ORLANDO, Fla. - Walt Disney World has spent more than a year rolling out a $1 billion system that changes how visitors do everything from enter their hotel rooms to ride Space Mountain. But a few weeks ago, a front desk agent at one of Disney’s marquee hotels was still wrestling with the technology.
“Behave, you naughty thing,” a Wilderness Lodge reservations clerk muttered at the malfunctioning management system. Scolding didn’t work, but a computer reboot finally did.
So it has gone with My-Magic+, an ambitious effort to make Disney World more profitable by making its 30 million annual visitors happier. The multifaceted system has taken longer to introduce than expected as Disney has confronted an array of daunting complexities that include training 70,000 employees, equipping 28,000 hotel-room doors with radio frequency readers and prompting guests to wear data-collecting electronic wristbands.
Disney has been vague about when investors can expect returns - to the frustration of a few analysts - but there are signals that the system is finally ready to roll. As it prepares for the peak summer season, Disney recently started to market the service with national TV ads and quirky online videos. On Monday, Disney began allowing all visitors to use the system; previously, only Disney hotel guests and annual pass holders had access.
Among other perks, the system provides a service called FastPass+, which allows visitors to prebook front-of-the-line access to three rides, parades or character meet-and-greets.
The system also strives to make it easier for guests to buy food and merchandise - just stand at the register and swipe your wristband, called a MagicBand, which also functions as room key, park ticket and VIP access. Disney thinks people will spend more money and time at the 40-square mile megaresort if they find it easier to navigate.
“We are pretty transparently upping our promise to our guests, and that is why we’re being so deliberate about this test-and-adjust period,” said Thomas Staggs, Disney’s parks and resorts chairman. “Delight turns very quickly to expectation.”
“Certain things have taken longer to make broadly available than we initially would have liked,” he added, “but our rollout was designed to be flexible to ensure that the guest experience was always our first priority.”
For Disney, a $143 billion entertainment conglomerate, the new system is one of its most important initiatives in years. Aside from the project’s sheer scale, theme parks have emerged as a growth business even in a bumpy economy, and Disney feels an urgency to use technology to improve its offerings, particularly as younger consumers come to demand it.
Disney wants to keep people from visiting competing Central Florida parks, including Comcast’s Universal Orlando Resort, and it thinks preplanning is one answer. Disney guests will be urged to use a website called My Disney Experience to begin locking in the particulars of their visits long before leaving for Orlando. (Adjustments can be made during the visit using a related smartphone app.)
If Disney gets it right, the smartband technology could ripple through the leisure industry to other parks or even zoos, museums and Las Vegas resorts. And there is an added element of pressure for Staggs. Disney is set to name a new chief executive in 2016, and he is one of several leading candidates. Successfully completing the project would be an important feather in his cap.
Staggs said that about 3 ½ million people had participated in tests of the new system, adding that the early feedback had been “fantastic.” Among the findings: Because guests no longer have to present paper tickets at turnstiles, the system has reduced the park entry time by 25 percent.
The technology allowed Disney to accommodate 3,000 additional daily guests at its Magic Kingdom park during Christmas. Staggs said use of the new FastPass reservation system has increased 40 percent over the old one, freeing people from standing in line and increasing the number of experiences they have there.
Still, investors have been keenly waiting for financial evidence that the $1 billion investment is paying off. Disney’s parks business has lately been a good one - operating profit climbed 17 percent last year, to $2.33 billion - but the company’s spending on the project has dented margins at its flagship property in Orlando.
Underscoring its importance to the company, analysts have peppered Disney executives with questions about the system in recent conference calls.
Disney has been typically tight-lipped about details of the project, and the dearth of information has allowed rumors to flourish. Coursing through the many blogs that track Disney’s parks are reports that the new system is overbudget. Some armchair analysts have speculated that Jack Dorsey, a Twitter co-founder and chief executive of Square, the mobile payments company, recently joined the Disney board to offer MagicBand help.
Seated in his office at Disney headquarters in Burbank, Calif., a smiling Staggs dismissed such chatter. He said that the initiative had stayed within budget. He also said that a faster-than-expected consumer shift to mobile devices had actually saved Disney money; most guests are using their smartphones to gain access to the system while inside the parks, reducing the need for Disney to install costly kiosks.
Staggs said more enhancements are on the way.
For instance, Disney will soon allow visitors additional quick reservation access on the day of their visit. It is also working on an upgrade that will give guests more flexibility - using the line-skipping feature across multiple parks in a single day, for example, and making it easier for groups of people to use the system.
The company has also been tweaking the hotel room door sensors, some of which were installed in locations that made them awkward to tap with a wristband. “We want it to be comfortable,” Staggs said.
Business, Pages 23 on 04/07/2014