Disney Exploring Asia Park Sites, Cruise Ship Venture

Though smarting from the miserable performance of its Euro Disney resort in France, the Walt Disney Co. may start its own cruise ship line and is looking for additional theme park sites in Asia, a top executive confirmed Tuesday.

Disney’s interest in entering the cruise ship business comes about a month before its eight-year relationship with Florida-based Premier Cruise Lines Ltd. expires.

“It’s more than window shopping,” Peter Rummel, president of Disney Development Co., said in an interview. “We have spent some time trying to understand the (cruise) business.”

More broadly, the Pacific Rim presents an “enormous business opportunity” for Disney, Rummel said in a memo last week to Disney executives.

Rummel said Disney is ready to continue expanding internationally despite the severe problems at its Euro Disney resort outside Paris, which lost more than $900 million in the last fiscal year. Disney has threatened to abandon the project--it owns 49% of Euro Disney’s parent company--if lenders won’t refinance its construction loans.

The plans are further evidence that the Burbank-based company is actively looking for fresh opportunities that exploit its strengths in family entertainment. They come on the heels of an announcement that Disney will renovate a theater on New York’s 42nd Street for stage productions and in the midst of the first season of the Mighty Ducks of Anaheim, an NHL hockey team.

Jeffrey Logsden, an analyst with Seidler Amdec Securities in Los Angeles, called the company’s long-range planning on Asia commendable, though he cast doubt on Disney’s cruise ship efforts.

Instead of developing a cruise business, he said, profit margins would be higher if Disney could entice more people to stay at hotels in its theme parks, where they are continually shelling out money for food, tickets and souvenirs.

In Asia, Disney already has its name on the popular Tokyo Disneyland, which is owned by Oriental Land Co. The relationship remains close enough that Disney Chairman Michael Eisner announced plans two years ago to develop a new Disney ocean-oriented theme park in Tokyo in tandem with Oriental Land.

Rummel said any additional Asian sites would be developed without interfering with the Japanese property.

“The last thing we are going to do is step on our own toes,” said Rummel, who also heads Disney Design & Development, an umbrella organization that covers his division and Walt Disney Imagineering in Glendale, the company’s creative and engineering arm for theme parks.

Rummel has promoted Senior Vice President Ken Wong to lead the effort to find Asian sites. Wong is also the executive in charge of the proposed $3-billion Disneyland Resort in Anaheim. Rummel stressed, however, that putting Wong in charge of both projects should not suggest any loss of interest in the Anaheim project.

Theme park industry observers were mixed about Disney’s chances of developing Asian sites.

Jim Benedick, senior vice president of the theme park consulting firm Management Resources in Tustin, said Asia is “a relatively untapped market.”

Benedick, himself a former Disneyland executive, added: “I think there are opportunities for well-developed, quality resorts in Asian countries. A lot of individuals in those countries are considering the same types of investments.”

Among the countries ripe for theme park and resort projects, Benedick said, are China, Singapore, Taiwan and Malaysia.

But Dennis Spiegel, a consultant based in Cincinnati, who manages theme parks in China and Singapore, said, “it would be really difficult for them to go deeper into Asia” now because there are so many established attractions.

When it comes to cruise ships, however, Disney could quickly become a major player in the family market. For years, it has allied its name with the “Big Red Boats” of Premier, a three-ship outfit based in Cape Canaveral that specifically promotes family cruises with Disney-costumed characters aboard.

The firms recently announced that the arrangement would end March 31 “by mutual agreement.” Since then, Disney has been talking about an alliance with another major cruise ship line.

But Premier Senior Vice President Gary Sain said he expects Disney will find no takers because of the high price it demands under the cooperative marketing agreement, which he said was “several million dollars” to his company.

“I believe they have come to crossroads where they may feel it is better to do it themselves,” Sain said.

A former Premier co-founder and president who is now chairman of American Family Cruises in Miami, Bruce Nierenberg, said Disney is “definitely” going to enter the cruise ship business.

“They will be great at promoting the concept of family cruises,” Nierenberg said. “It’s an enormous market. There will be plenty of room.”

Added Oivind Mathisen editor of Cruise Industry News, a trade publication based in New York: “It is known that Disney executives have been visiting European shipyards.”