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Disney World and the nightmare scenario for tourism

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Published: September 18, 2007 at 10:03 AM

Kevin Yee offers an intriguing read over at MiceAge today. He's takes a look at a top-secret internal Disney study examing worst-case business scenarios for Walt Disney World.

The study, Yee writes, was promopted by the Sept. 11, 2001 terrorist attacks and the resulting collapse of the air travel market. This time, Disney's consultants are forecasting what could happen to the Central Florida resort when "peak oil" forces prices far beyond the current $80 a barrel.

Yee writes that the Disney study predicts that Disney World could stop making money for the Mouse House at an oil price as low as $160/barrel. That, in turn, is prompting Disney to outsource as much of the resort as it can -- hotels, restaurants, Yee even imagines Disney selling the parks themselves, a la an Oriental Land/Tokyo Disney deal.

Obviously, Disney World would not be the only property to suffer if oil prices make long-distance travel prohibitively expensive. All Orlando parks would tank, and parks that rely on regional visitors would suffer as well.

Yee's piece barely mentions the point, but oil price increases could actually help Disney on the west coast, as a massive Southern California audience would look to Disneyland for its vacation get-away, with Hawaii, Cabo and even Las Vegas becoming too expensive to get to. (Disneyland attendance, unlike the rest of the theme park industry, surged after 9/11, boosted by locals staying close to home.)

Readers' Opinions

From Brian Emery on September 18, 2007 at 11:24 AM
This is kinda …………..What’s the word I am looking for……..ummmm…………Dumb…

They actually pay folks to do useless studies and scenarios … Of course if oil hits $160 oven the next few years or so Theme parks would be screwed.. So would Vegas and anywhere folks travel too. How much would a flight to Hawaii cost? Or Europe…

If they want to save money - then stop paying for ridiculous studies!


Just my opinion…..

From Robert Niles on September 18, 2007 at 11:54 AM
Yeah, but there is immense value to a corporation in knowing at *what* oil price their company becomes screwed. As always, the key to business is not knowing that you need to buy or sell, it is knowing the precise moment you need to buy or sell.

That way, you can plan for that moment, and bail out at exactly the most profitable time. That's why you pay for the study.

From Brian Emery on September 18, 2007 at 11:58 AM
It’s all relative.

If oil is $160 per barrel in year 2020… not a problem…

If oil hits $160 in year 2008 - major problem…

Relative within the current year’s economy. That’s why I feel many of those so called experts and studies and garbage.

From Derek Potter on September 18, 2007 at 1:20 PM
Personally, I wouldn't lose any sleep over these kind of changes within Disney. They have no problem licensing their product, and investors/operators may flock at the prospect of owning a piece of the mouse. It happens in the world everyday..a company hires another person or company to manage their business. I wonder how long the Disney brand would keep its shimmer under other management, but I wouldn't be surprised.

If Disney is really worried about the oil crunch, than why don't they take some of those imagineers and some of that billions in money and create a solution. Air traffic? How about a project that converts airplane engines to run on alternative fuel sources. Buy a fleet of planes, convert the engines, and fly the 40 plus million people that visit from regional hubs/intl airports to the resorts yourself. I suspect that a lot of the technology already partially exists to do such things. My point is this, if this company is truly concerned about the energy crisis, than they are in the position to make a real difference. We are talking about a company whose parks have cities built around them, who owns a gigantic portion of mainstream media outlets, who has billions of dollars, and the ability to market a magical place that doesn't really exist. If they want to be like everyone else and sell sell sell, than I wouldn't be surprised at that either. It's just like the rich to want more money.

From Anthony Murphy on September 18, 2007 at 1:39 PM
If that were the case, the entire tourism industry as we know it would crumble and Disney would just be a blip. I mean there goes Las Vegas and, ever worse, Hawaii since its an Island.

So they were looking at worst case scenarios? I think I would be more suprised if they wern't.

From TH Creative on September 19, 2007 at 2:27 AM
Great. Is there also a study about what they would do if six meteors simultaneously hit the parks? How about if Godzilla rose up out of the Seven Seas Lagoon? You know, some equally likely scenario.

Or if (in the most unlikely of all scenarios) Pluto were to go crazy and start chasing some little kid around Main Street USA?

Look, let's face it, a corporation of Disney's size always has to plan for worse case scenarios. If this allegedly "top secret" document is real, it's hardly news.

I mean would anyone here be surprised to learn that Disney has contingency plans if an earthquake were to strike southern California, or if there was a major fire shutting down one of the parks for weeks?

Miceage needs to get a grip. Every internal Disney document is not necessarily newsworthy.

From Mark Hollamon on September 19, 2007 at 5:18 AM
Kind of an odd twist here, but have parks studied what will happen to their attendance once it costs a barrel of oil to get in the park? Prices have been going up pretty steadily at all parks and people keep coming back.

I am not sure what the average family spends for a Disney vacation, but I just recently stayed at Wilderness Lodge and from the looks of things (and cost of things) if a family of 4 can stay on property a week to ten days for a vacation in a Deluxe Resort, oil would have to take a pretty large spike for anything to slow down.

From Mark Tilsher on September 19, 2007 at 6:10 AM
Unfortunately it is not as far fetched as you may think. Disney is very wise to conduct these studies. With Oil at its all time high and the world seemingly hitting peak oil in 2005, the cost of oil will continue to peg consistently higher over the coming years.

I think many people will be surprised at just how fast the price rises as the dollar slides down the slippery slope towards .75, and even .70.. Coupled with several nations moving towards Euro only for oil exchanges...

Well, $160 in the next few years may be far off... but $100 is just around the corner.

This is a major part of my life’s work, a topic I spend a great deal of time writing about and studying. I would be very surprised if a corporation as large and experienced as Disney did not have a legitimate contingency plan in place for peak oil.

The sad part is that most people don't realize that peak oil, in all likelihood, has already passed in March of 2005... Though we shall see! Hopefully this is just Disney money wasted and we can all continue to enjoy the high caliber entertainment we have grown accustomed to!

From robert miller on September 19, 2007 at 8:59 AM
Disney is not going to sell Walt Disney World. Its a cash cow. If tourism dies down, Disney will just use cost saving measures.
From Mike West on September 19, 2007 at 9:47 AM
I agree with Derek.
What giant in this world is better equipped that D to innovate a global shift in technology.
To free us from the desert regime. I wonder how fast that fuel cost would come down once there would again be an overabundance of crude & sand on their hands.
(Amazing that crude & sand would avail you the highest wealth per capita in the world).
Theme parks, for all their uses, have the most admirable role of innovating new technology.
LIM's, Monorails, ....this is where we get to know, perfect, & trust these advents.
They are the bridge between science fiction & reality.
Personally, I think those with they keys to the pumps are already preparing for this.
Not only building their oases of tourism(DUBAI), but also developing, preparing, & investing in the alternative fuel sources that will get folks there.
I'd be surprised if they werent.
From Robert OGrosky on September 19, 2007 at 10:21 AM
I dont want oil prices to keep going up and the economy to tank, which would affect tourism etc. Its not good for our country to go thru another reccession, though it will happen again some time as economies do ebb and flow.


But it would help me if it made lines shorter and forced disney to stop rasing prices or maybe even lower them to deal with less tourists.

From Noel G on September 19, 2007 at 3:38 PM
Just to throw a spin on things.

Maybe with future themeparks being built, the visionaries that create and design them should look at alternative forms of energy and perhaps have a totally green park?

Create the parks so they take in the free energy that is available, ie wind, solar, and so forth. Make features of that ordinary looking windmill when in reality it is producing electricity.

As I think the visionaries need to look past the cost of a barrel of oil, what happens when the worlds oil reserves are completly depleted?

As there are many recycling practices in place as I know here in Australia Warner Village Theme Parks, that encompasses the likes of Warner Bros. Movie World, Sea World, Wet'n'Wild Water World have included plastic recycling bins in there parks, with huge success.

So why not invest more in this and go green all the way, from recyled materials, uniforms, green energy, paper products, plastics etc.

With energy that is produced have it put back into the electricity grid for all to benefit.

From Barbara Boyer on September 20, 2007 at 4:41 AM
Just a thought - maybe the powers that be should begin looking at more mass transit opportunities directly to their parks. Spur lines from airports, train stations, etc. And shuttles, light rail, whatever, between parks that are close. Cooperation and conservation are alternatives to panic.
From Derek Potter on September 20, 2007 at 8:31 AM
Many parks have some form of transit to their front gates. Many hotels surrounding Disney have the shuttle service. The same goes for just about every other major park out there. Any major hotel offers a shuttle to the local park as part of their draw. Parks themselves rarely have passenger service because the cost outweighs the benefits for them...especially with every hotel offering some kind of shuttle and the tax help they get from parking fees.

What amusement/theme parks can do to help is to promote conservation. Recycling bins for paper/park maps, plastic bottles,...etc rather than a million trash bins that parks pay thousands to dump every day. Installing sinks and other bathroom fixtures that have the auto shut-off feature, not advertising gigantic gas guzzling vehicles, using LED light bulbs in all offices, restaurants, and other rooms...all of these things sound small, but when a park with hundreds of light bulbs, dozens of restrooms, thousands of plastic bottles and tons of waste paper can find a way to reduce energy consumption and promote a "greener" way of life, they have made a difference. Those parks with more money and influence (ahem Disney ahem) have even more capability of making a difference.

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