Disney Axes Lake Nona & Galactic Starcruiser

0:00 Okay, well, from our studios in Abu Dhabi and Los Angeles, this is Green Tag Theme Park and thirty. I'm Philip, He's Scott and Scott. It looks like the Disney and DeSantis saga might not have a happy ending after all, because Disney has just acted its plans for the campus that they were going to build over in Orlando. Yeah, and thus not providing how many jobs to the state of Florida. Well, several thousand, several thousand. Well, it's just kind of moving them over, so you know, but it's bringing them to the state of Florida, and as a Floridian it's like, Okay, that's true, that's true. Okay, let's set the context. I'm going to read the first few paragraphs here from the New York Times article, which gave a nice context here to get everyone up to speed.

0:48 If you're not haven't been following this saga. Oh, we forgot our little music to put in there. I'm going to have to come up with something in March. Music is that? Yes, Yes, that's it. It's it'll keep coming. In March. Disney called Governor Roda Santas of Florida anti business for his scorched earth attempt to tighten oversight of the company seam Park resort near Orlando last month when Disney sued the governor and his allies were what it called a targeted campaign of government retaliation, and company made clear that the seventeen billion dollar investment plan in the area was on the line. Does the state want us to invest more, employ more people and pay taxes or not, said Bob Iger during the earnings call, which we covered in a previous episode, And of course on Thursday, that was all put to the test because Disney Steam Park and Consumer Products chairman showed that they were not bluffing by pulling the plug on the office complex that was scheduled for construction in Orlando at a cost of roughly one billion. It was heading around one point three ish.

1:49 It would have brought more than two thousand Disney jobs to the region, with one hundred and twenty thousand dollars as the average salary, according to an estimate from the Florida Department at the Economic Opportunity, which talked about this when it was first announced, and just for further context, in the industry, it created quite a stir because most of those jobs are of course, coming from imagineering in California, and you're basically then asking a lot of creative individuals to move from California to Florida if they want to keep their jobs. And that didn't go over well at the time, and quite a few people had already started the process of relocating, and part of the package was they would pay your relocation costs and all that. So, so Disney did clarify that they would look into allowing some of those employees to move back to California and also to covering further moving expenses for them. And of course the mayor j jumped on adding that it was unfortunate, but you know, kind of also blaming the Santists by saying it was unfortunate, but what do you expect when everything is so difficult for businesses now in Florida. So and of course the Santist's rebuttal has been that, you know, Disney is suffering and their stock prices going down and everything going downhill for them anyway, so they need to reevaluate, which is not correct at all. Bye bye bye, just our last episode. Factually, I'm correct, there are no there are no facts to back what DeSantis is saying about about Disney. I mean, he's just because he's saying it doesn't necessarily make it real. The other thing I think

3:22 is interesting about this move is, you know, we had this discussion what two or three weeks ago or we said, if Disney really wanted to, they could just say by bye Florida, and that would that would sink certainly the Orlando area, and it's it wouldn't sink it. I mean, Universal obviously still has a very strong foothold there and it would be um. But just why is why is the governor of a state so adamantly opposed to a major contributor to the tax base continuing to provide their service to people who are coming in and the amount of tourism that brings in and the amount of people it employs. It's it is. It is baffling. I it is baffling, like his reactions baffling Disney. I actually, I think this is almost a little bit like all according to plan for Disney or or Or would be more like convenience in a way, because it wasn't. Iker was never in favor of this whole forcing cast members, forcing imagineers true to relocate basically and I do think that. I think I was actually just having this conversation with a friend of mine who's in the industry previously, where they were asking basically, would would you have done that? Would you have moved? And I'm like, you know, it makes it's very clear because whenever I go to

4:56 Orlando, you can feel the difference. I'm sure Scott knows this, you know, because it's similar. You can feel the energy there, just like you can feel it in Abu Dhabi, and you can feel it in these areas there. It's like you can't go anywhere without seeing people running into work and contracts and just everyone is doing something all the time. So there is that energy there. Definitely is a capital of the world, but it starts to get difficult when you get into you know, generally people live in California for a reason because if because otherwise you wouldn't live here because I could tell you it's too expensive and there's way too much traffics. You wouldn't live here unless you had a good reason. And I think that that gets to the crux of it is a lot of the the employees I can't imagine would have been happy. And I'm really not sure what my answer really would have been, you know, in that I'm like, I'm not sure, just because when you there's also the politics of this, right moving from California, which is very heavy blue, into something's very heavy red, especially in the context of all of this the women's rights, and there's so much craziness, you know, so I it seems to me like a little convenient. It's like, oh, well, we can we you know, I'm not We're not sure they really wanted to complete this move anyway, and they might have been facing additional issues with staffing, and then this kind of comes along, and it's a good it's a good Like Desantist is like almost becoming the true Disney villain in this because he's acteen as a scapegoat for something they might have done anyway. That's just my thought. Well, I think that's I think that

6:27 is very possible, and it's a very good point. At the same time, you know, you just said, why would you live in California if you didn't have a reason to Well, if that reason moved to Florida, which is significantly cheaper and significantly less of a of a of a state tax burden on its residence, I could see that there would be just as many people who would say, yeah, I have no reason to stay here anymore. I will now, you know, follow follow the mouse. And let's face it, the world has become so incredibly small now that you can go and live. You know, you can you can move with your company to um to Orlando for two to three years and then you know, go live somewhere else, or you can work remotely, or you could go and live in the Middle East for five months. I mean, all of these things are things that just happen now. So I I understand your argument, and I don't I don't discredit it. I think it's a very it's a very interesting counterpoint too to what's going on here. At the same time, the reason I think, and I don't know this for a fact, but the reason I think that they were trying to gather everyone in Orlando is because it is more cost effective for a business. It is more beneficial to the company as a whole. I mean, large corporations don't make choices like this that aren't based on some sort of of financial gain. And it's still I can't

7:58 help but think that it might be. You know, you're right, it may be it may be an easy out for them that is possible. At the same time, even if it wasn't an easy out, I don't think the decision would have been any different at this point because they feel under attack in the state of Florida and you and they are by well by the governor at least, And so whether it's whether it is a whether it is creating a scapegoat or not, whether it is a convenient way out or not, I don't know whether the decision would have been any different at this point.

8:39 Yeah, yeah, I would also want to add or just point out here despite I think maybe just like just what we both have all all just said, looking at Ghantum's situation, we have done the We we kind officially did the same thing that Disney and was planning to do. You know, we actually when they announced their plans, we did sort of adjust hours, and a lot of other firms that I know as well did the same thing, smaller firms, you know, support auxiliary people. And now we're looking at giving up We're just giving up our lease in California for our California building, and we're going to be down to three employees in California. And all of them are remote. And then we have we're going to keep our office in Orlando. We got like when Disney announced this whole thing, we got a new office there. We're going to keep that office there. And we're up to five in Orlando. So I mean we've we've shifted. And and I will say to your point, it is it is more convenient, you know, it's it's just easier. You know, all the work is there, all of our clients are there because everything is easier there. There might be designers that still there are still designed not might be there are still designers in in the so Cal region, but but you know, it's not anywhere you can work from it. Yeah, And and the kind of the density is just it's just something else, you know, being the density. There's much

10:13 more density being there in Orlandos. It's just not it's it's not really comparable. So I do wonder to your point of like, you know it, I'm still I'm still like, well, you know, the bulk of the industry is very clearly in Orlando in the US. That's where it is here in America. So you know, I it would almost have made more sense to me if they had said, we're gonna scrap this and we're gonna put an office in Abu Dhabi that would have or in the UAE somewhere, or in China or something that would have almost made more sense because because it's kind of undeniable that the the bulk of the industry is there in Orlandos. So I'm not sure. Yeah, it's And at the same time, you know, working as you said, you know, even with Ghantum, you've got the majority of your California employees working remotely. You can work when you work remotely, you can work remotely from just about anywhere. I trust me, I've been doing it for the last five months. I get it. Um.

11:11 You know, not only am I working my project here, but then I come home at the end of the day and and have conference calls for other projects that are coming up. And I'm actually quite excited to get back to seeing in person back in the States. So um, somebody basically said, you know, is there any difference between opening it opening this this complex or this campus in Orlando or Atlanta, or you know, somewhere just across the Florida state line where you know, you you have a lot of the same you could get actually probably even more tax benefits because you know, some of the some of the smaller southern cities are looking for some help. Not necessarily Atlanta, but some of the smaller southern municipalities are looking for some help.

11:56 So is it I don't I don't know what the answer is, but I do think I do truly believe that this is a situation where a state where the leaders of the state have proven that they are aggressively attacking a specific company, and their response is well, to heck with you, I'm not I'm not going to play this game. I'm gonna take my pieces and go. And you know, you've heard me say before, Disney could very easily just pull out and go away. They can take what you know, I know they've established a great foothold. I know it was um it has taken a long time to build the status that they have there, to continue to build the infrastructure that they have there. But if need be, and if pushed to, they could leave. And I don't you know, I don't think it's something they want to do. I don't think it's I don't even think it's something as as as non business related as the the basic pissing contest over over the the LGBTQ plus rights. Um, I think that is I really think that is secondary from a Disney from a Disney standpoint. Um.

13:07 But but if it if it becomes nonprofitable or it becomes more of a challenge to work in a specific state, they can take all their assets and go somewhere else. Yeah, perhaps Abu Dhabi or the UAE or or exact or wherever. Yeah. Well, I think my takeaway from this is not really much different than every time the thag has come up. You know, it's it's Disney is fighting the good fight. This is a fight that needs to happen and they need and I wish them success. I do think that if anyone's gonna we need this line to be underlined. Where As entertainment companies, we are private companies and we have First Amendment rights and that needs to be underlined and protected. And I'm glad they're either doing it. But from me from the Ghana's perspective, we're not rushing to close our Orlando office. You know, We're not like we're we're really not changing anything right now. We're just keeping everything kind of you know, as is, and we're not going to reopen our our California office, you know, We're just not. It's it's there's not enough there right right now, and it's too expensive just for us. We're very small, right, We're very small. It's it's just not. So we're not doing anything different, and we're just kind of I'm just watching to see how how where this is going to go. But otherwise we're not doing anything different. And that's that's my takeaway. So and for the smaller parks and smaller companies, I think my takeaway is we often think that we'll let somebody else deal with the politics in our area. Don't.

14:35 Yeah, let let your dollars, you know, just like Disney's doing. Let your dollars speak for the the environment that you are being offered wherever you're working, and get involved in your you know, your chamber of commerce or whatever is in your area, so that you can be aware of and your voice can be heard and you can speak with your dollars as opposed to just speaking with your mouths. So well, I guess Disney is also speaking with their dollars, but I'm not sure what they're saying with this next well, which again I hate to say it, but this next story is something that we said was most likely going to happen. It was either going one way or the other. Yes we did, Yes we did. Oh gosh, Okay, let's get to this. So Star Wars Galactic Star Cruiser opened March first, twenty twenty two, at Disney World, and of course it's offering a highly immersive two night experience in a galaxy far far away. But this week, Disney announced that the star Cruiser will make its final voyage September twenty eighth through thirtieth, so that will be roughly eighteen months of a run time.

15:41 The Star Wars Glactic Star Cruiser is one of the most creative projects ever and has been praised by our guests and recognized for setting a new bar for innovation and immersive entertainment, said Disney. Disney went on to say this premium boutique experience gave us the opportunity to try new things on a smaller scale of one hundred rooms. As we prepare for its final voyage, we will take what we've learned to create future experiences that can reach more of our guests and fans. We are so proud of all of our cast members and imagineers who brought Star Wars Collecting Strukers to life, and look forward to delivering an excellent experience for guests during the remaining voyages over the coming months. And let me just say off the bat here, the biggest thing, the thing that drove me crazy about this story is how much shit people are giving Disney for this.

16:23 So first of all, those imagineers and those creators, they do deserve kudos. They deserves are Disney deserves kudos for trying this. It was an incredible experience. I didn't get to do it. It actually was way too expensive for both Scott and I, so we didn't get to do it. But we saw, we heard, and we knew people that worked on it. It was phenomenal. It was tremendous. And again here's again, somebody, I'm a little soapbox here. You know, there are only so many stand back, stand back. Okay, I got my coffee free for this one. I'm ready, Okay, So there are only we know, there are only so many levers you can pull with theme parks, just like haunts. You know, we know that you start off as an fec, you eventually grow into a theme park and what you your main goal for most of your most of the brands out there is just butts and seats. Like my old chef you said I was apprenticed to. You should say, it's through put, it's butts and seats. How many people can we get to click the turnstile then we get into the park. Once you reach that critical mass, it becomes increasing the spend per guests. And how many times we talked about that, We've been talking about So then what happens when you can't possibly fit any more people in the park? Then you have to figure out what is the max spend per guest? And once you've really come close to that, then you have to figure out what could we possibly do that goes beyond this? Where is the ceiling? Where is the limit? Nobody has ever had to solve that problem. Everybody else is just sitting back there with the tried and trude method of increasing your shoulder seasons, adding attractions, adding festivals,

17:59 adding ba ba blah blah blah, everything that we know works. That's what everybody else is doing. The only brand that has to actually worry about these problems is Disney, and thank goodness, they are dealing with it because then we just get to stand back and watch what they do and then just copy it and make money. That's it. It's not I mean, it's it's glorious. So Disney deserves praise for trying this because we knew, like somebody had to do it. Somebody had to try it, somebody has to test it. It didn't mean it wasn't good. It is a test. That's what it has always was supposed to be. And just like Scott had said a hundred times, you can't make a bad test or you won't know if it actually succeeded or not. So they had they had to make it a premium experience. They had to spend the money. They had to do their due diligence to make it incredible. To find out what is the ceiling?

18:45 How much will the Disney fans and the Star Wars fans actually spend a day? We have to know. And if you remember they tried that around the world thing, there was twenty four thousand dollars, so loud immediately, okay, so these are the signals they're getting. They're like, okay, well if twenty four thousand dollars will sell out, but that's only ex seats and I mean it's it's all a test, so I think this is par for the course. I don't think there's anything wrong here. I think everybody should be proud about their contributions. I think Disney should be congratulated for testing it. And what it tells all of us is that here's the line. We found it and it's not a mistake. And you know what, they can use that for something else. They can use it for a regular hotel now, and just make it a boutique hotel, like we have plenty of hotel, but there are so many hotels that have less than one hundred rooms like this is. I can't, I can't in the mainstream media. Also, let me just say, New York Times, I do not appreciate you pull in tweets from random vloggers and putting them into the New York Times and saying that, oh, we think Disney might have mispriced this, and it was so clearly no, no, no, shut up. It was not clear that this wasn't this was too expensive, because if it was clear, they wouldn't have done it. Like, we all needed this information and now we have it, and we should all be thanking them because now we know like now we know, now we know if Universal wants to do a Horror Nights experience that's a two night Horror Nights extravaganza in Vegas, they know,

20:18 Hey, we're probably not gonna be able to sell that for twelve hundred a night per person. And that's valual information. Okay, I'm done. Yes, I was, so I was steaming about that. Wow. Well no, it's funny because what we had said very very early on was it was either going to be a massive financial success yea, or rolled out to other parks than other other countries. Yeah, it was last. And so it the thing that I agree with absolutely everything Philip has just said. I think that it is. It is a great um. It was. It was basically a funded beta testum, which I think is is really wise and it was done correctly, you know, just to echo what Philip said when he was echoing what I've said in the past, and that is, UM, you can't do you can't test something if you only do it half half heartedly.

21:18 You've got to go in and test it fully to find out what works and what doesn't. Um. You know, and I'm sure they are looking at it going was it the price point. Was it the it was? It was perhaps I've heard some people say it was too immersive, Um, it was too focused on a single ip um and there were people who were coming from other places who wanted to experience a broader spectrum of the Disney ip Um library. Um. I've heard some people say it was because it reminded them of a cruise ship. For the same price, they could have gone on a much longer cruise and seen real things. So it kind of ta taps back into it. Is it more of the the actual reality that we've been talking out on the show here? Who knows. But to Philip's point, it tested the waters. It found that that breaking point or that that feasibility I wouldn't call it breaking that feasibility limit, and I think that it is. I again, just like you, Philip, I applaud them for doing it. I applaud them for doing it right, and I'm sure that the learnings that they're taking away from this will be applied for years and years to come. What I would caution anybody who is looking at doing who looks at doing something testing it grandly and then having it not meet the expectations or not be sustainable, either financially or from a casting standpoint or whatever. My caution is, don't get locked into in the future. Well, we tried

22:48 it and it didn't work. Look at it in though, in such a way as we tried this, and we learned this, and this worked, and this worked, and this worked, and if we do it again, here here are the things we have to address. So take the learnings, not the failures. That's the most important takeaway I can give for because, let's face it, you know, they're very, very, very very few of us who are going to ever have the opportunity to work on a project of this magnitude with this kind of of immersiveness and interactivity. Um And and who knows Disney may not do it at this level again. Um But I think it's I think it's important to recognize that no one should ever go well, Disney tried it and it didn't work. That's that's not fair, nor is it accurate, nor is it a good way to grow. The best way to grow is to you know you've you've It's it's an old adage you learn from your failures, but I think you also learn from the successes within your failures, or you learn from the things that are not necessarily it's not necessarily sustainable in a really good idea. So um, yes, Disney did it right. Yes, it was not sustainable for whatever reason. And yes, let's hope that they build based on what they learned from from this, uh, from this attraction slash immersive hotel experience, the data that they gathered.

24:15 And make no mistake, they definitely gathered data because that is Disney's way is going to be invaluable and their entertainment across their entire spectrum. You can see it. You're going to see it show up in other places, you know, like you said, figuring out the degree of immersive, how how much is too much? All these things. I mean, they announced the community the living communities as well, and they announced there's going to be entertainment in those and I mean they could bring a Star Wars experience on tour. There's and then the people that are saying this is a waste of money, No, Disney doesn't let assets go to waste. I mean, there's there's there's a lot of ways to use this property, and I would say I could pretty easily see it being converted into just a regular you know, it deluxe resort for the properties, and even at a hunt. I mean, you know, if you remove the immersive nature and just let people stay in it. I mean, people already pay five hundred to a thousand plus a night anyway for just regular, regular deluxe rooms in a non experienced hotel, so I could see they could just scoosh that price point down a tad and make it a regular hotel with regular concierge staff. Or maybe it's just an all confierge hotel. It's fine, there's there's plenty of race recyclists. It really reminds me of the similar reaction to Universal's announcement of doing something horror in

25:49 Las Vegas, because what did we hear so much? Well, they've already tried to year round haunt and trashing it didn't work, blah blah blah. Well that again, this is why we have to I mean, these are all data points for all of us. And yet again that's why they're not bringing. That's why Universal is not bringing a year round on attraction. They are bringing a dining kind of cocktail type of experience because that is what is working in other markets. We see the food we just talked about the food trends. We see this working. So and I'll say all that all of that too. I mean, look at it's just they tested menu options out there that people absolutely loved. You saw guests saying they would go back just for the food, or they would stay on the ship. I mean, they got a lot of very positive feedback. You saw people complaining they would never get to eat those things. They can still make them, like, it's not like they lost their kitchens and they lost their chefs. Like they can just move them or put them into in different experiences. It's just it's now I'm gonna if I'm gonna look into the Crystal Ball, because You're right, they will. They will repurpose this asset somehow somewhere in the future, I would guess, And honestly, in my heart of hearts, I kind of hope that they take it, they take the bones, they strip it down, and they superimpose a new ip for the hotel. I really hope that they don't make it galactic star Cruiser light, even though I think there

27:21 is a market for that. I think some people would love to be able to say, well, I didn't get to do the full experience, but I did get to stay in the hotel. I would hope, at least in the short term, that they would completely change it, because there's always going to be that perceived cloud of quote unquote failure over the space and people will never be happy with it, and people who went and enjoyed it before will say it doesn't compare, and people who go now will be like, I can't believe people spent so much money on it. It's just going to be negative. It's just going to be negative for them, at least in the short term. Now, assuming that Disney is going to continue to stay in Florida, they can if they wish, based on the amount of land that they own, just sit on it for a few years. Yeah, and let the you know, let the negativity fade away. Um. There are there are properties in the Florida Resort that have been that sat dormant for many, many years before they were either redeveloped or just allowed to go back to natural Florida wildlife. Um, it's it's interesting. I'm again I'm curious to see what happens. But I would assume and almost like I said, almost hope that they would um that they would let it, let it rest before they before they bring it back. I would hate to see it come back as the experience they originally intended, only watered down. But we'll see, We'll see what happens. You know, you you mentioned for listeners other

28:55 people. You mentioned that listeners should be thinking about when they do their tests to understand that it doesn't mean that everything is a failure, just one. You know, if a project bill doesn't mean everything about failures. You know what I just kind of talked about how it's really only disit it has this problem or one of these problems of trying to figure out what's going to work because they've maxed out their parks or whatnot. I mean, do you think it's still the best option for other people to be focusing on the other items we talked about increasing their guests they're spend per guests, and increasing their capacity and filling out their season because essentially this was something that was out of all that because they couldn't do that anymore so they were trying to create a premium experience for premium fans. I mean, do you think that is something that people should be focused on or just the old years I've been I've been touting premium experiences for premium fans. I think that is I think that is something that theme parks miss out on. And as I sit here and I look out the window of my hotel and I see the I see Ferrari World outside my hotel. One of the premium experiences there is you can actually hook up to a cable and walk on the roof. It was something that is and so cool because I see it happen every day out my hotel window. Um, they found the right price point for it. It continues to be sustainable, so you know, find those things. Is it is it a completely immersive experience? Not necessarily. What it could be for you is taking advantage

30:26 of your assets. So don't think that there is not a high end market out there. Uh, there is, there is, and you can continue to find ways to expand and play into that high end market UM and hopefully UM generate some additional revenue for you know, for you and your parks. So keep exploring those. And what was right for Disney is you know not it may not be right for us even in theory on the on the lower levels or smaller parks, but that does not mean that there is not a market out there for high end experiences. That does not mean that there is not something UM unique that you can do to continue to get more in park spend or to generate additional revenue outside of your regular hours. So keep keep looking, keep looking UM and continue to look for us because we're going to come back next week because we're done for this week, and check us out.

31:19 Make sure that you we are on our We do have the YouTube channel now, please make sure you check us out there when I when I get back to the States, I'm hoping to put together some additional content from here. I just haven't had the time to do it because I've been working UM but that will go up on the on the YouTube channel as well, So um on behalf of Philip and myself until next time. This is Green Tag Theme Park in thirty and we will see you next week.