While I think that the discounts may undercut the profit margin, there's a very good long-term impact on this whereby many folks who would not have visited the theme parks are getting introduced to it. This is a very good Disney brand-name introduction and cultivation.
Then again, the hotel promotions have helped Disney continue its push to keep guests on resort property for the entire duration of their vacations, especially when combined with features such as its free airport-shuttle-and-luggage service and the Disney Dining Plan. Several stock analysts think Disney has been able to use the economic downturn to gain market share from rivals Universal Orlando and SeaWorld Orlando.
Mark Wienkes, an analyst at Goldman Sachs, called Disney's discounts "a very thoughtful, coherent long-term strategy."
Although Wienkes said the discounts will result in "significant [profit] margin erosion" at Disney's U.S. parks this year, he said that is preferable to holding the line on prices at the expense of having fewer people in the parks.
"To the extent that you can sustain the brand — maintain the experience and keep the brand alive — then I would choose that," he said.
It's a tough time for everyone, but Disney has been very wise in what they are doing to survive this period.
Zz.
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