Disney CEO calls construction of new theme parks 'inevitable'

May 8, 2018, 3:07 PM · Walt Disney Co. CEO Bob Iger said today on the company's quarterly earnings call that Disney is looking at opportunities to build additional theme parks in China and elsewhere around the world.

"We think there’s opportunities to expand in China," Iger said. "There may also be opportunities in other parts of the world."

Disney reported that its U.S. theme park attendance was up five percent year-over-year for the quarter, of which 40% of the gain was attributable to Easter falling within the quarter this year. Spending was up on tickets, food, and merchandise, with Disney enjoying domestic hotel occupancy higher than 90 percent. All together, parks revenue was up 13 percent to $4.9 billion.

But Disney also sees growth opportunities for its brand by developing additional parks in other markets around the world, too.

Disney opened Shanghai Disneyland in 2016 but currently has no other theme parks under development. Yet Disney is expanding aggressively within its parks around the world, opening Toy Story Lands this year in Shanghai and Orlando, and Star Wars lands in Anaheim and Orlando next year. Major expansion plans also have been announced at Disney's other resorts, in Paris, Hong Kong, and Tokyo.

Picking the site for a new theme park demands sharp research and attention to global and local markets and political trends. Disney would need to find locations with the promise of a strong local economy, support for tourism, and political stability. Disney also would need to consider the desirability of working with local development partners, versus buying land, building the resort, and maintaining it on its own. A poor choice could cost the company billions of dollars, not to mention the opportunity cost of developing a park in a better location elsewhere.

So this is not a decision to be taken lightly or made swiftly. As Iger said, "it doesn’t necessarily mean we're going to build something anytime very soon. But we're going to look."

Replies (47)

May 8, 2018 at 3:45 PM

Texas

May 8, 2018 at 4:17 PM

That's an extremely stupid question to ask a CEO. What does he expect, Disney may never build another theme park?

May 8, 2018 at 4:40 PM

With both domestic parks incredibly busy, a third one seems to make sense...central location...like Memphis?

May 8, 2018 at 4:51 PM

Good point, although it's always fun to speculate where the next park will be (cough, cough, Brazil, cough, cough).

May 8, 2018 at 4:52 PM

South Carolina.

They already have a vacation club there, and it would get people from cedar fair’s carowinds Park. People from further up the East Coast who don’t want to go all the way to Florida would have a Disney alternative

May 8, 2018 at 4:54 PM

I'm going to second James' suggestion. If only so that perhaps WDW can get a slight reprieve from the throngs of Brazilian Tour Groups.

May 8, 2018 at 5:11 PM

I predict that Disney will put their next park in Wakanda.

May 8, 2018 at 5:28 PM

Jeffrey H, you read my mind.

May 8, 2018 at 5:39 PM

I have to concur with the Texas assessment or someplace Midwest. I certainly think they are desperate for a fifth gate in Orlando, but somewhere in Central US that does not get too cold but not too incredibly hot would be optimal. South Texas has miserably hot summers, but North Texas has land and the weather is not too bad. Orlando is just absolutely crazy crowded to the point that it simply is not fun. You want to go completely controversial, you could say farmland off of I-40 in Arkansas outside of Memphis. You have people that can drive from Memphis, Louisiana, St. Louis, Texas, and Disney would be completely in control of the infrastructure. You build it and they will come (in the US).

May 8, 2018 at 6:33 PM

Texas makes sense, and would be another Disney resort in the U.S. San Antonio would be a good spot. It’s mild all year round. Though, gets hot during the summer. It would also be close to other tourist attractions, such as the Alamo, and the Riverwalk.

Brazil would make for a good location internationally. There is no Disney Resort in South America. It would be its first. A Disney park outside of Rio would make for a good location. I always thought Spain would have been a good location for a Disney park. I doubt that will happen, since it’s so close to Paris.

May 8, 2018 at 7:31 PM

North Texas, No,ooooooooo we don't want Disney and the riff raft that comes with in our backyard.

May 8, 2018 at 7:40 PM

Iger said he’s talking to Saudi Arabia about a park. You know, the Royal Family that tortured Disneyland Paris’ biggest private investor who is still a Saudi Prince, but not as free. Disney seems to have no problem investing in Communist and Authoritarian governments.

May 8, 2018 at 8:05 PM

Disney wants a fat check in licensing fees and/or a government willing to take on the land acquisition and construction costs. I can't imagine any location inside the United States offering the type of deal that the company is going to be able to get abroad.

May 8, 2018 at 9:58 PM

I think a 3rd gate in Anaheim should preclude any new US parks. Orlando has plenty of room for expansion at all of their parks. A 3rd US resort doesn't make any sense when Orlando is no where near it's capacity potential.

Internationally Shanghai and Hong kong will get 2nd parks before anything else. I can't really see Disney building any other countries. South American countries are too poor and other continents already have Disney resorts with room for expansion. Europeans just aren't interested in Disney and those that are already visit Paris or they prefer to travel to the US parks and add Disney to their very long holidays.

May 8, 2018 at 11:04 PM

The next Disney park will probably be a second gate in Hong Kong or Shanghai (probably the latter). The next US Disney park will almost certainly be either a third gate in California or a fifth gate in Florida, as I don't foresee much chance of a third resort in North America. The next Disney Resort will likely be somewhere in Latin America, as that's really the only part of the world that would have enough interest yet doesn't currently have a Disney park. Realistically, I don't think we're likely to see any new parks outside of Asia in the next decade, but stranger things have definitely happened.

May 9, 2018 at 12:43 AM

Shanghai Disney is still very new, a 2nd gate is too early, a few more expansions within the 1st gate is much more realistic. They have already reserved space for it.
Hong Kong Disney will eventually have a 2nd gate for sure, probably "announced" but certainly not "built" within the next decade, it takes till 2023 (another 5 years) to finish the current expansion plans (Frozen, Castle expansion, Marvel, Moana) Disney will want to see some results before they pour in money again.

Guys, you don't need to ask the CEO, just ask yourself, with all the tensions around the world now, it would not be wise to build another brand new park in a new country with no certainty. If I am Iger I would add new Gates to existing parks especially those making money and maybe open smaller and cheaper "Disney experience centers" in other countries.
Let's say that that existing Disney Parks will get bigger and bigger and countries without one won't have one for a very long time.

May 9, 2018 at 1:38 AM

Taxes and regulations on foreign companies in Brazil are way too high to make it even possible for a Disney Resort to be built there, hence why no major parks are in Brazil to begin with. Also the political situation has been unstable for a long time. Imagine you spend a decade and billions building a massive theme park and the government arbitrarily decides to raise taxes by 50%. I can't see Brazil happening. Plus all the wealthy people in Brazil go to Florida.

IMO the most likely candidate is a second park in Shanghai. There is definitely demand and i'm sure the government is salivating at the idea of more service jobs.

I'm sure the company would like to see a third park in Anaheim at some point but there's a lot of politics involved with that as well, and for the first time ever the city recently voted against a Disney expansion plan. I think Disney will build one when they can acquire all the land they need for additional infrastructure. That property has badly needed more capacity for decades, huge market and small property.

Hong Kong is unlikely at least anytime soon. I think the reason there are no Star Wars or Marvel rides in Shanghai is because they are saving it for a second gate. Hong Kong is currently building a Marvel Land.
Even 15 years later its still recovering from being such a big flop when it opened. However, it is a good park now with lots of unique attractions, so at some point you would think the crowds would start to pile in.
The big problem with now is that Hong Kong is an extremely expensive place to visit and not a good value for tourists from the mainland. With a bigger and more famous Disney in Shanghai, what reason do people have to visit Hong Kong? That is a tough thing to overcome.

Paris - no way in hell that's going to happen anytime soon. Both parks need new attractions badly and the property still loses money.

Can't see anymore parks being built in the USA outside of Florida and California. It's just too expensive and not worth it considering all markets are covered. It's so cheap to get to Orlando from places like New York, Chicago, and Atlanta there's just no reason to.

May 9, 2018 at 1:53 AM

Unless there is a massive increase in costs in the air transport industry I think we can forget any new US resorts. The airline market is too mature and tickets too cheap for a new park to do anything but canabalise the others.

If I had to put my money somewhere, it would be on either Qatar or India.

India has the population, and for the region is affluent, and that population is outward looking. Although still “exotic” by American standards the legacy of the empire should mean a lot of the legal/business structures are familiar.

Qatar has money to burn and needs a way to show up it’s neighbours and build its tourism industry further. Plus it will help with their diplomatic policies (who wants to cut their kids off from Disneyland?)

May 9, 2018 at 2:34 AM

I'd like to say Australia. Would be a stupid move financially, but it would save me a lot of hassles. (I'm not suggesting they spend billions of dollars to save me hassles).

May 9, 2018 at 2:40 AM

@Robert Niles Maybe Dubai (if they where serious about theme parks)?

May 9, 2018 at 3:42 AM

A park in the Midwest US would start the cannibalization of the existing parks here. A smaller regional type resort in Australia (similar to Hong Kong) is a no brainer. They currently are severely lacking theme parks there.

May 9, 2018 at 3:48 AM

I believe the best place to build a 3rd resort here in the US would be in the Great Smokey Mountains area. It is the 2nd most visited tourist area in the country, right behind Disney World.

May 9, 2018 at 6:25 AM

@grant maybe if they bring back the SS Disney idea....

May 9, 2018 at 6:30 AM

It is highly unlikely that Disney will build another theme park in the USA. The US market is too saturated.

Disney needs an untapped market and lots of foreign capital. South America and/or the Middle East for new resorts and a second gate for Shanghai seems most likely.

May 9, 2018 at 7:03 AM

India.

May 9, 2018 at 7:19 AM

There just isn't enough blue collar money in South America to support a theme park resort. It would go fine for a couple of years, but at some point the locals will grow restless and run out of money. There's way too much risk, not only financially, but also from a security standpoint, to build a Disney resort in South America, even in relatively safe places like Rio, Sao Paulo, Buenos Ares, Lima, or Bogata.

The Middle East is just so risky right now with the level of saturation occurring in the tourism market. There's plenty of money there to support a resort, but interest is spread way too thin already, and adding another player to the market could irreparably damage it.

I think South Korea represents a very strong market as well as North Africa (Morocco in particular). Those are places where there's a hunger for entertainment and the money to support it. They are both rising economic centers with South Korea just hosting the Winter Olympics, and Morocco gaining steam to earn the rights to host the 2026 World Cup. I wouldn't be surprised to see Disney expand in China, but I think tapping new markets, emerging markets would make the most sense right now.

May 9, 2018 at 7:51 AM

With the prospect of Elitches in Denver closing, the market would no longer be saturated. Denver also has the infrastructure and the land to deal with a large park and huge crowds. Geographically it would serve as the mid-point of the nation. Disney would need to keep an eye on some of these indoor parks to see how to build something that could be open all year.

May 9, 2018 at 8:18 AM

There's always the northeastern states as well. Especially if the "park" is not just a clone (Main Street [promenade], castle, etc.). Different concept like EPCOT Enterprise. I believe Disney had explored doing something on the waterfront in Baltimore. And certainly the inclination to build 'Disney's America' (which might be worth a revisit) had to be based upon some demographic studies that would have indicated there was an audience. Also (again if I remember correctly) when Virgina said they were not interested in 'Disney's America' Maryland stepped up to offer some tax abatement incentives on property.

May 9, 2018 at 8:28 AM

A fifth Orlando gate is unlikely unless Universal's inevitable third gate (fourth if you count Volcano Bay which I don't but Universal does) is a huge success. Remember that Disney's last two gates were in response to the success of other area parks (Hollywood Studios in response to Universal Studios and Animal Kingdom in response to Busch Gardens Tampa).

A third Anaheim gate is unlike because there just isn't room to build there unless Disney does a major, massive, and expensive land grab.

While I would love Texas, I don't think its likely either because nearly everyone in the country are already within a day's drive (or a few hours flight) from a Disney park.

The Middle East could be a good area, but there is a lot of competition over there right now, and the market may already be over saturated.

I don't believe any of the Eastern parks will be getting an additional gate, either. Expansion of their current parks is all they can hope for.

Europe? Not a chance. Three words: Disneyland Paris disaster.

No, I think the most likely candidate is Brazil. Yes, the taxes and development cost would be high. But Disney could cut a deal with the Brazilian government. And while its because of the high development cost that has kept other companies away from Brazil, we are talking DISNEY amounts of money here.

May 9, 2018 at 8:45 AM

Northeast USA isn't going to happen. One of the major reasons WDW was built in Florida was to capture that market. Disney also isn't into things like Disney's America anymore, that was Eisner's pet project, everything Disney builds now is stuff that will enhance the Disney circle of brands (Disney, Marvel, Star Wars, ESPN etc).

There is 0% chance of Denver happening. A small city, with a small population, that's out in the middle of nowhere, with an extremely harsh winter. You cannot pick a worse place to put a destination park. And it's only a 2 hour flight from Denver to LA so those people all go to Disneyland now anyway.
The mid point of the country at least demographics wise would be somewhere like Chicago, not Denver, and that definitely wont happen either as that's WDW territory and also has a horrible climate. All those western states around Colorado are mostly desolate there's no way.

When Iger says looking for opportunities to build more parks trust me the only places in the USA he is looking at is California and Florida. China & India (or maybe Singapore which captures the indian market) are other places that may make sense.

May 9, 2018 at 8:59 AM

@TH - Living in the DC/Baltimore region for my entire life, I'm very familiar with Disney's America concept. The original location was supposed to be near the Manassas Battlefield (Battles of Bull Run), which is about 20 miles west of downtown Washington, DC in Northern Virginia (and actually pretty close to Dulles Airport, which 25-30 years ago was just starting to really see an uptick in flights because of restrictions on growth at National Airport). There were rumors for months about Disney executives visiting the region and looking at and purchasing available parcels to merge and create a resort property with a living history theme park (similar to Colonial Williamsburg). Virginia, as it's apt to do, was willing to provide some consolations in the form of zoning and minimal tax incentives, but they weren't about to roll out the red carpet (Virginia was red at the time, but has recently turned blue in the DC suburbs if you believe political affiliation forms business strategy). All of the talk resulted in a bunch of hot air, but ultimately the plan fizzled out because of a conflict between local residents, farms, historical preservationists, and even the Federal Government. Maryland (always a blue state) did try to get involved by throwing a ton of tax incentives at Disney to woo them to find and purchase property for the resort east of DC. However, Disney never found a suitable spot (Baltimore was never an alternative as far as I know), and the plans in the DC area fell apart. I do believe Disney then turned their attention to Texas to house the same concept, but talks never got as far there as they did in the DC Area.

Eventually, though Disney did purchase some property in Maryland on the Potomac River at a location that is now known as National Harbor. The original plan was for Disney to build a 500-room resort hotel similar to Aulani and other stand alone DVC properties. It looked like Disney would finally start building about 10 years ago when the Gaylord Hotel and Resort opened at National Harbor to kick off development in the area (followed by the National Harbor complex, Tanger Outlets, and MGM National Harbor Resort and Casino). However, Disney opted to sell its property at National Harbor (which was at the top of the hill with the most panoramic views of the River and monuments in the distance), and it's now slated to become an apartment/condo complex.

May 9, 2018 at 9:33 AM

If my memory serves, there was once a design for an all indoor project that was a combination of shopping areas and dark rides. You would have a Haunted Mansion, Pirates, Small World, and animatronic type attractions, with themed restaurants and shopping areas. It could be plopped down anywhere, including cold climates. I am sure it was just a design theory, and scrapped as being cheap and not popular not that indoor malls are going out of style.

As to other locations in the US, I will disagree. The way the population centers are going, it is getting more and more costly for a family of four or more to drive or fly to either coast, and population centers are growing to meet or match that of large areas. Take Texas, for example. Driven there lately? It is getting very close to driving in Southern California. There are lots of people in that market that are not going to either coast, plus several airports that are very cheap to get to from several markets. You could not build an outdoor theme park like Disney near Denver or the Northeast as the outdoor rides would have issues with the weather, as would the guests.

But my main reasoning for a middle US park is simply due to the extreme overcrowding of Orlando. It is certainly popular, and it is very fun, but with the current crowds and how they manage it, many are one and done instead of returning every two years or so. They need an escape valve. It is not an additional attraction or three in each park. Orlando needs a fifth gate and a way to restructure its ride reservation system (which they must do before Star Wars opens). I do think Universal's new park will be problematic due to its location, and, yes, all of this current development in Orlando is in response to Universal's successes, but it does not change the fact that Disney will still be the theme park leader. They are just too willing to pack too many people into too small a space.

May 9, 2018 at 10:05 AM

JC,

That indoor park was the St. Louis concept that the company ditched in favor of the Orlando project (which became Walt Disney World).

May 9, 2018 at 10:14 AM

James Koehl said it best.

Brazil! Brazil! Brazil!

May 9, 2018 at 10:16 AM

South Korea is way to close to Japan and Shanghai. The risk from North Korea is alive and well. It's way too soon to say the situation has stabilized.

The best bet might be Australia despite the small market, but it's far enough away from Hong Kong and Shanghai that the theme park business won't cannibalized. Australia is close enough to the South Asia market like Singapore, Indonesia, and India.

The most stable country in South America might be Columbia. Columbia is certainly an option, but a long shot.

May 9, 2018 at 11:25 AM

The next Disney resort will be somewhere in one of the wealthy Gulf states, like the UAE, Saudi Arabia or Oman and will cater not just to Middle Easterners but also to wealthy tourists from Africa and South Asia as well. This will likely be built sometime in the late 2020's. It will open as a castle park with room for a waterpark and second gate to be included in future expansions.

This will open around the same time as the opening of a second gate in Shanghai, which will basically be a clone of Hollywood Studios, with it's own Galaxy's Edge, Pandora and Marvel Superhero Area, as well as an Arendelle expansion either there or in the original park.

After that, Disney will open a third gate in Anaheim sometime during the 2030s. This park may be a brand new concept, a revived Westcot or simply a "best-of" park that combines the best attractions from other parks around the world. For those that say Disneyland doesn't have the room to expand in Anaheim they do own a plot of land a few blocks away from their current plot that is currently being used only for overflow parking. This plot is easily large enough to hold an entire park and though not immediately next to other parks could easily be connected via a monorail extension. It's possible that this expansion may not be a third gate and will only be a waterpark, shopping area and resort hotels in an an attempt to make Disneyland more of a multi-day resort, however I view this as the less likely option. Either way, Disney owns a ton of prime real estate in Anaheim and is going to want to develop it in some way sooner rather than later.

The next major expansion after that will be in Brazil sometime around 2040, and will be in the suburbs outside either Rio or, I think more likely, Sao Paolo, and will be a bilingual Spanish-Portuguese park marketed towards all of South America. Brazil is currently a little too economically and politically unstable, and crime is still too much of a problem for a park to be viable immediately, however another 20 years of growth and Brazil's economy should be very close to what Japan's was like in the 1980s, and it will be a large, wealthy, stable country, with plenty of disposable income ripe for Disney expansion.


Beyond 2040 it's difficult to predict, but there will likely be a second gate in the Middle East sometime in the 2040s and the huge numbers of tourists visiting that park from South Asia and India's (by then) booming middle-class will eventually lead to Disney opening it's next resort somewhere in India in the early 2050s. (Disneyland Mumbai has a nice ring to it.)

While a park in central Texas, would be convenient for many and likely ease crowding at parks on both coasts, a third Disney resort in the United States is never going to happen. Disney is only expanding to places where they can grow their brands and/or capitalize on areas with under-served amusement park/tourism/resort markets and Texas qualifies as neither. Beyond the locals who would go regularly, a third resort in the United States would mostly just cannabalize the existing American/Canadian market and offer minimal new growth. What is far more likely however, is third North American resort being located somewhere in Mexico, which could also serve to be a cheaper vacation option for many Americans and Canadians as well, which as a result would ease crowds at the two American resorts, but gives Disney the potential of growth in a growing economy of more than 100 million people. (And for what it's worth, Mexico City is a shorter drive from San Antonio than either Orlando or Anaheim is.) I don't predict a third North American resort will be built anytime soon, but if it is, you should be looking at the opposite side of the Rio Grande.

As for a fifth gate in Orlando, I don't think that's going to happen. Firstly, unlike with Anaheim, all of their parks still have plenty of room for growth and expansion, and secondly, on a dollar-per-square mile basis, Disney likely sees building new multi-million dollar hotels as a safer and more lucrative investment than a multi-billion dollar park. I could be wrong of course, and maybe a fifth gate is already deep in planning but I wouldn't hedge my bets.

May 9, 2018 at 12:16 PM

Good old "Disney Double-Standards"! Remove the oh so offensive auction scene in Pirates but let's ignore China's appalling on-going Human Rights record since President Xi Jinping took office. All Disney are interested in is $$$$$$. They are devoid of morals. As the saying goes "What would Walt do?"

May 9, 2018 at 1:28 PM

NO WAY to Jeff's Denver suggestion! I have no desire to deal with what Anaheim and Orlando have to put up with. Disneyland is close enough thank you. I love my city the way it is.

May 9, 2018 at 2:27 PM

>>>South Korea is way to close to Japan and Shanghai. The risk from North Korea is alive and well. It's way too soon to say the situation has stabilized.

I agree it is close to Shanghai and Japa (although I'd be less worried about Shanghai, I think thats more a China-Audience target), but I think you're vastly overplaying the NK threat. It hasn't really hurt the South Korean Tourism industry (if anything, the DMZ stands as a great tourist attraction!) and the south korean citizenry don't seem overly bothered, and both Universal and Fox came pretty close to a park at one point, and I can find reports Liongate is working on something. Plus there seems to be a pretty good variety of local parks too.

May 9, 2018 at 5:28 PM

I would say it has to be in California. The Toy Story parking lot has been tagged for a third park for years. In fact I think they have 10 more years to build a 3rd gate until the land reverts back to the city. And with the current political acrimony between the city and Disney I doubt they would grant another exemption. Maybe someone else knows all the details.

May 9, 2018 at 11:42 PM

I'm sure that we will see the development of an Indian Disney resort in the next couple of decades. One of the most populous countries in the world, rising middle class, locations with great weather, relatively stable democracy, almost everyone speaks English, and the market isn't very close to any existing Disney resorts. Universal will most likely open a resort as well.

May 10, 2018 at 12:59 AM

"I would say it has to be in California. The Toy Story parking lot has been tagged for a third park for years. In fact I think they have 10 more years to build a 3rd gate until the land reverts back to the city. And with the current political acrimony between the city and Disney I doubt they would grant another exemption. Maybe someone else knows all the details."

I heard the Hong Kong government has a land parcel reserved for its 2nd gate park development for 15 years already. The land alone is worth 400 million usd today and the right to buy it for cheap and develop will also expire within 10 years. Disney has a lot of these agreements lying around (including Shanghai and Paris). Disney will just negotiate and postpone its development until they are ready.

May 10, 2018 at 10:01 AM

Look at the demographics for WDW. Brazil! Brazil! Brazil!

May 10, 2018 at 12:04 PM

Hey James Koehl, let me tell you why choosing Brazil for its next location would be bad.
First, the country is going trough a very tough political and economical turmoil right now. The constructions companies they would have to work with here in the country would definetly not stay in the deadline + would find a way to steal money in the process.
Also, Brazilians are the main visitors of WDW, I bet, the US doesn't want to lose that percentage of investment in the country.
Last, but not least, Disney would simply not work here, even with Disney training, depredation and littering within the parks would be inevitable, and would ending up killing the magic.
just some thoughts of a brazilian. Thanks!

May 10, 2018 at 7:51 PM

IF they don't do Orlando part 4, Houston, TX seems like a no brainer for the next Disney park. 2.3 million people, 2 airports full of international flights from all over the globe, sunny and warm 97% of the year, direct flight access for central and south Americans, and a fanbase eager to have a park back (Astroworld going out was a travesty).

May 12, 2018 at 7:31 PM

The next park is being built in my back yard...

May 15, 2018 at 12:19 PM

Forget Sao Paulo, Buenos Aires, Bogota or Rio. Impossible to build in the center, too dangerous to build in the outskirts.

In South America, I would build either in Brasilia or in Uruguay.

Brasilia is dry, few rains and good weather all the time. Has a good hub airport. Disney could build in the empty rural area, far from the city but easy to build a train line to airport and plano piloto. It is center located, so it would be easier to the countries in the South America pacific side to reach.

Uruguay is stable, organized and has lots of flat land. Disney would have no problem to run a park there with Disneys's standards. It could benefit from the proximity of Buenos Aires, and the south of Brasil, and it is a short flight from Sao Paulo, Rio, Belo Horizonte, and Santiago (Chile). But it is too far away to the north of Brasil and the other countries.

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