Concept explainers
Disney’s Magic Numbers
Sales and operations planning at Disney World is all about people—how many people visit the parks and what they do while there. The Disney property in Florida includes 4 parks, 20 hotels, 27,500 rooms, 160 miles of roads, and 56,000 employees.
Planning begins with a five-year forecast of attendance based on a combination of econometric models, experience-based models, extensive research, and a magic mirror. The econometric model examines the international economies of seven key countries, their GDP growth, foreign exchange rate, and consumer confidence. The experience-based model looks at demographics, planned product introductions, capacity expansions, and marketing strategies. Extensive research is conducted by 35 analysts and 70 field personnel year round. Over 1 million surveys are administered to key household segments, current guests, cast members, and travel industry personnel. The magic mirror is the patented part of the forecasting procedure that, in part, accounts for the mere 5% error in the five-year attendance forecast and the 0% error in annual forecasts.
Disney’s five-year plan is converted to an annual operating plan (AOP) for each park. Demand is highly seasonal and varies by month and day of the week. Economic conditions affect annual plans, as do history and holidays, school calendars, societal behavior, and sales promotions. The AOP is updated monthly with information from airline specials, hotel bookings, recent forecast accuracies, website monitoring, and competitive influences. A daily forecast of attendance is made by tweaking the AOP and adjusting for monthly variations, weather forecasts, and the previous day’s crowds. Attendance drives all other decisions.
Disney is a master at adjusting its capacity and managing its demand. Capacity can be increased by lengthening park hours, opening more rides or shows, adding roving food and beverage carts, and deploying more “cast members.” To maintain flexibility, cast members are
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The collection of data is easier and more timely with a new vacation management system implemented by Disney, called My Magic+. The system transforms how visitors navigate the park, and hopefully provides them with a better customer experience. It also provides Disney with more
Think about the future of RFID tags in our daily lives. What are the pros and cons of the MagicBands? Of other types of RFID?
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