Furor from devoted Disney fans has spilled to Wall Street, but will a boost to earnings keep Bob Chapek as CEO?
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Furor From Annual Passholders
Since Bob Chapek took over the reigns from former Disney CEO, Bob Iger, it’s been a rocky road. Navigating out of the ever-changing COVID-19 restrictions meant that Disneyland resorts in California and Walt Disney Resort in Orlando faced different policies, procedures, and reactions from the public.
However, in addition to reduced maximum capacity (as low as 25% for the Magic Kingdom theme park in Orlando), the parks laid off some 28,000 cast members, reduced benefits, and added criteria that exceeded the requirements by the cities and states in which they operate. Here are some of the key reductions of service that were implemented during COVID:
- Park hopping (this may still be possible but requires a reservation at the first park and is subject to availability after 2 PM, is not guaranteed and is usually limited to one daily)
- Fast Pass (ability to schedule a no-wait ride)
- Included Photo Pass (digital copies taken by professional photographers in the parks)
- Ability to become an Annual Passholder generally
Following a return to nearly pre-COVID conditions, reservations have stayed and then came the delayed introduction of “Genie+.” This daily $15/person add-on that restored some Fast Pass ride access, Photo Pass, but added “Lightning Lane”, a Fast Pass alternative for the Disney parks most popular rides for an additional per ride variable charge typically about $9-15/each.
Prices have gone up, annual passes still have not returned outside of the “Pixie Pass” a local-only weekday Pass with heavy limitations.
According to feedback online, “the magic is gone.” Supply chain issues have affected the usual sterling quality of Disney products, and passholders have expressed outrage at the endless cash grabs for what was (and remains) an already very expensive experience for families.
Wall Street and Main Street Take Notice
Prior to becoming CEO of the Walt Disney Company, Chapek was chairman of Parks and Resorts. Some have stated that changes like Genie+ were in the works prior to Chapek taking over as CEO, but that would indicate that he was at the helm (and he was) during their development.
Wall Street had deteriorated the stock price of DIS from an all-time high of just over $203/share to $133.60/share prior to last week’s earnings call.
Rumblings from faithful Disney fans are nothing to ignore, but any change will always be met with disdain from their biggest fans.
However, some mainstream swell began to gather in the last few weeks. A Change.org petition to “Fire Bob Chapek” has garnered more than 103,000 signatures. The New York Post covered a movement to remove him from the board of directors on February 9th. Abigail Disney, daughter of Roy E. Disney, debuted her film at Sundance last month calling for a boycott of Disney parks to help cast members secure better working conditions. Former Chairman and CEO, Iger, declined calls to return to the helm and avoided questions about working conditions in the film but applauded Dolly Parton for adding books, tuition, and fees to the benefits for Dollywood employees.
Positive Earnings Growth May Keep Chapek Installed
Unfortunately for loyal Disney fans, the revenue moves and reduced benefits is helping earnings. Visitors to parks around the world including the six-park complex at Walt Disney World found that one-third to one-half of guests are paying for Genie+ despite higher ticket prices. However, a small number of visitors are Annual Passholders so the numbers may be misleading.
In the previous quarters, Parks, Experiences, and Products performance sagged but has now come back stronger than ever. Investments in home entertainment and streaming services still operated at a loss, and Chapek indicated during the earnings call that Disney+ prices would be climbing.
Investors don’t care about happy customers so long as the registers continue to ring. One would say the two go hand-in-glove, but to this point, that doesn’t appear to be the case. Despite a vocal and public push for Chapek to be replaced including Disney shareholders and Disney regulars, based on the last quarter his replacement seems unlikely. To the detriment of Disney visitors, Chapek will likely be emboldened by surviving any attempted ousting and buoyed by the financial performance of the company.
What do you think? Will Chapek remain in charge of Disney? If so, will he further degrade the product or will customers, in fact, vote with their wallets in support for his policy changes?
IMO one of the decisions that really show how shortsighted Chapek and co. are was getting rid of Magical Express. They’ve worked for years to create the “Disney bubble”, and now they are encouraging people to find their own way from MCO to the property at a time when Universal has a third park opening in a few years. People will always keep coming to Disney, but I think people are getting more comfortable with the idea of only spending part of their vacation there when that was more so the exception.
Additionally, on-site hotels are losing their competitive advantage, at least to those of us with more limited budgets. The old 60 day Fastpass window forced many (myself included) to stay on property, but none of the on property perks are really compelling. I’m not sure when, but I sure hope Disney will eventually realize that say, $500+ at the Contemporary (essentially a Hyatt Regency) is not worth it for most people. Even the value resorts are ridiculous for the price; Universal has better resorts for less money. The proximity is nice, but with more people renting cars/ridesharing due to the death of Magical Express, it’s less of a factor than before.
Another travel site just did a story today on the replacement for the Magic Express. Really no difference other than now you have a pay a small fee. Still far cheaper than renting a car or ride share.
That’s what “nickel and dime” means: a small price, here and there, for a long-standing benefit. And why do we still have to walk from the parking garages (in Disneyland) and immense parking lots at WDW? Bob Chapek is the king of the five and dime.
Yes he will stay and yes he will continue to degrade the experience at Disney parks.
Easy to get him removed. Stop going to Disney parks and consuming anything Disney. As you said, Wall St will notice and he will be gone.
The parks are busier than ever and people are lining up for hours to buy Anniversary junk. He isn’t going anywhere and those complaining are still spending their money. Anyone who doesn’t believe me should download the Disney World app and look at the wait time for rides. The Genie+ and Fastpass’s are bringing in huge extra money and are a success. Hotels on site are sold out most nights if you look. And the Magic Express was replaced with a paid option which is another great business decision. Bob isn’t going anywhere, regardless of the whiners.
And once the hype of attending Disney after a pandemic wears out, and people wake up to their own financial limitations, you can bet Disneybwill be waving the help signs soon enough. It’s all lovely in the beginning but in time, the fall of Disney will go down in history soon…
We had taken a Disney trip at least once per year since we had kids; my 1st trip was when our oldest was 4 months old. We’ve been back twice post the Covid reopening. The last time was such a miserable experience, we won’t be back unless major changes are made.
The parks are busier than ever only because people have an addiction to Disney theme parks, it’s a lot easier to get to them than it was 20 or 30 years ago, people are now coming in from all over the world, and we have a lot more people here in the USA than ever lived year before, and many of them will take the first chance they can get to spend Biden’s infrastructure money on a trip to Disney. (Well I guess some of that infrastructure money actually went to infrastructure money after all… Disney infrastructure paid for by a theme park admissions. I guess it really is a small world after all!)
Come on Kyle, of course he’s going to degrade the product and experience for customers while charging them a lot more. After all, that’s what Disney CEO’s do. Hosing the customers to favor the shareholders is not exactly a novel approach.
People with little kids that want to go Disney parks are legitimate targets to squeeze and squeeze hard. Spend money on your rugrat even if you have to forego your dinner to ake ends meet. AOC wil be out with pitchforks in support of people who mindlessly pop out kids, can’t afford them and want others to pay for them, but this is capitalism.
Think about all the great memories you will have of the sacrifices you made for your kids when they graduate as doctors, lawyers, engineers. So stop being a loser, sacrifice for your kids, and don’t ask the government for handouts.
Damn, politics have rotted your soul.
He’s an executive of Disney. Therefore, evil by design.
Yep, people will still gripe and moan about Chapek, and nothing will happen. Disney is stuck with him. Prices will continue to go up and up, and the average family won’t be able to afford a Disney vacation, unless more and more people start making noise and a difference to get his heinie out of the corporation.
Seems to be a lot of very public noise at the moment.
My wife and I are both 20+ year Disney park fans and annual passholders at WDW. But when our APs expire this summer, we won’t be renewing them. The Disney bubble has burst and and a day at the park is no longer magical. Chapek has degraded the experience with hours long lines that can only be avoided by forming over more money to Genie+. You can’t stroll about the park marveling at the attention to detail; you’re constantly staring at your phon for ride reservations, dining and mobile ordering, wait times, etc. The food is atrocious, the theming and merchandise cheap Chinese knock-off grade garbage. With the money I would have doesn’t on renewing our annual passes, we are going to Venice, Italy instead. Bye, Mickey.
My wife and I are annual passholders and 20+ year park fans. But Bob Chapek and his bean counting has destroyed the park experience in a short-sighted money grab. Raising prices while cutting amenities and services, prolonging the asinine Park Reservation requirement, replacing Magical Express with a non-inclusive paid bus, and don’t get me started in the daylight robbery that is Genie+. Gone are the days of wandering about and marveling at the incredible attention to detail Imagineers of old spent years crafting. Now, you’re forced to spend every waking moment staring at your phone hoping to improve on an already abysmal attraction line situation, fighting for dining reservations, Mobile ordering food hours in advance, etc. We’re taking the money we would have spent on WDW tickets and flying to Venice for a week. Goodbye, Mickey. Hopefully we’ll meet again when magic once more means more than money at Disney.
The having to stare at my phone the whole time with Genie+ was my biggest gripe (besides the insane wait times). You just can’t beat Universal right now, stay at one of their premium hotels, walk or boat to the park and enjoy unlimited express passes.
In addition to the above sad, very real commentaries, what I find troublesome is the fact you now have to make reservations to get into the parks. It’s my understanding that Disney had wanted to implement this procedure for a long time & used the pandemic as an excuse…I could be wrong. So now tickets must be purchased months in advance, then hopefully you get reservations for the desired park/parks ANNNNND, should another family member or friend want to join you, what are the chances they’ll get into same parks as your reservations!? No more last minute, quick trips to Disney… no spontaneity…! It’s just too much work, in addition to constantly checking phone. The magic is gone.
It’s actually now cheaper to fly to Tokyo for Disneyland/DisneySea..
The Japan park has a after 5PM discount..
And hey you’re in Tokyo for gods sake..
After going to Disney since I was 12, and continued every yr for the next 40 years current changes have made me say ENOUGH! No more Disney for me, I’ll hold on to my memories but the current Disney holds no magic. It’s all about t how much they can squeeze out of people and ruin the experience.
Having worked for the company for many years (Burbank and Glendale) and having worked directly either Chepak, I knew he was the wrong person for the job. Retail-izing to the maximum whilst cutting budgets to all things that made Disney unique and special across the board, from amenities like the photography mentioned above to budgets for the E-ticket attractions, is what was predicted.
My question did he get a pay increase
Yes, he received quite a bonus.
I made my last trip last June and really felt the magic had gone. I grew up in FL going to WDW regularly and it felt like I’m just a year a completely different experience. While short term it may appear to increase revenue, as long time customers like myself feel the loss of magic, it will provide opportunities for Universal and others to start attracting customers. My wife decided out next to will be to Universal instead of WDW which is a big change for us. Let’s hope someone sees the issues before it’s too late.
It’s sad to say but the annual pass holders contribute to overcrowding to the point that the parks are not enjoyable. Worse are the Florida residents who get a discount. Raising prices is not going to stop people from taking part in the magical experience that is Disney. There are hundreds of millions of people around the world who will pay whatever it costs. It’s a special experience for children.
What we need is capacity controls. Florida residents and pass holders who are going to visit the parks multiple times a year are overcrowding them. Disney should get rid of the annual passes and Florida discount altogether and institute a limit of 1 visit (2 week block) per year. Prices would rise but standing in line for 60 minutes for each ride that you don’t have the lightning access for or don’t pay the $7.50-$15 per ride with the 2 limit per day in a park kills the fun. Disney could control how many people are in each park so that the experience will be the best. People who aren’t irritated waiting in line for 60 minutes will spend more money on food, products, in stores, and whatever.
Then they should stop selling any new DVC contracts and refund money for those that already purchased.
I have been to Disney parks numerous times over the years but I refused to continue after 2008 when I saw the price of admission for the parks jump 100% from our previous trips – I have Disney books and WHY Walt Disney created the first and second parks, because his parents couldn’t afford attending the Park in his boyhood town – so Disney parks were suppose to be affordable to common workers!
The change of Disney in the 99’s under Eichner and away from the Disney family was nails in coffin ! So Disney can keep charging more, restrictions for park jumping – removal of trans and 1 mike walks to entry way Plus charge for rides – I am not taking my family there for our reunion, so sorry you lost over 45 adults and 15 children – we can save the $10,000+, not including airfare, etc and put the $$ back into our state – going back to old family values and enjoy the company of each other!
Jackson it’s not Florida pass holders that are taking over the parks. If you go you will se the line for pass holder to get into the parks are not there we live in Florida so that’s one benefit but also there are a lot of people that live here that also work there . People will go to Disney no matter what the price is. They are called Disney nuts And if you don’t like Florida stay the hell out of here . But as far as Disney it’s a business they want to make money so if they have to sell a bottle of water for 5.00 they will
Bc someone will
Buy it. Disney is not hurting for money. It’s the cast members that are they make shit pay and have to put up with a lot. Mostly from visitors who think they are entitled to things.
Vote with your dollars folks. Stop going to Disney parks. We had a nice time at Universal on our last vacation.
Agreed, vote with your dollars, buy Disney stock which entitles you to a vote. If enough votes are cast against board recommendations things might change..
Thats what I did, spent a portion of what I would have spent on taking the family to WDW specifically on Disney stock just to vote against board recommendations.
As 20+ year Disney Vacation Club members , for the first time , we are actively considering selling our Boardwalk DVC “ ownership “. We came for the quality , we visited for the magic , we loved ( most of ) the food , we adored the attractions that Walt and his imagineers developed. We came multiple times per year because we are highly invested in DVC. But this current team of cost cutting bean counters have damaged our experiences and damaged our feelings. Having DVC and no annual pass is oil and water and unless we get back the ability to have an AP and the other value “ perks “ that we joined for , we are done. We’ll stay at a Disney DVC resort to use our membership but we won’t spend our vacation dollars at Disney. We’ll visit Universal or other Florida locations instead. Chapek has to go.
Couldn’t agree more. We have been DVC members since 2003. For the money, we are spending more time on DVL instead. The gap in cost and the value of service we have found cruising with Disney radically better. I just hope that Chapek doesn’t get his claws into DCL.
Ditto, well said
And when another tragedy strikes there will be commercials from these companies (with sad music and the flag) telling us how we should spend, SPEND, SPEND to keep the ball rolling.
Greed knows no limits and it’s justified by people who really think it’s ok. There is money to be made, plenty of it, without destroying quality or experiences.
Just got back yesterday. Parks were very crowded. My biggest concern is that if you are charging extra for the Genie+ and Lightning Lane than you owe it to your guests to have working rides. Every day in every park we visited rides were down. When we were at Magic Kingdom 5 rides were down at the same time, including both Lightning Lane selections. It’s a lot of money to pay when the rides are not working. I felt bad for the cast members trying yo be positive with frustrated guests.
It just blows my mind that adults go to Disney World. I went once or twice as a kid and thought it was fine enough but there are better rides elsewhere. And it’s expensive. I’d rather travel to Europe or other places in the United States for my vacation dollar, but to each their own I suppose. It’s just shocking that so many people, adults especially, have been hoodwinked into the “Disney Magic” (read: effort to claw as much $$$ out of you as possible) and vacation there year after year. I dont get it, but different strokes for different folks.
He looks good now but these changes happened after people had there reservations in most cases. My reservation was made last year. Let’s see how well he does in the future. I go to Disney World every few years but this is my last year. The Magic is gone. My family and I will have to vacation somewhere else.
It’s called price-gouging, when they raise prices during a time of limited supply. They may think they’re making more money, but they won’t over the long run as more fans say “Enough is enough”. Chapel deserves the pitchforks.
Since I first went to Epcot at age 3, I’ve been to Disney World and Disney Land a dozen times each over 30 years (lived on both sides of the country). The price has more than doubled in the past 15 years from expensive-but-doable to price gouging. I had always planned on taking my kids, but now that I have kids, the price is exorbitant. It would be the same price to take them on a vacation to Europe if I wanted the whole experience. It makes me sad that my kids are going to miss the Disney experience. Maybe we’ll go to Dollywood — I went there as a kid, too, and it was just as fun for a 4 year old as Disney at the same age.
Your parkhopping rules are not correct. It is not “usually limited to one park”. You can go to as many as you can get to after 2:00. They’ve also only prevented park hopping on one day and that was to MK on the Oct. 1 50th celebration.
That said, rule changes under Chapek have not been good for the parks. They aren’t as much fun or spontaneous as they used to be.
@Kevin – To my understanding, guests who desire to park hop still have to secure a reservation for each park they’d like to visit, I’m not aware of many success stories of hitting (4) in one day. In the olden days (2019) my family might start at Hollywood Studios, take the cable cars to Epcot for lunch, and finish at the Magic Kingdom for extra magic hours. So maybe it would be “reservation-required” or “limited hopping.”
We booked our trip last year. Disneyworld was expected to be quiet. We’ll it’s packed. Magic Kingdom was at 98% on Wednesday when we went. Animal Kingdom 88% on Monday when we went. Epcot was at 26% but we still failed to get onto Remys, Frozen or the roller coaster! Not going to bother with Hollywood studios at all. It is just too stressful to visit Disney at the moment. Next visit to Orlando will likely be 5 years time instead of next year and definitely will not have any Disney parks. $25 to park, $60 per day for our family just so we can go on a few rides without queuing up for over an hour (not the good rides though as they all had come back times of 8pm+ which doesn’t work with small children!).
Chapek may be looking good at the moment, with the 1st quarter numbers, but will it last? My guess is that the numbers are up because of the 50th anniversary and, of course, price increases. So, what happens when the anniversary is over? I think numbers will drop after March 2023.
I already have a trip planned for May 2022 and intend to go, but will not be spending any unnecessary money while there. My Disney Rewards Dollars will be used to pay for food and souvenirs…and when it’s gone that’s it. So sad that it has to come to that since this trip is costing $1000 more than the same exact trip 3 years ago…ugh!!
No doubt that this will be my last trip to WDW for a long time…Universal is looking mighty good for future vacations.
This is exactly what Chapek and Disney wants. We went through the same thing at my old job. Bear with my long explanation please, but this is what they’re doing.
I used to work for a major midwestern railroad. We serviced a lot of small customers and a lot of big ones too. Unfortunately for the railroad, serving the small customers cost a lot because we needed locomotives, rail cars, locations, and employees. Then came Precision Railroading. The idea is to get rid of the small customers (less than a few hundred carloads a year) which allows you to put your time and effort into the big guys like Ford, GM, FedEx, UPS, USPS, etc. You charge them much more (which they can easily pass on to their customers) and save money. Now that you cut the little guys out, you don’t need as many locomotives, rail cars, locations, and employees.
Now transfer that thought to Disney. The biggest complaint of all visitors is that the parks are too crowded. If they raise the prices continuously, at some point your average small family will be priced out. Then all that will be left are the ones who are ok with spending big $$$ because they’ll love the smaller crowds. Disney can lay off even more of their workers and save money. The families that do go will have lots of $$$ and will be glad to be there. And there you have it – less people attending, but spending more money. A Disney dream come true.
We just took our family to WDW last week from subzero Idaho. What an expensive mistake that was! Disney has lost it’s magic. It was like going to a shopping mall on black friday. My daughter and husband are both in wheelchairs so admittedly that added to the stress of navigating the masses of people.