The Elephant in the Theme Park

First published November 4, 2003

By C. W. Oberleitner

No, that ain't Dumbo that C. W. Oberleitner is talking about today. But—rather—the truly obvious problem that Disneyland management keeps overlooking. Can you guess what it might be?

Two weeks ago JimHillMedia ran a column by Michelle Smith detailing the possible introduction of Smart Cards at the Disneyland Resort. For the better part of the past year Kevin Yee of MiceAge has run a series of columns about the Disneyland Resort’s plans to either completely end it’s long running Annual Passholder program or significantly alter the way these passes are offered to the public. In addition, virtually every Disneyland related website along with mainstream publications like The Los Angeles Times and CBS MarketWatch have run stories about Team Disney Anaheim planning on altering in one way or another the Annual Passholder program and or the very popular FastPass program.

All of these stories have two things in common. The first is that they originated from within Team Disney Anaheim, Burbank and Walt Disney Imagineering in Glendale. Many, if not all of them, were deliberately leaked probably to enable managers to gauge public reaction to these potential operational changes.

The second thing they had in common was the almost universal use of the phrase …to relieve congestion on Disneyland’s overcrowded walkways.

Despite the fact that attendance at Disneyland Park has held rather steady over the past several years at an average estimated—Disney does not release actual attendance figures—12.5 million visitors per year the walkways between various themed areas of the park have become increasingly jammed with guests. By midday on even so-called off-season weekends it’s not unusual to see throngs of guests helplessly waddling at a snail’s pace between Frontierland and New Orleans square. During the Holiday season, spring breaks and the summer tourist season foot traffic around the park resembles that of most Los Angeles freeways at the height of rush hour.

Whether it was the complete secession of the Annual Passholder program, the introduction of Smart Cards or a revamping of FastPass each of these "new ideas" shared a common goal, a reduction in Disneyland guests’ perception of the park being overcrowded. A perception that has resulted in an increase in guest complaints and corresponding decrease in overall guest satisfaction.

More importantly, as each of these ideas was being floated before the public The Walt Disney Company was tacitly acknowledging that something was very wrong inside the park. The problem is that, like ignoring the proverbial Elephant in the drawing room, by nibbling away at peripheral issues like annual passes and FastPass Disneyland managers are ignoring the root causes for overcrowding in the park.

"They’re ain’t nothin to do and it takes to long to do it." One young Disneyland visitor was overheard to say. And, therein lies the problem.

The problem is not hundreds of thousands of annual pass holders jamming walkways spending less per visit than their Disney World and Tokyo Disneyland counterparts. Or, that FastPass removes thousands of guests from ride queues only to have them loiter about the concourses. When they should be riding the "A," and "B" ticket rides or spending time in the shops or food courts. No, the problem is that these programs had the misfortune to arrive and be embraced by Disneyland guests at the same time the effects of the cost cutting measures of the 1990s came home to roost.

Home to Roost

After more than a decade of deferred maintenance, cost cutting and consolidation programs, and rounds of layoffs that most affected hourly operations personnel. Disneyland is more vulnerable than ever to temporary if not complete attraction shutdowns. Ride closures, either from a lack of proper initial funding as in the case of Rocket Rods, operational cutbacks like those that forced the closure of the submarine ride, or sudden unexpected systems failure, as was the case with Space Mountain and Big Thunder Mountain, cut deeply into Disneyland’s capacity.

The loss of attractions was not the only thing to affect the park’s ability to absorb guests. Entertainment centers like the Festival Arena and dinning centers like Big Thunder Barbecue, capable of hosting thousands of guests a day, were consolidated and or converted to use as corporate rental facilities.

It was also during the late 90s that park guests began spending less per visit on merchandise. Services like Package Express, which allowed guests to pick up all of their purchases at the end of the day in one convenient location, were cut back. The explosion of Disney Stores, and other retailers offering almost exactly the same merchandise as the parks, made shopping at Disneyland virtually unnecessary. With little need to shop while at the park there was little need to get off the walkways and go into the shops.

To be fair the drop in per cap merchandise spending by Disneyland guests can’t be blamed entirely on Team Disney Anaheim. The Internet has played a major role in the way collectors of Disneyland memorabilia obtain Disneyland collectables.

Disneyland hosts several merchandise events a year. Internet brokers flock to these events and buy up as much merchandise as the rules of a particular event permit. Often a broker’s entire family will register for an event. Each member of the family will stock up on the limit of the most desirable items. When they return home the excess merchandise will be offered for sale on eBay.

Oddly enough this is probably the one change in the way people acquire Disney brand items that doesn’t negatively impact Disneyland’s capacity. Disneyana collectors know that they pay more for collectables over the Internet than at the park. But as more than one of them told me while I was attending the NFFC The Club for Disneyana Enthusiasts National Convention, "We save the cost of airfare, car rental and a hotel rooms. Not to mention the money we would have spent in the park."

It’s a Small Budget After All

So what is the elephant in the theme park that Disney managers are trying to avoid while attempting to address Disneyland’s overcrowded conditions and guest resistance to spending more per visit? Here’s a clue from a recent address given by Disney Parks and Resorts President Jay Rasulo at the opening of Walt Disney World’s Mission Space attraction at Epcot.

After telling his audience about Parks and Resorts four-part investment strategy, E-Ticket Attractions, live shows and spectaculars, re-theming existing attractions and R&D Special Effects like Lucky the dinosaur Mr. Rasulo had the following to say,

Even with all of these projects (at DCA, Bug’s Land, the Aladdin musical, Lucky the dinosaur and the coming of Tower of Terror) capital spending for Parks and Resorts has been reduced considerably versus the past five years. Capital spending in fiscal 2002 and fiscal 2003 was down nearly $600 million from 2001. And, beyond 2003, our average annual capital spending target for domestic resorts is materially below $1 billion per year.

That $1 billion will be divided among the three Disney Resorts, Disneyland Paris, Walt Disney World Florida and The Disneyland Resort in Anaheim. With its long range bookings still down from pre September 11, 2001 levels Walt Disney World in Orlando is expected to see the lion’s share of those funds i.e. Mr. Rasulo’s big lever, E-Ticket attractions. Epcot at WDW just opened Mission Space, and work has begun on the E-Ticket coaster Expedition Everest in WDW’s Animal Kingdom. In addition plans have been announced to build a WDW version of DCA’s very popular "Soarin Over California" flight simulation ride. This leaves the two Disneyland resorts, Anaheim and Paris, to fight it out for whatever’s left.

While a billion dollars seems like a large investment in the future of Disney Parks and Resorts it’s amazing how small a number it turns out to be when put in context of the needs of Disneyland alone.

Last summer I spent a day at The Disneyland Resort with an old friend. This particular old friend is a highly respected theme park production designer. He has worked on theme park attractions around the world. As an independent contractor he has worked for some of the most famous names in themed entertainment including Universal, Landmark Entertainment and Six Flags just to name a few. When he’s visiting a theme park, however, he’s a teenage kid all over again.

We had been in Disneyland for several hours and were on our way over to DCA to ride the big coaster, California Screamin and the flight simulator, Soarin Over California. As we passed the entrance to Tomorrowland we both lamented the prolonged closure of one of our favorite dark ride Space Mountain. On this particular day the Matterhorn Bobsleds were also shut down. Half jokingly I turned to my friend and said, "You know there’s nothing wrong with this place that a billion and a half dollars wouldn’t cure."

My friend paused for a moment. His expression became quite serious. He turned and looked at me and said, "That’s about what its gonna take."

And that’s the elephant in the theme park that nobody wants to talk about, money and the lack of it to fix what’s really wrong at Disneyland. To truly restore crowd capacity to Disneyland hundreds of millions of dollars will have to be spent repairing, replacing or restoring things like, the motor boat lagoon, Rocket Rods, Space Mountain, Big Thunder Mountain, and the Monorail. And Mr. Rasulo has made it very clear that Burbank has no desire to invest capital in doing any of this.

For the same reason it isn’t very likely that shopping and dining at Disneyland will get any better either. As one former TDA executive told me, "For a group of people known to be merchandisers they (TDA) sure do a lousy job of giving people a reason to shop there." Take the World of Disney store in Downtown Disney for example.

The World of Disney store carries virtually all of the same merchandise that is available inside both Disney’s California Adventure and Disneyland. It has the added convenience of being located just a few short steps away from the tram stop for the Mickey and Friends parking structure. Local area Disneyland Resort visitors use The Mickey and Friends parking structure. These are the same visitors Mr. Rasulo credited with restoring the resort’s attendance figures but who are not spending as much inside the parks as they once did. It doesn’t take a degree from the Wharton School of business to see that local area guests, who don’t want to be weighed down with packages while inside the park, are doing their Disneyland shopping outside the park in the World of Disney store on their way back to their cars.

The solution to this, as the former TDA executive explained it to me, is to create more one of a kind merchandise that can only be found inside Disneyland and restore Package Express thereby making it less cumbersome for guests to shop while in the park. "Of course this will never happen." He went on to say. "Both of those things would mean lower margins and increased costs." Mind you he did not say that they would not be profitable rather that they would be less profitable than the current system of mass merchandising the same items all over the resort.

With The Walt Disney Company publicly committed to continually lowering the amount of capital it is willing to invest in its parks and resorts it seems clear that the only avenue left open to addressing the issue of decreased capacity within Disneyland is that of tinkering with how and when guests arrive. The WDC just named former Disney Cruise Line President, Matt Ouimet, as the new President of The Disneyland Resort. Early reports indicate that upon one of his first tours of Disneyland Mr. Ouimet was struck by how crowded the park seemed on what he had been told was an off-season weekend. Disneyland fans everywhere anxiously await his first response to these conditions.

C’ya real soon!