Webinar Replay | Achieving Destination Performance: How To Step off the CapEx Rollercoaster!

Thank you all for joining us today. I’ll tell you, I could not be more excited about this topic after talking about our participants and the content that we’ve got lined up for you. I really hope that you’ll think so too. We’re going to run for about 45 minutes, so if there are questions please do post them up in chat and we’ll pick them up. Speaking of our esteemed panel, kindest thanks to you all for your time and contributions.

We’ve got Bob Allen, IDEAS Founder and Chief Storytelling Officer, with a lifetime of experience in brand, and media, and experience in design with the Walt Disney Company. With IDEAS, for like about 1,300 clients across the globe, just a few projects.

Also with us, we’ve got Jeremy Hauwelaert, with a lifetime of attractions leadership, and marketing, and brand in experience – most recently as President and CEO of the Jungle Island Resort in Miami. We’ve also got Rick Allen, thank you. Leveraging a lifetime as Senior Exec at Disney Parks and Resorts. He’s now, and also legendary, Operations and Leadership, and Training Consultant and you can hire him! He’s another famous Allen. He’s been with Disney Park since he was just a mere boy.

Then there’s me, I’m Mark Edson. I do Biz Dev for IDEAS and generally just try to help people deliver the best experience they can at their attractions and have a great time doing it. We also have Executive Producer Hannah Baumhofer. Thank you so much, Hannah, for making all this magic happen and pulling all the strings. So you know, you can almost set your watch with the timing that every year or every other year the big theme park players are going to do some grand celebration. I was in the middle of them, some grand celebration or attraction opening to give guests a new reason to visit, give the park something to talk about.

Our topic for today is that small to medium-sized regional attractions have capital constraints that make it difficult to achieve growth by adding another attraction or doing a major renovation every year. We think there are smart ways to grow your business through use of a time-tested methodology, a little creativity, and innovation that don’t necessarily rely on a massive capital expenditure. So, that’s where we’re heading, and I’ll turn the helm over to Bob to build on that and offer ideas thoughts behind, you know, what really makes people want to visit, what is it that makes destinations perform and how can we deliver that without burning our P&L for the next 20 years. So, Bob…

Thanks, Mark. Yeah, it’s always, you know, it’s always dangerous to give a story guy a microphone, so I’ll take a little liberty here and maybe do some stage setting right? And look, I don’t think we’d offer up any of this is hard-and-cold fact, truth and beauty. I think what I’m going to tee up to get the real smart guys going here is some observations and a couple of thoughts – maybe a thesis statement.

The first observation that I’m and this is self-evident, but I like saying it out loud. You know, we as an industry have more options for guest experience delivery than we’ve ever had, than we could have ever imagined having, at least speaking for myself going back those many years. And you know, you all know what they are, they’re increasingly complicated, and by the way, that evolution curve of all those delivery system options, is also rapidly evolving.

So, it’s kind of a logarithmic flow that we’re dealing with, but you know just to run through some, you know, there’s the and much of these frankly are, you know, much vaunted and we could have a robust and round debate on whether any of them are actually valuable. I’m going to presume some of them are sometimes, but you know. Gamification, so you know, that’s been a buzzword. New immersion systems, I don’t even like to use the “I-word” anymore because it’s gotten so pale, but there are lots of ways to do that now – both big and small.

Robotics, right? I was talking to my wife the other night about how I worked on the original Spaceship Earth show at Epcot, and I wrote about it recently. She said, “Well how did it hold up?” I said, “You know, it’s been re-written.” and I said, “Honestly, I think the AA figure curve has gone from cutting-edge technology all the way back around to ‘oh isn’t that quaint?’ because we have so so many other ways of doing that now.” So, the show actually does hold up pretty well and then who knows where AI is going to go in all this – you know, that’s another topic for another day probably. You know, Personalization is a big deal. How do we put each guest in their part of a story? That’s increasingly available. Everybody’s playing the app game now. Again, sometimes they help and sometimes I think a good case can be made that they get in the way, but they’re out there and they’re part of the mix.

Another one that you know isn’t as object-specific, but I think it really plays a role. The adoption curve or the adaptation curve of new market-proven IP is really quick now. Partly it’s because we’ve had this extraordinary explosion in content right, because of streaming and the sort of the diaspora of the media market, so there’s lots more content out there to maybe take a look at and choose from. Also, we have a lot of new form factors, you know. There’s been much made about ride and show stuff happening now built around game IP. That’s kind of obvious. I think there’s emerging even other platforms, like the market share that’s currently commanded by graphic novels is immense. It went from being sort of a ‘yeah that’s kind of a young adult thing’ to a worldwide giant mass-market phenomenon. Who knows we may see TikTok influencer content becoming an experience soon.

There are lots and lots of ways to grab and run with IP out there more than ever before. Maybe the flip side of some of these, particularly the technical ones, I would argue is we’ve got some pretty good emerging market evidence now that real live actual human engagement and human performance – things that musicians do, things that actors do, things that performers do – in an increasingly virtual world where people spend a lot more of their time on screens than ever before turns out to be growing in value. The premium placed on – no, I actually saw an actual human do that – is growing and we see that across markets.

As our consumer selections, that you know move toward brands and experiences that are markedly sustainable or have employed net positive development and operating strategies: inclusiveness is gigantic; ease of access is turning out to be a really big issue and those are all just human factors. So, you kind of can make a biscuit out of all of those, you mix it up and say, “that’s an interesting background”. And possibly interesting in the Chinese sense, you all heard the gag that in traditional China, one of the worst things you could say to somebody is, “May you have an interesting life”, because interesting meant way, way too complicated to deal with. So there’s a lot going on.

Good news: lots of choices, right? Here’s another observation that maybe goes with that one. So if you take that little biscuit we just baked and you look at it and you kind of look at its pieces and parts you say, ‘”Okay, look. There’s a really interesting recipe book there that potentially could offer, you know, my guess, a more satisfying experience.” In that context, we have to drop that against the market backdrop. So while we’re getting more choices, the other news is competition for that guest share of their leisure wallet or just getting attention or guest time, the competition is absolutely fierce. It’s really really difficult to get anybody to look at you once – drive trial – that’s all getting a lot harder than it used to be.

One reason is what we’ve seen is a tremendous amount of blurring between: “What’s a theme park? What’s a resort? What’s a family entertainment center? Oh, theme dining, does that count? Well I don’t know, is there a ride and show in it? There might be.” What about retail dining entertainment districts? Zoos, aquaria, science and technology centers – well, is it a science center if it’s got an aquarium in it or is it a zoo or is it up the middle? Because people like aquariums, lots of science centers are trying to flirt with that now. Let’s not forget about cruises, the fastest growing leisure activity on Earth, you know just huge huge growth. And then there’s probably a whole bunch of hybrids that most of you will even know that I have no idea about.

My point is there’s an awful lot more to do with your time, and so when I start thinking about, “I’m busy”, my attention is fractured, content’s coming at me right and left on screens all day long, you know and I have all these choices. To me, it almost offsets “yeah we got all these interesting new things we can do”, but on the other hand good heavens it is a complicated space we’re all living in within which we have to do them. Okay, so if any of that is even remotely correct, or at least for the next few minutes let’s presume it might be.

So what’s the key question? It goes something like this: given all of that, given those observations, and I don’t know about you, but my experience is a business climate that puts increasing pressure for, you know, internal rate of return on equity, higher EBITDA, and all kinds of resource constraints, “How do I decide where to put my effort? Where do I put the emphasis? What’s my pathway to sustainable growth over time?” is sort of the key question.

So our thesis, having looked at it a bit, is that this environment kind of builds an argument that today, successful growing destination entertainment, to cast a broad net around it, probably isn’t built from the ground up. I don’t care how good your site is, it’s probably built from the guest out. We really believe and we’ve experienced that really really paying, not lip service, but really intense attention to the guest and understanding that is the key starting point.

We have this name we call, Destination Performance, and we’ll talk about that in a second and then I’m going to turn it over to the smart folks. But building from the guest out, really is alchemical, right. It’s kind of semi-magic, but it requires this interesting planful mix of components. Yes, certainly there’s going to always be room and a requirement, and in fact a valid need for a sort of the historical, you know, big ride show of capital asset and acquisition to defeat that attendance burn curve, right. But that alone, that swing for the fence model alone looks like it’s way too expensive now as a primary strategy, and because those prices escalate all the time.

Our argument is that if we employed a particular kind of systems-thinking around this, we might come up with some answers that turn out to be a little bit more viable. So, let me just define Destination Performance. It’s a term of art we like to use and I’m going to give you some metrics here. These aren’t the metrics, these are my six metrics. You can plug your own in and and lots of people do, but in general if I said, okay, the premise for a high performing growing destination entertainment enterprise kind of rests on these things: we want attendance growth over time. We want attendance to go up over time. We don’t want to see it turn around and go the other way. We’d like our per capita growth to grow over time. We’d like to be able to take rates on admissions, food and beverage, merchandise, and parking. We want that per cap growth to go up and we want that per cap growth to go up while we’re also growing attendance and that’s a pretty tall order. We’d like the length of stay to increase.

Generally speaking we all know that the longer a guest stays, the more likely they are to both: number one report that they had a good time, but also spend more money and that drives some of that per cap.

We’d like to shorten the visitation curve, we want to see increased frequency. If you come every year, we need to do things that will get you to come every eight months, that’s a really long lever to pull. Part of that also is identifying and making sure we’re really taking good care of our top fans, you know the folks who are in the insert-name-here-o-file camp. People that love what we’re doing, they’ll come six times a year if we really take care of them.

These days we can spend all the money on advertising and marketing that we want. Homage to my marketing colleagues, but the number one thing that’s going to drive that next turn-style click is somebody posting on Instagram, somebody sending their friend a text saying, “You got to come with me next time. The kids loved it!”. So that driving that tremendous intent to recommend, in fact driving that all the way through action is critical.

Finally, guest satisfaction scores in that world are more important than ever. I do like to laugh because here in Orlando, we get an interesting viewpoint. If you drive down the bee line, you know every other billboard says “World’s Best Something” or “World’s Biggest Something”. I’m not sure that’s born out by scores, but what we care about is what the guest says.

If you take those six things and we just said, “look if we can start moving the needle up on all six of those or, gee, even four of them, we’re going to be performing well. We’re going to start hitting those marks we want to hit”. Our simple premise is, we think systemically, if you start with a guest you’re going to win. So what does that mean? It means two things to us.

One, is anecdotally understanding your guest and understanding your guest’s behavior – and by anecdotally, I literally mean collecting stories, and I think we’ll hear some today, but the most important stories to collect are from the frontline folks in the operation that are working with the guests. They know what the guests are saying, what the guests are doing, what they like and what they don’t like. You can talk to Partners and you can talk to your Inbound Channel Partners, all those things and just harvesting what seems to be working, when they’re having a great day how do we know.

The other side is to do that formally, and I won’t get deep into this as I don’t have time today, but formally through primary market research – the word primary is what’s key. it is not frankly going to prove to be good enough to go scrape the internet. It turns out you have to go ask people who look a lot like the people you’re entertaining exactly what they think and if you ask properly they will really tell you. So, we understand the guest, once we do that we can plug in our business factors. What’s our internal Rate of Return on Capital Requirement? What are the interest rates right now? What are the operating realities of our business? Where are we on EBITDA? Do we need to drive a few more points of performance? You can kind of arrive at whatever it might be if you got those metrics to move, what should you spend to drive those metrics – not what can you, but what should you spend – and that’s a fascinating number.

Finally, we can get into the home figure. Well okay, if we know our guests, we understand them better and we kind of understand our business better, and we’ve put some guardrails around that. What we’re going to propose is instead of incrementing from this moment, we start with “hey we’re not going to throw anything away”.

What’s a new fresh story or stories we can start telling to those guests and start with that narrative. Then finally, the tail on the dog is, all right if we know all those things what’s a long term experience design plan look like – and that’s going to be a mix of blending brand activation, guest engagement, all those tactics and strategies in a mix that says this integrates well and it includes 5 of those and 6 of these and 22 of these, and then, yeah, maybe one big hero ride because we’re going to have to buy one of those eventually.

I’m going to stop there just to say and I know that’s a lot to come at you with, but that’s sort of what’s behind the dialogue today. Now, none of that’s as important as what happens next, which is some people that are really out there doing this, maybe sharing a few stories. So Mark, I’ll relinquish the mic.

Thanks for that Bob. Holy smokes that was a lot, thank you.

I would go to Jeremy and as I was listening to the elements of Destination Performance, I think that he has found multiple ways of bringing them to life to engage guests with and that the context of this session engages guests in ways that just don’t require a lot of capital. He started generally with nothing. He had a wonderful piece of real estate and then activated that, ignited that, through using Partnerships, and I just think that’s such a wonderful story. Jeremy, you want to share a little bit about that? There’s so many pieces to it.

I want to make sure I tie this into what Bob was talking about as well, right. Anyone who’s familiar with the Jungle Island project here, I mean Jungle Island is a theme park here in Miami. It carries 85 years of history and a couple of years ago, there were great dreams and even bigger promises and there was so much engineering happening, and unfortunately, like everywhere else COVID happened.

So, we engaged with IDEAS and together, we came up with a brilliant new master plan for the property, but unfortunately because of COVID the cost ballooned so much for the redesign of the park that I could almost argue that from from an investor perspective there was some analysis paralysis.

Everybody got so much data and information, and many decisions to make that honestly nothing happened anymore. After being closed for two years, we started seeing a breakdown of our property. Although we were trying to take care of the asset itself, we started certain things by not being used. They were starting to, well, go down.

What had happened was, we started realizing, “Okay, so what do we have? We have this absolute unique real estate here in the heart of Miami. We’ve got these 18 acres of lush jungle in the heart of a concrete jungle, right. What is the biggest value?”

Well, because of COVID, we’ve noticed that having that natural resource was absolutely top dollar, right. That was absolutely vital for people who were willing to come out and do something else. And for us, we didn’t have the staffing anymore, we didn’t have the budget anymore, so we re-engaged by opening up the Jungle Island almost looking at it from a public park perspective.

We decided to allow people to just come and have a peek at the Jungle. We did it first with partnerships, right. So, we found partnerships who wanted to do a unique activation for us, who wanted to do a Halloween activation, and during COVID they were able to establish a drive-thru Halloween haunted house experience and they wanted to actually come and build 5 or 6 houses here on the side of Jungle Island.

All of a sudden it allowed us to really re-engage that machine of traffic and attendance. They did a great job in marketing it. They did a great job in building the experience itself. Basically for us, all of a sudden we saw the benefit of doing that with a partner because they brought all the employees to the table. They brought all the marketing dollars to the table and from a Jungle Island perspective, we were able to capitalize on parking, on food and beverage, and on a limited revenue share on the ticket sales.

From that moment on, we decided to just keep moving in the same space because all of a sudden we decided that, “Hey, there is actually money to be made in parking, and in food and beverage, and in all the other things.” We opened up the park for a garden admission. Going back to what I was saying, almost looking at Jungle Island as a public park, and we no longer call it “garden admission” because we didn’t want to raise any expectations for guests, because what do you do in a garden? You stroll around. We started by doing so, and we actually did very well. We started just by opening it up, we saw that people really wanted to come and stroll The Gardens, and then we started adding little layers on top of it.

We started making little improvements step by step, and I’m really talking small improvements because the park was slated for demolition. We were almost going to tear everything apart, so we had nothing left in terms of signage, fencing, or shows. It was a very, very limited product offering. We started gradually increasing what that offering was by returning, for instance, signage for the guests, adding a new food outlet, adding a show, and building a new enclosure that could be built in-house, which really brought something extra to the guest.

Whatever money was made, we reinvested that little capital because the original intent of opening this park was just to pay for its upkeep. It wasn’t meant to generate a large amount of revenue. We are now a year and a half later, and by continuing this path of continuous improvement, we’ve been able to achieve record attendance. The park that exists today is miles away from the park that was here in 2019 when I started, and it’s been a really interesting journey.

However you want to address it, right Mark? So, basically when it comes to partnerships, right. Going back to what we were saying earlier in the conversation, is the fact that once you realize what you have and what you own, and that is the space, how do you maximize that space? How do you create revenue from that space? And they’re creating those partnerships and finding people that were willing to invest and believe in the project was absolutely instrumental, right.

So, first of all, we had Treetop Trekking, which is an aerial adventure course that came in to operate our aerial adventure park. We then continued with a Lantern Festival, where we operated from November until March for an evening activation as well. All in the same model: we provide the space, you provide the efforts and the energy, and we’ll do a revenue share on this. And that kept transitioning, right. So, we have Halloween, we’ve got Luminosa, which is our Lantern Festival, we’ve got Treetop Trekking. We’ve added a carousel that’s currently being built in a similar model, and then we are currently adding a giant inflatable water park that we’re very very very excited about, I would say. I’m almost as excited as I would have been when I was 12 years old seeing it in my backyard. Those are the things that really create a brand new park experience without really putting the capital.

You know the most interesting thing of all and it’s something that really dawned on me, when I had a quick chat with one of our marketing coordinators last week. She decided to leave us because she said, very blatantly like, “Oh, I thought when I joined Joia Beach or Beach Club there would be money that I could spend.” And honestly, that’s how a lot of people think, right. And as long as you’ve got money to throw at a problem, your problem will probably or hopefully go away.

It’s really being creative without money that sets us apart, right. It’s really being creative, and to drive attendance, and to do things without having – without needing – money that really is a differentiator, right. And from now on, every time I have a job interview with somebody from marketing, it’s the first thing that I ask. I tell them, “There’s no money so how do you want to go about it?”

Hey Jeremy, if I could just knock on real quick and I’m going to toot your horn a little. Jeremy, among other things, is a really brilliant marketer.

I think the other underpinning of that story is, recognizing the absolute power of that tremendous brand equity. Jungle Island is enviable for the rest of us, cuz it has this amazing brand engine. You know, you can’t talk to somebody in Miami and say Jungle Island and not get a response that sounds like, “Oh! Went there when I was a kid”, “Oh! I love to take my grandkids”. So, recognizing that brand value and saying, “that gives us the latitude to be a little more clever”, I think is a big piece of you know, and I applaud Jeremy’s creativity, and frankly courage because I know his owners.

Appreciate that. Right on.

So Rick, Jeremy’s talked about relationships with partners and through your career, you’ve seen and designed some just fantastic ways to build relationships with your guests. Maybe you could share a couple of those examples?

Sure! Sure sure sure.

So, you know an interesting point, you know. So, my career was 40 plus years of all Disney World and almost all of that was in operations and so I’m an operating guy. When we think about how you’re going to get money, like you all just said if you had money to spend or the marketing person asks, “What money do I have?”. Operators don’t get any money. You know, you have to spend money. You’ve got a – you’re you’re the biggest expense. You’ve got the labor piece, which is all the most. So, we have to be very very very very creative and that’s the fun part.

I think an interesting thing that hit me over the head, as soon as I got there, and we talked to our cast members about this all the time, is to say, “We are surrounded here with hundreds of millions of dollars of infrastructure”. You know rides that are designed, some of the best in the world, and what do our guests write to us about or answer surveys about? 90% of those guest letters that I would get all talk about: interaction, engagement with the cast and that’s where it hits home.

So, a custodial guy getting down on his knees to talk to little kids and say, you know, “Good morning princess!” or “How are you doing?”, that’ll get you a guest letter. Simply walking a guest to a restroom, instead of pointing at it over there, “Honey you want to know where? Come with me, let me just show you”. People are overwhelmed with that – that’s no cost, low cost. We’ve got – we had guests – who would book their vacations around the availability of a housekeeper, and they would say, “I’ll come book on the date she’s there and I want to make sure I get her room”. That sort of engagement has no cost. It doesn’t cost anything in order to make that happen.

I’ll give you a couple of stories. I was the Opening General Manager for Disney’s Art of Animation Resort, which is themed around four feature films for Disney, if you haven’t seen it: Finding Nemo, Cars, The Lion King and the Little Mermaid. And so, we wanted our challenge, was to, immerse our guests into those stories more than we had at any other resort. And we’ve had just a ball doing it.

The things we came up with were, all employees using language was the biggest one, just short little things to help keep guests in the story. Not long spiels, just simple. So, we would train our cast: if you see somebody walking somewhere you can just say, “Hey! Just keep swimming, just keep swimming.”, just like out of the movie, right. Or if you’re over near the Cars area, you can look at kids and go, “Hey, kachow!”, and they’d always “Kachow!” right back, or you know, “Hakuna Matata”, when you’re out near The Lion King etcetera.

When we check people in, like for example, if you check into Art of Animation, at least when we open you’d have, if you were going to be in the Cars buildings, we checked you in like you were a car. And so we’d say, “Hey! You know, you’re gonna, you’re a car. So, here’s the keys to your garage and we’d give you directions.”. And we’d say, “Okay, I want you to go out of – when you go out of – the lobby, you’re going to go past the big blue – which is the ocean in Finding Nemo – you’re going to go past the big blue, you’re going to turn right. Then you’re going to go past the drop off, you’re going to see Route 66, I want you to take Route 66. You’re going to see your garage. Your garage is on the building on the left and by the way, say hi to Tow Mater when you walk by for me.”. We’d get letters from people saying it’s just awesome, you know that got us there, and it is absolutely, there was no cost.

I’ll give you a similar one about, I got to work in Epcot for a while in Future World at Soarin’ Around the World. It used to be “Soarin’ Over California” and, it was, the show was changed to “Soarin’ Around the World” when I was there. And so, we were closed while the rehab was happening and we got to reopen. We got a chance to train everybody and we use those same tactics. and I know these sound simple, but that’s what we’re looking for, right. So, particularly if it’s stormy weather outside, which it always is in Florida, most of the time at 3 o’clock in the afternoon, big rain coming down. As people are walking in the queue, we welcome them in and just we tell them to say, “Hey! Welcome it’s a great day to fly, it’s a great day to fly. Beautiful weather, it’s a great day to fly”. And, people are looking at you like you’re crazy, and then they’re starting to get, “Okay, yeah I’m going to be part of the story here”.

My favorite part of that one was, if you’ve been on Soarin’ or on any sort of of these types of flying feeder rides, at the end, when you exit you land because you’ve been flying and then you walk out and the exit doors open, and we’d go stand back there and other cast members and you just look at them all and you’d say, “Welcome back! Welcome back!”. Simple thing and sometimes people ignore, but they double take going, “Oh yeah, welcome back! I was gone, that’s right.” Or you just say, “How was your flight? How was your flight?”. Well they grab you, pull you, “Oh it was great! It was marvelous!”.

I know the attraction did the hard work, but it’s those simple things that are, the things we got the letters about. I’ll tell you one about Cabana Bay, Mark shut me up when you… just wave at me and I’ll get.

Yeah, no, I think you’re right. Those are fun things to brainstorm about other businesses and I’ll give you a non-Disney example.

I went and checked into Cabana Bay Resort, which is Loew’s operated and over at Universal Studios. I’m a hotel guy and I’m looking at everything critically and cynically. I was there with my daughter, she’s a very big Harry Potter fan. And so we were checking in and their employee said, “So what are you doing… while you’re here…”, and I said, “Well, you know my daughter’s a big Harry Potter fan and so we’re going on to go see Harry Potter”, and she goes, “Oh you’re gonna love it! You’re gonna love it!”. Then she gave me some tips, what you’d expect that’s great, go at this time, and do all this. And she said, “You know when you get to Hogwarts, you know, you’re going to ride on”, you know, whatever the specific coolest Harry Potter ride was I can’t remember the name of it. She says you’re going to ride on that, she goes, “That’s the best one out there!”. She says, “Here’s what I want you to do. Please come back, you and Libby.” I told her my daughter’s name, “Come back and tell me how it was”. I never forgot, “Really you want me to?”, and I did by the way. I went back. I went back the next day and I said, “Hey, I want to let you know that we really had a ball on that”, “Oh, that’s great! you got to try this and try that”.

It costs nothing, but that engagement, I think, was there.

I’ll give you just another real short one, then we move on. I was at the Grand Floridian Beach Resort, a luxury resort at Walt Disney World. I’d heard that one of the cast members there, we again, we kept getting all these great letters. And it turns out, I went out, on the front desk one time and somebody said, “Hey, she’s doing it, you need to go watch.” And I went out to watch her. What she would do is, I wish I had a little model here, she would check in, guest’s kids stuffed animals. So if they had a stuffed Bambi, then you know, she would put it up on the desk and go, “Okay, Bambi. You’re checking in okay and I’m going to give you a little ID card”, and she gives and puts the name on it “Bambi’s ID card” and she’d make the little kids sign the little reg card and all that. Oh man, are you kidding me?

That you know, we got letters out to you and that it just cost nothing for that to happen. But that kid has a memory forever, and of course, the parents have that memory forever too. Those sort of things that you learn from your cast too, you learn from your employees. They come up with the best ideas.

You bet, yeah that’s just such great stuff!

As I mentioned before – I’m just – I’m all filled up on those. Other than training time, they just cost nothing. To that, costing nothing and Jeremy earlier in with partnerships, I know that or in the early days and then it grew. I thought it was a fascinating story of how you grew your admissions, your gates and tailored those things along with your Partnerships to drive attendance, drive revenue which is key to anybody’s success. Again, based on nothing that you had before. Can you share a little bit about what you did with your admissions evolution?

Sure, sure sure absolutely!

So, going back to what I was talking about opening up for Halloween and making money from parking, and food, and beverage. When we opened the park in the beginning, I looked at what some of the biggest tech players were doing and they were giving things away for free and I was like, “Huh, what if I give the parkway for free?” And so, it was really interesting because all of a sudden I didn’t have to spend money on advertising, didn’t have to spend money, really, on PR or to get the word out. It just started snowballing by itself that if people registered online in advance, they could come visit the park for free.

And I started looking at the park as like an outdoor FEC, where certain things were included in the admission and certain elements of the park that required additional staffing or that had additional operating costs would come at a separate charge for the guests itself.

Now what the really interesting part of this was, that when people were registering online everything worked really well. But then you had certain guests that all of a sudden knew that the park was operational and open, and they showed up. It took more time to explain to the guests why it was free, than just saying it’ll be $10 to come in today, because they were much happier to hand over $10 than you having to explain why they could wander around for free. People didn’t understand the concept of free.

We’ve been really playing with that model, and to what Bob was saying in regards to marketing earlier on his metrics, so we had a few, obviously it’s the guests that that do the storytelling for you on the marketing side, and especially when you bring them in everybody these days is an influencer, right. And believe me, I don’t like the term at all, but everyone’s, everybody, is posting their stories. Everybody’s posting on TikTok, Instagram, and Facebook.

There was this lady that came to the park, created a fun video and had rap music on it or hip-hop music on it. All of a sudden, there was this other Miami Things To Do With Kids that actually saw the video, and used The Lion King music on it. Same video, just changed the music, went to The Lion King music, and that thing went viral in Miami through the wazoo. And all of a sudden, we had 3-4,000 people registered every single day for like in August and September, which are traditionally the slowest months of the year for us and those are things that you can only dream about, right. We had 20-25 year record attendance in August and September and just by giving it away.

I mean if I would have or if anyone would have to spend that amount in marketing dollars you’re talking about very substantial marketing campaigns to get the same level of exposure that we were able to get just by giving it away.

Yeah, that’s just the best. I’m watching our clock. I’m like, holy smokes. We have been hearing some wonderful stories and we’re burning some clock here.

I want to get back to Rick and one of the greatest stories that he had shared with me was, and I’ll let you go with it Rick. I don’t want to share too much, but just the Test Track and your team brainstorm. From a problem-solving perspective and cast engagement and letting them lead, I just thought it was fantastic. Share a little bit about that would you?

Yeah, sure. So, the Test Track is an interesting complex attraction and it takes a lot of people to do it. But this one ends up with a little simple exercise, maybe that’s what you’re talking about, right, Mark? That exercise we’ll do, yeah, we can share that.

So, what we’re supposed to do when I was there, by our SOPs and our spiels is every guest is supposed to be welcomed as they walk through and they’re supposed to be welcomed with, “Welcome to Test Track presented by Chevrolet. Welcome to Test Track presented by Chevrolet. 1,600 guests an hour, we do and welcome. So obviously we’re not doing it and when you go to the cast to say, “Hey how’s this going?”, they say, “It’s ridiculous!”. You know, they all want to do a good job and they look at you and say we can’t do that. What can we do? Good point.

So we got the team together and talked to them about that and said, “How can you engage more?”, and they said, “Look, we think there’s ways to do it, but some people are really outgoing and it’s easy for them to engage with guests. Some people aren’t as outgoing and how do we get there?”. And so, we got this very simple, that I would share, very simple exercise. You’d get about, we’d get about 20 or 30 people in a room we were doing some training with and we’d say, “All right get ready we’re going to brainstorm.” And you’d throw up a picture on the screen of a typical guest. Maybe the guest is wearing a Cubs hat and, you know, maybe they got a nice shirt on, and maybe they’re with their mom, and maybe there’s a backdrop or something like that. What you tell them is, “Okay guys, we got a contest going. we’re going to see how many of these you can get. The last class got 20, let’s see how many you got. You got 30 seconds, what is a phrase you could say to this guest as soon as they walk up? Go!” And they they start going. Go Cubs right, and then you got a flip chart up front, and you’re writing it down. When people see you’re writing it down, they feel validated they’re going. So they just start throwing stuff out and I’m telling you, “The cars are running fast today, got it! Yeah, that’s right. Hey are you from California? Yep, good got it! I loved your shirt! Great, got it!”

In 30 seconds. you’ve got 25 responses, and then you just sit back and go guys that’s all you got to do. Pick one of these, that’s all you got to do and I gotta tell you that was so effective for our teams. Number one they participated with, they came up with the ideas. It was just so simple for them and that we got you know out of sounding like robots at the front. I believe the same thing in food and beverage, by the way. I’ll just throw that out, you know. I’m one of those guys that I shouldn’t say I hate, the dreaded “have a nice day” at the end of your transaction or what at Disney sometimes people say, “Have a Mickey day”. I know they’re trying to do the right thing but that still gets you a C+ but we told our guys to just say something about what’s in front of them. They’re bringing you a meal, right, they’re bringing, they’re looking at you’re cashing it out say, “Man, I love those fries!”, oh the goes “yeah oh well I picked those out” that’s you know you know pretty good. “Hey that bacon burger is my favorite.” Oh good, doesn’t cost anything, doesn’t take another second. “hey, I love that key lime pie”. Beautiful and that gets people I think much more. “Have a nice day” doesn’t buy anything, but you can engage just a little bit and that can help you get there.

Yeah, cool. We could keep going with these for and actually we did setting this up. There’s so many great stories and so many wonderful ways to both drive revenue and you know, enhance, to lift your destination experience, your attraction experience.

We talked through the value of using real estate – the real estate that you have – your assets to their fullest. Growing your reasons to visit, through effectively leveraging partnerships. Jeremy’s innovative, amazing admission strategies, ways we build relationships with guests and ways to make your destination stand out is distinctive and that’s the key thing. Activating stories through experiences that make you distinctive, make you different, make you preferred, and drive all those the key drivers of destination performance and keep your advocacy going out in the marketplace. It is just that we are chalk full.

Sorry Mark. If there are a few more minutes, I wanted to bring something up for overall discussion.

We were talking in the beginning about limited CapEx investments to really create the guest experience, right. So, I wanted to bring in Risk Mitigation as well because no matter what the size is, you don’t always get it right. I mean if we look at, and I’ll take this like, let’s look at the Star Wars Hotel for instance. They’ve tried taking guest experience to the extreme here that it became almost like let’s say a niche product to a certain extent?

And I just wanted to ask Bob and Rick, like how do you mitigate risk and what is the right decision to make, so where do you, what are the things that you can pallet? When you want to or where do you start?

Yeah, it’s interesting Jeremy. It’s a great question. We were actually talking about this the other day, on a project that we’re doing right now.

We’re helping to develop a really cool destination: retail, dining, entertainment and attraction experience in Puerto Rico. So we’re in the process of really getting into that nervous period of the project where you’re starting real hard core value engineering and refining the concept of operations and all those things. In doing that you know you have to identify the value criteria you’re engineering against. And so, we said yeah okay so one of them is a seamless branded experience. The second one is risk mitigation, I’ll come back to that cuz it’s your question. And the third one, was about financial performance, got to do return on capital and all that.

Well it turns out, there’s a couple kinds of risk and they have a weird relationship, one of them simple mindedly is Financial Risk. So, the definition is, “Hey, if we’re wrong, we’re not going to make our numbers. We’re gonna over invest or under margin”. That’s a risk. The other one is what I call, Brand Risk.

One of the biggest balancing acts we think you have to make is you’ve got to balance those two. It’s like, well on one hand boy, “that’s really expensive and I’m not sure we should do that”. And on the other hand, if we don’t do that, we’re going to have an anemic offering and that low-level offering could overall come right back to bite us, and it might trash our brand for the next decade.

So, there you raise a really good point, there’s lots of kinds of risk and we think you have to balance. You have to take the longer view and say, “Yeah, what I know it’s expensive but what if we don’t”. It really does become important. People say, well mitigating risk, yeah, but define risk. It’s good to ask that question all the way around the horn. Okay, what if we do and we’re wrong, well then X. All right, what if we don’t do well, that’s why which is riskier X or Y.

I can tell you a quick anecdotal story from the Disney days when we did Studio Tour. We opened and we knew that we were under capacity, because we wanted to hit our opening date and our opening budget. But we know from the early going the demand was going to be high. So, somebody finally said, “Well we’re going to have to come up with”, what basically became a new land, but the anchor was the Hollywood Tower – Twilight Zone Tower of Terror. And said, “Okay we’re going to do that attraction”, it’s a great attraction. Well, in those days at that time, you know, financially purely on opening day, that show had a negative net present value. But, it was way better than what the cost in eroded attendance at the main gate would have been if we hadn’t done it.

I think these are all illustrations , you got to balance and of course if you’re smart you can figure out how to even that, even the boat out as you get going. But you know that balancing risk is really critical.

You know can I layer on because I also think that’s such a key question. And Bob, I know we also were talking about this this part. Now, I’ll caveat this up front by saying I don’t have to write the checks, so it’s easy for me to say what I’m about to say. But, you know the Star Wars Hotel particularly and I didn’t get a chance to experience it, but over the top and in the stories that it was delivering, and so it closed didn’t work for whatever reason.

At the Disney company they preach you know you should be a risk taker. We support that and I tell you they took a big risk. It’s one of those things that you know how many more people now are gonna say, “Hey, I want to work at that place. They were crazy enough to try that”. I don’t know. I think there’s a lot to be said when people say “we celebrate taking risks even if we fail”. Well, a lot of places don’t. I mean they say that but they don’t, man. Here I think they’re saying, “Hey, we gave it, we gave it a great shot and it was one of a kind” and they may get a lot of great things from that, you know.

The other side of that one is you also learn, right. You say, okay here’s… valuable lessons learned. Whatever they were, didn’t do our market study right, there’s a million reasons you could come up with for why maybe a very very high-end niche product like that didn’t do well in that environment. So now you go, “Okay that doesn’t mean we’re not going to have any more ideas like that or take any more risks like that”. It means the next five, don’t forget to put this on your wall, “These were the five things we learned. Let’s not do that again”.

Also, by the way, the flip side is, “Okay we couldn’t make it work but here’s all the stuff that did work. So next time we’re coming up with one, you grab some of those things that worked, and you plug those in”. Rick, I wanted to say, one I think it’s tangential, but in a lot of your stories I think there’s a real interesting side benefit, which is when you start, when you do those cast member driven, those employee driven kinds of things that builds tremendous relationship equity and loyalty with your staff. They walk out there and they say, “Hey that was my gag!”, or you know “Hey, they listen to what I said .” I don’t think we can underestimate or overestimate the value of that going forward. You talk about brand amplifiers, as we know, there is no better brand amplifier than a really great staff member engaging a guest.

I’ll give you a one minute story, that makes me look stupid that shows just exactly what you’re talking about. Again, it was a Test Track. Test Track’s a big thing, that’s why there’s lots of stories about it.

Anyway, we have financial targets, just like everybody and so we had to figure out where we were going to trim labor back all over the place. Operators are smart, we think we’re smart. We get in a room, we think we have a plan… boom! I got a plan. This is what we’ll do and we’ll go. I cut a position out of Test Track and then after we had done it for about three weeks, I went out and had an engagement session with the team, with the frontline cast, “How are we doing? How’s this going?”. And they said a lot of nice things at first you know, but then they finally said, “Well if you’re really asking, you cut that line – you shouldn’t have cut that line”. Then, I probably condescendingly said, “Well you know we have these financial targets and so we have to blah blah blah blah blah”, and they said, “No, no, no. We get that. You cut the position that ruined our productivity. If you cut this line over here, we’re going to be just fine”. And I said, “Okay, consider that done”.

And to your point Bob, after that I said okay, “Okay, well if you’re listening I got three more ideas for you”. I’ll never forget that session. Sometimes you gotta admit, you don’t have all the answers and they’re the ones that do. That’s for sure

Yeah, I just wanted to reply to Jarred on this real quick, right. Jarred asked like, “Are there new experience expectations that you’ve noticed your guests have now that didn’t exist a few years ago and require additional resources to address?”

So, I was just going to type in to say yes but in a very interesting way, because Jungle Island has been very much like, I’m sure everybody has seen these reels appear: Instagram versus Reality. And Jungle Island, for the longest time because it’s got a presence when you walk up to it: it’s got a big main gate, it’s got box offices it’s got huge theaters. But the product offering was never able to live up to the expectations.

So, with all the small incremental improvements that we’ve been doing over the year and a half, we’ve really increased the guest satisfaction to such an extent that finally expectations are almost meeting the reality of our product. What we have done that we really added on that guest experience, right, we’ve created outposts inside the park. So, whenever we added an extra layer of attraction, we try to figure out like, “Hey, how can we interact with our guests?”, and those outposts serve two purposes.

One, I mean their primary purpose for us would be almost like a little outpost sales office. We want to make sure that whoever we have to staff there, needs to be able to earn their own keep. Is it by selling animal feed? Is it by selling additional experience? Is it by selling some additional merch?

Great, but then on the other side, it also ties into what Rick was talking about, where it really is to greet guests, and welcome guests, and interact with the guests because instead of just letting people lose in our park, right now there’s really multiple touch points for the guests that were not there before.

So, yes it comes at an additional expense, because additional staffing is required. But by trying to be creative on how we offset that expense, it really, it’s almost like a wash. But when it comes to guest expectations and experience, it’s really a plus. So, honestly and Jarred to that point with a lot of the things that we do, we have our baseline model now for revenue. Whatever we try to do and innovate with, there’s one main driver and that is not losing money. I mean doesn’t have to be making money but not losing money is really the key here.

You know it’s interesting, Jeremy, that we’ve got it on the wall at our office, but it’s a quote from Michael Eisner. At the peak of what really was about to be the turn a big turnaround for the Walt Disney Company. It was in a Variety article about special effects and creativity, but Michael’s quote and I’ll mangle a little bit he said, “Look it turns out, if you look at the history of the Walt Disney Company particularly, but others too, creativity works in tough times” he said. To your point, he said, “The key is to put the creative first and try not to lose money”. He said, “You’ll get through the tough time and then you’ll grow”. And that was pretty good advice, you know.

I wanted to try real quick, before we run out of time totally. Holler asked “Are there other examples of local attractions?” and the answer is yeah I mean I can we could do a whole hour on this and maybe we will if somebody’s interested. But we did a lot of work with Icon Park here in Orlando.

Icon Park was built in the middle of I-Drive and right before we got to it, over three years, it had three complete sets of leadership and five different brands. It was not doing well and it was hemorrhaging cash and all the things. So a brilliant, brilliant young man with a great background in, frankly, real estate development and rich family history in destination entertainment was brought in as a new CEO. He very quickly hired us and and our research partners, Integrated Insight, to come and do this exact process we started with this morning talking about.

If you go fast forward from about 2019 to today, that park has completely turned around. It’s become the Crown Jewel of the International Drive Entertainment District. It’s thought of it as a mainstream in Orlando. It’s making a profit and it wasn’t any one big giant whack. Yes, there were some capital improvements, but they were more functional, more basically infrastructure improvements: opening up sight lines, looking at guest flow and making it easier to walk and all those things. Once you do that and you do a branding effort, you begin to create a sense of place, which is what they did with landscaping and lighting and cleanliness and wayfinding – all those things. All of a sudden, there’s no main gate at Icon Park, so attendance begins to go up. When attendance started to go up, then they were able to attract an even better tenant mix which drives more attendance growth. That in turn helps them do kind of what Jeremy’s been talking a little bit about, which is, “Now we don’t need to invest in big riding show. We’ll have partners who want to be in that business do that with their capital. We’ll provide the location, we’ll provide the attendance based on the brand and we’ll rev(enue) share”. So, another good collective model about and, boy, we had no shortage of really expensive cool ideas and I still love some of them, but it turned out the best strategy, was to do a a thousand smaller things at low capital cost prove the performance make the brand work and then be really smart about the way you layer in the larger assets.