More Business Than Pleasure at Disney

Disney (NYSE: DIS  ) hasn't made many mistakes under CEO Bob Iger's watch. Shuttering its Virtual Magic Kingdom online community earlier this year was one. Closing down Florida's Pleasure Island in two months will be another.

Naturally, the family entertainment giant won't concede that these business moves are mistakes. It has expanded on the Virtual Magic Kingdom by launching premium virtual worlds themed to everything from pirates to fairies. However, Google's (Nasdaq: GOOG  ) move to jump into this niche earlier this month with the launch of Lively -- especially with Lively's viral gimmick of embedding the experience into third-party sites -- will leave Disney smarting over killing off what could have been an ideal ambassadorial winner for its theme parks and entertainment properties.

Now we find Disney set to take down the six lively nightspots that make up its Pleasure Island complex in Downtown Disney in September. The official company line is that Disney will be taking things to "the next level" as it replaces the clubs with "an extraordinary mix of shopping and dining" based on guest feedback.

Really? Guest feedback? I've never heard anyone in Disney World's massive resort mutter the words "This place really needs more stores and places to eat." They may bellyache about wishing that merchandise would be cheaper or that the quick-service alternatives would be tastier, but I don't think making it up in volume will change that. Disney is a company that already makes many of its attractions empty out into gift shops. I don't have a problem with that. It's good business. I just think that most guests would rather see a gift shop empty into an attraction for a change.

The "re-imagining" of Pleasure Island is different, though. For starters, one can't really describe the six clubs that are getting the ax as havens of adult debauchery. Many are open to accompanied minors. Some of the best times that I have had with my teenaged son in the resort have been at the Comedy Warehouse improvisational shows and walking into the one-of-a-kind establishment that is the Adventurer's Club. The other four clubs may be more conventional throbbing dance-floor joints, but how will Disney appeal to adult visitors by replacing clubs with the shopping and dining that are plentiful elsewhere?

Keep in mind that regional operators like Cedar Fair (NYSE: FUN  ) and Six Flags (NYSE: SIX  ) don't have the kind of luxury that Disney has in housing many of its day guests as overnight lodgers.

Both Disney World in Florida and Disneyland in California have Downtown Disney districts that stay open late to catch guests as they leave the parks at the end of the day. Some may want to shop more. Some may still be hungry. However, I can't be the only one who feels that Disney razing its nightspots -- even if it's the whitewashed Disney variety -- can't be good for business if it gives fewer visitors a reason to go to Downtown Disney in the first place.

Bad call, Disney. Taking things to the "next level" is apparently a big step backward.

Related Foolishness:

Disney stock is a Motley Fool Stock Advisor recommendation. Google is a Rule Breakers pick. Cedar Fair is an Income Investor selection. If business is your pleasure, treat yourself to 30 days of great stock ideas. A free trial is available for these newsletter services.  

Longtime Fool contributor Rick Munarriz is a fan of most things Disney. He owns shares in Disney, Six Flags, and Cedar Fair. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


Read/Post Comments (10) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 15, 2008, at 3:31 PM, VELT wrote:

    RIGHT ON !

    BUT IF YOU CHECK THE RECORD DISNEY HAS NEVER REALLY GOT ADULT ENTERTAINMENT RIGHT THE FIRST TIME AROUND. THIS IS THE THIRD MAKE OVER FOR PLEASURE ISLAND. EVEN ON THEIR CRUISE SHIPS IT TOOK THREE RE DESIGNS TO GET IT RIGHT. AND THEN THEY STILL HAVE IT OFF IN THEIR MAIN NIGHT CLUB ROCKEN BAR "D". I THINK THEY NEED TO HAVE AN ADULT THINK TEAM FROM OUTSIDE THE COMPANY TO ADVISE ON THESE ADULT AREAS. THEY DID DO AN ACCEPTABLE JOB ON DOWNTOWN DISNEY WEST AND VERO BEACH CLUB. GIVE THEM TIME AND JUST MAYBE YOUR KIDS WILL SEE IT RIGHT.

  • Report this Comment On July 15, 2008, at 3:45 PM, SharonHeg wrote:

    The Adventurers Club and the Comedy Warehouse are chock full of some of the most talented and entertaining performers in all of Central Florida and some of their alumni have gone on to be successful in much larger cities, such as New York and Los Angeles. Both clubs have had strong followings for years and whereas the dance clubs might have only five patrons on a slow weeknight, the Warehouse and AdvClub still have dozens upon dozens. Multiply that tenfold on busy weekend nights.

    A dance club is a dance club but there is nothing in the world that's similar to the Comedy Warehouse or, even much moreso, the Adventurers Club and it would be a shame to see them disappear.

    If anyone feels compelled to voice their complaint about the closing of these clubs, might I suggest visiting the following sites:

    http://www.savetheclub.blogspot.com/

    and/or

    http://www.kungalooshforever.com/

  • Report this Comment On July 15, 2008, at 3:48 PM, rpmdfw wrote:

    I totally agree. Disney is making a HUGE mistake closing these clubs. They're sacraficing business from return guests that these clubs draw over and over again for a quick buck at a third pary vendor. Not smart.

    Apparently a lot of fans of the clubs agree as well. There's a movement to save the Adventurers Club with quite a few people. I think

    savetheclub.blogspot.com has the most information about it.

  • Report this Comment On July 15, 2008, at 4:04 PM, 999Frank wrote:

    This is indeed a big mistake. Closing the clubs will mean that people take their money elsewere - not just the money they spend in the clubs. There are people going to WDW longer and more often just because of the Adventurers Club. I know many of them. In fact, I am one of them...

  • Report this Comment On July 15, 2008, at 4:12 PM, Skurvy wrote:

    Disney seems to be moving away from that which makes it unique and distinguishes it from the other Orlando area destinations. My family eats several meals at Downtown Disney each time we're in Orlando and we do quite a bit of shopping while we're there. The reason we go there to begin with is the Adventurers Club. It is such a uniquely "Disney" venue - really the only Disney attraction anywhere outside of a Disney park. Without the draw of such unique "Disney magic" I won't feel the need to go to Downtown Disney. Downtown Disney is starting to look like any other large shopping and dining complex in cities all over the world - why waste valuable vacation time there? I hope Disney will rethink this decision and realize what a valuable asset the Adventurers Club really is before it's too late.

  • Report this Comment On July 15, 2008, at 4:31 PM, sgmco wrote:

    It's sad that while Disney has opened two attractions that stress virtual interaction (Turtle Talk with Crush and Monsters Inc. Laugh Floor), there is a literal 4th wall separating the guest from "actors". Whereas, The Adventurers Club and, to a lesser extent, The Comedy Warehouse, invite guests to become participants with real, live human beings.

    Wasn't that part of the message from WALL-E (which, coincidentally opened the same day the anouncement of the closures was made)? That if we become so disconnected from human interaction, that we stop noticing what we're being fed, even if it's crap?

  • Report this Comment On July 15, 2008, at 5:40 PM, barrett08 wrote:

    The Adventurers Club is one of those attractions that is uniquely Disney, combining actors, puppets, atmosphere, and more. Such a place could only exist with the resources of an entertainment complex behind it. Some visit the Disney downtown area to eat and shop before heading to this club. it is a magnet, a showpiece. It only exists in WDW, so once it is gone, it's gone. Like Figment, Oswald, and Cinderella's Castle, it is timeless, a heritage that should be preserved instead of lamenting its loss.

  • Report this Comment On July 15, 2008, at 10:01 PM, Oathkeeper216 wrote:

    I believe that Disney is making smart business decisions both with the end of VMK and the closure of Pleasure Island, with the exception of the extremely unique Adventurers Club. Freed from the bonds of the generic Pleasure Island clubs alongside which it was marketed, The Adventurers Club would be able to forge its own path and would, I believe, be a very profitable entity for the company. The fact that it (and, to a somewhat lesser degree, the Comedy Warehouse) is the only place still crowded on any dead night at Pleasure Island is a testament to its popularity and money-making ability. Even if it's filled mostly with Premium Annual Passholders and Cast Members who don't purchase admission, they still hit the bar, and that's where the real money is made.

  • Report this Comment On July 16, 2008, at 5:12 PM, DarFL wrote:

    Totally agree with the writer. This is truly a huge mistake on Disney's part. There will never be another place like the Adventurer's Club or Comedy Warehouse. The baloney about "guest feedback" is amazing. I've made over 100 visits to Pleasure Island since it opened and not ONCE have I been asked my opinion or taken a survey. If I had, the last thing I would have said would be that PI need's more generic entertainment and restaurants. Disney; think this one over very carefully. The young suits there need to get a grip on what Walt Disney really intended. And it wasn't a Cracker Barrel.

  • Report this Comment On July 18, 2008, at 12:25 PM, krubles wrote:

    Some years ago, it was at its best. The Wild Horse Saloon gave us C/W music and ribs! It became another loud dance club (ooh so unique - not!) They had a Jazz Club, with wonderful performers and nifty appetizers (great with drinks). They bought in lounge signers and it died. They had the West End stage - with fun, all night dancing. Then that went away and that area died. It was a ticket venue, not many with babies and strollers. It was opened to all, adults had to get around the strollers and running children. We met with some adults annoyed to find, after standing on line, tickets were needed to get in the clubs. So the death knell has been sounding. Where my husband and I would go 4 or 5 times during our annual 12 day visit, last year we went only once.

    Such a good adult venue should have been better developed not trashed. It seems lately, as much as I love WDW, I'm finding it harder and harder to recommend it to child-less friends.

    Hopefully they'll realize their mistake and change it again!

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