Planning a Post-COVID-19 Future Disney Style, MIC Key™ Snaps, V4 I2

Tuesday, January 26, 2021 5:32 AM

As we explored in our last Snap, COVID-19 has been terrible for the travel, leisure and entertainment businesses. Disney’s theme parks have been hit especially hard. It’s a reversal of history. Whenever other Disney divisions were draining money from the company—and that was often—the parks division kept the company afloat.

Disney Parks were, usually, financial winners, but a number of problems remained unaddressed as long as the money rolled in. COVID-19 has created the circumstances where Disney can address those issues. Here are five examples.

Overcrowded parks – Disney policy had been to let everyone who showed up at the gate into a park until the park was out of space. There was simply no way to control how many people showed up and the Mouse, not wanting to disappoint anyone, allowed its parks to become overly crowded. No more. Now—just as you do for a concert, a sporting event, a cruise or an all-expenses paid vacation—you need an advance reservation to enter. The result is less crowding. This change could not have been made without offending the public. COVID-19 made it possible and, I expect, permanent.

Annual Passholder crowding at Disneyland – A related issue has been locals visiting Disneyland for a portion of a day, not a multi-day vacation, and causing logistical problems. Because they drive to the resort, more car parking space is required. Because they only visit for a portion of a day, personnel scheduling is more difficult. Because they crowd the restaurants in the evening, dining reservations for vacationers are harder to get. And, being frequent visitors, locals do not spend as much on souvenirs. Disneyland announced its cancelled its annual passholder program. Additionally, annual pass renewals are currently on hold at Walt Disney World. Both moves are highly controversial for locals while creating better situations for vacationers. They would have been impossible to do without COVID-19.

FastPass at Walt Disney World – When FastPass premiered, we were told it was intended as a way to end lines at Walt Disney World. That focus later got shoved aside in a push to more evenly distribute park guests. The result was an ungainly system where guests were required to book three FastPasses at a time (one for a popular ride and two for rides that did not, except for the very busiest of days, require a wait). As more requirements and qualifiers got added to FastPass, a Walt Disney World vacation went from a spontaneous adventure to a tightly controlled regimen. COVID-19 has upended FastPass. Whether it completely disappears or not, it is clear that COVID-19 has allowed Disney to back away from the millions they spend on this flawed system.

Character abuse at meet and greets – Once upon a time, characters walked freely around the parks. Gradually, over time, the parks got crowded and guests got aggressive. Multiple groping incidents, performer injuries and guest arguments developed. Disney placed it’s character performers in tightly controlled queues with specific direction about what to animate and when. Character meet and greets—no longer spontaneous—became a process. Now, because of COVID-19, characters have more freedom to animate and guests no longer get close enough to a performer to cause harm, injury or chaos. Who knows what happens when COVID-19 is conquered. We can, however, reasonably suggest that the need for all character meet and greets to be up close and personal has been disproved.

Employee bloat – This one is difficult (and distasteful) but should be discussed. Disney occasionally purges its ranks. Over 2000 salaried personnel, this author included, were packaged out in 2008-09. Similar situations have occurred every 10 years or so since Walt Disney World opened. Although union contracts restrict some moves the Mouse might like to make, COVID-19 opens up new ways for Disney to let go those who are high pay/high seniority, or in positions no longer relevant, or underperformers, or have bad attendance and/or discipline issues. I have no inside information, but past experience suggests the Mouse is very careful about who it keeps and who it releases. It has made me very suspicious of recent retirement announcements. The result will be a leaner organization with tighter payrolls better positioned for the future.

What lessons can we take away from Disney’s actions?

COVID-19 causes chaos. Out of chaos comes a new normalcy. COVID-19 will not last forever. Now it the time to get your business house in order. Rather than just reacting to the situation as it is today, think about your needs going forward and use this opportunity—as perverted as it may be, it is an opportunity—to pave the way for a stronger post-COVID-19 future.

Walt would have agreed. He once said, “I haven't the faintest idea where this business would drag me from one year to the next. It's at the controls, not me! As long as we keep on growing, the future will keep opening up."

May it open up for you too.