Disney Parks in New Countries “Inevitable”

During Disney’s Q2 2018 earnings call, CEO Bob Iger gave a surprisingly candid response when asked about new Disney Parks in different countries, saying “there’s an inevitability to us building parks in other countries, but it doesn’t necessarily mean that we’re going to build something anytime very soon.”

Iger also remarked that Disney believes there’s “opportunity to expand in China, and there may also be opportunities in other parts of the world.” He also indicated that Disney regularly engages in conversations with representatives from different markets who would love to put Disneyland in their market.

Disney reported that U.S. theme park attendance rose 5% in the quarter, with most of the growth coming from Walt Disney World (albeit much attributable to the timing of Easter). Parks & Resorts revenue increased 13% to $4.9 billion, while operating income for the division grew 27% to $954 million. Iger attributed the growth to price increases and increased attendance.

Given attendance trends, the chatter about further development should come as no surprise. It seems like nearly every quarter, we hear reports of attendance and other growth. Particularly since 2011, the U.S. Disney Parks have seen pretty consistent annual attendance growth.

Where Disney will build its next park is a question that comes up with surprising regularity. In part, that’s probably because it’s fun to daydream, and many Disney fans want to imagine a theme park in their backyard. If you listen to Texans, it’s practically a criminal offense that Disney has yet to build in the center of the universe Texas. (No offense to the Texas-centrics reading this–perhaps Disney is just worried that such a concentration of awesomeness would be lethal to us non-Texans?)

The other reason for this ongoing conversation is because it seems like every other week there’s another article that makes the rounds about bogus plans for a new Disney park about to be built in [insert random country here]. No, for real this time. While it’s easy to dismiss those stories as dumb clickbait, my suspicion is that many of these articles are fueled by politicians with various ulterior motives. I won’t digress into that, though.

Whenever friends have sent these to me, my response has been the same: I doubt I’ll see another castle park open in my lifetime. While this new quote by Bob Iger might cast doubt on the likelihood of my ‘prediction’, I think there’s still only a 50/50 chance I’ll see the opening of another castle park. Not because I think ‘Rio DisneySky’ is next or because I plan on dying in an epic bear-wrasslin’ battle in 4 years, but because I just don’t see any options for resorts in new locations in the foreseeable future.

If I were to prognosticate the future development of Disney Parks around the globe, I think the safest predictions are new gates in Shanghai, Hong Kong, Anaheim, and Paris (in that order). Even then, those are likely not in the cards as near or mid-term developments, except perhaps second gates in China and Hong Kong.

In the more immediate future, expanding Walt Disney World, Disneyland, and Hong Kong Disneyland, plus fixing Disneyland Paris are all planned. These projects have been announced, in some cases construction has begun, and they will consume a significant amount of Parks & Resort’s capex for the foreseeable future.

Timelines for the announced projects listed above already stretch into the next decade. It’s difficult to see Parks & Resorts capex being diverted to developing new sites with any of those safer bets still on the table. Once those expansion projects plus yet-unannounced second or third gates are completed, we’re already looking at 2030, at the earliest.

Setting that aside, and assuming arguendo that Disney has a more immediate desire to build in a new locale, there are basic prerequisites. First, the location needs to have a high concentration of middle class residents within close proximity; spitballing, I’d say there need to be over 50 million income-qualified potential guests within 4 hours.

Second, the location needs to be somewhere that would not cannibalize a significant amount of business from Disney’s existing parks. This is the one that eliminates literally any other location in the United States. (Sorry, Texas.) It also eliminates anywhere in Europe.

Third, the location needs to be somewhere that has demonstrated long-term political stability. A place that has economic or political volatility would not be a good suitor. This eliminates Brazil (and a number of other locations, most of which were probably already eliminated, anyway).

Finally, the choice needs to be relatively uncontroversial for a family-friendly, all-American brand like Disney. I think this might rule out places like United Arab Emirates, Saudi Arabia, or Qatar. These countries otherwise have governments with the resources to lure Disney (or license the name) if they so desired. China seems about as bold as Disney would get in that regard.

Speaking of which, assuming what I’ve listed are Disney’s actual parameters, that basically just leaves expansion at new sites in Asia. Beijing is pretty far from Shanghai, and also has a sufficient population buffer, but that city is getting a Universal theme park (which is already rumored to have had a rocky development).

Guangzhou is also a huge city and a safe distance from Shanghai, but it might be too close to Hong Kong. In actuality, there are probably a few other potential candidates in China, but it seems likely that Disney would take a wait and see approach in the near to mid-term with further development in China.

India is another option, but I think that’s another one where a wait and see approach might be appropriate to see how middle class income continues to develop. Still, development here within the next 30 years is not outside the realm of possibilities.

Seoul is another interesting option, and there are a number of thriving industries that could make this location sustainable. However, let’s not forget the instability a mere 50 miles from the city. There’s always the possibility the North Korea ‘situation’ does get resolved in the near future, but to the extent that Disney is comfortable building there? That seems highly unlikely anytime in the mid-term future.

I think that’s about it. Realistically, I think it would also take the local government offering Disney a sweetheart deal or taking a stake in the business (or both), which complicates this calculus even further. As with the Olympics, being home to a Disney theme park is a legitimizing factor, and I could see other emerging world cities that want to step out onto the world stage also vying for a new Disney park. The question, ultimately, is whether Disney would be willing to take the gamble.

Your Thoughts

Where do you think Disney will build its next park? Do you think we’ll see a new castle park in our lifetimes? Where is your dream location for a Disney theme park–either close to home or your favorite travel destination? Any other speculation, commentary, or questions? Hearing from you is half the fun, so please share your take below!


56 Responses to “Disney Parks in New Countries “Inevitable””
  1. Ethan September 14, 2018
  2. dion July 29, 2018
  3. Aimee June 5, 2018
  4. Matt May 20, 2018

Leave a Reply

Your email address will not be published. Required fields are marked *