Disney will open a theme park in Abu Dhabi, United Arab Emirates, its seventh worldwide.
The company has partnered with Abu Dhabi-based Miral Group to bring a waterfront resort, Disneyland Abu Dhabi, to Yas Island.
Disney CEO Bob Iger addressed the news during the company's fiscal Q2 earnings call Wednesday.
"Disneyland Abu Dhabi will be authentically Disney and distinctly Emirati," Iger said. "It will serve as an oasis of extraordinary Disney entertainment for millions and millions of people in this crossroads of the world."
Iger, speaking from the United Arab Emirates, said he's visited the country three times in the past nine months in preparation for the project. Disney will oversee the design of the park, license its intellectual property and provide expertise, Iger said. Miral will provide the capital, resources and operational oversight for the park.
Disney will get a royalty from the park, he said, calling the arrangement a "license arrangement, but with considerable involvement of us." Disney employees will be embedded in Disneyland Abu Dhabi.
Disney believes the park will draw guests from the Middle East, Africa, India, Asia, Europe and beyond. The company said the UAE is within a four-hour plane ride of one-third of the world's population.
During the call, Iger expanded on why Disney selected Abu Dhabi as a location. In addition to already having a large income-qualified population nearby the park, Iger also pointed to its location near "hundreds of millions of people" for whom a trip to Disney's six other parks would be long and expensive. So, Disney decided to bring its product to them.
As an example of Disney's popularity in international markets, he pointed to the Disney Adventure cruise ship, which will be Disney's first operating out of Singapore. That ship will debut in December. Iger said first-quarter sailings sold out in a matter of days.
"There's clearly a desire of consumers to engage with Disney in a wide region," Iger said, also pointing out that Abu Dhabi is far enough away from its other theme parks so as not to be cannibalistic of visitors.
Additionally, Iger said he was impressed by the UAE's commitment to quality, the arts and new technology. Of Miral specifically, he said Disney "immediately bonded with them," because of their forward thinking and appreciation of the company's history and legacy.
Asked by an analyst if Disney was eyeing locations for an eighth Disney park elsewhere in the world, Iger didn't rule out the possibility, but said it's not a near-term focus of the company.
A good quarter for parks, hotels, cruises
The Abu Dhabi announcement comes at a time when Disney is investing more in its theme parks than at any time in the company's history, Iger said. It is investing more than $30 billion in its parks in Florida and California, which is being used to increase park capacity -- he noted Disney caps attendance to ensure a good guest experience.
The second quarter was a good one for Disney's domestic parks.
Domestic parks and experiences saw an operating income increase of 13% to $1.8 billion. Worldwide revenue was up 6%, totaling $8.89 billion, while operating income was up 9% to $2.49 billion.
Disney attributed those results to increases in passenger cruise days on Disney Cruise Line with the debut of the Disney Treasure as well as increased theme park attendance and increased hotel room nights and unit sales via Disney Vacation Club. Guest spending at domestic theme parks was also up.
Bookings are looking strong for the Walt Disney World Resort in Florida, CFO Hugh Johnston said. With about 80% of bookings in for the third quarter, bookings are up 4%. Fourth-quarter bookings are up 7% with approximately 50-60% of bookings in, he said.
Operating income for international parks and experience was down, which Disney attributed to lower theme park attendance and increased costs at Shanghai Disney Resort and Hong Kong Disneyland Resort.
While international park results were down, it's not getting any worse, Johnston added. Attendance is actually up, but per capita spending in China isn't quite as high because Chinese consumers are tightening their belts a bit, Johnston said.