Is the current set of parks sufficient for the next quarter century?

In the next decade, Universal Orlando will open the first wholly-new theme park in Central Florida since its own Islands of Adventure in 1999. Disney will not have opened a new theme park in the Sunshine State for over 20 years.

Disney will tell you that this is, in fact, illustrative of the key difference between it and Universal. While Universal is fighting a battle in Florida that it cannot win, Disney’s eyes are far beyond the horizon — eyeing international expansion unlike any other entertainment enterprise. While Universal remade itself in Florida around Harry Potter, Disney built an entirely new resort in Shanghai, China.

When you look at what Disney is doing, a new park seems to be low on the list of priorities. In Orlando, the company has been taking a park-by-park look at renovating each gate — first with Animal Kingdom, then Disney’s Hollywood Studios, and now with Epcot. Elsewhere, revamps of Disney’s California Adventure and potentially Walt Disney Studios in Paris signal that Disney is largely done expanding.

But, ultimately, that decision will be left up to the new CEO. Will they be content with the current set of parks? Will they want to grow any one resort with a new gate? Will they want to open an entirely new resort somewhere in the world, or even on US soil? The answer to this question will define the theme parks in the 21st century — and only one person will be able to answer it. Too bad we don’t yet know who it is.

What happens in a recession?

Three years into Bob Iger’s tenure as Disney CEO, the world was plunged into a global financial meltdown. The 2008 financial crisis devastated most of the world’s economies — particularly in sectors that live off of discretionary spending. Disney certainly was hurt by the Great Recession, but not as badly as you might think.

In part, this was due to the marginal insulation of the nation’s wealthiest from the downside risk of such a catastrophic recession. It was also due, in part, to the resilience of the American need for entertainment. And so, swimming against the curve, Disney bought Marvel in 2009 for $4 billion. That investment paid off wildly, but it was hardly considered a slam dunk at the time it happened.

Iger’s response to economic disaster put the company in an even stronger financial position after the crash than it was in prior to it. Compare that to Michael Eisner, who was wholly unprepared for the recession of 2001 — which ultimately set in motion the events that would lead to his ouster.

Since the crash, the world economy has been in a boom state. In the US, we are experiencing record growth in that span — falling under two terms of a Democratic and one of a Republican president. But, eventually, the good ride will come to an end. They always do.

As of right now, Disney is positioning its theme parks as luxury experiences — a kind of Apple for entertainment. It’s expensive, yes — but what you get for the cost is a deluxe, high-end product that you won’t be able to get anywhere else. They don’t expect the majority of their guests to go back year-after-year. Instead, they expect them to go less often, but spend more each time.

That is a pretty radical shift from the theme park strategy of old, and it’s one that requires guests who have lots of money to spend. What happens if those wallets start to tighten slightly? What happens if the economy turns downward and what was once one of the great bargains in family entertainment prices itself out of the market? What is the theme park strategy when guests can’t afford to spend thousands on tickets, dining, resorts, hard-ticket events, upcharge experiences, and more?

This will be up to the next CEO to figure out. If they get it right, their tenure in the position could last as long as they want it to. If they get it wrong, it could be the beginning of the end both for them and the theme parks as we know them.