Middle East Tourism: The Elephant in the Room

0:00 Okay from our studios this week in Los Angeles and Tampa. This is Green Tagged Theme Park and thirty. I'm Philip from Gantum Mighty and Controls, and I'm joined by my delightful co host Scott Swinson of Scott Swinson Crey Development. On Green tag Theme Parking thirty, we look at the top news each week and discuss why it matters to industry professionals in the theme park and theme entertainment spaces. This week, we're gonna touch on a little bit of updates from six Flags, and then we're gonna get into the elephant in the room of the Middle East tourism impact, and then finish with some of the changes that Disney has made to its executive team. And we want to just note that this week's episode is brought to you by Spinach Espresso. Who sent.

0:42 There. It is Spinach Espresso. It's not everyone's cup of tea. We've had several people who have reached out, not you know, I would love to say thousands up on thousands, but we've had a couple folks reach out and ask about Spinach Espresso and you can you get Spinach Espresso swag and merchandise, and now yes you can. I don't know why this has become such a thing, but. I've just had a great time with it, developed a logo and so this this episode is brought to you by Spinach Espresso. It's not everyone's cup of tea. But if you'd like a mug or a T shirt or I think there's maybe onesies or something like that. I mean, all kinds of stupidness with the Spinach Espresso logo on it.

1:25 And the T shirts actually have the green tag logo on the back too, which is kind of fun. Yeah, but if you want those, you can go to zazzle dot com just search Spinach Espresso and it will come up. But I didn't Yeah, I didn't know this was a thing until they had just appeared. And it's like, okay, Scott ran with it. I think it's so stupid, it's fun. I don't know. But there again, had nobody mentioned it, had I been the only one laughing, then I would have said, oh screw it, we'll let this go. But there's a couple of you out there, you know who you are, and I appreciate and I appreciate you commenting Spinach Espresso because that was a random made up thing at the time, and you know we're gonna we're gonna see if we can make it a thing. Yep or yes, I don't know. At least I have a mug and a T shirt. So but if you too would like a mug or a T shirt, it's at zazzl dot com.

2:16 Just search Spinach Espresso and I will tell you it is print on demand. So it is not the most cost effective way to do things, but I have I promise you it is set on the absolute minimum amount of profit. I think I make two percent off of each each thing sold. So if you want to play along and have a good time, and if you do get something, please take a photo and post it on you know, post it in the comments for our our YouTube too, just because we would love to see you and your Spinach Espresso gear. Yes, it's stupid and fun all right. Now back to things that are serious. Yes, speaking of of serious brand activations.

2:57 Oh, that could be a good segue. That was a good smooth, good smooth transit there. It's almost as smooth as the espresso in spinisch Espress anyway. So but if not everyone's company, that's. No it's not everyone's company in either of this show or our chuckleheadedness over here. So Travis Kelsey has been officially named as a brand and brand ambassador for six Flags. If y'all remember back in October, we talked about how Kelsey had joined the investor group of Jena Partners when they bought a nine percent stake in the company, So he had already we'd already talked about that in the past, and remember that at that time, Six Flags teased that they were going to be doing something with Travis Kelcey that was going to be like this. So they rolled out officially what it means, and I'm just going to read exactly from the press release. It says Kelsey will partner with six Flags provide a marketing support to the company's portfolio of parks, including supplying digital content across various social media platforms. Six Flags has also has the right to utilize Kelsey's name, image, and likeness across a variety of approved channels, including broadcast media, streaming platforms, and in park market outlets. In a separate press release that Dorian Lake sent out, which was forwarded to me by the editor of Trashus, magazine. They said in that that Kelsey was going to be promoting Six Flags in his social media platforms as well, and so it sounds like it's a it's both where he'll be talking about going to Six Flags and having fun there on his social media platforms, and then the park will also be able to use his image, likeness and content that he's developing in their

4:30 stuff on social but also in the park as well. So it's I think this is I think this is really interesting because it's it's not it's it's a finding finding a way to do marketing that's not traditional marketing, that is current marketing, and that benefits the person. You know, there have been for years. They have always tried to find spokespeople for parks, or representatives or brand ambassadors for for certain areas. Yas Island tried desperately to find a different brand ambassador or for different different things, and to my knowledge, they've gone through I think three and nothing really stuck. So I think that this is just another example of how a person of notoriety can actually invest in a company and then contribute to that to the well being of that investment by continuing to use their notoriety to keep the Six Flags name out there in social media, both provided by the company and on their own social media platform. So this this seems like the next step in the marketing evolution that's happening when it comes to theme parks, especially but kind of in general.

5:38 So I think this is wise and see it works. They did not disclose any financial information about the deal, but to Scott's point, you could see how essentially, since he is an investor, if he makes the company more valuable, then he that's how he gets he gets compensated. Right, I mean, he's got a nine percent stake in the company, so yeah, it's in his best interest to continue to promote it. Yeah, so we'll continue to follow this. I think it'll be more interesting once we actually see what the campaigns look like. So I'll be curious to watch when it starts showing up in the parks and we start to see if it actually moves the needle or not. So you know, we'll we'll we'll watch for that. So okay, let's move on now to the elephant in the room.

6:22 So several people have asked about this in the last several episodes for us to talk about the what's going on in the Middle East, and Scott and I have, in classic Scott and I fashion, been avoiding talking about it until at least a little bit more information is out there. And we have talked about it in our Patreon show where we've bounced ideas back and forth, and we've heard from a lot of listener, like an enormous amount of listeners about this topic. So I think for me, I just want to keep it in our lanes because we're not geopolitical experts. But I was set to be. In the Middle East, so with Scott, I was vending at Ayapa in the Middle East, and Ayappa has canceled its show in the Middle East, and they, as I predicted, offered two options. You could get a refund minus twenty percent, or you could put your money towards next year and hold your spot for next year. So gantum, we're going to be holding our spot for next year because I think, I don't you know, even if I took that twenty percent and invested it, We're like, what, You're not really gonna make up for that loss. To me, it mostly was the travel and those type of expenses. But anyway I am, I am holding moving the money and moving towards that, and from a strategic standpoint at Gantum, what I'm looking at here, I think it's mostly a waiting game of sorts because it all depends on how long and how long to my For me right now, I think it all depends on how long the straight actually remains closed. That's to me the biggest thing, and that's because,

7:54 right an enormous amount of our oil comes through that and so twenty percent of the world's oil goes through that straight, right it does disproportionately impact Europe and Asia. Eighty percent of China's oil comes from that twenty percent that comes through that straight, but also a significant portion of the UK and Italy and Japan. Those places are going to be more or impacted by it. But on a rit large level, the amount of time that that strait remains closed could increase oil prices. So the longer it's closed, the higher oil prices go. If oil prices go high, that doesn't just impact those people, it impacts us and tourism. And that's because higher oil prices are inflationary.

8:40 Because everything requires transit, especially in America, like food materials. Everything has to move on trucks, or move through the air or somehow get around, and so it's not just inflationary in terms of it costing more at the pump, but it's inflationary for all sorts of items. So that's what I'm thinking about. I'm thinking about, how how long is this straight going to be closed? How many drones do they have? They just released a statement today, actually, the new Supreme Leader release the statement today saying that he in full like their main mission. Is to keep that straight closed. So if it remains, the longer it mains closed, the more inflationary it is. If it's too inflationary, that could not only impact our economy, but impact everyone's economy in a tourism sense. In my opinion, what that does is make places like six Flags especially vulnerable because, as we have talked about writ large, the higher inflation is that means less discretionary income for the value minded consumer, which is who six Flags is targeting. I think this will be less of an impact to Disney, and I think Universe will sit somewhere in the middle.

9:42 I'm done, Scott. Well, okay, now, this is one of those few times that Philip and I don't necessarily see eye to eye. On this particular point, I actually think that higher fuel prices, especially when it comes to gasoline, is actually going to benefit a six Flag situation because they have a lot more local parks. People will not be doing the major destination travels if it holds true with previous previous situations where travel has either been impacted because of COVID or fear of retaliation or gas prices or whatever. So it's the local parks that actually have a little bit of a boost, and it's the destination parks that take a little bit of a hit because people don't travel for their once a year visit to Walt Disney World in Florida or Disneyland in California. They instead go to their local parks. So this I believe that this just might be a benefit for six Flags to get people to come to the local parks because people are more often because people are not willing to travel long distances because of the cost. Now whether that is true or not, I don't know. Like like Philip said, we are not experts in this, but this is something that I'm just looking back. You know, in five years of doing this show, we have covered some pretty major catastrophes, some pretty major situations, whether it's been you know COVID or well going.

11:04 Two COVID. Yeah, yeah, there's basically basically, I think the most important thing for our listeners to remember is make sure that your plan you're doing parallel planning so that no matter which situation does come to be, whether it is I mean, perfect example, Philip and I both have very similar backgrounds, we have very we have access to very similar resources, and we have drawn two slightly different conclusions. We don't know which is right. We don't know which one is going to be true. I think the same is going to be true in your industry as well. So make sure that you are planning a lot of what ifs and continue to plan in parallel, not with the idea of well, I'm going to shift when I need to be able to shift smoothly, because the more smoothly you can shift between one parallel plan and the next, the less likely it is to impact to impact your industry negatively or impact your company negatively. So yeah, with all sort of post crisis leadership, the only kind of christ leadership there really is is really good planning so that you have multiple options and you are right now, not when it happens, but right now, exploring as many options as possible that will reduce the costs your transportation costs for goods and to increase your your local awareness so that people won't have to travel as far. You know, keep all of those things in play so that you can just shift lanes as opposed to stop one project and start a whole new one. That's going to be my biggest piece of advice.

12:34 I yes, I agree with actually most of what Scott said. I just want to clarify it's not simply gas prices. So actually having that straight closed, I think I think a lot. When I first started researching it, I thought it would just be like price at the pump. But the more I researched from economists, the more I learned that it's not just that. Because everything requires gas to move, so goods coming in and out out. It's much transportation of goods, but. It's not so I think my point was groceries will be more expensive as well as gas, so if a family that's already struggling with income, they're going to be facing multiple So though I didn't think about to your point, that means though that like it, probably I could definitely see the argument where if you know, if you're a zoo, a local zoo, and you have families that you know are on the you know, in the lower income set, and their groceries are getting more expensive, I could see how you could offer them a deal and say, hey, we're right right nearby. You could just ye, it's it's it's cheap and easy for you to get here, there's transit, whatever, you could encourage people to come in. I can see that argument. So I didn't think about that, Lens Scott, but I completely and the only.

13:47 Reason, the only reason I bring it up, the only reason I bring it up is is during nine to eleven, Bush Gardens had a very strong We were at a nice fifty to fifty balance between a very strong local and a very strong tourist base. So the local base helped us keep moving forward because we already had it. We didn't have to we didn't have to garner it, we didn't have to try to gather it last minute. And as you say, food's going up, everything that you buy is going to go up because t interpretation is going to be and so therefore household incomes are going to be stretched thinner and thinner and thinner. So those big trips, those big signature trips in my imagination, may be reduced. Now the human psyche is a very weird thing and we can't always track it. It's also possible that they may not do anything locally and decide I'll be damned if for given up on our Disney. So I don't know, but I think I think this is a perfect example though, of what I'm trying to explain, and that is have plans that you can shift between smoothly and evenly that are already in place. So it's not, oh crap, we're not getting our tourism business. We have to shift to locals. Now is the time to figure what do you do with locals? And I would even say start to enact it.

15:04 Yeah, So in a way, I think we're almost saying the same thing that we were saying previously to this in that we had talked about in our Trend's episode. Previously, we had talked about how in the industry it seems like it's bifurcating in that you know your people are looking at how can we make our offering seem more valuable even haunted houses, like making sure people can spend more time there, and if they're going to spend. Money, they get a whole evening out of entertainment out of it. And as Scott mentioned, all of the efforts from the zoos and the smaller attractions, but we've also seen this expansion in luxury offerings, and that's because the highest growing demographic in America is millionaires. So here's the thing. You know, if the highest growing demographic in America is millionaires, they're not going to really be impacted by any of this.

15:45 Like most economists that I read predict that if the Strait remains closed for longer, we could see three to five percent inflation. That's not going to impact a millionaire. They're still going to go to Disney and they're still going to buy premium experiences. So I think it basically what we've been saying is like your parallel planning and that you're you're looking at your value offerings or you're also looking at luxury offerings. If you if that's the thing that you offer, and if you already. Have that in your in your wheelhouse, and if you don't, maybe it's something to explore right now. I think the other thing we have to look about look at in the Middle East. Is the Middle East was on the precipice of becoming a major explosive and I'm sorry for using that word, but an explosive player in the attractions and it's a good word. Yeah. Sorry. I realized as I was saying it that it was the wrong choice, but that they they had, you know, they had their goals.

16:35 You know, that they wanted to be the hub of entertainment with things like Kadia City in Saudi Arabia, with things like Yeaes Island in Uae, even smaller projects in in uh Qatar. You know, there's a there's a lot of a lot of things happening, a lot of moving and shaking going on in that region because the government is looking to sort of expand its portfolio of revenue generating industries and because they have you know, dry, warm weather year round and are a relatively easy flight from European nations and a lot of well everything in that hemisphere.

17:15 Really that they wanted to continue to expand and make people recognize that the Middle East is a decent place to come and play in theme parks, which is why. And yes, they all realize they have to overcome the stigma which I won't even go into, but they had to. They realized they had to do that. And the way they were going to do that is by the st factor, biggest, fastest, longest, all of that. And they had the deep pockets to do it, and they had the government support to make it happen, which is why, going back to our Six Flag stories, why Six Flags was so eager to partner with them in Kadea City. So, I, as far as where is that going to go right now with my friends who are living there at the moment, Yas Island has not closed in in Abu Dhabi, those parks are still operational. The Kadia City is still opening. Aqua Arabia is still scheduled to open on time. So and and I have you know, one of my friends on my WhatsApp group in UAE said, yeah, it's it's business as usual today. We heard a couple of booms this morning. Now, of course, being an American that makes me nervous anyway, but apparently there you know, there is a a shelter in place recommendation, but you know the I signed up because again I do business in multiple parts of the world.

18:44 I am signed up for all of the State Department recommendations for travel to these places. And it's interesting because they are at level three right now, which is reconsider your travel, and that's all of the Middle East, obviously, with the exception of Israel and Iran, that is, do not travel simply. But what's very interesting to me is each one of these and I get probably two to three a day, each one of these emails will say our number one priority is to get all American citizens out of the country. So whether they are recommending that, you you know, no matter what the level is, the focus of the State Department is to get American citizens out of these countries. The other thing that they started to remind people of is the local laws because they are different and in Ue, for example, one of the things that came up in this morning's email from the State Department basically said, just as a reminder, posting any sort of propaganda or any sort of video of attacks is illegal in the UAE. So they just kind of reminding people, don't make it look worse than everybody already thinks it is, because again they're trying to control the narrative a wee bit so and again we want to say, oh, that's horrible, and we do it here too, So I just think it's I just think it's important to recognize that,

20:15 like we've said, with the Middle East and those attractions that are continuing to expand and explore explode there, Sorry, another bad choice of words, but the ones that are starting to expand at a very high rate and being built very quickly to compete with parks in other places in the world. I don't think that's going to stop. I think it may. It may go on pause for a hot second or two, but it might also and this is going to sound counterintuitive, but it might also give them a little bit of extra time to make certain that things are running properly before it opens up to a world market. Again.

20:55 That's right, That's right. Yeah. So we're asked quite a few times, you know what we thought about exactly what Scott's just said, and I think that I agree with everything Scott said. I'm just going to add that we I don't think anybody ultimately knows, like we said, it's about parallel planning, and it's about recognizing that it's the likelihood of different scenarios is going to change depend on how long things take and and what happens. But I think right now I agree with Scott in that. That's why again I can say what we're doing as a company and what where I'm doing is rolling over my money into twenty twenty seven because I believe in what Scott is saying that that area will. This might be a speed bump right now things are right now, This might be a tourism speed bump, but I don't think it's going to derail the tourism plans for that area. So right now that is our plan is to exhibit there next year for the IAPA Middle East that will be in April of twenty twenty seven.

21:49 And I can also say that what we're doing is I took a little bit of the funding that we had and I signed up for IAPA Expo Europe this year because that kind of diversifies my region. And again, even though the UK could. Be negatively also impacted by the inflation due to the oil and how long that could take, whatever, et cetera, you know, I still think that the universal project there is proceeding for as much as we can tell. And also that being said, all the designers that I know that are designing stuff for the Middle East. Are still designing. They might be designing from here, but they are They're still working. Most the ones I know are still there. Most of the ones I know are still there, and they have chosen not to leave. So yeah, I think the thing that we have to recognize is when when Saudi, especially I'm gonna use Saudi as a microcosm because I don't want to lump Saudi and Ua together because they have a very different approach to this. But with Saudi, this was a long term plan. I mean, this was not a get rich quick because they don't need to get rich.

22:47 They're already rich. Okay, So the governments that are funding these these projects, and yes they are for the most part government owned, even though they are leasing the six Flags name or leasing the other ip names that are going to be there. But it was a long term plan. It was not a gosh, we have to earn our profit back in the first year. They're trying to change not only the world's perception of what their country is known for, but also the perception of the type of people their country is attracting. And I think that that's going to continue. And I'm that is assuming that you know, we are looking at a war that will end within and when I was about to say shortly, but I was going to say end within three years, which in the grand scheme of things is relatively shortly, and we've been doing the show longer than that, so you know, well, but I think that I think that there's still going to be a viable market there because again, this was not short term, and they have invested a great deal of time money, and they have a lot more planned for the future. So and we'll see, yep.

23:58 Okay, I suppose if you all have more questions about that, you can add comments on there, or if there's anything that you are seeing, people you know that are working in the areas or whatnot, you're welcome to add more into this. It's obviously developing story, and everything that we have said is based off of when we're recording, and we are recording early. Just I'm going to put this disclaimer on here. We are recording on Thursday the twelfth, So if something has happened since then and you're listening to us and you're like, oh my god, then that's why, because we're talking to you from the past or the future. No, the past. I don't know where we are. What's time. Okay, let's our last story. We're not going to get to finish the entire story, but we're going to start on this. The last thing is that Disney Experiences has announced leadership changes. So in brief, of course, we already discussed about how Josh Tomorrow it's going to be Disney's new CEO beginning March eighteenth. We talked about that and about what that meant for Disney. Really more investing in the parks side versus the classic I guess film's side or how it used to work in the past, so kind of looking at how acknowledging how valuable the parks have become.

25:09 Basically we're talking about that. So uh, now they've announced the rest of the transitions. So Thomas Maslom is going to succeed tomorrow as chairman of Disney Experiences. The three other leadership changes is that Jail Astoriano will be the president's land resort. Tassia can't announce that. I'm gonna butt you this, Lae. We'll just call her Tassia our buddy. Yeah, Tassia, our buddy is going to be the president. Philipotos I believe is the pronunciation. But I'm not. Philippotas okay, and Lisa Balziki. It's going to be the president of Disney Consumer Products. So I'm gonna we can get I want. I have notes to get into each person individually, but I think in interest of time and just to tie to what we were just talking about writ large, my opinion of all of this is that what it does is signal, like highlights Disney's investment in the more signature premium experiences and also the acknowledgment of the strong ip and the stuff that the parks have, and not just of course in you have here Thomas's background, I mean most of Thomas's background, like out of his twenty eight years or whatnot, maybe four working parks. Everything else was cruises, hotels, food and beverage and luxury hospitalities.

26:34 You kind of kind of get that sense from his direct background. And then if you look at Jill, Jill who I met on a plane randomly, you know, in Asia, and who I watched her speak multiple times, she is she's she's incredible, She's she's absolutely incredible, she's brilliant, she's an incredible leader, incredible woman. She's so kind, she's so nice. And her big thing, of course was overseeing the Asia region, and she was the one that oversaw the Duffy and Friends and that expansion. And that's the example that Scott and I. Scott brought up when we talked about the Disney where the Duffy has now transitioned from a theme park and now going into the film and going into animation.

27:21 So it's the complete inverse of what the old Flywill used to be. And so she explained how they you know, they basically made new characters that target specifically the biggest demographic groups in the park. I mean, she has a great mind from merchandising for all that, and now she's moving to Disneyland, which is kind of the seat of where they are doing a lot of the you know, sixty billion dollar, you know us renovation, that kind of thing. So I Scott's what's what's your take? No, I think you're absolutely right. I think that from from what I've seen here, the people that they're putting in place other than I think I will say that I think Thomas Meslom only wanted to put people in whose names were harder to pronounce than his So I think that was one of the biggest factors. But other than that, you know, looking at their at their experiences, I think you're absolutely right. I think that the focus is going to be on the premium experience, at least short term. And my guess is there's somebody sitting in an office somewhere going, oh God, Galactic Star Cruisers should have waited another five years and we would have been huge, We would have been gigantic. But that said, I mean you also see that diversification. You know, Iappa has has started to incorporate cruise lines Disney of course with the Disney Adventure and Singapore routes that that's continuing to expand the Disney chunk of that, and quite honestly, you know,

28:52 even even Disney Abu Dhabi is is is part of that expansion. Part of that Let's get the brand out there to people with higher incomes. Now, the thing that I know you always are you always get concerned about, and you've mentioned it multiple times in the course of this show, and that is, you know, where is are we creating two level too high a level of exclusivity for these parks, And that is possible, but I think it's also necessary if we're going to get into a situation where and once again we are not experts, but if we're going to get into a situation where the economy is such that the average family or the mean income family is not able to travel, then the businesses have to find a way to make up that money somewhere, and the only people they can target are the people who have the higher income who are not impacted as much by the shift in the price of gasoline to the pumps, the price of bread and the grocery stores, the price of eggs, whatever, whatever, whatever. So yeah, I think this is I think Disney is ahead of the curve, and what I think they're doing is exactly what we've talked about. These things have I'm pretty sure have been well.

30:06 As with Disney, they've been in the pipeline before they ever announced them. So they've been in the pipeline. Now they're bringing them to the surface. And so they've been following that multipath we'll call it pre crisis leadership, not even post crisis leadership, pre crisis leadership from the get go, and they've brought in the people that can make that happen and make it work. So I think it sounds like they're making some good business decisions. I don't know whether they will be popular with the mass populace of Disney fans, but I think I think they will definitely keep the company afloat so that in the future, excuse me, in the future, when things normalize, or if they normalize, at least, the company will still be there. So the question is is it better to make it only for the rich for a short period of time or lose the company completely? And those are those are the challenges that I think we're gonna We're gonna see here. I also see here that we are out of time. So once again, I just want to say thank you everybody.

31:05 The vast majority of this show came from your suggestions and your comments. And when Philip and I started the show five years ago, over five years ago now, we wanted very badly to make it so that we would open up a form so people within the industry could find a place that they could hear our takes and then continue to chat and discuss with each other. And we are seeing that happen so much on the YouTube channel, and I just wanted to say how much we appreciate it and We hope that you all keep listening, keep paying attention, share us to friends, family, tolerable, enemies, and we will continue to putting out this information. We will see you all next week here on green tag theme Herkin thirty