If you don’t know, Bob Chapek is the CEO of The Walt Disney Company and he is destroying the Disney experience we know and love. Chapek took over after the retirement of former CEO Bob Iger, who somewhat surprisingly, retired in February of 2020. Then COVID hit, and Bob Iger decided to stick around a little longer to help Chapek adjust to his new role. Chapek, who didn’t want any “help,” was furious.
Chapek then began putting his own mark on the company. His “mark,” it turns out, is solely meant to make money and please investors, while thoroughly pissing off long-time (and loyal) Disney fans.
Chapeks first public showing of how he would runs things differently was aimed squarely at Scarlett Johansson. When Johansson sued Disney for violating her Black Widow contract by releasing the film on Disney+ and movie theaters concurrently, Chapek fired back by releasing Johansson’s salary publicly. Instead of addressing her concerns about losing compensation, Chapek tried to shame her by essentially saying “didn’t you make enough already?” The irony of a multi-billion dollar company that charges $5 for Dasini bottled water at its parks was apparently lost on Chapek. This would be the beginning of the theme that “no money, is enough money,” for Chapek.
For Chapek, It’s All About The Money
The parks at Walt Disney World seem to signify a special slush fund for Chapek. Need money for more Disney+ programming? Raise food prices. Need money to support political causes? Raise ticket prices. Need to show your shareholders you’ve got what it takes to lead the company? Raise prices on pretty much everything to such degrees that even die-hard Disney fans can’t stand you.
In the two-and-a-half years that Chapek has been CEO, ticket, food and hotel prices have gone up multiple times while the company has significantly cut experiences. Disney has cancelled its Magical Express service which provided free roundtrip transportation from Orlando International Airport to Disney resorts. Parking fees have also been added to all Disney-owned resorts adding $15-$25 per night for guests. Trams were permanently parked, bus routes were understaffed. Heck, even the lids on fountain beverages were removed. During COVID. Yes, during a pandemic, they decided to let everyone’s beverages “breathe” in the enviroment around them.
And, what is now known as the most infuriating change under Chapek, the previously free Fast Pass service has been replaced with a paid service called Genie+. But don’t worry, Genie + won’t get you on all the rides. If you want to ride those, you’ll have to pay up to $20 per ride. This privilege is called Individual Lightning Lane. (Really? The most creative people in the world came up with that? No, I bet Bean Counter Chapek did.)
The standby lines at Walt Disney World parks are now so congested that if you don’t pay for Genie + and Lightning Lane, you will spend twice as much of your day in line. So Chapek is essentially telling all of us: The $100+ you spent on your ticket is not enough. We will make your day miserable unless you pay even more money to ride rides.
Chapek also seems to have hired a staff to watch social media and jack up the prices on anything that seems to go viral. The amazing Cheeseburger Spring Rolls everyone was posting about? They went from $6.50 to $9.50 overnight. Repeat this formula for any other item that is “instagrammable.” Popcorn buckets, cupcakes, smokey drinks, and more. Subtlety is not his strong suit.
The “pixie dust” vistors would hope would be sprinkled on them for events such as birthdays, weddings or even first visits? Forget it. Disney fired over 32,000 employees during the pandemic, and if the wait to buy a drink or snack is any inidcator, they haven’t hired most of them back.
Parking lot trams to all parks except the Magic Kingdom were shut down for almost two years. The fact that the distance from some parts of parking lots to the front gate can be up to a mile did not dissuade Chapek. Anything to save a buck, is after all, his mantra. In a move probably motivated by this year’s record-breaking heat waves, trams did come back at the end of May. I’m sure a cost-benefit analysis was run between trams and the inevitable heat-stroke lawsuits.
Disney’s bus service, meant to keep guests on property so they can spend more money, has also been severly understaffed. We visit Disney often and have now switched to driving ourselves or using Uber anytime we want to go somewhere. Buses run sporadically, wait times can be over an hour, and the drivers are undoubtedly in a bad mood due to everyone else being cranky over being treated like walking ATM Machines. I’d much rather drive myself to Disney Springs than allocate three hours of my day for “free” bus rides to and from.
He Really Hates Annual Pass Holders
For two years Disney explained all these changes with the now common phrase “…. but COVID.” We were all exceedingly patient and even believed this explanantion. But numbers don’t lie and public companies have to release them. I”ll let Disney’s own words tell the story:
August 10, 2022.
BURBANK, Calif. – The Walt Disney Company today reported earnings for its third fiscal quarter ended July 2, 2022. •Revenues for the quarter and nine months grew 26% and 28%, respectively. •Diluted earnings per share (EPS) from continuing operations for the quarter increased to $0.77 from $0.50 in the prior-year quarter. Excluding certain items(1), diluted EPS for the quarter increased to $1.09 from $0.80 in the prior-year quarter.
Below is a screenshot from their quarterly report released August 10, 2022.
You can see above that Disney Parks are shattering the previous years income. Disney reopened on July of 2020 after their four-month COVID shutdown. The comparision between 2021 and 2022 can’t be explained away by Covid closures. I’m sure shareholders are thrilled with these numbers and Chapek is patting himself on the back. “Those poor suckers will pay anything for a Disney experience” must be going through his mind. I obviously made that up, but the quotes below are 100% Bob Chapek’s words. Comments in italics are mine.
- While bragging to CNBC that he’s getting more and more money out of guests: “about a third to 50% of our consumer base are actually our guests in the park are choosing to upgrade to Genie+.” (Of course they are, Bob. You’re strong arming them into it. Don’t want to buy the pass? Fine, you can stand there in line and watch everyone else walk right past you on to the ride.)
- On Annual Pass Holders just don’t bring in the ching during the Q3 2021 Earnings Call: “As you know, different guests, depending on where they are coming from have different relative values in terms of their contribution as a guest to the park. Typically someone who travels and stays for 5-7 days is marginally more valuable to the business than someone who comes in on an annual pass and stays a day or two and consumes less merchandise and food and beverage. (How do you not understand the value of your most loyal fans, Bob?)
- On how COVID gave him the perfect opportunity to yank the rug out from Annual Pass Holders at Disneyland: We’ve made some changes already, you know. You’ve heard about some changes in our Annual Pass program at Disneyland, which, you know, in a non-COVID environment would have been a tough one to make because they just keep renewing and renewing. But, you know, when you start lapping a year, without anybody going for an Annual Pass program, that gives you the chance. And so we’re going to use that though in order to have an even better Guest experience at Disneyland and really manage the crowds so that no matter what day you go to Disneyland, you’re going to have an extraordinary experience.” (What he really means is that on any given day at Disneyland everyone there would have paid full price without those peskly locals taking up space.)
So, in Chapek’s own words he is telling us that loyal, die-hard Disney fans who pay for annual passes are worthless. My “worthless” family spends almost $6,000 per year on annual passes. We do not live in Florida. We come for 1-2 weeks at a time and 2-3 times a year. We buy tons of merch, and we’ve purchased three DVC contracts. Maybe Chapek doesn’t understand Passholders as well as he thinks he does. You’d think those little trackers, uh Magic Bands, we all wear would make the data readily available. Or, maybe they do understand and we’re really just not that profitable after all.
I hope all this short term revenue is worth the long term damage Chapek has created. Our family has decided not to renew our passes this year and we’re taking a Disney break for the forseeable future. I’ll miss it though. The memories of that magical place haven’t been completely replaced yet. Although I do make my own cheeseburger spring rolls now.\
More on Passholders: Disney Continues To Pound Annual Passholders
