Walt Disney Parks And Resorts Investor Conference with Tom Staggs

Please note: some posts may contain affiliate links which means our team could earn money if you purchase products from our site

In case you missed these notes from the Walt Disney Parks And Resorts Investor Conference I am going to post them here.

They are a little long but full of juicy details of all the upcoming events, changes, and expansions to Disney.

Tom Staggs

(Chairman, WD Parks & Resorts)


2/17/11

I was reflecting, actually when I was, when I knew I was coming here,
that one of thing things that I really liked about my old job was that all of
you when you had issues you wanted to discuss, would call and talk
about them. So shouldn’t there be a few more billion that you’re putting
into share purchase or, you know, digital media that ultimately good or
bad for the business. The answer is still good, by the way. And now I’m
glad to see that that hasn’t changed. I got two questions last night about
what time the gym opens, and another person wanted to know if I could
give them FASTPASS assets, access for their kids. So, it’s good to know
you still come to me for the big stuff.


It has been a fantastic year. It was weird to go sort of cold turkey, though
on the regular cadence of investor meetings and quarterly conference
calls. As you’d imagine, I’ve listened in to a number of the calls, and I
can tell you this… I haven’t missed me a bit. In all seriousness, Jay has
done a great job, as you’ve seen firsthand, of jumping into the role. And
I’ve had a bit of jumping in to do myself as I’ve tried to travel through all
of our locations and immerse myself as much as possible into the world
of Disney Parks And Resorts.


Now, this day and age, there’s always someone around with a video
camera, which allowed us to pull together a few clips to show you a little
bit about what my last year has been about. Take a look.


TOM’S FIRST YEAR VIDEO


So right after we shot that video, Gary Marsh marched me straight over
to Bob Cavallo’s office at Hollywood Records. That meeting didn’t go so
well. Really, though, it has been a really fun and fascinating year, and
fulfilling as well. And it’s a great time to be in this job. As a number of
you have pointed out, the parks are really well-positioned to take
advantage of the economic recovery, which should help fuel strong
growth for the segment over the next couple of years.
We will capitalize on that economic recovery as it solidifies, but at the
same time, we have a significant number of long term initiatives
underway in our business, and that’s really what I want to talk to you
about today.


So now having spent considerable time with you over the years, I know
that when I say “initiatives” in the parks business, your thoughts
immediately turn to capital requirements. And, to be sure, we are
putting substantial capital to work – especially this year and in 2012.
But let me say up front that I am very confident in our ability to create
value with these investments.


Our principal financial objectives, for Parks and Resorts, are to deliver
attractive double-digit returns on investment capital along with
continued profit growth over the long term. As we look out over the next
decade, we fully expect to deliver on those objectives. That confidence is
bolstered by our tremendous competitive strengths and sources of
differentiation in this business.


At Disney Parks, we are known for the iconic assets that we build — our
castles, hotels, cruise ships… but at the end of the day, these aren’t our
core products. We aren’t in the attraction business, the hotel business,
the cruise ship business… we are in the guest experience business.
The great shared memories that guests cherish and create every day at
our parks help keep people coming back year after year. Understanding
that is essential to understanding how Disney’s unique assets and
competitive strengths set Parks and Resorts apart. So let me briefly
touch on four of these key strengths.


The first is, of course, the Disney brand. In the Family Travel and
Leisure business, the Disney name truly stands apart. It’s uniquely
powerful, is synonymous with quality, it evokes trust and it generates
loyalty. It allows us to establish a connection with our consumers unlike
any other company. We have the extraordinary benefit of having
customers who actively seek a relationship with us, a relationship that is
based on emotion and trust. And we understand that we must be
relentlessly consumer-focused to sustain and grow those relationships.
Our second major differentiator is the incredible wealth of fantastic
intellectual property and creative talents available to us. At Parks and
Resorts, we bring the company’s creative content to life in an immersive
and tangible way. Many of our properties are evergreen, as Jay pointed
out. They provide an ongoing source of strength and relevance for us.
At the same time, the constant flow of stories, characters and music
generated across the Disney company allows us to infuse our parks,
resorts, cruise ships, etc. with vibrant new content on an ongoing basis.

The third competitive strength I want to touch on is our long-standing
focus on leveraging technology and innovation throughout our business.
While it may be chic to talk about innovation these days, it’s been a key
focus at Disney since Walt famously said, “It’s kind of fun to do the
impossible.” Trust me, if you spend time with our Imagineers, you’ll see
that the drive for innovation is still inherent in everything that we do.
And it’s inspiring because our opportunities to leverage technology and
innovation are greater now than they’ve ever been.


The fourth strength I’ll highlight is one that I’m not sure we talk about
enough, and that is our incomparable cast. It might surprise you, but in
our research, people cite interactions they have with our cast as the
single biggest factor in their satisfaction and intent to return. The
excellence of our cast members is borne out of a deeply-rooted cultural
commitment to quality and service that has been part of the organization
for over half a century. What I’ve really come to appreciate this past year
is that our cast’s commitment to guest experience is holistic – from
designing our parks, attractions and resorts, to creating our
entertainment offerings, and even down to the food that we serve – we
want to wow our guests with every interaction.


Maintaining this culture of excellence across all the various disciplines
required in our business is extraordinarily difficult, if not impossible, for
others to replicate. The guest service orientation of our business does
require a significant labor commitment, and operating labor comprises
about a third of the segment’s cost base. But when so many of our
guests single out interaction with our cast as the most important part of
their visit, we know this continued investment is worth it.
So capitalizing and building on the key sets of competitive advantage that
I’ve just listed is central to our investment decisions, and it’s an essential
part of the initiatives we now have underway. Our current initiatives fall
into three areas: Growing our established assets; Building out our new
businesses; And expanding in geographic markets.


So looking first at our established assets, here at the Disneyland Resort
we’re well under way with our expansion of Disney’s California
Adventure. Since its inception, Disney’s California Adventure has
featured some of Disneyland’s most popular attractions… But from the
standpoint of delivering on the fundamental Disney differentiation and
immersive storytelling, we missed the mark. So now, we are bringing
more beloved characters, more atmosphere and more Disney DNA into
DCA.

Last night you all saw World of Color, which opened just last summer. I
hope you really enjoyed it. But I hope you also noticed that it’s not only
astounding on a creative and technical level… it’s also firmly anchored by
classic Disney characters, stories and music that people love. It’s been a
huge hit with guests, and so far it’s been seen by over two million people.
Since opening World of Color, through the end of our first quarter,
attendance is up nearly 20% at Disney’s California Adventure. And that
increase gives us even greater confidence in our ability to grow our
attendance and better distribute it between the two parks.


This spring, we’ll open Little Mermaid – Ariel’s Undersea Adventure, and
construction has already begun on Buena Vista Street, the re-imagined
entry to the park that will transport guests into a romantic, idealized
Hollywood of the 1920’s. In the summer we’ll open, of 2012, sorry,
summer of 2012, we’ll open CARS LAND – a new 12-acre land that will
transport guests to Radiator Springs and immerse them in the world of
CARS.


Later this afternoon, Bob Weis, our lead Imagineer on this expansion,
will give you a deeper look at our plans, and I think you’ll see that we’re
transforming DCA into a park that is truly differentiated and truly
Disney.


Meanwhile, we’re also investing for growth at Walt Disney World… which
is, of course, our biggest and most profitable asset. For most of our
guests, the centerpiece of a Walt Disney World vacation is a visit to the
Magic Kingdom. And the most popular land in the Magic Kingdom is
Fantasyland, with its iconic characters and popular characters. But
Fantasyland has seen relatively little expansion since the park opened in
1971. Consequently, it can be extremely congested and difficult to
navigate on busier days. That decreases the number of experiences
guests can enjoy, which in turn directly impacts guest satisfaction. With
this in mind, we are well into the expansion that is the largest in the
Magic Kingdom’s history, and it will double the size of Fantasyland once
complete. By expanding the offerings of our most popular land, we have a
real opportunity to drive guest satisfaction even higher.
And we know that when we increase guest satisfaction, guests spend
more time and more of their vacation dollars with us… and intent to
return and positive word of mouth increase as well. We also have an
opportunity to better utilize some of our most beloved stories and
characters in new attractions, dining experiences and immersive
environments to create a differentiated experience that no one else can
match, like Under the Sea: Journey of The Little Mermaid, which will
take guests into the world of Ariel, Sebastian, Flounder and all their
friends.


Not far from Ariel’s new home, guests will be able to relive their favorite
moments from Beauty and the Beast in Belle’s Village and Beast’s Castle.
One of the most popular attractions of the Magic Kingdom, Dumbo the
Flying Elephant, will double in guest capacity, and will also feature a
circus-themed interactive queue that will delight guests of all ages as
they enter the Big Top.


Finally, we’re adding an innovative new mine coaster based on one of our
most iconic and enduring films, Snow White and the Seven Dwarfs. This
attraction will feature a new ride vehicle that we patented, which twists
and turns on its track… adding atmosphere, kinetics and adventure to
Fantasyland.


We have additional opportunities at our resorts as well. In 2013, we’ll
open our new Art of Animation Resort at Walt Disney World. This new
property celebrates some of our most popular animated stories, including
The Little Mermaid, Lion King, Finding Nemo, and Cars. The resort will
have nearly 2,000 rooms, including 1,200 family suites, giving us
significant boost in our attractive value-priced room inventory. Now our
value resorts, and especially our family suites, play an important part in
providing our guests with a broad range of hotel and pricing options.
They’ve been extremely successful and have generated some of the
highest occupancy rates on our property.


We believe these initiatives in Florida and California will allow us to
deliver attendance growth that outpaces population growth by several
percentage points. By delivering better value, we also feel we can
generate real increases in per capita spending. For example, we’re
already seeing a pricing benefit from World of Color. While previously,
crossing between Disneyland and Disney California Adventure was
essentially free for people on a two-day passes, there is now a $10
premium to park hop.


In addition to focusing on expanding and enhancing our physical assets,
we’re also spending considerable time and energy to fundamentally
change the way our guests experience our properties. As we’ve discussed
in the past, consumers are changing: they have increasing access to
information, an increasing array of choices, and an increasing desire and
expectation for recognition and personalization and recognition. So we
need to transform the guest experience to reflect that.


We know that our guests love creating great Disney memories with their
friends and their families. We also know that they don’t exactly relish
waiting in line, checking at the resort, worrying about missing their
favorite attractions or feeling uncertain how to best navigate and access
our properties. In the coming years, we’ll introduce a broad, integrated
set of systems and tools that will help us create a more seamless,
personalized experience, and help guests to get more out of their visit
with us. That’s our ultimate goal – to welcome more and more people,
while making their experience more satisfying, more personal and more
immersive.


We’ve launched a number of initiatives over the years, including
FASTPASS and Magical Express, and they’ve been incredibly popular
with our guests. But we plan to take these kinds of enhancements even
further. Giving our guests faster and better access to the fun is the
centerpieces of our investment in technology. As a result, we are
currently developing an innovative system that will, in essence, create a
version of FASTPASS for their entire Disney vacations. Now we define the
guest experience as beginning from the time a potential guest sits down
at a computer or picks up a phone to make a reservation. Our new tools
will help them better understand all that we have to offer and better plan
their time with us. They’ll be able to create a personalized itinerary that
gives them the exact Disney vacation they want.


Guests will be able to reserve times for their favorite attractions and
character interactions… secure seats at our shows and spectaculars…
make dining reservations… and pre-book many other favorite guest
experiences – all before even leaving their house. We also plan to simplify
the check-in process so that guests will arrive at the resort with room
key in hand. They will be able to go straight to their room or a theme
park – again, allowing them to get to the fun faster.
We are also creating innovative new ways to pull guests into our stories.
A picture with a Disney princess is a quintessential part of a Disney
experience for many of our guests. So, in Fantasyland at the Magic
Kingdom, our Disney princesses will soon have dedicated homes
complete with Disney magic. And the tools that we’re creating will allow
them to greet and interact with our guests in an immersive and highlypersonalized
way.

We are rethinking the queue lines at many of our attractions, and are
enhancing them in ways that make them part of the show, essentially
creating a new “Scene One” for the attractions, if you will. For example,
the Winnie the Pooh attraction in Florida we just opened has a new
hands-on area where our younger guests can explore and play in the
Hundred Acre Wood. It’s been so successful that we’ve heard kids asking
their parents NOT to use FASTPASS in order to enjoy the new first scene
that much longer. You know we are doing something right if kids are
asking to wait in line.


We’re also developing the means to better assess and manage guest
traffic throughout our theme parks so that we can use entertainment
experiences, characters, and other forms of Disney magic to help improve
the flow of guests during peak periods… and drive increased utilization
as a result for our parks. Through this work, we will put better
information into the hands of our cast, so they can deliver even better
and more personalized service for our guests. Now, it will be some time
before we roll out the bulk of these initiatives, but we are well into
development, and in fact have a number of patents pending on our
approach. So it’s too early for me to say much more than that… but our
vision here is clear, and we see a real opportunity to further enhance and
differentiate the Disney vacation experience.
We’re excited about our growth prospects at our existing sites, but at the
same time, we have a real potential at our new and expanding
businesses, with the most important of these being Disney Cruise Line.
Cruise is a great example of Disney’s competitive strengths giving us the
opportunity to successfully enter a new area of the vacation industry. In
so doing, we created the blueprint for family cruising. In fact, over a third
of our passengers say they would not have chosen a cruise vacation if it
hadn’t been for Disney. From stem to stern, our ships have been
designed to deliver a great Disney cruise vacation for every member of
the family.


We’ve carved out a very attractive niche in this business, generated
strong returns, and created a new avenue for growth. But the most
gratifying aspect is the response of our guests. Virtually everyone who
sails with us says they will recommend the product to others. And over
80 percent say they will come back to cruise with us again within five
years.
I was just on the maiden voyage of our new ship, and I met a couple who
was on their 80th Disney cruise. No, not 8th, not 18th – 80th! Their
80th Disney cruise. I love them.


At the breakout session later, Bruce Vaughn, head of creative for Walt
Disney Imagineering, is going to give you an overview of our two new
ships – the just-launched Disney Dream and the Disney Fantasy, which
arrives next spring. I think you’ll be impressed with how beautiful these
new ships are and how innovative we’ve been in their design and
development. There’s literally a surprise around every corner – from the
magic artwork to the virtual portholes.
Expanding in cruise allows us
to take more guests to more parts of the
world and test new markets, as well. We have repositioned the Disney
Wonder to the West Coast, which will allow us to take, to sail to Mexican
destinations, and for the first time ever… to Alaska this summer.
Now while we’ve incurred significant costs to launch the Disney Dream
this quarter, we expect our new ship to start contributing nicely to our
profits beginning in Q3. Our cruise business has generated double-digit
returns, and we anticipate having a similar return for the business after
the two new cruise ships come fully online. Given our capacity increase, I
am particularly pleased that our booked occupancy across the fleet is 12
percentage points above where it was at this time last year.


Now just as we were able to create a unique Disney vacation experience
with Disney Cruise Line, our aim is to do the same in Hawaii with
Aulani… our first stand-alone family destination resort, which is
scheduled to open in late August. We are creating a stunning vacation
destination in one of the most beautiful places on earth that will allow us
to deliver an incredible Disney experience that captures the very best of
Hawaii. The project will feature 359 hotel rooms and 481 of our popular
Disney Vacation Club villas. Like our cruise vacations, Aulani will offer
something for everyone. It will feature: a family friendly lagoon; a pool
and water play area that literally needs to be seen to be believed;
dedicated clubs and activities for kids and teens; an 18,000 square foot
spa; and access to special Disney-created guided tours and adventures
on Oahu.


We know the Disney Parks brand is already powerful in Japan, but we’ve
been pleasantly surprised by the interest in Aulani and Disney Vacation
Club in the Japanese market. As such, we fully expect this to be both a
domestic and international tourist destination.
The experiences we create translate extremely well across geographic and
cultural boundaries. And in the longer term, we expect expansion outside
the United States to be our most important growth opportunity. And in
building great guest experiences and destinations and around the world,
we also are laying important foundations for the Disney brand.
As you know, our current principal focus in new markets is China, and
we think our timing here is right. Roughly 30 million Chinese enter the
middle class each year, which will lead to significant growth in leisure
travel. In fact, spending on domestic leisure travel in China is expected to
more than double to over $200 billion by 2015.


Our first entry into China is, of course, Hong Kong Disneyland, where we
are celebrating our 5th anniversary. Last year, Hong Kong generated
record attendance, hotel occupancy and guest spending… and that
momentum has continued this year. We opened Hong Kong with an eye
towards expansion, so I’m pleased to say that construction is currently
underway in Hong Kong on three themed lands: Toy Story Land opens
this fall and will take guests into the world of Buzz, Woody and all the
toys from Andy’s room. We opened a similar version in Paris last summer
and it’s been a huge hit with guests there. In 2012, we’ll open Grizzly
Gulch, Hong Kong’s take on Frontierland, but this time we have an Old
West mining town built on erupting hot springs. Mystic Point, opening in
2013, is reminiscent of the Haunted Mansion and features a Disney take
on a widely-known Chinese character called the Monkey King.
With the addition of these three new lands, we expect the upward
momentum we’re seeing at Hong Kong resort to continue. Bear in mind
that more than 40% of visitors to Hong Kong Disneyland come from
Mainland China. Given that our penetration rate in Southern China is
currently just 1% per year, we certainly have room to grow.
As we announced this fall, we’ve signed an agreement with the Shanghai
government to build a new theme park there, and are awaiting final
approval from the central government in Beijing. Again, we think there is
huge potential for a Disney property in Shanghai, and I couldn’t be more
excited about our prospects there.


We are well into our blue sky development, and once Shanghai opens in
about five years, we know we will have a park that is distinctly Disney,
yet authentically Chinese.
Taken as a whole, we believe China is the most exciting opportunity
we’ve had since Walt first bought land in Florida in 1964. Walt Disney
Parks and Resorts is a dynamic business – one that will continue to be
enjoyed by guest around the world for generations. It’s a business with
high barriers to entry and sustainable competitive advantage that
provides attractive opportunities for us to profitably invest our capital.
The current investments we’re making in our existing assets, new
businesses and new geographic markets leverage and expand our
competitive advantages, and they enhance our growth prospects over the
near, medium and longer term. They are right for our brand and for our
business, and they will help us create value for our shareholders for
many, many years to come.
Thanks very much, great to see you all again.


[END OF PRESENTATION]

  • Tom Staggs Offers Update on Walt Disney Parks & Resorts (chipandco.com)
Walt Disney Parks And Resorts Investor Conference with Tom Staggs

D2T-1

Let our friends at Destinations to Travel help you book your next Disney Vacation. They are the preferred Travel Agency of Chip and Company and Disney Addicts, and who we use ourselves.

Get started below for your FREE No Obligation Quote.

Book With our friends at Destinations to Travel

Name(Required)
MM slash DD slash YYYY
This field is for validation purposes and should be left unchanged.

For the BEST in Disney, Universal, Dollywood, and SeaWorld Theme Park News, Entertainment, Merchandise & More follow us on, Facebook, Instagram, and Youtube. Don't forget to check out the Chip and Company Radio Network too!


Written by:

12,833 Posts

Chip is the owner, editor, and writer of Chip and Company. When he is not writing about Disney News or Planning Tips, you will find him counting down the days to his next Disney Vacation.
View All Posts
Follow Me :