Disney World Resort announced the closure of one of the most innovative hotels in the world, but did it need to?
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The Long-Awaited Star Wars Hotel
After years in development, Walt Disney World Resort opened its Star Wars Galactic Cruiser experience hotel with direct access to Disney’s Hollywood Studios. Its unique immersive experience was intended to captivate Star Wars fans in a limited hotel with just 100 rooms. Guests would arrive at the Star Wars Galactive Starcruiser terminal and find themselves living fully in the environment the classic movies created. Most would take an excursion to Star Wars Galaxy’s Edge inside the park (requiring a separate entrance ticket) but while “onboard” interacting with cast members refusing to break character including Kylo Ren and enjoying the crown of Corellia dining.
The Halcyon Starcruiser experience was unique to other theme parks but revolutionary for its ability to put visitors in the thick of the movies they love. Like a cruise, all food onboard was included and the windowless “Galaxy Class Suite” could accommodate up to four guests.
Trouble Along the Way
The costs, however, were nosebleed high from the start and remained so even through its demise. In fact, after inital bookings slowed, they tried everything. They cut sailings, thinned staff, offered press trips – nothing worked. The only thing they didn’t change was the only criticism visitors ever had – the price.
As I have indicated before, a two-guest cruise (on water, not a pretend one in a concrete Orlando hotel) is rarely as expensive even for a week-long journey as opposed to this two-night experience. In a world where everything is imaginary and the only thing that’s real is the cost, spending $750-1,200/night per guest is ludicrous.
The public agreed. Disney announced it will shut down the hotel in September, barely a year after it opened.
“The brief experiment was niche for many reasons. For one, its price point and subject matter limited it to affluent diehard “Star Wars” fans. Although dressing up wasn’t required, it did invite fans to interact with the crew’s actors for two full days, putting it out of the comfort zone of more introverted guests. Guests who didn’t want to commit to the interactive elements — or who preferred to be cozy in their hotel rooms by 8 p.m. — could miss crucial parts of the storyline. Others disliked the rooms’ design, which only had screens mimicking outer space to look out on; some compared it to a “windowless bunker.” – SF Gate
The hotel sits immediately behind Galaxy’s Edge with its own specific entrance to the park. The opportunity to build an amazing Star Wars themed experience remains, but pricing should have been more inline – at a bare minimum – with other Disney parks. The Grand(ma) Floridian, for example, often prices above the Four Seasons Orlando (an absurd notion for such a dated property) at about $1,000/nt but that allows for up to four guests or about $250/nt. The Star Wars Galactic Starcruiser Experience was at the very least 300% higher.
Why Would Disney Do This?
I personally find CEO, Bob Iger, to be one of the most intelligent and savvy business leaders in the world. Disney had a simple question it asked, “Will guests pay high rates for an immersive Star Wars experience?” The answer was initially yes, then interest waned and sales slumped over time. Any business leader would have to ask themselves if the product was not up to par and from all accounts, it appears the product was just fine. Then the question has to move on to the price, and the market and media were clear – it’s too expensive.
But why would Disney shutter the operation entirely? Is the brand too proud to walk back the nosebleed prices? I know travel agencies would have lapped up an opportunity for special deals to pitch the product. The public would have welcomed an off-peak pricing approach that allowed Disney to save face and future rates while putting heads in beds.
Was the situation so dire that Disney felt it couldn’t recover?
The answer was so clearly price and yet the brand failed to adjust or discount. Disney has an incredibly successful cruise line on an actual ship with actual destinations for far less nightly. How could one justify spending more on a stationary (albeit unique and fully immersive) cruise than on an actual physical ship?
The opportunity for a similar property at a competing resort is a compelling offer. A Harry Potter-themed hotel connected to the associated sections of Universal properties could command a higher price than other properties for the brand with a highly detailed approach. But couldn’t this be achieved for less than $2400/nt?
The hotel is ill-positioned to be used for another theme and it would be such a complete disappointment if it’s converted into office buildings.
Disney was so commited to its product vision that it wasn’t able to separate the experience from commercial viability. It’s a shame because the concept is great and I’d love to see more of this type of innovation rather than leave it as a cautionary tale. Why didn’t Disney find ways to get more aggressive and ensure its success?
What do you think? Did you stay at the Galactic Starcruiser? Could Disney have saved it in some way?
Disney, taking another L? I am glad I’m here for it.
While they shut this down, they should also fire Kathleen Kennedy and start repairing the damaged Star Wars franchise. But they won’t do that.
“Disney was so commited to its product vision that it wasn’t able to separate the experience from commercial viability.”
You seem to insist it could be “viable” at some lesser price point—what evidence do you have of that? Maybe Bob Iger, whom you admire, knows a little more about the situation?
@JM – Perhaps he does, but without putting anything in a spreadsheet, I’m pretty confident that the product could work at a lower price point. They weren’t serving lobster and filet, transportation costs were literally white box trucks with customized interiors driving less than a quarter mile. Other commenters have mentioned that Disney staff is not paid particularly well, and the building is likely to be fairly efficient given its new construction. If you can’t host four people for two days at less than $749/person (with all four in one room) then that should have been apparent before it was ever built. If you said, well not at the current occupancy rates – fair enough, but most hotels plan for a lower than sold out occupancy, and even then – how would the experts at Disney not forseen such details.
On its face, a $2000+/nt hotel rate for the base level room is simply absurd. For comparison, the Four Seasons during Memorial Day weekend on less than a week notice grants you a one-bedroom suite with bay view – six categories up from the base level room – for approximately the same nightly rate. And before you say, “the Galactic Cruiser included food” this also has a $150/nightly credit included at $2,183. The Four Seasons Miami is doing just fine at those rates, but the Galactic Starcruiser is shutting down. It looks like the market has spoken.
The Star Wars Galactic Cruiser was never designed to be a “hotel” in a way that your comparisons to the FS or other hotels make any sense. People stay at Disney resorts or nearby resorts off site like the Four Seasons because they want to go to the Disney World parks. That wasn’t even something possible at the Star Wars Galactic Cruiser. Aside from the few hours you were allowed to go over to Galaxy’s Edge at DHS (and even then that time was designed to be in service of the overall immersive experience as whatever story threads guests were following would continue on there) there was no way to go to the other parks. The whole time you are there you are participating in an interactive narrative experience and that’s the point, you would be wasting your money if you didn’t spend your time on the ship fully participating. If you wanted to tour Disney World that would have to be a separate stay at an actual hotel. As designed the SWGC was more of a two day long attraction in and of itself. Taking the immersive experience of something like Rise of the Resistance and stretching it out into a 2 day long interactive theatrical experience complete with an army of expensive performers necessary to keep the plot moving and guests engaged and the technology and flexibility to allow guests to move through the narrative freely while still arriving at a satisfying conclusion at the journey’s end. Nothing about that is cheap or comparable to what any hotel does.
The labor costs for such an ambitious operation are radically higher than even a Four Seasons because so many of the cast members are actors and performers who command much higher salaries than typical hotel employees. It’s not even a fair comparison to cruise ship entertainers who perform a couple times per night and make up a tiny percentage of cruise employees. Given the free-flowing, choose your own adventure nature of the SWGC, most of those performers had to be “on” the entire time they were on the ship since they had to be in character and move the story along should any guest interact with them. Disney might not pay its housekeeping type staff well, but the type of performer needed for the experience they intended obviously does not come cheap, especially when you realize how many of these performers per guest there were. Four Seasons might have a high staff to guest ratio, but at the end of the day most of that staff is still comprised of low-skilled, low-pay employees. Finally, unlike the depreciable costs of the show building, those high labor costs needed to be covered in full every single time the experience operated.
Disney clearly overestimated the market for a fully-immersive interactive experience that is only enjoyable if you fully participate at the price point necessary to make such an ambitious operation make sense economically, but for what they were offering, the price was justified. If Disney were trying to make just a hotel, some of your criticisms would make sense, but that was never what the project was trying to be. Ultimately, it turned out there weren’t enough people willing to pay what it cost to provide an admittedly niche experience. While I am impressed at what Disney came up with and it’s execution, a two day immersive and interactive experience is just not for me and I know I would never be able to let go and participate enough to make it worth it. The problem is that Disney likely knew that there was no way to cut costs without diluting the experience to the point that it appealed to no one. Without the immersive component, all Disney has is a windowless box of a hotel with no pool and cramped rooms. That wasn’t an issue when the whole point was the experience itself (which most reviewers noted was pretty jam packed and led to not much time spent in the room if you fully engaged with the experience) and not just a place to stay.
1. Disney certainly was too ambitious in its perception of a market for a project like this, but given how much people spend to experience a 4 minute ride (or a 15-30 minute ride if you include the pre-show components) of something like Rise of the Resistance, it’s not crazy to think there would be a market for something that stretches that out for 2 days, even if the costs of running it would make it very expensive. By all accounts, Disney succeeded spectacularly in achieving what they intended.
2. Given the massive skilled labor costs every time Disney did a “voyage” the price doesn’t seem too high in the abstract, although it definitely limited the already small audience to the point where it wasn’t sustainable.
3. To compare SWGC to an actual hotel makes no sense. It charged what it charged because it was an experience. Not only that, it was an experience that only worked if you were fully on board and willing to actively participate. The rooms and the dining weren’t the point, in fact if you were participating as intended you wouldn’t even be spending much time in your room except to sleep. If the immersive, participatory wasn’t for you, then there was no point in going.
Star Wars is now garbage and no one is interested anymore.
That’s right, Mr. Stewart. How dare you share your personal take on a failed tourism related venture without first having a personal conversation with Bob Iger?
Geez, some of the comments are ridiculous.
Disney has morphed into this bizarre portrait of greed built around a cult.
No, I did not do my due diligence and did not review all the financials before expressing my opinion.
Please read my sarcasm.
You’re exactly right with this comment, Disney has no idea how to run a successful business. They clearly made a knee jerk reaction with this announcement. How dare they??
I imagine the costs were so high that they ran the numbers and if they reduced the price and ran at a higher occupancy it still didn’t work
The issue I could imagine having as well is unless you were pretty wealthy you had the need for the entire travel party to check out of their hotel and commit to this. Unless you timed it at the beginning or end of your trip that’s quite an inconvenience
I am in the UK and I doubt there are many families from here that would do that and justifying it on top of the $$$ rates for Disney hotels for say Dad+Son to do just wouldn’t have been feasible for nearly all travellers from here
From what I read, I wonder where all that money went to. The “hard product” didn’t appear that lavish and the soft product, the actors, are notoriously underpaid at Disney parks as they exploit their brand to get die hard fans to work for peanuts (pardon the pun, Dumbo). That’s why, in general, I personally don’t want to take my daughter to a Disney branded park because it’s not a family park for the masses anymore. I remember when I got a literal “E ticket” for the best rides back in the 1980’s and the park wasn’t crowded and largely affordable.
Perhaps the reason for not lowering the price is that the “savvy” Bob Iger may worry about setting a bad precedent if they admit that they priced something too high.
All that said, there’s an irony that the Star Wars original films portrayed both an exciting, but also sterile and uncomfortable space future where “rebels” and “stormtroopers” alike lived in cramped conditions during conflict. It’s like someone putting up a “Das Boot family adventure” of living in a submarine $2000/day. Ask sailors: It ain’t glamorous!
The classic film “Dark Star” and even Alien showed that future work in space is not glamorous.
That’s funny….like Disney would ever feel bad about overcharging for something. You clearly haven’t visited one of their theme parks, where prices are completely outrageous, and they continue to be packed.
I know a lot of senior executives who work at Disney in Los Angeles, and all I can say is shuttering this project, as well as others, has more to do with the enormous losses that continue to incur with Disney’s streaming service, and projected future costs once the WGA strike is settled.
Despite the ridiculous and inaccurate rhetoric from conservative media, most Disney businesses make an enormous amount of money, and have rebounded from the pandemic better than their counterparts. Recovering from the pandemic takes more time than flipping a light switch.
This is true… Paid $1100 for 4 day tickets for 3 people in January for Disneyland. Park was sold out each of those 4 days
$90 per ticket (apparently) off-season isn’t absolutely horrific, but still pretty high. I have a friend whose wife used to work at Disney. She (or her friend) could escort us in. Another way is to get someone with Florida residency to buy your tickets, or at least tickets for your kids. I wouldn’t pay full price for Disney but then again, I’m not a fan of Disney anyway.
May I suggest Zatorland? 🙂
Disney is taking a horrible amount of losses in it’s streaming division. I’m sure all other divisions need to make even more profit to make up for this, even a cute cult hotel. The shareholders demand no less…..
As someone who has never watched a minute of any star wars movie, I imagine making it less expensive would require cheapening the experience to where diehards are going to wreck it in reviews. Probably better for them to end it and invest in something else… preferably in a less hostile state
There is another point to consider here: the “starcruiser” hotel experience is based on the sequel trilogy characters and lore that is, to be charitable, not beloved by many die-hard Star Wars fans. While the ludicrously high pricing is certainly the main issue, the Cruiser almost certainly would have enjoyed more success had it been built around the original trilogy story line.
Disney is struggling mightily with the Star Wars IP, and a lot if it really is hubris. They took the story into a direction that is at best divisive, and has not expanded the overall fanbase as it was supposed to. The seventh movie did very well and the others were certainly not box-office bombs, but they have no staying power. Fans are simply not engaged with the characters or the story, which is evidenced by the utter failure of merchandise sales. It was clear from day one that an exorbitantly expensive immersive experience based around this era of Star Wars would never succeed. I suspect that Iger and the Disney executives realize this now, but there are no good options to address it.
Iger sure doesn’t see it, if he’s green lighting Kathleen Kennedy’s next Star Wars trilogy with Rey as the lead. Disney Star Wars will continue to take massive L’s.
I say, this is all because of that rascal Ron Desantis. He and his Trumped up Trump buddies ruined the gay bottom line of the gay hotel with their don’t say gayish gay bill.
When you consider the costs of running a cruise ship vs even a small hotel I find it impossible to believe that Disney could not have made this work at a lower price point. Especially if the alternative is to just shutter the property. At that point you have to consider all the physical plant to be a sink cost that you’re not trying to recover. The question then becomes can you cover the costs to operate the hotel and still make some kind of profit at a lower price point. I find it hard to believe that the answer was no especially since Disney didn’t even try this.
Another potential problem I see was this experience suited to repeat guests? If the interactive portion was always exactly the same for everyone it doesn’t incline someone who enjoyed it the first time to consider a repeat visit. Because the most essential elements would be exactly the same.
All in all if Disney leaves this permanently shuttered it’s a huge miss. And one that given the nature of the offering and the price point was totally foreseeable.
Absolutely! I would have loved to stayed there but they weren’t even close to reasonable.
Disney can’t lower the price of the hotel rooms because the immersive experience with characters walking around the lobby, personal transport to the attraction, and all the interactive features that require staff make it a money loser for a hotel with the small number of rooms it had.
I disagree with the characterization of Bob Iger. He has ruined shareholder value by pushing wokeness when families just want neutral theme parks without gender propaganda. The stock is lower than in 2015. That’s the definition of a bad businessman. He is paid tens of millions a year to lose shareholders’ stock value. He set the tone for the CEO who replaced him for a year. He bows down for 5-7% of the population while slapping the face of at least 50% of it. He’s part of the 3% who have a disproportionate control over every industry which they use to push the globalist agenda. If it would be about economics that would be an understandable business decision but it’s not. Something else is at play here. No one is allowed to criticize them directly.
50% is a gross overestimation of the population that has kids and cares about republican culture war BS. Most people of that age either support people’s right to be gay or are too poor to afford Disney tickets. That’s why parks are full.
I don’t think Disney cares about what a bunch of boomers with shriveled up ovaries/a dependence on viagra think about them.
Tell us about your shriveled up organs.
I disagree that Disney couldn’t have cut the price. Let’s run the numbers:
$2500 per room, per night, 100 rooms. Let’s go with 90% occupancy and cut out $300/night for the base room. That leaves $2300 x 90 = $207,000 per night in budget!!! Let’s assume a staggering professional cast membership of 80 people paid $800/day including benefits. That’s only $64,000. This is (truly) like Star Wars money (as in the military budget for Star Wars 🙂
Here’s my theory: Saying that a Disney attraction was overpriced and lowering the price by 1/2 because people weren’t paying is like Rolex or Louis Vuitton cutting prices on their designer products that cost 1/10th of what they charge. They don’t want to do that because the prestige is in the price and/or if you admit your product is overpriced, it could collapse (like, say, natural diamonds.)
Side observation: If the service costs were so high, then they should have sunk more money into the hard product which means: Tempt people to hang out in their rooms. Provide $20,000 entertainment systems loaded with all the Star Wars media, video games, toys and gadgets such as an R2/D2 bar, you name it. Load it with liquor. Get someone drunk enough to hang out in the room all day and you don’t have to pay someone to entertain them. Sheesh, Disney execs should have called Vegas.
That reminds me: It would be funny if Disney after charging $3000/day added a “resort fee.”
check the GALLUP poll on LGBT by GENERATION…..not just overall population. Good DAILY MAIL article with graph….search for it.
Also DAILY TELEGRAPH of LGBT in Australia. 30%+!
Then you see what’s going on in the younger generations.
You win the GOLD MEDAL if you think long and hard about the break points…GEN Z, Millenium, Gen X, etc…
The thought of screwing up a Star Wars hotel is unfathomable. All Disney had to do was invest the money, let the imagineers do their thing, and people would come in droves.
Instead of going with a traditional hotel (slam dunk business model), Disney opted for an overly ambitious risk. Now they’re left with a ~100 room hotel in MGM’s back lot. If they want to expand Galaxy’s Edge to include the Starcruiser, it’s about a mile away.