August 28, 2009

Cuts didn't trim fun, Orlando-area theme parks say  

By Jason Garcia 
Sentinel Staff Writer

One year ago this month, the schedule for Universal Orlando's Islands of Adventure showed 16 days on which the theme park was open until 10 p.m.

The latest the park has been open this August, according to the monthly schedule, is 9 p.m. — and then for only one evening.

Universal is not alone. All of Orlando's big theme-park resorts — Walt Disney World and SeaWorld Orlando, included — have cut costs this year as they slog through the worst recession since World War II. By laying off workers, reducing hours, dropping shows and slashing countless other expenses, the parks have been able to soften the financial effects of falling attendance and lower guest spending.

But as the economy continues to struggle into the fall — a lean travel period even in good years — Disney, Universal and SeaWorld could find it difficult to continue the cutting without risking a backlash from guests.

"We are selling an experience. And if you reduce the experience and people don't want to come back, then you have hurt yourself more than you have helped. It's a balancing act," said John Gerner, managing director of Leisure Business Advisors, a Richmond, Va.,-based consulting business. "It's not easy to reverse negative opinions once they're in place."

Critics say the theme parks have already crossed that line. Kevin Yee, who has written several books about Disney theme parks, said Disney World's latest round of cost-cutting has exacerbated previous cutbacks.

"In years past, when times were good they were cutting, so they cut the fat out [then]. Now they're cutting meat and bone," Yee said, adding that he has seen similar developments at other Orlando parks.

Yee noted that Disney World has routinely closed Disney's Hollywood Studios at 7 p.m. this summer.

"For one of their four major parks to close at 7 p.m., that's not a cost-cutting device. That's an insult," he said.

Former park executives say the resorts know they must be careful when cutting. Brad Rex, a former Disney World vice president in charge of Epcot, noted that Disney management is filled with people who have guided the resort through downturns before.

"The decisions they make are done very thoughtfully, with the highest regard for preserving the guest and cast experience," Rex said.

Parks sidestep specifics

Perhaps wary of alerting guests to what has been cut, each of the parks would not discuss their cost-cutting approaches in any detail. Instead, they would comment only broadly.

"Our business decisions are always based on making sure we provide a great guest experience. Beyond that, we are working hard to manage our operations as efficiently and effectively as we can," Universal spokesman Tom Schroder said.

Universal has been particularly aggressive this year. Records show the two-park resort slashed costs by 16 percent during the first six months of 2009, lopping off $59million worth of expenses. The deep cuts actually helped Universal boost its overall profit during the second quarter of the year despite lower attendance, though its profit was down for the full six-month period.

Site-specific figures are not available for Disney World. But Disney's worldwide theme-park division has reduced its expenses by 6 percent — $317 million in all — so far this calendar year, which has helped blunt overall profit declines brought on in part by the discounts Disney's parks have been using to lure travelers.

SeaWorld owner Anheuser-Busch InBev does not break out detailed financial results for either the park or its theme-park operating unit, Busch Entertainment Corp. But earlier this year, AB InBev executives credited cost cuts at its theme parks with helping keep profits overall stable despite slower sales.

"Like any successful business, SeaWorld manages costs in an effort to meet our performance targets," SeaWorld spokesman Nick Gollattscheck said. "We would like to emphasize, however, that while we manage costs as business conditions warrant, we never compromise our high standards of guest service, safety, overall quality and animal care."

Some cuts have drawn widespread attention. Disney, for instance, laid off more than 850 parks-and-resorts employees in Florida earlier this year and eliminated an additional 500 vacant positions. Universal, meanwhile, laid off 70 employees.

Though Busch Entertainment says it has not laid off any employees this year at its Florida parks, it made what may have been the most vehemently protested cut of all in January when it said it would stop offering free beer samples at the hospitality centers in its parks. Busch said it ended the practice to make the hospitality centers more appealing to a wider age range, not to save money.

Other cuts have been much subtler, such as fewer trains operating on roller-coaster tracks and less in-park entertainment. Yee said he has even noticed fewer open cashier lanes at some Disney restaurants this year.

'Like boiling a frog'

As difficult as they may be to spot, those kinds of small cuts add up, Yee said.

"Like boiling a frog in water slowly, the ratcheting up of prices, tightening of services, scrimping of portion sizes and reduction of menu choice has been so gradual that people can't really put their finger on what's wrong," Yee said. "But if you sit down and ask them if this vacation was just as magical as the one 10 years ago, you may well hear that it wasn't."

Disney, like Universal and SeaWorld, insists it does not compromise customer satisfaction in the name of savings. Spokeswoman Zoraya Suarez pointed out that current surveys show that 98 percent of Disney guests rate their vacations as good, very good or excellent.

"We regularly evaluate our offerings and make operational adjustments based on a variety of factors, including demand and guest feedback," Suarez said. "Our focus remains on providing a unique, high-quality experience."

Copyright © 2009, Orlando Sentinel.