Disney has provided extra particulars about Disneyland Abu Dhabi, the corporate’s first-ever theme park & resort advanced within the Center East, on Yas Island within the capital metropolis of the United Arab Emirates. This put up affords the reason from CEO Bob Iger and Parks Chairman Josh D’Amaro about why the UAE was chosen for the following fortress park, together with our colour commentary.
Shortly after the unique announcement, Iger and D’Amaro have gone on a media blitz with appearances on CNBC, Good Morning America, CNN–and maybe elsewhere I haven’t seen. Along with that, the Walt Disney Firm hosted its second quarter 2025 fiscal yr earnings name and shared extra particulars, whereas additionally answering analyst and Wall Avenue investor questions.
All of this paints a really clear image of why the United Arab Emirates, versus different places, for the seventh Disney theme park & resort advanced on this planet. So should you’re questioning why Disneyland Abu Dhabi is coming earlier than parks in Australia, Vietnam, Indonesia, Brazil, Texas or [insert country/state of your choosing–I’ll go with Michigan], this could provide rationalization.
In response to an analyst inquiry, Iger shared that the selection of the United Arab Emirates and Disneyland Abu Dhabi was the results of evaluating regional demand and long-term enterprise alternative.
Bob Iger gave a protracted and detailed reply, which I’ll merely share in full:
“On the Abu Dhabi query, which is an effective query, Stephen, as a result of we did research the area very fastidiously and we all know that we had many alternatives. Clearly, constructing a theme park in a location is a big endorsement of that location speaks volumes when it comes to the flexibility of that location to maintain the Disney theme park.
I ought to begin actually with an summary of the Center East. It was very apparent to us that there have been many individuals — principally a whole bunch of thousands and thousands on this planet which might be earnings certified the place a visit to one among our six places was fairly prolonged in nature and costly. And so, we felt one of the simplest ways clearly to succeed in these individuals is to principally carry our product to them.
Apparently sufficient, as an apart, after we determined to construct a cruise ship and put it in Singapore, which is not going to launch till the top of the yr, we put it on sale only a few months in the past and the primary quarter bought out in a matter of days as a as an illustration. So there’s clearly a want to have interaction shoppers with Disney in a large area that’s truly distance sufficient from our different places in order that we don’t actually view this as in any method cannibalistic to the locations we already function.
Then while you take a look at Abu Dhabi and the United Arab Emirates, I discussed these statistics earlier at this time. We speak about it being at crossroads of the world, 500 million earnings certified individuals stay inside 4 hours, 120 million individuals will come by way of Dubai and Abu Dhabi this yr alone. Abu Dhabi estimates that 39 million vacationers will go to Abu Dhabi by 2030, that claims rather a lot.”
“Then as we began to essentially dig deeper into Abu Dhabi particularly and interact with our companions, clearly, capital was not a difficulty. However along with that, they’ve demonstrated a lot of issues that had been actually necessary to us. One, an actual appreciation of high quality and innovation and appreciation of the humanities and creativity and an enormous dedication to new know-how. And we had been impressed with all of that.
We additionally checked out what they’ve already constructed between the Louvre that’s already constructed, the Guggenheim which goes up and unimaginable different experiences, the structure right here as properly. And in all places we glance, we principally had been satisfied that this was an ideal place for us.
After which in Miral, our companions, we instantly bonded with them in lots of respects, spoke the identical language and principally, we each have an actual appreciation of our historical past and our legacy, however shifting ahead and being ahead pondering and innovating can be a part of our principally our DNA.
And so, it was very, very clear to us that of the entire locations that we might select from, there didn’t appear to be anyplace that was higher than this. And one of many the explanation why I got here collectively so shortly is due to how satisfied we turned, significantly after participating with our companions that this was the appropriate selection.”
Our Commentary
It most likely goes with out saying at this level, however Iger is a easy operator and is clearly going to provide a diplomatic reply. As a 3rd celebration, I can minimize to the chase and provide the extra simple rationalization: cash.
As we wrote beforehand in Disney Parks in New Nations “Inevitable” when assessing this rumor and our resolution to not dismiss it out of hand: “The distinction with the UAE is that there’s a really practical situation involving one of many nation’s sovereign wealth funds. They might have backed up a cash truck to Disney and CEO Bob Iger may view this as one final massive legacy mission. Stranger issues have occurred.”
To place a finer level on it, right here’s a dramatic reenactment of the unique assembly between Disney and Miral:
The UAE has been focusing closely on diversifying its economic system from oil as a part of a long-term technique to reinvest its oil fortunes for the inevitable decline of the fossil gasoline business and its reserves. Type of like how Philip Morris has invested closely in different industries in preparation for a smoke-free future.
Or maybe extra aptly, how Disney was prepared to function Disney+ at a loss for a number of years. Keep in mind all these quarters that they reported a whole bunch of thousands and thousands of {dollars} to over one billion {dollars} in losses on the streaming aspect? All of the whereas home theme parks overperformed because of pent-up demand, however nonetheless had initiatives minimize or slow-rolled?!
Disney used the income generated by its theme parks and slowly-dying however cash-positive legacy companies to construct what they thought/assume is the way forward for media. Jury remains to be out on the knowledge of that method, however the salient level is that Disney misplaced billions of {dollars} on streaming for years in of venture on its future.
It’s a considerably comparable story with Abu Dhabi’s Tourism Technique 2030. The long-term plan is very large progress for the journey & leisure sector. That comes with an excessive willingness to spend cash–and lose tons of it!–proper now within the hopes that within the 2030s and past, they may see a large growth.
They’re prepared to take a position tens of billions of {dollars}, with no actual quick ROI, as of venture on the longer term. And Disneyland Abu Dhabi would be the marquee or flagship providing to that plan. If Yas Island had been a mall, Disneyland Abu Dhabi can be the sponsored anchor tenant that will get well-heeled worldwide vacationers to e-book journeys.
Regardless of theme parks & resorts being a progress engine, Disney is rather more conservative with its personal investments within the Experiences division (e.g. those made with out different individuals’s cash). There aren’t any massive swings or daring bets to talk of within the 10-year “turbocharged” plan.
Versus constructing brand-new theme parks in the US, Disney is investing in new lands within the present gates. And truthfully, calling these new lands is a little bit of a stretch–they’re largely redevelopments of present parcels of “underutilized” capability to extend effectivity.
That’s why we’re seeing progress through cruise ships as the first enlargement avenue for brand new worldwide locales. That mannequin is extra nimble and dynamic, and fewer dangerous than constructing bodily infrastructure on overseas land. If the economic system or political local weather sours at one of many residence ports of a Disney Cruise Line ships, relocation is fairly easy and quick.
So what’s totally different right here that brought on Disney to make such a daring and sudden transfer with Disneyland Abu Dhabi?
It isn’t an enormous swing. In any respect. They’re spending different individuals’s cash. Disneyland Abu Dhabi will function beneath a licensing mannequin. Miral will absolutely fund, develop and construct the resort, and run its operations as soon as the park opens. Disney supplies use of its mental property whereas being paid royalties on that and the whole lot else. Imagineering will lead inventive design and lend its operational oversight and experience to offer a world-class expertise, whereas making certain the advanced meets model requirements.
Iger additional elaborated throughout the Q&A: “We personal our IP and license it to them is actually the association. We’re answerable for design and improvement and we will likely be concerned considerably in oversight of their operations principally to make sure that the Disney expertise going — which means the Disney theme park expertise is as much as the extent that we provide within the different six places that we function.
By the way in which, we’re not involved about that in any respect. [Miral] has already demonstrated a dedication to high quality in that regard. However that is primarily a license association, however with appreciable involvement of us. So though, they may function it, we can have workers embedded within the group with them to assist them function a Disney theme park principally on the high quality degree that everyone is used to.”
Disney’s new 10-Q submitting confirms this: “Through the third quarter, the Firm and Miral LLC, a restricted legal responsibility firm organized beneath the legal guidelines of the United Arab Emirates (Miral), agreed to create a Disney-branded theme park and resort in Abu Dhabi, United Arab Emirates, to be constructed and operated by Miral. The Firm will license its IP for the operation of the theme park and resort and supply sure improvement and administration companies to the mission. The Firm will earn royalties primarily based on the mission’s revenues and it’ll additionally earn service charges. The Firm is not going to present capital for the mission. The event of this mission is topic to finalizing further agreements among the many events.”
That submitting nonetheless doesn’t present full particulars concerning the relationship specifics, noting that not the whole lot has been finalized. Nonetheless, it’s our understanding that Disneyland Abu Dhabi will comply with the Tokyo Disney Resort mannequin, the place Oriental Land Firm (OLC) owns and operates the parks. Throughout a few totally different interviews, that is the comparability that Iger and D’Amaro have made, whereas noting that every relationship seems somewhat totally different.
In different phrases, Disney isn’t offering any capital for the creation of Disneyland Abu Dhabi. Zero, zip, zilch, nada, nothing. This doesn’t influence the event of any present initiatives at Walt Disney World, Disneyland, or Disney Cruise Line which have been beforehand introduced as a part of the $60 billion ‘turbocharged’ funding over the following decade.
The truth is, Iger reiterated twice throughout the earnings name that the corporate nonetheless has plans to take a position greater than $30 billion in its present theme parks in Florida and California “to boost these choices, create jobs and help the U.S. economic system.” Iger known as this a “vote of confidence” in each Walt Disney World and Disneyland.
From a guest-facing perspective, the Tokyo parks are pure Disney magic–arguably the purest type. The parks are paid for by a 3rd celebration with deeper pockets (or a minimum of extra competent decision-making and useful resource allocation) and Imagineering is the unique contractor for design work.
In the meantime, Disney oversees the whole lot to verify the parks are as much as the corporate’s requirements. The result’s that the Tokyo parks are arguably the most effective managed on this planet, with the very best requirements and high quality. It’s a win-win method with rather more accountability.
Disney earns royalties on all income generated at Tokyo Disney Resort. The exact settlement and quantity of the royalties aren’t publicly disclosed in earnings experiences by OLC or Disney, however had been revealed to be 10% of ticket gross sales and 5% of in-park purchases within the Eighties. (It’s unclear whether or not there was a renegotiation for the second gate.)
The perfect case situation is that Disneyland Abu Dhabi is extra of the identical–one other Tokyo DisneySea. Even when it doesn’t method that degree of themed design, attraction high quality, or operational attention-to-detail (and my guess is that it received’t–Japan is a distinct beast), it’s nonetheless a pleasant payday for Disney.
No matter deal OLC may’ve gotten within the Eighties might be not the identical because the one Miral would get at this time.
The most important distinction is that Japan within the Eighties isn’t the identical as United Arab Emirates within the 2020s. Disney can be a distinct firm; a much bigger one, with the assets to sort out extra initiatives and with out the necessity for money movement to almost the identical extent. All of that is to say that I strongly suspect the UAE and Miral made Disney and Bob Iger a suggestion they couldn’t refuse (not within the mafia sense), with a sweetheart deal that made the corporate prepared to miss…properly, let’s simply say “rather a lot.”
So should you’re nonetheless questioning why Disney selected to construct Disneyland Abu Dhabi over Disneyland Jakarta (or wherever), it comes right down to cash and danger. A ton of the previous and not one of the latter–a minimum of, not within the monetary sense. If one of many governments or sovereign wealth funds in one other location the place it’d make sense to construct a Disney park provided the same deal, I might hazard a guess that Disney would likewise take it.
However within the absence of such a deal? Not an opportunity. It is just too dangerous, and runs counter to the method that Disney has clearly recognized for its Parks & Resorts enlargement plans. Even a enterprise mannequin extra on par with Shanghai or Hong Kong, the place Disney companions with a state sponsor (roughly) 50/50 on investments and earnings, wouldn’t be practically as fascinating at this second in time.
Finally, the monetary association with Miral to construct Disneyland Abu Dhabi must be considered as a optimistic one for investments and enlargement at Walt Disney World and Disneyland. This very clearly doesn’t reallocate financial assets from Florida and California to the worldwide parks.
On the contrary, it might simply be argued that the money movement from royalties (plus no matter upfront lump-sum cost, if any) can be utilized to assist fund the home gates. It’s principally the precise reverse of the streaming companies mannequin! It’s solely potential that the Miral partnership will likely be historical past ‘rhyming’ with what occurred within the Eighties.
Again then, the partnership with OLC to create Tokyo Disneyland gave Disney a income stream to endure the early, rocky years of EPCOT Middle, fund future enlargement, and finally propelled the corporate into turning into the behemoth it’s at this time. Wanting again at this time, it’s straightforward to say Disney ought to’ve constructed Tokyo Disneyland on their very own, however the contemporaneous circumstances and dangers had been very totally different.
Will we glance again on Disneyland Abu Dhabi in 40 years and say it’s apparent that Disney ought to’ve guess massive and spent the cash to construct it themselves? Probably, however I doubt it–and it’s not like that’s an precise choice within the right here and now. The price-free method to a park within the Center East is certainly the most secure path ahead for myriad causes.
This isn’t to say there received’t be different, non-monetary prices of Disneyland Abu Dhabi. There are reputational dangers, after all. There’s additionally the chance that this doesn’t come to fruition, regardless of Miral having a superlative observe report to this point with Yas Island–much better than graveyard of deserted Center East theme park plans.
The most important value may truly be when it comes to expertise. Imagineering has been quickly staffing up in Florida and California simply to deal with the home initiatives already on their plates. Now throughout the span of every week, OLC has introduced intentions for main enlargement to Tokyo Disney Resort and now there’s the massive reveal of Disneyland Abu Dhabi. May Imagineering’s high abilities be unfold too skinny? That’s a definite chance–and a subject we’ll attempt to sort out quickly.
Want Disney journey planning suggestions and complete recommendation? Make certain to learn Disney Parks Trip Planning Guides, the place you’ll find complete guides to Walt Disney World, Disneyland, and past! For Disney updates, low cost info, free downloads of our eBooks and wallpapers, and rather more, join our FREE e-mail publication!
Your Ideas
What do you consider Disney’s resolution to create Disneyland Abu Dhabi? Was this the proper monetary resolution for Disney, or do you continue to assume they need to’ve invested their very own cash to construct a brand new park in Michigan? Ought to it cement Disney as a theme parks enterprise, in the beginning, versus a media firm? Do you assume we’ll see a brand new fortress park in our lifetimes after Disneyland Abu Dhabi? The place is your dream location for a Disney theme park–both near residence or your favourite journey vacation spot?
