Where will Disney build its next theme park? Listen to this Buzz for clues

May 9, 2018, 3:18 PM · Disney CEO Bob Iger sparked the imaginations of theme park fans around the world yesterday when he confirmed that the Walt Disney Company would be looking for new sites around the world to build theme parks. It's become cliche within the industry over the decades that developers have promised local authorities and investors that they would build "the next Disneyland," but Iger's words open the potential of a community getting the real thing.

But where? While I enjoy the speculation as much as anyone (My poorly-informed guesses? Chongqing and Beijing in China, and Seoul in South Korea top the list), it's no secret how Disney has found the sites for its theme park resorts in the past. If you want some well-informed clues as to where Disney will expand around the world, listen to the words of the man who told Walt Disney where to build Disneyland and Walt Disney World.

Long-time Theme Park Insider readers will know that I am talking about Harrison "Buzz" Price, the Disney Legend who passed away in 2010. Buzz Price never worked as a cast member for Disney. Walt hired him on the side to help choose the location for Disneyland, then employed him again to find the best place to site what became the Walt Disney World Resort.

But Buzz Price did much more for the theme park industry than pick the locations of America's two most popular theme park resorts. Buzz Price was the common denominator of pretty much every major theme park development in America in the late 20th century. He developed the methodology for the feasibility studies that almost every successful theme park company used to guide their development. (And those who thought they knew better than Buzz typically washed out of the business, and swiftly.) In addition to working with Disney, Price worked with Universal, SeaWorld, Six Flags, and Busch Gardens over the years, conducting an estimated 3,000 feasibility studies for his clients.

His guiding principle? "Guessing is dysfunctional. Ignoring prior experience is denial. Using valid numbers to project performance is rational."

You will find that quote, as well as king's treasure of history and first-person anecdotes about the development of the theme park industry, in Price's memoir, Walt's Revolution!: By the Numbers. I cannot recommend this book enough for anyone who wants to work in, or just learn more about, the themed entertainment business. Not only does it detail Buzz's look into the numbers behind the decisions to build and expand many parks, it's a personal story with dozens of vignettes about working with Walt Disney as well as with SeaWorld's George Millay, Six Flags' Angus Wynne and Universal's Lew Wasserman.

A confession: when I suggested Chongqing, Beijing, and Seoul as potential sites for Disney's expansion, I didn't just pull those names out of my imagination. I looked at population and income data, as well as growth patterns and the sites of current Disney and competing theme parks to decide what I thought would be the three most promising markets for new Disney theme park resorts. No, I don't have access to all the data that a company such as Disney can collect, but I tried to apply Buzz's principles to my thinking.

I also do not believe that Disney is looking to take on the expense of buying and developing land on its own, as it did with its Florida project. It makes much more business sense for the company to take on a development partner that will obtain (or provide) and develop the land for the new resort. That way, Disney invests nothing upfront beyond design costs and gets equity in the new development and potentially licensing fees in addition to share of the resort's income, in return. That's not a deal that Disney will find from any community in the United States, but it's the model that the company followed in Shanghai and one assumes will be available elsewhere in growing China.

(Fun fact: I've heard from multiple insiders that Disney looked at the site on Sentosa Island where Universal ultimately developed Universal Studios Singapore, but Disney dismissed the site as too small. If Singapore ever could present a large enough site for Disney, it absolutely would be in play, too.)

Disney's also looking for long-term political stability in an international destination, which is why I don't see it rushing to place a new resort in the Middle East, despite the money that the United Arab Emirates and Saudi Arabia are pouring into tourism developments. Perhaps Disney might be swayed as to the stability of the destination by a big enough check, but none of the projects that we've seen launched in the UAE or Saudi Arabia are costing anywhere near the amount of money that Disney would demand from a new resort. That's why I think that the Far East provides a more attractive target for Disney's expansion.

Anyway, go read Buzz's book. It will deepen your appreciation for what happens in the theme park business.

Replies (20)

May 9, 2018 at 5:12 PM

Here are my top 3 educated guesses based on market research:

1. Iraq
2. Mozambique
3. Syria

May 9, 2018 at 5:24 PM

Shanghai barely crossed the finish line. Budget overruns. Finicky public. Do they really want to do it again? Save Hong Kong!!!

Disney stock dropped $2. Now at $99.97. Despite making a lot of money, stockholders should invest elsewhere.

May 9, 2018 at 7:53 PM

@Anton M...
You may want to research Shanghai’s success.

You may also want to research the current Hong Kong expansion.

You may also want to research the massive expansion of the Tokyo Disneyland Resort.

You may also want to research the massive redevelopment of the Disneyland Paris Resort.

You may also want to research DIS from a historical perspective, from the day Iger became CEO.

You may also want to research current price targets for The Walt Disney Company.

May 9, 2018 at 8:09 PM

It will be India - the next emerging market, and on track to be the second biggest economy in the next decade.

May 9, 2018 at 9:14 PM

@104: And? Based on stock in prices alone, if you invested in Feb 2015, you made no money 3 years later. In contrast, the DOW gained 38%.

Disney stock lost 10% value from Jan to May 2018 despite breaking box office receipts for 2 new Marvel movies. The DOW gained 2.9%. So what’s going on?

May 9, 2018 at 10:21 PM

More in Europe! If only the UK was big enough...

May 9, 2018 at 10:48 PM

Disney fifth gate in Florida will make sense

May 10, 2018 at 1:51 AM

The stock is down waiting to see what happens with Fox. However Comcast was at $44.00 a share not long ago, so it's down just over 30%. Fox is where your money should be and then consider the loser of Fox.

May 10, 2018 at 6:31 AM

@Anton - The trepidation from Wall Street towards Disney has a lot to do with their debt. They took on a lot of debt to purchase Marvel and LucasFilm. They are still servicing debt from the Pixar merger, and continue to rack up debt from all corners of the company (including the Theme Park Division). As the price of borrowing money has skyrocketed in the past few months, you can see the companies that are not burdened in debt, as those are the ones driving growth of the stock market as a whole. Until Disney can control its debt problem (currently owns almost $16 BILLION), they will continue to be flat, and purchasing Fox, and it's $13.7 BILLION in debt, will only make this problem worse.

May 10, 2018 at 7:43 AM

Disney will continue to take on debt with the Fox purchase. Then further theme park expansion means spending lots of money and owing lots of money. Executive compensation isn't a problem. Iger is making more money than ever.

May 10, 2018 at 10:27 AM

I'd love to read Price's book, but apparently it's out of print. Would be nice if a digital copy of it was available.

May 10, 2018 at 10:45 AM

My guess is Brazil!

May 10, 2018 at 3:45 PM

Every time I post a link to it, the supply sells and the price jumps some ridiculous amount. Check the link again in a few days. It usually comes back.

May 10, 2018 at 9:11 PM

@Anton
You’re picking and choosing your data to support your position.

How much has Disney returned to shareholders in ROI, including dividends) since Iger was appointed CEO.

@Russell
Disney’s debt, from a corporate perspective, is rather low. The market, actually awards DIS for being UNDER leveraged.

Market analysts have been trash talking traditional broadcast media as dying and slow to adapt to OTT. Who besides DIS is going ALL IN?!?!?

Iger now openly talks about broadcast’s transition to OTT.

May 11, 2018 at 12:48 AM

Australia please! I know that Disney were interested in a small park in sydney but couldn’t reach terms with the govt. if they could revisit that I’m sure a Down under Disney would be amazing

May 11, 2018 at 5:33 AM

I don't think debt is a big problem for Disney as companies purposely have taken it out over the past decade because it was so cheap, they are making plenty of cash. Marvel was only $4 billion with half being in stock, Lucasfilm was only $4 billion with half being in stock. All of these movies are making over $1 billion just in box office ticket sales. Think of licensing agreements, toys, video games, theme park attractions, etc. Those acquisitions turned out to be cheap.

I was lucky enogh a copy Buzz Price's book at IAAPA 10 years ago or so. Really fascinating read

Regarding Saudi Arabia, in a recent interview Iger said the prince of has really been pushing for a Disneyland and offering him lots of "incentives" to build one. Iger has told him its not a good PR move to have a park in Saudi Arabia and he didn't seem interested.
A company like Six Flags will happily take the money and build a park...but lets be serious about Disney.

Also I really hope Singapore isn't on the table ... my one visit to Universal (which was not in summer) it was soooooooooo humid, being outside was like being in an oven. We spent half the day sitting in various restaurants trying to cool off, it was way worse than Florida on a 95 degree summer day.

May 11, 2018 at 5:43 AM

https://www.youtube.com/watch?v=tDB7gaUCB7I&ab_channel=CouncilonForeignRelations

12:00 is when he starts talking about Saudi Arabia.

May 11, 2018 at 7:33 PM

Disney down under !! Awesome !! Gold Coast has the perfect weather and is already a tourist hot spot !! Please please make this happen..

May 12, 2018 at 4:59 PM

They probably do another theme park in Florida like for example Jacksonville or Tampa

May 15, 2018 at 4:30 PM

South Korea, ranked 200 out of 200 in fertility rate by World Bank, is probably not a great place for a theme park that caters to kids & families. There are literally not many new families there.

China has a similarly low birthrate but the population is so humongous, it is still viable.

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