Disney (NYSE:DIS) may take a leap forward in its ongoing battle with big theme park rival, Universal Studios of Comcast (NASDAQ:CMCSA) by bringing Star Wars to its theme park.  In 2010, Universal Studios introduced the Wizarding World Of Harry Potter in Orlando theme park and it has been gaining popularity since. Star Wars has a huge fan base across the globe, and it will be interesting to see how Disney’s fans react to the arrival of the newly bought franchisee into its theme park.
Star Wars Land At Disney’s Park
It’s been less than a year since Disney bought Lucasfilm for $4 billion, and it appears that they have big plans for the franchise at their theme parks as it may bring Star Wars Land to Walt Disney World’s Hollywood Studios in Orlando. The project would be completed by 2018 and cost around $200 million.  Interestingly, Disney plans to come up with a new Star Wars movie every year beginning in 2015 with Episode VII.  This will help the company to promote the new addition in the theme park.
Only a few miles away, Comcast’s Universal Studios and its sister park, Islands of Adventure, have been running the popular rides based on The Simpsons, Transformers, Jurassic Park and Harry Potter. The idea of Star Wars Land looks like a direct reply to Universal’s Wizarding World of Harry Potter, which has a reputation of stunning and groundbreaking theme park experience. Disney also has the strong addition of New Fantasyland to boast at the Magic Kingdom, but Star Wars Land will be even bigger, in terms of grabbing attention and franchise appeal.
What Does It Mean For Disney?
Disney’s parks in the U.S. contribute more than 15% to the company’s value. The attendance and per capita spending drive the revenues from this division. The new addition will boost the attendance to the theme park. One of the important trends influencing the growth of theme parks industry is the concept of park-within-a-park. Disney as well as Universal have been investing to create multiple themes within their parks.
In addition to this, Disney invests in technology upgrade and other services to improve visitor experience. Such investments are necessary to drive attendance growth and at the same time provide the company an opportunity to connect with consumers in a better way and cross-market other company products such as movies, consumer goods, TV programming and games. Disney’s domestic theme park attendance has grown at an average annual rate of less than 1.5% for the last 5 years. We estimate the attendance to surpass 85 million by 2018.
Our price estimate for Disney stands at $66, which is roughly in line with the market price.Notes:
- The empire strikes back: Disney readies a major Hollywood Studios expansion at Walt Disney World, Theme Park Insider, Jun 13, 2013 [↩]
- Rumored ‘Star Wars’ land at Disney World said to be biggest expansion in resort history, Hypable, Jun 24, 2013 [↩]
- Disney Says New ‘Star Wars’ Films Will Open Every Summer Starting in 2015, Slash FIlm, Apr 17, 2013 [↩]