If DeSantis drags down Disney, he could bring central Florida with it
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- Disney said Thursday it was scrapping plans to develop a $1 billion corporate campus in Florida.
- A leading expert on Disney's history in Florida said the move showed the state has a lot to lose.
- Central Florida's economy relies on the tourists drawn in by Disney.
Conventional wisdom says you should never pick a fight you can't afford to lose — but looking at the ongoing feud between Disney and Florida Gov. Ron DeSantis, Florida looks like it's on shaky ground.
After more than a year of escalation, Disney's latest move was to scrap a $1 billion dollar development in Florida. The corporate campus could have brought more than 2,000 well-paying jobs to the Sunshine State, but reports said Disney's current relationship with Florida was one of several reasons the project was abandoned.
The news renewed questions over the wisdom of picking a fight with one of Florida's largest employers, and whether or not the state and the governor, or the company, have more to lose.
"I think DeSantis has more to lose, as this incident made apparent, depending on whether, as a fairly skilled politician, he can somehow put a good face on this," Richard Foglesong, a leading expert on Walt Disney World's history and politics, told Insider last week. Foglesong authored the 2003 book "Married to the Mouse: Walt Disney World and Orlando."
DeSantis has already faced political blowback for the Disney spat, including accusations from fellow Republicans that the 2024 hopeful isn't friendly to business and has lost his state jobs. Pending how the ongoing fight plays out, Florida could lose a lot more due to how much it benefits economically from Disney.
Disney is an economic powerhouse in Florida
A 2019 study by Oxford Economics found Orlando tourism generated $75.2 billion for central Florida in 2018. While that number includes other attractions, Disney dominates the area's tourism with four theme parks and two water parks.
The study also found Orlando tourism accounted for nearly half a million jobs and brought in $5.8 billion in state and local tax revenue that goes towards public safety, infrastructure, schools, and more.
Disney alone says it employs 75,000 people in Florida, making it the state's second-largest private employer behind the Publix grocery store chain, according to the Florida Department of Economic Opportunity.
And Disney Cruise Line ships leave from three different ports in Florida.
Theme parks are just part of Disney's business
Disney pulls in more revenue from its media and entertainment segment, which made $55 billion in revenue in the 2022 fiscal year. Disney parks, experiences, and products, in comparison, pulled in $28.7 billion, or around 33% of the company's total revenue.
And although Disney's Florida resort is its most popular location, bringing in a whopping 58 million people annually between its four parks, the company has many other locations, including internationally, that draw tens of millions of people each year.
Disneyland in Anaheim drew around 28.5 million visitors between its two parks in 2019. Disneyland Paris attracted around 9.7 million people in the same year, while Shanghai Disneyland (which Disney owns 43% of) brought in 11.2 million. Tokyo Disneyland and Tokyo DisneySea — which are owned by the Oriental Land Company with intellectual property licensed from Disney — had nearly 32.7 million visitors between them in 2019. Hong Kong Disneyland (which Disney owns 48% of) brought in 6.5 million visitors in the 2019 fiscal year.
Disney also has the Disney Cruise Line, which is set to expand to Southeast Asia in 2025.
All to say, Disney has options on where to invest or expand, which could have major consequences for Florida.
If Disney focuses its investment elsewhere, other tourist attractions in Florida could suffer
As Foglesong previously told Insider, Disney is stuck in central Florida. There's simply too much brick-and-mortar investment for the theme park and resort to be moved elsewhere.
Although Disney can't leave the state, Foglesong said "they can lower their replenishment investment in the Disney World theme park."
He noted that an overwhelming number — about 70% — of Disney World guests are repeat visitors. That's a credit to Disney but also provides added pressure to keep investing in the Florida resort or risk losing customers, which in turn could hurt Orlando's economy and cause a lose-lose situation for both the state and the company — unless Disney can make up the money elsewhere.
"The challenging question is how many times will guests come back to see the same rides and attractions?" Foglesong said, adding that Disney draws back repeat visitors in part because it is constantly expanding. "One could credibly argue that the buoyancy of the Orlando economy depends upon Disney's investment, or reinvestment, in new rides and attractions because absent that, people won't come back."
As the state's largest tourist attraction, Disney provides a major boon to other tourism and tourism-adjacent businesses, as well as the entire economy of central Florida. Choosing not to reinvest in its Florida resort could hurt not only Disney's own annual visitation numbers but those of neighboring theme parks and businesses as well.
"The people who come may be attracted by Disney, but they don't spend seven days there," Foglesong said, adding the average Disney visitor might spend four days at Disney parks, two at Universal Studios, and one at Sea World, for example.
Right now it seems that — apart from the $1 billion corporate campus — Disney continues to invest in Florida.
Josh D'Amaro, Disney's parks chief, said Monday the company still plans to spend $17 billion in Florida over the next decade and that the fight with DeSantis has not hurt Disney's business, according to Deadline.
However, if DeSantis's campaign against Disney ultimately results in less investment in Florida, it won't just be the House of the Mouse that loses visitors.
"They won't just not come back to Disney World," Foglesong added. "They won't come back to Sea World, they won't come back to Universal Studios, they won't come back to the mom-and-pop roadside tourists attractions."
from Business Insider https://ift.tt/1bjRYsS
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