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Monday Mouse Watch : Busting through the berm

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Monday Mouse Watch : Busting through the berm

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It was the news that sent Disneyana fans everywhere into a twitter last month. The very idea that Mickey was -- in the words of Jay Rasulo, Chairman of Walt Disney Parks & Resorts -- seriously considering "broadening our footprint" within the continental United States.

Translation: The Walt Disney Company is looking beyond Anaheim & Orlando for possible construction sites of new stand-alone Disney-themed resort hotels, retail, dining & entertainment districts, even water parks.

Mind you, Rasulo (As he was speaking with investors about this possible WDP & R expansion scenario back on February 7th) stressed that ...

"These concepts are (just) blue sky ideas right now ... They won't be executed at all if we don't believe they would generate the returns on invested capital (that the Walt Disney Company has come to) expect to achieve from our businesses."

Why is Jay sounding so cautious about this rather ambitious idea? It's simple, folks. Rasulo's initimately aware of all of the other times that the Mouse has tried to bust through the berm. To do some sort of stand-alone project outside of the theme parks. Only to have those other enterprises close because they either failed to turn a big enough profit or eventually proved to be an operational challenge.

Copyright 1972 Walt Disney Productions

Take -- for example -- the very first of these stand-alone projects. Which was the Celebrity Sports Center, built back in 1961 in Denver's fashionable Cherry Creek section. Truth be told, CSC didn't originally start out as a Disney owned-and-operated establishment. But -- rather -- this ambitious sports venue was something that Walt himself went in on as a limited partner. Shouldering the cost of construction with several other well-known celebrities of the day like Art Linkletter, Jack Benny and John Payne.

Of course, the main reason that Benny, Disney, Linkletter and Payne pooled their pennies in order to build this enormous sports center right in the middle of Denver (Which featured 80 bowling lanes, an Olympic-sized swimming pool as well as a high-end restaurant) was that they all hoped to make a huge amount of money off of this complex. However, given its somewhat bizarre mix of elements, the CSC was never quite as popular and/or as profitable as the partners had hoped it would be.

Copyright 1973 Walt Disney Productions

What exactly was the problem? Well, based on what several Disney veterans who actually worked at this complex have told me, Denver bowling fans back in the 1960s weren't all that interested in fine dining. Which meant that -- in order to cover its operational costs -- the CSC's restaurant had to rely heavily on the patronage of the swimmers. But then all of those wet bathing suits destroyed the upholstrey in the dining room.

You see what I'm getting at, right? Given all of its operational issues & additional unexpected expenses, the Celebrity Sports Center quickly became a money pit. Which is why Art, Jack & John eventually sold off their shares in CSC to Walt. And as for Walt ... Well, he eventually persuaded Roy that Walt Disney Productions should buy the Celebrity Sports Center outright. Making this Colorado-based sports complex a wholly owned subsidiary of the Mouse House.

Of course, one of the main reasons that the Old Mousetro wanted his company to own CSC was that Walt knew that he'd eventually need someplace to train all of the managers who'd work at that new ski area that Disney Productions was planning on building just outside of Sequoia National Forest. And what better way would there be to learn about how to run a brand-new sport complex then by managing the Celebrity Sports Center for a while?

Copyright 1975 Walt Disney Productions

Sadly, neither the Mineral King nor the Independence Lake ski resort projects were ever built. Though Walt Disney Productions did eventually wind up using its Denver property as a training facility. With many of WDW's original managers getting their first guest service experience in the late 1960s by dealing with all the bowlers & swimmers who frequented CSC.

Unfortunately, even with all of Mickey's marketing might behind this Denver sports complex, Walt Disney Productions just couldn't make a go of the Celebrity Sports Center. Oh, sure. The place would be packed on the weekends. And the lanes would do well on most weeknights. But Monday through Friday during the day, the place was basically dead. Which is why the Mouse eventually opted to unload the complex in 1979.

Mind you, this was the very same issue that brought down Club Disney in the late 1990s. Given that this proposed chain of Disney-owned-and-operated children's play centers would do land-office business on the weekends but then struggle to attract any patrons on weekdays ... Well, it just didn't make sense to move beyond this franchise's test phase. Which is why all five of the Disney Clubs that had been built were closed down on November 1, 1999.

Copyright 1997 The Walt Disney Company

This is also why Disney Regional Entertainment eventually abandoned its plans to go forward with construction of a worldwide chain of indoor theme theme parks. Given that the Chicago version of DisneyQuest also struggled to draw customers on weekdays, it just made no sense (from a business point of view, anyway) for the company to proceed with this project. Which is why the Mouse pulled the plug on the Philadelphia version of DisneyQuest even after the cellar hole for this 5-story structure had already been dug.

Then there are those mysterious projects like Mickey's Kitchen (You know? That fast food chain that the Walt Disney Company launched back in April of 1990?) which seemed headed for great success. Only to suddenly get its plug pulled in the Spring of 1992.

For those of you who aren't familiar with the Mickey's Kitchen concept, it was actually a pretty ingenious design. This fast food restaurant was built right next door to a pre-existing Disney Store. And -- given that the wall that originally separated these two businesses had been torn out -- shopping at the Disney Store and then dining at Mickey's Kitchen (or visa versa) was a pretty seamless / flow-thru experience.

Best of all, because the Imagineers had deliberately designed this shared space to be a split level. So that hose who were eating in the raised dining area in Mickey's Kitchen could then peer down into the Disney Store next door and have a clear view of all the merchandise that was on sale. Which clearly had an impact on some consumers. Given that gift sales at this retail-restaurant hybrid (Which was build in Montclair, CA) were 20% higher than at other Disney Stores in the area.

Copyright 1990 The Walt Disney Company

Given that Disney executives quickly greenlit construction of a second Mickey's Kitchen prototype (Which was built right next door to the Disney Store in the Schaumburg, IL. mall), it seems obvious that the company was eager to move forward with this franchise. But then in April of 1992, the Mouse suddenly pulled the plug on the whole operation.

So what happened? Well ... There's always been this rumor that the Burger King executives -- who had just signed a seven figure deal with Disney to promote the studio's upcoming releases as well as a few theme park events through its Kids Club meals -- insisted that the Mouse get out of the fast food business. That BK didn't think it was kosher that Mickey was horning in on its action. Particularly given that Burger King was going to be spending tens of millions of dollars to heavily hype movies like "Beauty & the Beast," "Aladdin" and "The Lion King."

The only problem with that explanation is that the dates don't exacty line up. You see, Disney signed its sponsorship deal with Burger King in August of 1991. But then the Mouse didn't bail out of the fast food business 'til April of 1992. Given the eight month lagtime between signing with BK and then shutting down MK ... I personally think that this particular story is more of an urban legend than an established fact.

Okay. So you're picking up on the pattern, right? How the Walt Disney Company will first announce an extremely ambitious plan for its latest outside-of-the-berm project ... Only to eventually retrench, regroup and/or just cancel the project outright.

I mean, sure. The Disney Vacation Club still operates its satellite resorts at Vero Beach (Which opened back in October of 1995) and Hilton Head (March of 1996). But let's remember that DVC originally announced that it would be building beyond-the-Disney-theme-park units in Newport Beach, CA., Beaver Brook, CO. and even just off of Times Square in NYC. But all of those projects were eventually cancelled in favor of safer, on-property resorts like the Villas at Wilderness Lodge, the Beach Club Villas, the units at the Saratoga Springs Resort & Spa, even the recently announced Animal Kingdom Villas.

Of course, some of these "Blue Sky" concepts sound like safer bets than others. Take -- for example -- those stand-alone "Downtown Disney" retail, dining & entertainment districts that the Mouse is allegedly toying with building around the country.

But let's not forget that -- back in the early 1990s -- that then-Chairman of Walt Disney Attractions Dick Nunis supposedly put the kibosh on the roll-out of a nationwide chain of Pleasure Islands. Reportedly out of concern about what might happen to the company's good name if some family eventually wound up being killed by a drunk driver who had earlier been drinking at a Disney-owned nightclub.

So obviously this is trickier than it looks, folks. Given that Jay Rasulo was actually senior vice president for Disney Regional Entertainment as well as general manager of the entire Club Disney chain back in the late 1990s ... Well, let's just say that this guy is very much aware of how truly difficult it is to first get one of these projects off the drawing board, then get it built & keep it open. Which again explains the caution that Rasulo used when describing all of this "Blue Sky" stuff to investors last month.

Copyright 2007 Disney Enterprises, Inc.

Though -- that said -- I am told that Jay does have one project that he'd really like to see make it all the way through to completion. And that involves building a Disney flagship hotel (Something along the lines of the Grand Floridian or the Grand Californian resorts & spas. Which would then be built in a U.S. city that is already a major tourist destination for families) which would have an indoor water park attached to it.

Of course, one hopes that Rasulo can learn from the mistakes that were made at the Celebrity Sports Center back in the 1960s and make sure that all of the upholstrey that's used in this resort's restaurants is water-resistant ...

Anywho ... What do you folks think? Do you like the idea of Disney broadening its footprint in the United States? Building new stand-alone hotels, retail, dining & entertainment districts and/or water parks? Or would you prefer that the company concentrate most of its efforts inside of the berm? Making sure that its pre-existing theme parks and resorts in Anaheim & Orlando are revitalized?

Your thoughts?

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  • As a stockholder and a Disney dweeb, I'm not all that thrilled by the prospect of Disney trying to expand its footprint outside of Anaheim and Orlando. Jim's already mentioned Disney's failures at trying to expand the Disney park & resort footprint outside their home bases; another couple of projects that weren't quite failures but weren't the resounding successes compared to their theme-park connected brethren were the DVC resorts at Hilton Head and Vero Beach. My understanding was that the properties took so long to sell out that Disney gave up on a prime beachfront location in California because they couldn't see the point of trying to get people to buy in to a location that wasn't physically connected to a theme park.

    While a themed Disney resort with a mini-park may sound good on paper, I think the reality would be that folks aren't gonna want to pay top dollar (and with Disney you KNOW it'll be top dollar) for the privilege of staying in a Disney resort and visiting a waterpark in a city where there's no actual Disney theme park and there are many other lodging options available. Maybe Rasulo thinks that Adventures by Disney could help fill the rooms, but the price point of an ABD vacation isn't going to bring in the number of guests that'll keep a hotel like this at or near full occupancy most of the year, either.

    Let's be honest here: Would you spend $300 or more a night to stay at the Grand Floridian or the Grand Californian if there weren't Disney theme parks a short distance away?  I have a feeling that most families that aren't hard-core Dinsey fans will answer "no".  

  • They should build Typhoon Lagoons/Blizzard Beaches....or newly themed Disney water parks.  Put em in the mid west states where it gets hotter than hell....the weekdays will see good business.

    Given the choice, I would take a Disney water park over Wet N Wild any day!  A pirates themed water park would make me happy...whether it was at DL/WDW or right down my street...

  • Jay Rasulo can't even keep the Disney Theme Parks in the U.S. operating flawlessly.  That should be Priority Number One.

    Even as Disney outsources jobs, cuts back on maintenance, closes entire attractions AND continues jacking up prices, it wants to ONCE AGAIN try its hand at a business venture that, Jim rightly points out, has been an abject failure every single time it has been tried.  Wait a minute ... there has been one major success: It was called The Disney Store, but Consumer Products "chairman" Andy Mooney and the Disney execs (including Iger) figured they'd rather take the money and run than keep investing in it.  Not surprisingly, once a little TLC was applied, new owner Children's Place saw a marked increase in traffic and sales.

    Stick to your knitting, Mr. Rasulo.  If you can truly make the current parks shine once again in the eyes of their harshest critics, then maybe it would make sense to try to apply the Disney touch elsewhere.

    If your division is so flush with cash it can be spending millions already on salaries, concept art and development plans, maybe it can funnel some of those bucks back into the problems your parks in California and Florida are facing.

  • Disney is already at risk of oversaturation.  Or maybe Disney actually reaches oversaturation every few years. The company is forced to retrench, experiences new succcess/attention, and then finds itself in the same position.

    I think these beyond-the-berm attractions could succeed and serve as really great guest experiences, but to do this the Mouse needs to rethink the Disney experience.  If this is another excuse for more mouse ear-shaped buildings and cadillac-pricing, then what differentiates this experience from Anaheim or Orlando?

    Disney needs to do something bold if they are going to proceed with this kind of gamble.  Simply becoming the next hotel/indoor water park on the block is only going to cheapen Disney's pedigree.

  • Unless they build a new theme park somewhere else in the country, I don't think that a new hotel or sports complex would bring in the money they're looking for.  somepirateguy's idea of a Disney water park in the middle of the country may work...but, like he said, the weekends would be packed.  And, I'm sure, summer vacations.  If you look at Typhon Lagoon & Blizzard Beach, they're only closed a few days a year, when the Florida weather gets just a little too cold.  Versus a water park in the midwest- where it gets really cold and snows.  It might take a while to make back the construction costs, unless they make super money when it first opens.  

    I think that a Disney retail complex would be the best bet.  But, as Epcot82 pointed out, Disney let go of the Disney Store.  I live in Orlando now, but, growing up, going to the Disney Store was almost like going to a Disney park, in the sense that I got a taste of Disney away from home.  I was upset when the Children's Place first acquired the Disney Store, but I think that they're doing a great job.  If Disney built a Downtown Disney-like complex, with multiple Disney stores (such as The World of Disney, Once Upon a Toy, etc.), then that may bring in some good money.  Just don't build it too close to an existing mall...

  • Disney could have an impact if the built the "indoor water park/hotel" combination. I have frequented Great Wolf Lodge in the Midwest several times, and it is a great family venue. They try to get the themeing, and it's close, but not quite there.

    Considering that this place already charges $249/night...minimum 2 night stay... and is almost always packed, Disney could charge a premium over that to have character interactions and other "Disney-style" entertainment/activities on the premises.

    Every time we vist GWL, we always think about how the place coule be improved had it been "Disneyfied".

  • I totally agree with pschnebs. The only reason Disney resorts can command the nightly rates they can command is because of their proximity to their theme parks (location, location, location).

    But if you compare even the high end of Disney resorts with true high-end hotels in major cities, it's not even close. The rooms are much smaller, the service isn't as good, the amenities are weak ... has anyone EVER stayed at any other high-end hotel that had the nerve to charge $10 a day for a rat-ass slow 'Net connection???

    No, gone are the days when Disney was any kind of leader in the hospitality industry. Which, strangely enough, Disney themselves seems to have acknowledged with all their outsourcing and bringing in Four Seasons ... so why do they suddenly think their brand is going to command high dollars in Chicago in December??

    They MIGHT be able to pull off a Disney themed waterpark somewhere ... but they'd do well to keep the hotel part out of it.

  • I think a waterpark / Downtown Disney would do well in Texas as it can get hot and doesn't get cold like in the midwest.  I don't know about a hotel though as it would probably be too expensive for families unless there was a themepark to draw families for multiple days.

  • There's a Six Flags-brandedresort hotel in upstate New York with an indoor water park. Definitely a good bit more downscale than what Rasulo's currently describing, but still a similar concept. I wonder how they're doing, and hope Disney's tracking this.

  • I'd rather see the millions of dollars for these proposed concepts being used to fill the pockets of the cast members - the people in the parks that make the "magic" happen.  While a hotel or restaurant chain can be appealing, return business isn't going to happen if the employees don't live up to the "magic" of the name.  What about using all of that money to reburbish and - gasp! - open the Wonders of Life Pavillion?

    I don't think opening new hotels will make the public any less blind to problems that currently exist inside the parks.  Putting out something new across the country won't make people forget about Walt Disney World and Disneyland; it will onlt distract them temporarily.  I feel the same applies to the new Four Seasons Resort being built on property - why show people that the company isn't confident enough in its own name to outsource hotels?  That, I feel, is just admitting defeat.

    PS. I would love if Club Disney was still around - I'd take my daughter in an instant!  Though I live an hour from Six Flags' main property, Great Adventure, I could never trust them with my child.

  • aeva said:

    "I'd rather see the millions of dollars for these proposed concepts being used to fill the pockets of the cast members - the people in the parks that make the "magic" happen.  While a hotel or restaurant chain can be appealing, return business isn't going to happen if the employees don't live up to the "magic" of the name.  What about using all of that money to reburbish and - gasp! - open the Wonders of Life Pavillion?

    I don't think opening new hotels will make the public any less blind to problems that currently exist inside the parks.  Putting out something new across the country won't make people forget about Walt Disney World and Disneyland; it will onlt distract them temporarily.  I feel the same applies to the new Four Seasons Resort being built on property - why show people that the company isn't confident enough in its own name to outsource hotels?  That, I feel, is just admitting defeat.

    PS. I would love if Club Disney was still around - I'd take my daughter in an instant!  Though I live an hour from Six Flags' main property, Great Adventure, I could never trust them with my child."

    I totally agree. I felt the same way when they started outsourcing guest service positions. It wasn't that long ago that Disney used to hold seminars for other companies, teaching them how to service customers "the Disney way." Now, they've basically given up and admitted they can't do it anymore. I think that's SAD.

    And I agree with you both about Club Disney and Six Flags Great Adventure ... we must live near each other, because I'm about an hour from there too and man is that place SCARY!

  • One word .... VEGAS !!!

    I know there are alot of people who think this is a bad idea. But what Vegas needs is a larger family oriented destination. There are people here with money... it's HOT here... so a water park/shopping complex would be great. I remember the Disney Gallarie at the Fashion Show Mall and how disapointed I was to see it go. I just dont like buying collectables thru the mail or internet.

    The hotel thing may be less of a good idea. But again... people come to vegas with money. Gives the kids a place to stay while the parrents move thru the strip. Plus... with a large showroom all their own... they could have a place to host musicals and such.

    Forget the gaming side of Vegas. Water parks, shopping, and the big stage shows. Perfect.

    Also.... why not build a place and have one of the big E ticket attractions.

    Imagine a large scale Disney resort somewhere in Vegas.... water parks, shopping, Mary Poppins headlining the showroom... and a fully working Pirates of the Carribean ride underneath it all. In fact..... build the water park in the POTC ride. It would be amazing. I dont think anyone would complain about no slot machines. But if they did.... build a "Touchstone" casino next door.

  • Wow! I grew in Denver and used to go to Celebrity all the time. I had no clue that it was owned by Walt or had anything to do with the Walt Disney Company.. I would have never guessed that one!

    I am mixed about the possible expansion. I was thrilled with the whole DisneyQuest idea years ago.. that is until I actually visited the Chicago one while on a business trip and felt so "nickel and dimed" to death with all their "hidden fees" that I vowed never to return. I remember going in with that "magic Disney feeling" that I get when going to the theme parks, and then coming out disappointed and feeling ripped off. It just wasn't a good show for Disney. They just couldn't keep the magic that far away from their core. I'd agree with others.. return the existing theme parks to their earlier glory, and THEN.. MAYBE... start to branch out.

  • I remember in history class when we were learning about the Roman Empire.  And someone asked the teacher "WHy it fell?"  and the teacher respoded with..."WHy did it fall?  the better quesiton is...how did it last so long."


    This is what is going on with Disney......they are too damn big !

    By the way...did anybody try the food at Mickey's Kitchen?  I heard that it was all "helath" food

  • I agree with Instidude. Great Wolf does a good business. If Disney were to borrow the concept of family friendly resorts and put them in family friendly destinations (NO Vegas is NOT family or Disney friendly AT ALL) like the Grand Canyon, Yosemite, Yellowstone, Wash DC, etc they could make a go at it.

    For anyone who has travelled with kids, the will understand that most hotel chains don't cater (nor even service) families. Most hotel rooms have two beds and you can get a roll away. At Great Wolf, they have rooms that sleep up to 8 people with a kid friendly atmosphere. Disney could do this better.

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