked, to restaurants where they refused to make very simple modifications for my autistic kid (e.g., no sprinkling basil on top of the cheese pizza) , to loooooooong lines and massive crowds at tourist sites (so much so we joked we were at basically Disney World, but without any rides and no way to skip the lines with DAS or FP/Genie). I could list dozens of things but it boiled down to this: it made me really appreciate that for all my frustration with missing the "good old days" at Disney (DME, fastpass, dining plan), the current watered down Disney World experience is still a pretty awesome vacation for our family. I went from wanting to take a break from Disney for a couple years to planning to go back in a couple months.

It is such a shame because Disney used to be my place where everything was perfect. Now definitely not perfect, but good enough to keep my coming back. And I think D'Amaro knows it.

Agree with all of this.

Although I'm firmly a Gen X'er, which I guess puts me in the company of "legacy" guests, I'm guessing I have a lot of the characteristics of the "favorable" guests Disney is supposedly catering to. We go once every 5-6 years, and because of that, we tend to splurge when we go (didn't think twice about budgeting for G+, ILL$, etc.). The only reason we didn't stay onsite on our last trip was only because we were with a big group where the Airbnb just made more sense, but otherwise, if it was just our family of five, we would have stayed on property and paid the Disney $$$.

I think Disney is counting on its IPs attracting people to their parks. It's what's kept us returning. The first time we went, it was mostly your standard Disney IPs and we went because the kids were little and a Disney vacation seemed like a thing to do at least once. So there's a subset of guests who will take that family Disney vacation as a "rite of passage" event. Had Disney not done anything to improve their parks and not introduced new IPs, we would have been one and done.

But the second time we went, they had added Pandora. We're not even big Avatar fans, but word of mouth about the ride and the land were enough to entice us back. And we had a terrific time - Disney service, as much as people say it's declined, is still pretty darn good compared to other places. And as a non-frequent visitor, I don't go enough to notice a lot of the things that AP and long time visitors have an eye for.

The thing is, we still would have been "done" with Disney after that last trip... except they then added Star Wars, Toy Story, Remy's, Guardians, etc. And that brought us back this past summer... and we loved our trip, G+ and all. I was pretty convinced that this would be our last Disney trip since our kids are older now, but seeing the construction walls at Epcot and Tron made us excited to come back again in a few years. My kids don't really have any nostalgia for the original attractions at the park like I do (Peter Pan is my still my favorite ride ever) but Ratatouille is my son's favorite Disney movie, and Elsa and Anna are my niece's favorites, and our entire family loves all things Star Wars and Marvel.

I know that I've completely fallen for the capitalist brainwashing that Disney needs to keep going, and I know that I'm being manipulated every time I get emotional thinking about my son and godson piloting the Millennium Falcon together. But as long as they continue to find ways to make their movie/character/IP popularity pay off at the parks, people will keep coming.

 

[hopeful4fl]

We are missing a major point here folks. People making decisions at the C-Suite level are not concerned about their salary (a few hundred thousand), or annual bonuses (a couple of millions), but are concerned on the 2-5 year stock price for their options (tens of millions of $$).
The decision they make are going to be in the "interest" of shareholders, which also translates to those same interests they hold dear for the (relatively) short term through maximizing profit for 2-5 years at a "damn who cares after" attitude.
The people of yesteryear who built a dream based on customer above all are gone. The people pervasive in our corporation are there to make sure their interests hold out, even at the expense of long term viability of the company. For the love of God I hope I am wrong, but that pattern fits here.
Legacy fans know how to work the system to maximize/balance the Disney magic with their spend. We are a "flat predictive graph" rather than the linear growth they need to boost the stick price. We are no longer the segment for that short term gain that profits the C-Suite for their lime light profit years.
We are in for some hard times, before another visionary takes over.

 

[DCLMP]

We are missing a major point here folks. People making decisions at the C-Suite level are not concerned about their salary (a few hundred thousand), or annual bonuses (a couple of millions), but are concerned on the 2-5 year stock price for their options (tens of millions of $$).
The decision they make are going to be in the "interest" of shareholders, which also translates to those same interests they hold dear for the (relatively) short term through maximizing profit for 2-5 years at a "damn who cares after" attitude.
The people of yesteryear who built a dream based on customer above all are gone. The people pervasive in our corporation are there to make sure their interests hold out, even at the expense of long term viability of the company. For the love of God I hope I am wrong, but that pattern fits here.
Legacy fans know how to work the system to maximize/balance the Disney magic with their spend. We are a "flat predictive graph" rather than the linear growth they need to boost the stick price. We are no longer the segment for that short term gain that profits the C-Suite for their lime light profit years.
We are in for some hard times, before another visionary takes over.

The whole market is down and probably going lower. I doubt Disney stock is going to be a beacon of light in the recession/depression even if the parks were as magical as they were10 years ago. They didn't hold up during the 2008 crash either, but I wish I would bought it at the lows.

 

[Jamie77]

"Now they want to segregate their market into groups; those who they believe will visit infrequently and spend the most with the slightest complaint, and those who continue to return consistently but also require a certain standard to be upheld to be appeased."

True. I took a survey two weeks ago that Disney sent me and one of the questions was: "On a scale of 1-10 how likely are you to take a WDW vacation?" I selected: 5. After that the survey closed and said that I wasn't eligible to answer anymore questions because they only wanted people who were going to visit WDW to take the survey. I was expecting the next question on the survey to ask me why I selected this rating. No, they didn't care to know. I couldn't take the survey again to change my answer because I really wanted to know what the next question would be if I "cooperated". However, I was told I'd already taken the survey and couldn't take it again.

If you ask me, that 50th anniversary song "Answer the Call' (or whatever it's called) is kind of concerning. Brainwashing at its finest. They're not even trying to hide it anymore. I'll go when I feel like it. I don't need them telling me what to do.

 

[AZBronco]

I'm one of those "Legacy Fans." I've been going to Disneyland since I was a little kid--my mom was at DL for opening day and she passed her love of it to me. When my kids were young and we lived in Irvine, we had annual passes. Like many on this board, I've been to the parks hundreds of times. Some visits were as short as taking the kids to see the fireworks on a Friday night after work, others were expensive week long trips to WDW. I took my family twice during COVID (it was amazing to be there with no crowds). My last trip was a year ago, and I have zero intention of returning unless Disney brings back the magic.

The parks were a mess--spilled popcorn, overflowing trash cans, overworked employees, broken animatronics on rides. It wasn't magical. Food quality was generally poor. As a long-time fan, I know how to keep up on park changes and knew we'd need to do our counter-service meals via mobile order well in advance of when we wanted to eat. It made me sad to see parents wanting to get food for hungry kids being told "place your order now and the next available pick-up time will be in 2 hours..." So they inevitably buy junk food from a gift shop to tide their kids over. I doubt those families felt the trip was worth it and probably weren't planning their next trip on the flight home. I could go on.

I understand price increases. But they're raising prices and killing the magic at the same time. My daughter (who loves Disney almost as much as I do) is a student at UCF. She's in her second year and hasn't gone to WDW once--but she's been to Universal a couple of times. And I have to admit--Universal does a lot of stuff better than Disney, now.

 

[Takket]

I understand the author's frustration. Disney has thrown all their chips into the pile of "the once a lifetime-er will still come even if we charge double for half the stuff". To this point it has been a huge success.

But I still wonder how sustainable it is especially now that the "summer of i don't care how much it costs i need a post-covid vacation and i want to take the kids to disney while they are still young enough to feel the magic" is over.

Our family are those legacy types that wanted to pass down the magic from generation to generation. I can tell you my child is 26 and has no interest in going to Disney. "Been there, done that, and it is too expensive."

Can Disney get by on betting so heavily on first timers, that will spend a ton of money but not feel like going back?

Before the pandemic one of my co-workers, with two small kids, was planning a trip. They had a whole package booked at the Poly. They never went because of covid and when i asked him a few weeks ago about it he said they had nothing planned and scoffed at how much it cost now. They are taking the kids elsewhere. And to be frank, money is not an issue for them, they have plenty of it.

How long can Disney sustain this currant business model? It doesn't seem like forever. I remember debating ten years ago about spending $65 a person to do the holloween party. But we did it. Now when my wife tells me the price I scoff, but then i think about it for a minute, and say "who am I kidding? Disney won't be able to sell the tickets fast enough." and they CAN'T.

They can ride this wave until is dissipates, and I'm not seeing anything, despite all the doom and gloom about inflation and stock markets, that indicates people aren't going to pack the parks and doll out massive piles of cash. But 5 years from now, without devolving the same brand loyalty, the "legacy" people, will they be able to sustain it?

Doesn't help that the price of airfare has skyrocketed either. It now costs about the same for one trip as we used to get for two trips. Have a room booked in March but not sure it is worth what it will costs unless the airfare drops and we get a room discount.

 

[DCLMP]

They can ride this wave until is dissipates, and I'm not seeing anything, despite all the doom and gloom about inflation and stock markets, that indicates people aren't going to pack the parks and doll out massive piles of cash. But 5 years from now, without devolving the same brand loyalty, the "legacy" people, will they be able to sustain it?

No they won't be able to sustain it long term and the little wave they are on right now will end over the next year. There will always be people that can afford Disney, but I don't see demand going back to 2019 levels for many years. I remember the CEO of AA saying back in 2019 that airlines would never lose money again. That didn't age well. Airlines still haven't recovered and probably wont with the energy policies. Prices won't come down they'll just keep cutting the number of flights.

 

[FuzzyPeach]

Disney is not only supported by “legacy fans” when times get tough, but years and years of good reputation and good experiences that push the infrequent guests to book. It’ll be interesting to see in the long term what impact their choices today in the parks have on all of that.

In terms of building a love of Disney and a desire to visit, I think todays children and teens have much more catching their attention than years ago. Other studios are much stronger than they used to be, there are massive franchises that will be what tomorrow’s adults feel nostalgia for similarly to the way todays parents feel about the Disney renaissance years. In the theme park game, Universal obviously has some really strong draws they did not in generations past, and it’s only going to get stronger once Nintendo opens.

Disney doesn’t really make visiting today easy on anybody. Their current system doesn’t really cater well to the infrequent high spending guests, unless they’re only referring to a VIP guide level of spend. It’ll be interesting to watch the coming years for sure, once the pandemic is actually in the rear view. They have the tools to manipulate crowds and staffing in a way they have not before.

 

[Jrb1979]

Disney is not only supported by “legacy fans” when times get tough, but years and years of good reputation and good experiences that push the infrequent guests to book. It’ll be interesting to see in the long term what impact their choices today in the parks have on all of that.

In terms of building a love of Disney and a desire to visit, I think todays children and teens have much more catching their attention than years ago. Other studios are much stronger than they used to be, there are massive franchises that will be what tomorrow’s adults feel nostalgia for similarly to the way todays parents feel about the Disney renaissance years. In the theme park game, Universal obviously has some really strong draws they did not in generations past, and it’s only going to get stronger once Nintendo opens.

Disney doesn’t really make visiting today easy on anybody. Their current system doesn’t really cater well to the infrequent high spending guests, unless they’re only referring to a VIP guide level of spend. It’ll be interesting to watch the coming years for sure, once the pandemic is actually in the rear view. They have the tools to manipulate crowds and staffing in a way they have not before.

I agree that Universal will continue to get stronger.

As far as Disney being a draw for kids and teens now, IMO IP isn't the draw it once was. Right now Disney is doing well due people like the ones on this board that take their kids due to them growing up on Disney and the parks. That only lasts so long. If you look at my sister's family, her kids loved Disney when they were 4 and 5. Now that they are 11 and 12, places like Cedar Point mean more to them as they want coasters over dark rides

 

[disneyseniors]

We are missing a major point here folks. People making decisions at the C-Suite level are not concerned about their salary (a few hundred thousand), or annual bonuses (a couple of millions), but are concerned on the 2-5 year stock price for their options (tens of millions of $$).
The decision they make are going to be in the "interest" of shareholders, which also translates to those same interests they hold dear for the (relatively) short term through maximizing profit for 2-5 years at a "damn who cares after" attitude.
The people of yesteryear who built a dream based on customer above all are gone. The people pervasive in our corporation are there to make sure their interests hold out, even at the expense of long term viability of the company. For the love of God I hope I am wrong, but that pattern fits here.
Legacy fans know how to work the system to maximize/balance the Disney magic with their spend. We are a "flat predictive graph" rather than the linear growth they need to boost the stick price. We are no longer the segment for that short term gain that profits the C-Suite for their lime light profit years.
We are in for some hard times, before another visionary takes over.

I don't know about working the system. We are those dreaded legacy fans, and when we went to WDW we would not cheap out. We bought what we wanted, ate where we wanted, stayed on property, and spent a lot of money every year. We never held back on our disney vacations because we felt we got good return on the investment - now, however, no such thing.

 

[disneyseniors]

I doubt it since they just discontinued the testing. We are still one of the few countries requiring vaccines.

Exchange rate is awful for international travers. With the energy crisis, soaring inflation and collapse of the Euro and pound I doubt there will a lot of European travelers. Asia is even worse off. Just got off 11 night DCL cruise in Europe and their might have been a handful of Europeans if that.
International travel isn’t anywhere close to what it was in 2019. Airlines cut a lot off flights and haven’t restarted them yet.

I thought I answered this but couldn't find it! Maybe I forgot to push post, so I will try again. I guess I judged this by 2 international friends who were chomping at the bit to get back to WDW as soon as possible. One is there now and the other will be there in 2 weeks. I imagine there are many more foreigners who were waiting to get the ok to visit again. I still feel there are enough who love disney as much as we do on these forums and will come back despite the costs. I know my friends will even though the cost of airfare is high, as well as all of disney,

 

[Figvention]

Disney execs keep trying to appeal to shareholders by talking about how they are milking every last dime from guests. But maybe the reason Disney stock is underperforming so much is that legacy guests like us are selling down our stock. I actually have a meeting with my broker next week and I plan to decrease my holdings of Disney stock. Customer goodwill and loyalty is part of the stock value, and someone at Disney needs to remember that quick.

Please don’t take this as paid financial advice and please consult with your financial advisors… but if people are selling due to bad park experiences and or trying to stick it to Bob Cheapskate, you are literally throwing good money away. Disney doesn’t produce needed durable goods and is strictly an entertainment company at the whims of discretionary consumer spending. Not a great place to be in the current market. In 3-5 years Disney+ will be the new Netflix but with the stable of well know properties to continue to drive traffic. This alone is worth holding onto the stock.

I miss the old Disney of it actually being a “resort” trip with luggage service/magic express and being treated like we old gray hairs were wanted. We cut down from 2 or 3 trips a year to one at Christmas, even cutting that down from 7-8 day to 4-5 as the value for the money isn’t there. I’m too old for “just rides” and meet and greets. All that said… your walking away from real profit on a 3-5 year play if your doing it for spite.

 

[Figvention]

As I see it, they are eating the seed corn, and may someday be amazed at how quickly the "magic" fades into a generalized, startling indifference.

They are pivoting to the market that will exist in the coming decade. Sure, there will still be a few high end whales here and there but the generation that are now new parents and the teenagers heading into the market in the next 3-5 years just can’t ring the register like we did. Real wages have not moved in 40 years (some professions they have gone backwards), things like education, healthcare, and homes are MUCH more expensive than they are for us. We often almost weep for what are kids have to go through to maintain the level of life we have. There is no generation of pensioners incoming to buy DVCs because those people don’t have pensions and will probably have to work well into their 60s. This is not a political statement but an economic reality.

The board/CEO is doing exactly what they should be doing by protecting their shareholders in prepping for the day pass crowd. The 20 year old getting married/having kids today will have zero memories of what it was like before, they will only lose customers when we kick the bucket. Happening all over markets, it’s not Disney specific. Well run companies are geared toward Johnny Paycheck… that paycheck ain’t what it used to be.

 

[DCLMP]

I thought I answered this but couldn't find it! Maybe I forgot to push post, so I will try again. I guess I judged this by 2 international friends who were chomping at the bit to get back to WDW as soon as possible. One is there now and the other will be there in 2 weeks. I imagine there are many more foreigners who were waiting to get the ok to visit again. I still feel there are enough who love disney as much as we do on these forums and will come back despite the costs. I know my friends will even though the cost of airfare is high, as well as all of disney,

So you know two people that want to visit WDW so therefore there must be thousands? There may be, but if Europe doesn’t change course many Europeans will have to choose between heat and food. Energy costs are up 80% in the UK. The way things are headed I don’t see Europeans flocking to the US. Their currencies are also collapsing making travel here a lot more expensive in the past.

 

[DCLMP]

Please don’t take this as paid financial advice and please consult with your financial advisors… but if people are selling due to bad park experiences and or trying to stick it to Bob Cheapskate, you are literally throwing good money away. Disney doesn’t produce needed durable goods and is strictly an entertainment company at the whims of discretionary consumer spending. Not a great place to be in the current market. In 3-5 years Disney+ will be the new Netflix but with the stable of well know properties to continue to drive traffic. This alone is worth holding onto the stock.

I miss the old Disney of it actually being a “resort” trip with luggage service/magic express and being treated like we old gray hairs were wanted. We cut down from 2 or 3 trips a year to one at Christmas, even cutting that down from 7-8 day to 4-5 as the value for the money isn’t there. I’m too old for “just rides” and meet and greets. All that said… your walking away from real profit on a 3-5 year play if your doing it for spite.

What good movies has Disney made lately? I guess you could say the same about Netflix. I had Disney plus for a month and couldn’t find one thing I wanted to watch.

 

[UrsulaWantsYourSoul]

DVC completely scrapped the plans for Reflections, which was a gigantic resort with hundreds of rooms. It had already started site preparation in 2020. Disney replanted the grass, removed everything, and scrubbed every reference to it on the website.

The last DVC new build was Riviera, which opened in 2019. It's maybe half-sold three years later, which is horribly slow in DVC pace.

The newest project was a flip of a small, old GF building that needed to be renovated anyway. Compared to the rest of DVC, it was very small. And none of the VGF2 rooms had kitchens. The original plans didn't even have microwaves, but they were added at opening.

The next project will be Polynesian 2, opening late 2024. No one knows whether it will have the larger rooms, like the larger DVC buildings do. This will be a huge gap in construction, compared to the pace DVC was running at. And it might even be a small building. We don't know the scale of it yet.

I'm not sure DVC does "cater to frequent guests" anymore. The VGF2 build was just hotel rooms, and those rooms are always the first to book. DVC has a huge industry of renting out the points, because at the end of the day it's a comp to a Disney hotel room. I could see the Poly2 build totally going in that direction.

The next project for DVC is actually Villas at Disneyland Hotel opening in 2023. So excited!
As much as some people seem to claim Riviera is not selling well, it's actually on pace with what some other DVC properties have done - but is millions of points so will take a while.

 

[Steve G]

I would be considered one of the Legacy fans and I'm also a DVC member and have been for over two decades I've also been an AP holder for most of this time period too. As I read this article two things occurred to me. One - even though I booked four trips this year I've still not purchased park admission. One trip has been completed and one is at the end of the month. I'll enjoy the resort and will find plenty of things to occupy my time but hitting a park currently isn't in the plans. Two - for most of this time I been "that Disney guy" - the one someone would seek out advice from if they were going to WDW. It occurred to me that it's been quite some time since that has occurred. Something to think about.

I can really relate to this post. The park experience continues to be more of a turn-off, both in terms of pricing and quality, and was noticeable even before Covid hit. We are DVC and bought in at a good price 13 years ago and enjoy the resorts, including the non-Orlando locations where we have plenty of non-Disney options, and are incorporating the parks less and less in our plans. Our kids are in their 20's and we don't have grandkids yet so maybe the focus will shift back to the parks at some point, but for now it's working just fine and still feels like we are getting good value for our spend.