Risk and Reward, is Disney Parks & Resorts on the Right Track?

With the recent announcement of an Avatar themed land and attractions coming to Disney’s Animal Kingdoms and the troubled opening of Disney’s first Hawaiian resort, Aulani, a lot of the conversation has settled on the types of risks the Walt Disney Company’s parks and resorts division has been taking lately.

It’s a bouillabaisse of different complaints:

  • The monorail and bus system is no longer inpsiring, future world has stagnated, Tomorrowland is now toontown, with the result that Disney’s position as a company with vision has been lost.
  • That Disney should believe in its own artists to come up with compelling stories and themes instead of buying properties like Avatar or Prince of Persia. Franchising is fine, but it shold be ‘Disney’ franchises, not Fox.
  • That building in Hawaii will not pay off for DVC. Either no one will buy it, or they’ll be using those points on the mainland anyway leaving Aulani an empty shell much of the year.

You can see why the Disney company may be confused. One one hand they get attacked for not doing enough on the other for doing too much. That’s true, but the general theme is Disney needs to take more risks when it comes to its parks and resorts.

The last time the Disney company bet its whole existence on a project was with EPCOT. Turns out, that was the last project to be scoped from Walt Disney own vision. I don’t see a corporation the size of Disney ever making those sorts of risky moves again. It’s just not in their DNA.

Disney might fail because it failed to take risks, but the stock holders will never fire the board because of that. On the other hand take a big risk as an executive and fail and the board of directors will show you the door. It took herculean effort to oust Eisner after 15 years of letting the company languish. You may complain about Iger’s franchise theory of business, but at least he’s doing something to expand the worth of the Walt Disney Company.

Disney is never going back to the days when it would risk profitability by building a huge project in the parks. It’s best to just accept that reality and find something else to love about the Disney legacy.

It’s also important to realize there are different types of risks.

The decision to license Avatar was about opportunity risk. The risk of passing on this opportunity was too great. If Universal landed it (they’ve proved they have the chops with Harry Potter) it would cement Universal as a two-day park in Orlando robbing WDW of one day of the typical families vacation. That was too big a risk for Disney to take at the price of acquiring Avatar. Opportunity risks are often overlooked in business, so I give Disney, and specifically Tom Staggs, credit for catching this one.

The ironic thing about Aulani was that at the time of the decision it wasn’t considered very risky at all. In 2006 and 2007, Disney’s land developers, run by the division of executives who populated Walt Disney World with DVC hotels and successfully captured the family vacation audience on property with EMH and Disney’s Magical Express, were riding high on the hog with plans to build resorts like Aulani all across the globe (Washington DC, Macau, UAE, etc). It was only the collapse of the world economy in 2008 that put a stop to most of those projects. That turns out to have been fortuitous because as we know now, the risk was actually much greater than Disney’s developers had calculated.

Which brings me to the famed Walt Disney World transportation system. At one time it was a vision to inspire America to build a system of interconnected mass transit across their own communities. Today it’s an injured beast trying desperately to heal its own wounds and last long enough until the next generation can take over the hunt. Monorails are running at reduced hours, the bus system experienced accidents and alerts over the last few years and continues to frustrate guests with delays, and, so far, Disney has not articulated a vision for fixing the problem.

I don’t have an answer. Disney is spending between $1.6 and $2.2 billion on a Next Generation experience for its theme parks, should they be expected to simultaneously spend a similar sum upgrading its transportation system to something that once again inspires future generations?

I want Disney to take more creative risks with its theme park properties, but they have to be smart risks that will pay off. I like the head that Tom Staggs has on his shoulders. I think he’s willing to take some risks, like with Avatar, and is able to put himself in the place of the guest and see what they really want. I think that bodes well for the future of Disney parks and I expect to see them take more risks in the future, even more than just Avatar.

What risks do you think Disney should be taking with its parks and resorts right now?

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25 Responses to Risk and Reward, is Disney Parks & Resorts on the Right Track?

  1. Jim says:

    Many good points.

    The changes that were made in Future World in EPCOT in the late ’90′s lacked creativity and robbed this section of EPCOT of its’ identity. The Imagination and Energy Pavilions need an immediate overhaul. I am personally insulted by the new script in Spaceship Earth. Test Track could use some scenic design so it wasn’t so obvious that you were riding inside of a gutted warehouse. I am a fan of The Seas, The Land and Mission Space. These Pavilions are fresh and retained their identities within the theme of EPCOT.

    I am in favor of the addition of Avatar to The Animal Kingdom. I was at the park last week and was dismayed at Camp Mickey & Minnie. It seems like a lot of real estate for one attraction (Lion King) that really doesn’t belong in that part of the park. If this were to become Beastly Kingdom, Bravo! I don’t think the popularity or success of future Avatar movies will have any bearing on the success of this new land. Disney will simply be providing us with new attractions based on mythological creatures. Dinosaur is a terrific attraction and I would wager that most park quests are completely unfamiliar with that animated feature.

    Finally, it use to be a pleasure to arrive at Disney and not get in the car again until it was time to depart. Not so anymore. My family would rather pile in the car than get on a Disney Bus. I don’t think we need additional theme parks. We need to strengthen the ones we have. Enlarge them so they require more days to experience each park. It is time to expand the Monorail System so that WDW can become cutting edge again.

  2. Michele says:

    Seems like Disney is doing better financially. They made good profits even during major financial downturns for the rest of the tourism industry. And when we were in the parks a few weeks ago? We saw the highest crowds for September we have ever encountered! They have effectively, through promotions turned their lemons into lemonade.

    But instead of taking those profits and increased crowds and offering the guest more, they stay scaled back. Running the night time parade at MK only a few times a week means the night it runs is INSANE. 3 hours to get back to the resort by Disney bus, fights in the bus line, and unhappy guests. People I talked to said they would not return unless they could stay on the monorail, which may SEEM like a great boon for Disney, but ultimately it may in reality mean these people will never return.

    Continually building resorts, raising prices, and not giving people more to do just leaves guests frustrated. Especially when they see empty buses sitting in a long line waiting to be directed while they wait for hours.

    In addition to not handling transportation effectively and making cuts when increases are needed, Disney is also cutting dining choices at the same time as they offer free dining. No more characters at Liberty Tree, lunch is cut at Garden Grill… Mickey meals are selling out now like Cindy at the castle used to. Why not add some rather than take away? Why not add something for BOYS??? Toy Story, Villians, Peter Pan, Pirate, Heroes, Star Wars? Boys have parents who spend money too! Evidence Pirate’s League which seems booked up pretty regularly!

    Disney doesn’t need to take big risks, but they DO need to realize that just because something works doesn’t mean that you can keep adding it for years and never do anything different. Everything reaches a saturation point, and new things become needed. New hotels are nice, but don’t build them at the expense of refurbishing your existing ones. A new Fantasyland for girls is nice, but don’t forget the boys. Lowering the number of buses or monorails are fine if the crowds are low, but when a value resort is sold out, don’t send more buses to the deluxe resort and leave lines of people standing. It builds resentment, and may cost guests. Even little things like closing stores, restaurants and carts throughout the parks before park close or at park close during extra magic hours? Sometimes, after being crammed in for 2 hours with thousands of other people, unable to move? People get thirsty. They are still headed home, they are still leaving, but a bottle of water would go a long way to keep them happy while they wait. A rude “Sorry we are closed, it is 10:03.” is just stupid.

    Just my dollars worth. :0)

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  9. J says:

    I had a very lengthy reply to your article but I lost it. So instead I’ll just say, it was a great read and I really appreciate you taking the time to look at this from all angles. You definitely express your view on Avatar in the Parks, but you don’t tromp on those that disagree with you. I respect and appreciate you going that route.

    I am not someone who approves of the Avatar project. However, it’s simply because I don’t like Avatar. Not because I don’t think the theming would work in the parks, or Walt wouldn’t do it, or it’s rated PG13. Those are just silly reasons to dislike the project in my opinion. I don’t like Avatar, and unfortunately that isn’t going to change. So sour grapes for me. I would on the other hand feel better about a single attraction or ride in a Beastly Kingdom. created, designed, and themed by Imagineering.

    Thanks again for the great read. Keep it up!

    Oh and I will say one more thing: Disney really needs to start investing into upkeep for their existing attractions as much as they invest into future and new attractions. I shouldn’t be able to go to Ariel’s Undersea Adventure in the new Fantasyland and see all shiny brand new animatronics and themes, then go on Splash Mountain and see broken and rusted themes and animatronics. For every $500,000,000 Disney invests into something like the Avatar Project, they need to invest $100,000 or more (probabaly a lot more) into everything else. Everything should look like it just opened yesterday.

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  11. David says:

    That Disney should believe in its own artists to come up with compelling stories and themes instead of buying properties like Avatar or Prince of Persia. Franchising is fine, but it shold be ‘Disney’ franchises, not Fox.

    On this note, I was thinking about how smart it was that Disney to purchased Pixar a few years ago. Pixar may be, in many ways, Disney’s savior as it has been one of the only vehicles in the last few years that has produced a variety of truly original stories for Disney.

    I liked Avatar, but it doesn’t necessarily feel “Disneyland-esque.” But neither did Star Wars or Indiana Jones before they became attractions for that matter.

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  13. William Smith says:

    I have been going three times a year from the Northeast for many years. The recent reports coming out about long waits for transportation back to the resorts and TTC after EMH and after special events is going to keep me from going back. Before Disney adds anything new, they could pay attention to what they have. Get the transportation system under control. Keep the rides and attractions looking fresh. These are the things that kept many of us coming back for more.

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  16. FutureExpat says:

    I’m a big Disney fan, and have worked for the company in the past. Part of Walt’s original vision was to keep everything as clean as could be, all the time (and that embraces maintenance). The company is failing there.

    As to adding Avatar, I’m not an Avatar fan but I can see where it could give Animal Kingdom a boost.

    It’s unfortunate that Disney theme parks are stagnating under the weight of corporatocracy when Walt’s approach was that if too many people agreed with an idea, it wasn’t worth doing. . .

  17. The Hey says:

    I haven’t been to Disney since 2004 and do not plan on going back for a few years. Frankly they haven’t had added anything interesting enough for me to return until Avatar opens. Before 2004 I used to go every other year but I don’t see a reason to do so anymore.

    I would love to see Soarin’, the new Star Tours and Toy Story Mania, but that’s not enough new for me for a return trip. When Avatar opens there will be just enough new experiences to make it worth my while.

    Disney seems to only be concentrating on building new resorts more than upgrading and adding to the parks and that bothers me.

    • John Frost says:

      Everybody has their own standards. But I have to say yours are pretty high. For me just the new Star Tours is enough to schedule a return visit, all the old favorites are still there and worthy of repeat visits themselves.

  18. Jeff says:

    I’ve traveled across the country (from Southern California) to visit Walt Disney World every year since 2006. We have another trip planned for this December.
    While I know WDW isn’t perfect, and there’s always something that could use improvement, I just don’t see the justification for all the complaining that’s been occuring recently. I think WDW is as good as it’s ever been.
    I’ve been going regularly since 1991, have never rented a car, and have always found the transportation to be just fine. Amazing even! Am I just lucky, or are other people being a bit nitpicky? I don’t think I’ve ever waited more than 30 minutes for a bus, and that was rare. Sure the monorails are having some maintenence issues, but Disney working on that.

    I have a theory that much of the complaining is based on the fact that the economy is weak and many people aren’t able to go as often as they’d like. They therefore claim WDW now “sucks”, I’ll go again when it’s improved.
    Just a theory, but IMO WDW is a far better place than it’s ever been in the 20 years I’ve been going.
    And it gets a little old when articles like this continue to whine and whine.
    Go somewhere else if you don’t like what Disney’s doing.

    • leigh ann says:

      I agree, Jeff.

      Maybe its because I don’t go as often as most Disney fanatics (Id love to, but I just dont have the money, and I like to explore other places as well). When I hear about things being broken, buses taking 3 hours to get to resorts, and monorails needing to be fixed – I feel like im going to a different Disney World then everyone else! I must be lucky, cause I have either not experienced or not noticed many (if not all) of these complaints most others have. Which leaves me thinking – perhaps the people with the complaints are in the minority, and most people who only go once every 2 or 3 years are the majority – and just dont notice or experience these things, and thats why Disney doesnt put much worry into it? Just a thought.

      Also – while I’m interested to see how it pans out, Im not too excited about the Avatar land, even disappointed. But we shall see…

      • leigh ann says:

        I just wanted to add though – i DO 100% agree about Epcot though. Epcot needs a whole lot of lovin’.

  19. Devlin says:

    Great article, but a few points:
    1. Harry Potter is way better, deeper and richer a world than Avatar and therefore has way more upside for a theme park attraction. If anything, they should’ve gone after Lord of the Rings. That would have a much bigger audience built in.
    2. Walt knew that Disneyland had to be built away from the beach, it is too much of a draw. The Hawaii property will fail because the beaches and beauty of the islands is more of a draw than a really nice swimming pool. Who is going to fly thousands of miles to Hawaii and hang out at the hotel?

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