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Disney Planning for Big Year in Anaheim
Amid Board Drama
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By Sandi Cain, March 2004

Down the road from the drama playing out in Burbank, Walt Disney Co. is gearing up for a big year in Anaheim.

The company’s publicity machine for its two Anaheim parks is revving, touting a much-needed addition to Disney’s California Adventure and a new musical at Disneyland Park.

The moves are a prelude to an even bigger push set for next year when Disneyland plans to celebrate its 50th anniversary.

The goal: keep visitor numbers on the upswing after the tough going of the past few years. With an improving economy, Disney—and all of Anaheim—is on track for a better 2004.

Disney doesn’t disclose attendance, but industry estimates put Disneyland at 12.7 million visitors in 2003, even with 2002. Struggling California Adventure drew only 5.3 million visitors, though that was up 13% from 2002.

Things are starting to look up. In the fourth quarter, the two parks saw attendance grow by 3% from a year earlier—no better than the rest of the year. But hotel room nights grew by 10%, and advance bookings for 2004 are running about 20% ahead of 2003.

“Advance bookings are making us smile,” Chief Executive Michael Eisner told investors during a recent conference call.

Last week, the company said those trends were holding in the current quarter.

Insulated Anaheim?

For now, Comcast Corp.’s rebuffed takeover offer and the boardroom intrigue surrounding Eisner don’t seem to be impacting Anaheim. To be sure, a sale of the company would raise big questions about whether a new owner would keep the parks. This year, Disney plans to spend nearly $1 billion on all of its parks.

Disney’s corporate issues are likely to dominate the company’s annual meeting this week in Philadelphia. Former board member Roy E. Disney is out to persuade other shareholders to vote against Eisner and three directors who are up for re-election.

Even if the vote doesn’t go Eisner’s way, it’s unlikely to affect anyone’s vacation plans in Anaheim, according to Robert Rauch, director of the Center for Hospitality Research at San Diego State University.

“It will have zero impact on short-term business in my opinion,” he said

Longtime annual pass holder Tila Pacheco of Brea said her family doesn’t care who owns the parks—as long as they’re safe and clean.

“I don’t care now, but if there were customer service changes, I would,” she said. “Disney cast members are smiling and friendly. And Disney rides make you feel like you’ve entered another world. Other parks don’t do that.”

Hoteliers near Dis-neyland are reporting more business and are boosting their efforts to play off Disney’s drawing power.

Hilton Anaheim installed the first Disney Desk information center last summer. And the Crowne Plaza in Garden Grove teamed with a timeshare company that uses the hotel as a sales center for Disney vacation packages.

Even the West Sacramento-based California Trucking Association moved its convention back to Anaheim from Las Vegas in part because of the parks.

“We’re selling the proximity of Disneyland,” said Kimberly Reed, director of events for the group. “It’s a very family-oriented industry.”

But changes abound.

Winter typically is prime time for sprucing up rides at the parks. But this year, workers have more to do as the park gets ready for the “Happiest Homecoming on Earth”—the tag line for next year’s anniversary celebration.

Upgrades are slated for Disneyland’s Central Plaza, City Hall and other highly visible parts of the park. In February alone, half a dozen attractions were closed—including biggies Indiana Jones, Space Mountain and Big Thunder Mountain. Those closures can create logjams at other rides during long weekends like the recent Valentine’s Day and Presidents’ Day weekend.

Some of the rides are set to reopen in time for spring break. But Space Mountain won’t reopen until next year. Tom Brocato, director of press and publicity for the Disneyland Resort, said all the down time is necessary.

“It takes about four weeks just to take down the holiday decorations from It’s A Small World,” he said.

Meanwhile, Disney is pushing “Snow White: An Enchanting Musical” at Disneyland. The addition of the Broadway-style show was inspired by “Disney’s Aladdin,” now into its second year at California Adventure.

Over at California Adventure, Twilight Zone Tower of Terror is set to debut in May and is expected to give a boost to a park that has yet to meet expectations. Industry sources say new thrill rides such as Tower of Terror, which costs an estimated $100 million, can boost attendance by as much as 10%.

“Tower of Terror will make that park a more competitive second gate,” Eisner said in a recent conference call.

Maybe so. But even with a 10% boost, the park still would fall short of original projections of 7 million visitors each year.

“It’s a B-grade park,” said Dennis Speigel, president of International Theme Park Consultants in Cincinnati.

For the past two years, Disney has fought that image, dedicating itself to retooling the park to be more kid-friendly by tweaking attractions to draw in tykes while keeping links to the California theme.

Word is the long-closed Super Star Limo ride will reopen at the same time as Tower of Terror. It wouldn’t be a big stretch to envision it as a Super Star Muppets, with Disney’s acquisition of Jim Henson Co. The ride is just a few steps away from Jim Henson’s Muppet Vision 3-D show at California Adventure.

“We look forward to expanding the use of Muppets in the parks,” Walt Disney Parks & Resorts President Jay Rasulo said at a February conference in New York.

The tweaks at both parks reflect Disney’s bid to boost their appeal without building a lot of costly E-ticket rides. In recent months, company executives repeatedly have touted lower capital spending.

Relying on Stage Shows

With less spending, stage shows are the alternative. Disneyland officials insist the shows work, citing studies that say theatrical performances are as effective as E-ticket rides in bringing visitors.

“We are constantly soliciting feedback from our guests, and their response to new entertainment shows has been very enthusiastic,” Disneyland Resort President Matt Ouimet said.

Besides “Snow White” and “Aladdin,” the “Magic of Brother Bear” show added at California Adventure last fall is said to be a hit, even if it’s not all that California oriented.

With few new rides debuting at Disneyland, officials are counting on the “Snow White” production as a centerpiece for the anniversary launch. Initial reviews are positive.

Other recent changes include the expansion of the Holiday Haunted Mansion to include more of New Orleans Square and a new interactive telephone at Innoventions, where kids can talk with Stitch (of “Lilo and Stitch”) in several languages.

Some tweaks won’t be noticed in the parks.

The new Disneyland team has abandoned the Disneyland Resort logo made up of California Adventure’s Grizzly Peak, Disneyland’s landmark castle and an updated typestyle. Instead, officials have reverted to the stylized, classic look of earlier days.

Of course, these plans were in place long before Comcast delivered its unsolicited bid to buy Disney last month. They also came before the shareholder rebellion led by Walt Disney’s nephew Roy Disney.

“Changing direction for a company like Disney is like turning an ocean liner with an oar,” said Kevin Skislock, an Irvine entertainment business consultant.

If the new attractions don’t create the expected demand, don’t be surprised if you start hearing about a Disney Cruise launch on the West Coast. Ouimet, who took over as Disneyland Resort boss after Cynthia Harriss’ October resignation, previously served as president of the Disney Cruise Line. Adding cruise passengers to the mix of those flying and driving to Disneyland could be one way to boost attendance.

The Theme Parks Question

Walt Disney Co.’s theme parks are loved the world over. But would anyone want to buy them?

Opinion about what Comcast Corp. or any suitor might do with Disney’s theme parks—and whether the general public would notice—is as diverse as the takeover and conspiracy rumors swirling around Disney.

Despite the high cost of running the parks, most think Comcast would retain them, partly because the Disney name has less value without the parks.

“The theme parks are the heart and soul of the company,” said Dennis Speigel, President of Cincinnati based International Theme Park Consultants. “But we’re talking mega-bucks here. It would probably take someone as big as Comcast to do it.”

In Orange County, it’s only natural to look to Sandusky, Ohio-based Cedar Fair LLP, parent company of Knott’s Theme Park, as a potential suitor. Cedar Fair is strictly an amusement operator without television and studio holdings.

Cedar Fair Chief Financial Officer Brian Witherow said taking on all the Disney parks would be “hard to digest.”

“But we’ve looked at big deals before,” he said. “We’re always encouraged by our board to grow the company internally or externally.”

As for park operations, few think consumers would notice a difference.

“Look at Universal Studios,” said John Robinett, senior vice president of Economic Research Associates in Los Angeles. “They’ve had ownership changes and the park just keeps going.”

Hard core Disney fans disagree and so do some within the industry.

“I agree that Disney has gradually lost its focus with its core customers,” said Kevin Skislock, founding partner and chief executive of Irvine-based Laguna Research Partners. “But the marriage of content providers and pipeline companies often doesn’t work.”

Still, Witherow said he believes Comcast could run the parks with little difficulty.

“Anheuser-Busch does a nice job with Sea World and they’re not an amusement company,” he said. “If Comcast wanted to focus on (the parks), they could likely do it well.”

In Fantasyland, there’s always another alternative.

Though most people interviewed for this story didn’t think Comcast would outsource park management, there are plenty of ex-Disney executives in the consulting business who’d jump at the chance to take on the Disney parks.

“We’d love to be involved in the management,” said Jim Benedick, a partner in the Tustin firm of ProFun Group, which just opened a theme park in Germany. “We could put our former Disney experience to work.”
 

Sandi Cain is a freelance writer and contributor to the Orange County Business Journal and meetings industry publications. She specializes in hospitality, tourism and travel. Cain holds bachelor’s and master’s degrees in education from Kent State University in Ohio, where she majored in social studies. A former high school teacher, she has written for niche-market sports publications in the U.S., England and Australia and formerly worked in both the printing and high-tech industries. A Cleveland, Ohio native, Cain hasbeen a resident of Laguna Beach since the late ’70s. She enjoys travel, gardening, reading and spoiling her three cats.
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Contact:
Sandi Cain
Laguna Beach CA
949-497-2680
scainado@earthlink.net

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Meeting Bookers Optimistic 2004 Will Mark Rebound Despite Potential Hurdles; Attendance Boosts at Recent Conventions Have Made Orange County California Hoteliers Hopeful / Sandi Cain / January 2004
Hotels, Theme Parks in Orange County, California Start Aggressive Push for In-State Visitors During Holidays / Sandi Cain / November 2003
An Oranges to Oranges Comparison; Anaheim and Orlando Share Tourism and Meeting Destination Bent, Differ in Some Areas / Sandi Cain / August 2003
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Orange County's Travel Agencies Continue to Suffer from a Downturn in Travel / Sandi Cain / May 2003
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Security Detail; High-Profile Meetings Have Police on Special Alert / Sandi Cain / January 2003
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Security Detail; High-Profile Meetings Have Police on Special Alert / Sandi Cain - January 2003
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The Orange Riviera - New Luxury Hotels and Renovation Projects Transforming OC’s Coast / Sandi Cain / May 2001 
Orange County Hoteliers Hope for a Solid Summer Season to Regain Momentum / May 2002 / Sandi Cain
Hotel Brokers: From Sales to Consultants / Sandi Cain / Jan 2002 
Tourism Officials Focus on Security of Events and Sites as Key to Attracting Visitors / Sandi Cain / Jan 2002 
Orange County Travel Agencies Bear Brunt Last Week, Waiting For Fallout / Sandi Cain / Sept 2001 
St. Regis Monarch Beach Resort & Spa Opening Adds to Competition in South Orange County California / Sandi Cain / Aug 2001 
The Orange Riviera - New Luxury Hotels and Renovation Projects Transforming OC’s Coast / Sandi Cain / May 2001 
Ayres Hotel Group Expands, Rebrands / Sandi Cain / March 2001
Orange County’s Hoteliers Relieved as Anaheim Convention Center Expansion Boosted Occupancy and Rates During Past Year / Sandi Cain / May 2001
Indomitable Disney / Bad News Doesn’t Tarnish the Mouse; Slowing Economy Another Matter /  / Feb 2001 
Orange County Hotels Poised for Meetings Growth; Newcomers Help Bolster Total Space; Disneyland Hotel Still No. 1 / Sandi Cain / Jan 2001 


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