I’m so annoyed because I had a really good CEO idea while I was listening to this episode and I lost it now. Hopefully it will come back to me.
2 Likes
I think it was maybe this? I don’t know why they don’t have more varied and themed character meals! Like come on, put Moana at Ohana, Tiana at Boatwright’s and for the love of all that is holy add Darth Vader SOMEWHERE!
4 Likes
I see your example, and raise you a counter example.
There comes a point when, for a hotel, it doesn’t cost them anything extra to have someone stay. So, let’s say the first 10 guests cover the expense of employees. After that, each additional guest becomes pure profit. You could argue that each additional room means additional housekeeping … But there is already housekeeping staff working, and they are already running laundry for the other guests. If there is any additional cost, it becomes negligible.
So, if that “free breakfast” costs them $100 to prepare for the first 10 guests, that ONE next guest covers that cost, and each guest after that becomes almost entirely profit.
When Disney prices their room, MOST of those rooms end up being pure profit, other than the minimum they need to break even. So when they then offer incentives, such as ME or anything else, it is simply taking away from the total profit they could get if the same number of guests stayed otherwise. So any incentive that brings in more people isn’t raising the base price of the room, it is adding to their profit, and actually could be REDUCING the average cost of each room!
So, I don’t really think your room costs more ultimately due to offered incentives. But for Disney, it is really about whether the added profit is more with versus without the incentive!
The discussion is different if Disney is struggling to bring in those minimum numbers, of course. I doubt that is the case. At least recently. But they are offering incentives now (which they only do in limited quantities) in hopes to increase sales of those pure-profit rooms which otherwise would be unsold.
2 Likes
I should add, they also will have people who don’t book because of the incentive, but decide to spend the same amount, but at a nicer hotel. Maybe upgrading from a value to a mid tier resort. That frees up a cheaper value room that someone can now book who can’t afford a mid tier!
1 Like
This is what I was getting at here:
Occupancy is a separate consideration that as I mentioned, can confound the effect of costs, which is why you have to keep all other things being equal when considering an incentive on its own merits.
But in an equilibrium, optimal occupancy will be factored into the market price of a room. Considering an incentive to be gravy only works when incentives are offered for specific periods. An incentive that is offered 100% of the time must be economical for the hotel (i.e., they must be recouping their cost through higher occupancy than they otherwise would have achieved) or they won’t offer it.
Oh, yes. Okay. I see what you are saying. So we agree. And not even agree to disagree. Instead, you agree with my disagreement which wasn’t really a disagreement, but was in agreement all along!
Agreed? 
1 Like
Agreed! 
My other thought about ME is the Chapek effect. Was this service ultimately a good PR piece but did Chapek ruin the relationship with Mears to a point that it was no longer salvageable to bring it back the way it was?
I have theories the Chapek set Disney parks much further behind than we gave him credit for. He completely didn’t understand the concept of spending money to make money. He only knew how to cut costs and raise prices and the product be damned. It looks like Josh is more like Eisner and willing to dream big to bring people in.
2 Likes
I hope you are right. Josh became the head of parks and experiences in 2020. I struggle to really think of any positive changes? I think we could all create long lists of things that have changed in order to create more profit at guest expense. Isn’t that what the poll items are about? Let’s add all the items he has monetized over the last six years such as FPs? (Paid as of 2021?)
Edited to add: he does smile, interact with guests, and many believe he is “good looking”. That does not mean he is a good leader, or more appropriate, not the leader we, the fan base, want. Although it appears he could be the leader the board and shareholder want.
6 Likes
Could be that anyone looks better compared to Chapek.
3 Likes
Your discussion here made me remember this comment. 
Joel is so funny!
4 Likes
When I got the email notification for this, I thought for a split second that your pull quote from PrincipalTinker’s post was about me.
4 Likes
Who’s to say it isn’t?
3 Likes
Of course it was.
3 Likes
Pretty much everybody except my mom.
3 Likes
This is my feeling too, but …
I think this is highly unlikely. Business is business and if a new CEO proposed a deal that was beneficial to Mears, I highly doubt Mears wouldn’t do it because of issues with the prior CEO.
2 Likes
I’m not sure I’m ready to trust D’Amaro, but I’m also think it is possible his tenure will be significantly better than Chapek’s.
My bigger issue is that, personally, I think Chapek wasn’t QUITE as bad as he has been accused of being. I think Iger also needs to accept responsibility/blame for some of the poor decisions. That isn’t to say I was happy with Chapek. I wasn’t. But it wasn’t JUST him.
So…D’Amaro might be just what we need. But he was also groomed by Iger to be the next CEO. So the question becomes, has D’Amaro just being “towing the line” (as prior manager I once had used to tell us we should do) under Chapek and Iger, but not really been brave enough to stick his job on the line to push for things differently, and now he will do what he thinks is best (and which the guests will agree with)? Or…was him “towing the line” showing that he really doesn’t have what it takes to make the big decisions?
Time will tell. D’Amaro may be a good PR person, but is he a good LEADER? Unclear. There is a lot in motion right now, and Iger has had his fingers all over it. So, Villains land will really be the first test of his OWN long term vision. I guess we will have to have a follow up to this conversation in 4 years!
2 Likes
Does the CEO of Disney negotiate the contract or does the head of parks and experiences/wdw?
When the contract for DME was not renewed, Josh was head of parks and experiences.
Edited to add: my point is that a CEO may be updated, and may even give final approval but they can in no way make operating decisions or negotiate contracts with a company the size of Mears.
2 Likes
I think Chapek was all financials and didn’t understand what made things “fun”. Now, I think Josh is still going to make decisions to make money, but his approach seems to be less abrasive. Do, yes, he will charge you for something, but you’ll get a a better experience for it. Now, this is only on the parks side, the rest of the company where he has less experience may be a different story.
Anyway, purchase delivery is what I would bring back.
2 Likes
Yes. But…I’m not really sure (yet) if that means he will make good decisions. 
I’m cautiously optimistic. As long as Iger can leave him be (unlike the micro-managing he was doing to Chapek).
3 Likes