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 put up presents 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 shade 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 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 complicated on this planet. So for those who’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 efficient query, Stephen, as a result of we did examine 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 by way of the power 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 — mainly tons of of thousands and thousands on this planet which are 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 best ways clearly to achieve these folks is to mainly convey 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 tip of the 12 months, we put it on sale just some 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 customers with Disney in a large area that’s really distance sufficient from our different places in order that we don’t actually view this as in any approach 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 folks dwell inside 4 hours, 120 million folks will come by means of 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 have interaction with our companions, clearly, capital was not a problem. However along with that, they’ve demonstrated quite a few 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 all over the place 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 shifting ahead and being ahead pondering 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 anyplace that was higher than this. And one of many explanation why I got here collectively so shortly is due to how satisfied we grew to become, notably after partaking with our companions that this was the correct alternative.”
Our Commentary
It in all probability goes with out saying at this level, however Iger is a clean operator and is clearly going to present a diplomatic reply. As a 3rd celebration, I can lower to the chase and provide the extra easy rationalization: cash.
As we wrote beforehand in Disney Parks in New International locations “Inevitable” when assessing this rumor and our determination 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 might have backed up a cash truck to Disney and CEO Bob Iger may view this as one final massive 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 financial system from oil as a part of a long-term technique to reinvest its oil fortunes for the inevitable decline of the fossil gas 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 tons of 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 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/assume is the way forward for media. Jury continues 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 a raffle on its future.
It’s a considerably related 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’ll see a large growth.
They’re prepared to take a position tens of billions of {dollars}, with no actual quick 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 backed 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 folks’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 actually, 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 by way of 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 international land. If the financial system or political local weather sours at one of many dwelling ports of a Disney Cruise Line ships, relocation is fairly easy and quick.
So what’s completely different right here that brought on Disney to make such a daring and surprising transfer with Disneyland Abu Dhabi?
It isn’t a giant swing. In any respect. They’re spending different folks’s cash. Disneyland Abu Dhabi will function underneath a licensing mannequin. Miral will absolutely fund, develop and construct the resort, and run its operations as soon as the park opens. Disney offers use of its mental property whereas being paid royalties on that and every part else. Imagineering will lead artistic design and lend its operational oversight and experience to offer a world-class expertise, whereas making certain the complicated meets model requirements.
Iger additional elaborated through the Q&A: “We personal our IP and license it to them is actually the association. We’re accountable for design and growth and we might 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 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’ll function it, we may have workers 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 underneath 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 primarily based on the challenge’s revenues and it’ll additionally earn service charges. The Firm is not going to present capital for the challenge. The event of this challenge 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 every part has been finalized. However, it’s our understanding that Disneyland Abu Dhabi will observe 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 appears to be like a 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 present tasks 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.
In reality, Iger reiterated twice through 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 reinforce these choices, create jobs and help the U.S. financial 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 no less than extra competent decision-making and useful resource allocation) and Imagineering is the unique contractor for design work.
In the meantime, Disney oversees every part 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 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 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 Eighties. (It’s unclear whether or not there was a renegotiation for the second gate.)
The most effective case situation is that Disneyland Abu Dhabi is extra of the identical–one other Tokyo DisneySea. Even when it doesn’t method that stage 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 largest distinction is that Japan within the Eighties is just not 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 tasks and with out the necessity for money circulate to just about the identical extent. All of that is to say that I strongly suspect the UAE and Miral made Disney and Bob Iger a proposal 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 for those who’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–no 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 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.
In the end, the monetary association with Miral to construct Disneyland Abu Dhabi needs to be considered as a constructive 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 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 fully potential that the Miral partnership might 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 Heart, fund future enlargement, and in the end propelled the corporate into changing into the behemoth it’s at this time. Wanting again at this time, 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 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 associated fee-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 likelihood that this doesn’t come to fruition, regardless of Miral having a superlative monitor file to this point with Yas Island–much better than graveyard of deserted Center East theme park plans.
The largest value may really be by way of expertise. Imagineering has been quickly staffing up in Florida and California simply to deal with the home tasks already on their plates. Now inside 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 prime skills be unfold too skinny? That’s a definite chance–and a subject we’ll attempt to sort out quickly.
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Your Ideas
What do you consider Disney’s determination to create Disneyland Abu Dhabi? Was this the right monetary determination 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, at the start, 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 dwelling or your favourite journey vacation spot?
