Disneyworld - December 29, 2008, 08:00 A.M. (Updated January 2, 2009 10:00 A.M. Central)

Shares of The Walt Disney Company (NYSE: DIS) seem to be undervalued, at least based on the Peter Lynch principle of analysis, where actually going out and looking at the business yields tangible evidence of prevailing conditions.

We spent December 25th, 2008 to January 1st, 2009 in Disney World and saw nothing but huge crowds at every park, including Magic Kingdom, Disney's Hollywood Studios, and EPCOT Center where there were 45 minute waiting times to get on rides that most people would normally ignore due to their low thrill potential.

On New Year's Eve visitors were reportedly turned away in the afternoon at EPCOT as the park was filled to capacity. We were there later in the evening and saw nothing but wall to wall people. There were lines to go into restrooms, lines to order soft drinks, beer, fish and chips, hamburgers, and in some cases even souvenirs.

On New Year's day, by mid-morning, there were still huge crowds at the one park we visited, Disney's Hollywood Studios.

The on-site restaurants remained full for those without reservations throughout our stay. Buses and boats to all parks are full to capacity, and one Disney worker told us that Magic Kingdom alone saw 72,000 visitors cross the gates on Christmas day.

We saw and spoke to visitors from Japan, Argentina, India, England, and New Zealand, as well as visitors from the United States, where our non-scientifica methods suggest lots of folks from Florida and the East Coast are visiting.

One group of visitors from Mexico was in Disneyworld on vacation but were also taking advantage of the outlet malls in Orlando to buy designer clothes with the low dollar, as they told us that designer clothes are prohibitively priced in Mexico, so they were stocking up before returning.

Europeans noted that even with airfare, it was less expensive to travel to Orlando than to travel in Europe.

There were lots of locals apparent, and the parking lots were full of cars, with lines forming at night to take visitors back to their cars in shuttles.

All in all, three major trends are apparent. First, Disney parks, at least Disneyworld, continues to be a major global attraction, and is perceived as a value, despite very high prices for all items, including food, drinks, admission, hotel stays, and souvenirs.

Second, much of this is being aided by the low dollar, as the number of foreign visitors to this park, is the highest we've ever seen.

And third, lower oil prices are playing a significant factor, given the number of cars visible in all parking lots.

Conclusion

As we've noted in other "Tales From The Road Installments" recently, travel does not seem to be affected to the degree that Wall Street analysts and economists seem to expect that it would be during a recession.

This, for us, is now a trend that we've been following for the past two months, having delivered reports from two small towns in Texas, Wichita Falls, and Waco, where the local economies were quite stable and local businesses and national brands with strong presences in the communities seemed well supported.

Now, in this huge international setting brand loyalty is clearly a dominant factor in destination travel.

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