Which Is Better, a Fifth Gate or Several Themed Lands?
During a meticulously planned question-and-answer question, Disney CEO Bob Iger somehow still stirred up controversy.
Iger derided the incoming threat of Universal Epic Universe by saying Disney had known about the threat for “more than a decade.”
Questionable timeline aside, Iger also triggered another debate when he pounded the table for his own strategy.
So, let’s have the debate. Which would you, as a Disney fan, prefer, a fifth or several new themed lands?
Establishing Terms
Okay, let’s set the stage for the debate. During the 2024 Annual Shareholder Meeting, a person asked this question:
“Why hasn’t Disney prepared anything or placed more than just a handful of attractions in the pipeline to be ready for this in 2025 at Walt Disney World?”
Importantly, Disney had selected the questions in advance, leading to an especially boring Q&A segment.
When you read Iger’s remarks, you should keep in mind that he’d prepared them ahead of time, which makes them that much odder.
“We’ve been aware of Universal’s plans for a new park for more than a decade.
“And we have a sophisticated approach to analyzing the needs of all of our businesses and strategically deploying capital.”
Critics have jumped all over Iger’s timeline, noting that Disney somehow knew years before Universal had even bought the land.
That’s the lesser part of this conversation, though, at least in my opinion. Here’s what Iger added:
“By staggering these major launches, we’ve been able to commercially and operationally optimize our new offerings over time, rather than having to do it all at once.”
Therein lies the crux of the debate, as well as Iger’s logic.
He’s effectively arguing that it’s bad from a momentum perspective to build an entirely new theme park.
Is Iger Right?
Let’s evaluate this philosophy from the viewpoint of someone running a company.
Iger feels that adding an entirely new theme park comes with challenges.
Specifically, once you open the new park, you’ll lose momentum quickly.
Disney witnessed this phenomenon three times over the past quarter century (or so).
Disney California Adventure, Disney’s Animal Kingdom, and Hong Kong Disneyland all suffered a cooling-off period after opening.
You can argue the specifics of the statement, but it’s the perception that became a reality.
Those three new gates all experienced splashy waves of optimism before opening.
Soon afterward, they became yesterday’s news, a phenomenon that happens in all phases of society.
We grow excited about something, its release occurs, we relish the moment, and then we move on to the next thing.
The movie and music industries have faced this dilemma for years, but it’s a more serious problem in the theme park industry.
Companies invest hundreds of millions of dollars or, in Disney’s case, billions to build parks.
These businesses want bang for the buck, but that grows more challenging after a couple of years.
The change occurs when the park stops being the new hotness, a turn of events that’s challenging to quantify. It does happen, though.
At that point, the theme park is still trying to pay the bills for the investment, but the consumer interest has waned.
Will that happen with Universal Epic Universe? It’s yet to be determined.
However, this park isn’t the automatic slam dunk people believe right now because tourists aren’t considering the logistics yet.
The third gate at Universal Orlando Resort is in a different place, which is a bigger deal than people realize at the moment.
As a theme park CEO, these are the things Iger considers.
The Pros of Multiple-Themed Lands
We’ll have this conversation a lot over the next couple of years because the debate has only just begun.
What I’ll say right now is that Iger has a point. As the CEO noted in his response, Disney’s approach comes with a kind of cadence.
Consider what the company achieved from 2017 through 2023.
In year one, Disney unveiled Pandora – The World of Avatar. During the following year, Toy Story Land debuted.
In 2019, Disneyland Resort and Walt Disney World added their versions of Star Wars: Galaxy’s Edge.
Despite the pandemic, Disney somehow opened Mickey & Minnie’s Runaway Railway in 2020 and Avengers Campus and Remy’s Ratatouille Adventure in 2021.
Over the next two years, fans received Guardians of the Galaxy: Cosmic Rewind and TRON Lightcycle / Run.
Later in 2024, Tiana’s Bayou Adventure will finally arrive, and its Audio-Animatronics appear groundbreaking.
And therein lies Disney’s marketing cadence. For each year since 2017, the company has been building toward something new and exciting.
Each year, Disney could provide guests with a new reason to visit the parks. There was never the possibility of the lull we just discussed.
A Theoretical Example
Contrast that to if Disney had built Star Wars Theme Park instead.
Many fans wanted that and hoped for a complete park rather than a single-themed land, albeit one on both coasts.
In that scenario, Disney would have built toward the opening of Planet of Star Wars or whatever it was called.
Let’s say that Disney still made a deadline of 2019 for that project.
Walt Disney World would have that park, but Disneyland wouldn’t.
Also, we might not have Pandora and we definitely wouldn’t have Toy Story Land or probably Mickey & Minnie’s Runaway Railway.
In building a single park, there’s a sacrifice in other locations.
Universal has faced that problem recently with the “just okay” additions of Minion Land and the upcoming DreamWorks Land.
Opportunity cost drives many decisions in the theme park industry, and they typically benefit from a more modular approach.
We got several different themed lands and attractions gradually over time rather than a single park.
And, from Iger’s perspective, that single park would have lost its heat quickly, not even factoring in the pandemic.
If you don’t believe me, try telling a theme park fanatic that Remy’s Ratatouille Adventure and Cosmic Rewind are new rides.
To many fans, they are old news. I’m talking Nelson Peltz old.
The Advantages of a Fifth Gate
So, the choice seems obvious, right? A company like Disney should expand all its existing parks rather than add a new one.
No.
Sometimes, all the logic in the world doesn’t counteract a simple truth.
Walt Disney World is the most popular paid tourist destination in the world.
Here are some crowd pictures from April 4th, 2024. That was a random Thursday, folks.
Yes, it was the Thursday after Easter and, yes, some wise MickeyTravels agents informed me it was Spring Break for many.
Still, Disney must face some hard truths here. Two of its parks have reached near-maximum capacity.
When you visit Magic Kingdom or Disney’s Hollywood Studios, you must be prepared for anything due to the unpredictability of the crowds.
Disney needs to expand, and I don’t think that adding five new themed lands across the four parks is enough.
Even if I weren’t also a fan who simply wants a fifth gate, I’d feel that way.
Disney should care more about protecting its golden goose, Walt Disney World, than it does about a multi-year marketing campaign.
Every bit of Iger’s logic is right, but I’m night and day more likely to visit Universal Orlando Resort next year due to Epic Universe.
The same statement would apply to Villains World or whatever fifth gate Disney added.
New theme parks don’t have to sustain momentum forever.
Instead, all they need to do is provide breathing room at the other parks.
That’s the x-factor that’s being underrated here.
Universal’s building out because it needs more tourists.
Walt Disney World needs a fifth gate because it has too many tourists.
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