NextGen to Launch in 2013? And Other Observations from Disney’s Earnings Call

By Dave Shute

Disney had its FY2012 earnings conference call late last week, and a couple of items were interesting.

MORE DETAILS ON NEXTGEN “EARLY NEXT YEAR,” BUT LAUNCH DATE UNCLEAR

Disney’s NextGen project was referred to several times in the call—although neither the words NextGen nor Fastpass+ came up.

The language used was variants of “guest experience enhancement project,” and the most detail that came out called it “pre-reserving…to make guests’ visit[s] more efficient and enjoyable while they’re there,” thus “giving guests the chance to plan their itineraries ahead of time, including access to their favorite, and often our most popular, attractions.”

This is consistent with prior Disney comments about NextGen, without giving any more specifics.

On the call, more detail was promised “early next year” when the program is “ready for primetime…but we’re getting close.”

The actual launch date was not announced.  While listening to the call, I had the distinct impression that launch would be in FY2013—that is, affect visits by the end of September 2013.  But reading the transcript of the call does not give nearly so sharp an impression.

My bet is still FY2013, and it’s interesting to speculate about when.

Two things seem to me likely to drive the launch timing.

One is that the launch would be aimed at a fairly lengthy low-crowd period (so that kinks could be worked out during a period of low demand), and the second is that the planning window would be at least 3 months—that is, if NextGen launched tomorrow, the first visit date that could be pre-reserved would be mid-February.

If you buy these two points, then I could see two launch windows as making sense: early January 2012, aimed at visits starting right after the week after Easter, or a later launch window aimed at visits beginning in late August or early September.

VOLUMES AND PRICES IN Q4 AT DISNEY WORLD

Disney’s fiscal fourth quarter is basically July through September—a high volume and a low volume month, with a transitional month in the middle.

Piecing together parts of the call, it was clear that overall Disney World attendance during this period was down compared to last year, particularly from US visitors, but that achieved prices were strong.

Oddly, there was no discussion about why volumes were down, but Disney’s strategy for quite some time has been to accept volume and hotel occupancy drops if they can be more than offset from higher prices.  This has been positioned as the pathway back to normal price and margin levels coming out of the recession, but I’m wondering if anything else may be going on here…

• Did the increasingly close opening of New Fantasyland shift some visits from earlier in the year to late 2012 and 2013?
• Is there a new strategy here of purposely trying to lower crowds through pricing?
• Or something else?

I guess, as they say at the end of the nightly news, “time will tell…”

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