— Lordy, lordy, look who’s 40.
On Saturday, Walt Disney World will celebrate the 40th anniversary of its opening on October 1, 1971. There’ll be a character parade, fireworks and, no doubt, much discussion of its founder’s vision and hopes for the future.
Funny thing is, that vision probably wouldn’t have included the Disney World we know today, let alone the resorts, cruise ships and other projects that increasingly define the company’s outsized role in the travel industry.
Now, 40 years on, the company is embarking on new projects — the recently opened Aulani resort in Hawaii, a new “Avatar land” at Animal Kingdom in Orlando, a new Disneyland in Shanghai and its second new cruise ship in just over a year — and hoping to make an even larger mark on the great American vacation.
The mouse makes its mark
Opening five years after its founder’s death, Walt Disney World debuted with a single park — Magic Kingdom — and just two hotels. Yet its impact was hard to miss.
“One of the biggest things it changed was where we vacationed,” said Chad Emerson, author of the 2010 book “Project Future: The Inside Story Behind the Creation of Disney World.”
“Before the Disney World property became what it did, the area was a swamp. Back then, when people went to Florida, they went to the beach,” said Emerson. “Disney World proved that if you build something and make it compelling enough, people will go just about anywhere.”
Disney World also offered something its predecessor in Anaheim couldn’t — adjacent space for hotels, restaurants and other ancillary offerings. Where Disneyland is surrounded by urban sprawl that provides marginal value (and zero revenue) to the company, Disney World was designed from the start as an all-encompassing experience.
“The goal was to use the theme park as a centerpiece and then add other types of development — the hotels, the restaurants, the shopping,” said John Gerner, managing director of Leisure Business Advisors LLC. “That packaging aspect is essentially what the company has given the industry.”
Ironically, that “gift” may very well have gone ungiven if Walt Disney had lived to see Disney World open, suggests Emerson. “Late in life, he was more interested in city planning. He saw Magic Kingdom as a primer, a way to generate interest and traffic, which would then be supplemented with real neighborhoods, office parks, an airport,” he told msnbc.com.
“If Walt had lived another 10, 15, 20 years, Disney World wouldn’t be nearly the tourist destination that it is.”
Thinking outside the berm
As a 20-year Disney veteran, Tom Staggs has played a pivotal role in adapting Walt’s vision to changing times. Now chairman of the company’s parks and resorts business, he’s leading the charge to ensure that business stays relevant in the decades to come.
Actually, Staggs’ “parks and resorts” title is a bit of a misnomer as he also oversees the company’s vacation-ownership (timeshare) operations, its rapidly expanding cruise line and Adventures by Disney, which offers guided family trips to non-park destinations around the world — endeavors that are increasingly far removed from the traditional theme-park experience.
“For Walt, the ‘place’ was simply a device to create the experiences he wanted to create,” said Staggs. “That’s the context we look at when we consider new businesses. Where are the opportunities we can create these great guest experiences that we can feel good about calling Disney experiences?”
Such efforts underscore a fundamental shift for the company: Instead of focusing exclusively on bringing guests into the parks, Disney executives are also looking at where else their guests like to go — Hawaii, for example —and hoping they’ll choose Disney as their preferred travel provider.
“When we got into the cruise business, it was almost a non sequitur for some people,” said Staggs. “Basically, they said, ‘You’re a theme park company.’ But to say that misses the point. The cruise business for us is about creating this vehicle for shared experiences.
“To a certain extent, we even had to culturally get our own people to understand that we didn’t have to have families inside the berm — in the theme parks — to deliver a Disney vacation experience.”
What does it mean for travelers? Less focus on fairy-tale castles and animated characters and more emphasis on authentic, local experiences. At Aulani, Disney’s new resort on Oahu, for example, cast members — it is a Disney property, after all — offer language lessons and share stories of Hawaiian culture. Mickey and Minnie do show up, but they’re portrayed as other guests, not as lords of the mouse-house manor.
That’s especially true with Adventures by Disney, which debuted in 2005 to provide guided trips and tours designed for families but with nary a Disney character in sight.
“People always ask us, ‘Am I going to see Mickey on the Colorado River?’ ” said Karl Holz, president, Disney Cruise Line and New Vacation Operations. “I guarantee you Mickey will not jump out from behind a rock.”
Which, it should be noted, could be considered a double-edged sword. Without its signature characters, Disney has to compete in these new areas with companies that have been in the field for decades — and without it’s proverbial ace in the hole. Whether it’s Westin in Hawaii or Royal Caribbean on the high seas, Disney is, strange as it sounds, the upstart, not the 800-pound gorilla in the game.
Nevertheless, these new businesses, coupled with continued strong theme park attendance (and, let’s face it, some of the highest ticket prices in the business), appear to be serving the company well. Through the first nine months of Disney’s fiscal year, which ended July 2, revenues from its travel-related businesses approached $8.7 billion, up 9 percent from the year before.
Boy wizards and blue aliens
Meanwhile, the other side of the ledger shows the company investing billions — almost $2.1 billion under the parks and resorts banner over the last nine-month reporting period alone — on new projects and expansion/updates.
And let’s not forget “Avatar,” the themed-land-in-the-making based on Disney’s recently announced partnership with James Cameron, director of the blockbuster movie. Set to open in 2015 or 2016 at Animal Kingdom in Orlando, the film-based “land” is both a response to Universal Studios’ mega-successful Wizarding World of Harry Potter and a nod to the fact that the theme-park industry itself is changing.
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“If you can license an existing character, you have a quicker, built-in audience for merchandising and food and beverage,” said Emerson. “The majority of the profits from Harry Potter aren’t coming from lodging nights or even ticket prices; it’s the wands and butterbeer.”
Whether similar merchandising opportunities exist for Avatar is unknown, although the smart money says the two proposed movie sequels will be written with such things in mind. And when it comes to merchandising, no one beats the mouse.
“If you look at all we have going on in our parks and resorts business — from Aulani to Shanghai to Avatar — you’ll see a confidence in the brand as something that is leverageable across a number of different venues,” said Staggs.
As for what else the company is considering, all he’ll say is, “Right now, this is what we’re focusing on — but we always keep dreaming.”