Should Disney CEO Iger Be Fired?
It’s not often that you’ll find me thinking Disney has got things wrong but their recent agreement to list their hotels on cut rate price negotiator “Priceline” has me thinking exactly that. I’ll even stick my neck out and say this is nothing more than sheer stupidity. A brilliant way to devalue the product. So the face of Disney is no longer a mouse… but Captain Kirk… “to boldly go”… well, it can now be said, Disney is guilty of following instead of leading. I can’t help but wonder what Walt would make of it?
If you haven’t heard much about it then let me fill you in. Just recently Disney announced that Walt Disney World hotel rooms will become part of Priceline’s inventory in November. Disney rooms will only be available through the site’s conventional booking engine they state and guests looking to use Priceline’s “Name Your Own Price,” will need to stay elsewhere. “We are not participating in Priceline.com’s ‘Name Your Own’ service,” said Disney spokesperson Andrea Finger, “and we have no plans to do so.”
The move represents a strategic shift in attitude by Disney, which has always claimed it has refused to utilize Priceline for room sales, even while making inventory available on other online travel sites. Guests have been able to search for Disney rooms on Expedia and Travelocity, for instance, since 2002.
However, it now turns out that Disney has experimented with the “Name Your Own Price” option in the past. During 2006, Disney briefly made rooms at the All-Star Sports and All-Star Music, both value resorts, available through Priceline’s auction engine…something they’d like to keep pretty quiet. The rooms sold for as low as $35 per night, less than half the price of Disney’s cheapest rate for the resort rooms.
It is also interesting to note that the Disney-Priceline agreement does not include making rooms available on Booking.com, Priceline’s European subsidiary. The detail is significant, because Booking.com is Europe’s biggest online travel site, and as such, has obviously contributed heavily to Priceline’s growth.
The concern for Disney seems to be about image; that listing hotel rooms on Priceline would then cheapen the company’s premium-brand reputation, which allows it to command higher rates than competitors with similar rooms. But, in the current economy, it’s clear that Disney has been rethinking their approach. Average occupancy in Disney hotels fell 8.8 percent from the same period last year, to 83 percent during the company’s fiscal third quarter, which ended July 3.
To me this is a ridiculous and stupid move by Disney and one that will ultimately harm them in the long term. This is nothing more than short term thinking and a great company selling themselves short. If you go back 100 years and find a list of the top 100 companies around then, you’ll find that today very few exist and that speaks volumes about some of the thinking going on inside the Boardroom. It seems that these corporate executives never learn. Like lemmings they line up to cut prices and give their product away. For a short time the guests benefit but slowly but surely these companies start cutting back in areas they shouldn’t…areas that interact with the customer and affect that customers experience.
For me, it gives folks even more of a reason not to stay at Disney when they visit Orlando. Why take the risk of staying at a place that’s cutting corners and costs in every conceivable place ? And, more to the point, and this may be controversial, why stay at a place that now becomes more attractive to the wrong type of people?
Personally, when I go on vacation, I like it to feel special. I don’t want party goers or, putting it frankly, yobs, ruining my vacation. Vegas has spent years trying to overcome their reputation for seediness before finally giving in and embracing “What Happens in Vegas, Stays in Vegas” and all that Disney is doing is cheapening what was once a great vacation experience at their resorts.
For me, this move is one that should see Disney CEO Robert Iger fired. It’s a clear indication the man is dealing in short term-ism and worrying about his next quarter numbers. It’s everything that’s wrong with America today.
What do you think? Leave me your comments…
