Disney has provided extra particulars about Disneyland Abu Dhabi, the corporate’s first-ever theme park & resort complicated within the Center East, on Yas Island within the capital metropolis of the United Arab Emirates. This publish 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 12 months earnings name and shared extra particulars, whereas additionally answering analyst and Wall Road investor questions.
All of this paints a really clear image of why the United Arab Emirates, versus different areas, for the seventh Disney theme park & resort complicated on this planet. So if you happen to’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 clarification.
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 an extended and detailed reply, which I’ll merely share in full:
“On the Abu Dhabi query, which is an efficient query, Stephen, as a result of we did research the area very rigorously 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 power of that location to maintain the Disney theme park.
I ought to begin actually with an outline of the Center East. It was very apparent to us that there have been many individuals — mainly a whole bunch of tens of millions on this planet which can be revenue certified the place a visit to one in all our six areas was fairly prolonged in nature and costly. And so, we felt one of the best ways clearly to succeed in these individuals is to mainly convey our product to them.
Curiously sufficient, as an apart, after we determined to construct a cruise ship and put it in Singapore, which won’t launch till the tip of the 12 months, 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 interact customers with Disney in a large area that’s really distance sufficient from our different areas in order that we don’t actually view this as in any method cannibalistic to the locations we already function.
Then while you have a look at Abu Dhabi and the United Arab Emirates, I discussed these statistics earlier at the moment. We speak about it being at crossroads of the world, 500 million revenue certified individuals reside inside 4 hours, 120 million individuals will come via Dubai and Abu Dhabi this 12 months 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 various 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 expertise. 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 unbelievable different experiences, the structure right here as effectively. And in all places we glance, we mainly 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 mainly, we each have an actual appreciation of our historical past and our legacy, however transferring ahead and being ahead considering and innovating can be a part of our mainly our DNA.
And so, it was very, very clear to us that of all the locations that we might select from, there didn’t appear to be anywhere that was higher than this. And one of many explanation why I got here collectively so shortly is due to how satisfied we turned, notably after participating with our companions that this was the correct selection.”
Our Commentary
It in all probability goes with out saying at this level, however Iger is a clean operator and is clearly going to offer a diplomatic reply. As a 3rd social gathering, I can lower to the chase and provide the extra easy clarification: cash.
As we wrote beforehand in Disney Parks in New International locations “Inevitable” when assessing this rumor and our choice to not dismiss it out of hand: “The distinction with the UAE is that there’s a really reasonable situation involving one of many nation’s sovereign wealth funds. They may have backed up a cash truck to Disney and CEO Bob Iger would possibly view this as one final huge legacy challenge. 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 trade and its reserves. Form 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 tens of millions of {dollars} to over one billion {dollars} in losses on the streaming facet? All of the whereas home theme parks overperformed due to pent-up demand, however nonetheless had tasks lower 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/suppose is the way forward for media. Jury continues to be out on the knowledge of that strategy, however the salient level is that Disney misplaced billions of {dollars} on streaming for years in a raffle on its future.
It’s a considerably related story with Abu Dhabi’s Tourism Technique 2030. The long-term plan is huge development 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 speculate tens of billions of {dollars}, with no actual rapid ROI, as a raffle on the long run. And Disneyland Abu Dhabi would be the marquee or flagship providing to that plan. If Yas Island had been a mall, Disneyland Abu Dhabi could be the sponsored anchor tenant that will get well-heeled worldwide vacationers to ebook journeys.
Regardless of theme parks & resorts being a development 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 are not any huge swings or daring bets to talk of within the 10-year “turbocharged” plan.
Versus constructing brand-new theme parks in america, Disney is investing in new lands within the current gates. And truthfully, calling these new lands is a little bit of a stretch–they’re largely redevelopments of current parcels of “underutilized” capability to extend effectivity.
That’s why we’re seeing development through cruise ships as the first growth avenue for brand spanking 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 completely different right here that prompted Disney to make such a daring and sudden transfer with Disneyland Abu Dhabi?
It isn’t a giant 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 gives use of its mental property whereas being paid royalties on that and the whole lot else. Imagineering will lead artistic design and lend its operational oversight and experience to supply a world-class expertise, whereas guaranteeing the complicated meets model requirements.
Iger additional elaborated in the course of the Q&A: “We personal our IP and license it to them is basically the association. We’re accountable for design and growth and we shall be concerned considerably in oversight of their operations mainly to make sure that the Disney expertise going — that means the Disney theme park expertise is as much as the extent that we provide within the different six areas that we function.
By the best way, we’re not involved about that in any respect. [Miral] has already demonstrated a dedication to high quality in that regard. However that is basically a license association, however with appreciable involvement of us. So though, they may function it, we may have staff embedded within the group with them to assist them function a Disney theme park mainly on the high quality stage that everyone is used to.”
Disney’s new 10-Q submitting confirms this: “Throughout 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 growth and administration providers to the challenge. The Firm will earn royalties based mostly on the challenge’s revenues and it’ll additionally earn service charges. The Firm won’t present capital for the challenge. The event of this challenge is topic to finalizing extra agreements among the many events.”
That submitting nonetheless doesn’t present full particulars in regards to the relationship specifics, noting that not the whole lot has been finalized. However, 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 completely different interviews, that is the comparability that Iger and D’Amaro have made, whereas noting that every relationship seems to be a little bit completely different.
In different phrases, Disney is just not offering any capital for the creation of Disneyland Abu Dhabi. Zero, zip, zilch, nada, nothing. This doesn’t affect the event of any current tasks at Walt Disney World, Disneyland, or Disney Cruise Line which were beforehand introduced as a part of the $60 billion ‘turbocharged’ funding over the following decade.
In actual fact, Iger reiterated twice in the course of the earnings name that the corporate nonetheless has plans to speculate greater than $30 billion in its current theme parks in Florida and California “to boost these choices, create jobs and assist the U.S. economic system.” Iger referred to 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 social gathering with deeper pockets (or not less than 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 one of the best managed on this planet, with the best requirements and high quality. It’s a win-win strategy with rather more accountability.
Disney earns royalties on all income generated at Tokyo Disney Resort. The exact settlement and quantity of the royalties are usually not publicly disclosed in earnings stories by OLC or Disney, however had been revealed to be 10% of ticket gross sales and 5% of in-park purchases within the Nineteen Eighties. (It’s unclear whether or not there was a renegotiation for the second gate.)
One of the best case situation is that Disneyland Abu Dhabi is extra of the identical–one other Tokyo DisneySea. Even when it doesn’t strategy that stage of themed design, attraction high quality, or operational attention-to-detail (and my guess is that it gained’t–Japan is a distinct beast), it’s nonetheless a pleasant payday for Disney.
No matter deal OLC would possibly’ve gotten within the Nineteen Eighties might be not the identical because the one Miral would get at the moment.
The largest distinction is that Japan within the Nineteen Eighties is just not the identical as United Arab Emirates within the 2020s. Disney can be a distinct firm; an even bigger one, with the sources to deal with extra tasks and with out the necessity for money circulate 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…effectively, let’s simply say “rather a lot.”
So if you happen to’re nonetheless questioning why Disney selected to construct Disneyland Abu Dhabi over Disneyland Jakarta (or wherever), it comes all the way down to cash and danger. A ton of the previous and not one of the latter–not less than, 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 an analogous deal, I’d 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 strategy that Disney has clearly recognized for its Parks & Resorts growth 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 revenue, wouldn’t be practically as fascinating at this second in time.
Finally, the monetary association with Miral to construct Disneyland Abu Dhabi needs to be considered as a constructive one for investments and growth at Walt Disney World and Disneyland. This very clearly doesn’t reallocate financial sources from Florida and California to the worldwide parks.
On the contrary, it might simply be argued that the money circulate from royalties (plus no matter upfront lump-sum fee, if any) can be utilized to assist fund the home gates. It’s mainly the precise reverse of the streaming providers mannequin! It’s completely attainable that the Miral partnership shall be historical past ‘rhyming’ with what occurred within the Nineteen 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 growth, and finally propelled the corporate into changing into the behemoth it’s at the moment. Trying again at the moment, it’s simple to say Disney ought to’ve constructed Tokyo Disneyland on their very own, however the contemporaneous circumstances and dangers had been very completely different.
Will we glance again on Disneyland Abu Dhabi in 40 years and say it’s apparent that Disney ought to’ve wager huge and spent the cash to construct it themselves? Presumably, however I doubt it–and it’s not like that’s an precise possibility within the right here and now. The associated fee-free strategy to a park within the Center East is unquestionably the most secure path ahead for myriad causes.
This isn’t to say there gained’t be different, non-monetary prices of Disneyland Abu Dhabi. There are reputational dangers, after all. There’s additionally the likelihood that this doesn’t come to fruition, regardless of Miral having a superlative observe file so far with Yas Island–much better than graveyard of deserted Center East theme park plans.
The largest price would possibly really be when it comes to expertise. Imagineering has been quickly staffing up in Florida and California simply to deal with the home tasks already on their plates. Now throughout the span of per week, OLC has introduced intentions for main growth to Tokyo Disney Resort and now there’s the massive reveal of Disneyland Abu Dhabi. May Imagineering’s prime skills be unfold too skinny? That’s a definite chance–and a subject we’ll attempt to deal with quickly.
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Your Ideas
What do you consider Disney’s choice to create Disneyland Abu Dhabi? Was this the proper monetary choice for Disney, or do you continue to suppose 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, before everything, versus a media firm? Do you suppose 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?
