A few months ago, Jay Rasulo, the worldwide head of Disney's parks and resorts, announced a plan to bring the Disney themed hotel concept to cities around America (and presumably around the world, later). He was vague on the details, and industry analysts either scratched their heads or simply shrugged. Who’s going to want to visit the themed Disney hotel (say, the Grand Floridian as an example) while they happen to be in Boston for business, they ask. After all, the attraction of a Disney-themed hotel is only really there when you’re already on vacation at Walt Disney World and want the magic to continue into the evening. Can that magic really be there for just a part of the day?

It turns out Disney may have much more in mind than just a hotel. What if it were a hotel, an indoor water park, a shopping area, and an E-Ticket ride all bundled together and themed into one seamless region? Imagine Fort Wilderness, an indoor River Country, and a Splash Mountain all plopped down together and forming a contiguous themed environment. Or Animal Kingdom Lodge and Kali River Rapids and an Africa-themed indoor water park, again, of modest size and scope, but highly themed.

Kali River Rapids... in Chicago?

One obvious goal here is to lure families to stay at the Disney-branded hotel since they are coming to the city in question anyway. Why not stay at a place that has an indoor water park (indoor because that enables Disney to branch out to colder cities too, and attract folks year round) that includes free admission when you stay at the hotel? The entire concept is collectively known as Location-Based Entertainment (LBE), an idea flirted with during Eisner’s years with the DisneyQuest arcade idea.

DisneyQuest (DQ) was an admitted failure, however, and its one location outside Walt Disney World (WDW)—in Chicago—closed after a few years. The reason is pretty obvious: DQ is little more than a glorified and highly overpriced arcade. It only remains at WDW because tourists find it easy to "add on" to their theme park tickets and can visit the water parks. Because DQ is included with the water park tickets, it attracts an audience. Otherwise, it too might have closed by now, as indeed it was struggling for some time.

But the new model for LBE—hotel, water park, E-Ticket—might succeed just for being a different kind of offering. This wouldn’t need to stand on its own merits and encourage a visit during a few hours of the day; it could instead *be* the destination for families coming to Chicago anyway. That was never going to be the case for DisneyQuest, but might for the hotel-park-ride combo.

Disney may well have been inspired by the Nickelodeon hotel sitting close to WDW’s front door, on Osceola Parkway not far from Disney-MGM Studios. (Hmm, yet another instance of Disney being reactive rather than proactive?) At any rate, this Nickelodeon hotel, a joint effort with Holiday Inn, was a one-of-a-kind venture. It’s got a moderate-sized water park in its central courtyard, available ONLY to people who stay at the hotel. I confess, for a family it’s a pretty big incentive to choose this hotel over the competition, especially if rates are competitive (and they are).

Nickelodeon Resorts Marriott Hotel concept art.

The Nickelodeon hotel brand has been in the news since early June, because the contract with Holiday Inn is expiring, and Viacom will be partnering with Marriott instead. The fate of the current Orlando location wasn’t specified—one hopes they won’t simply close it. But the new partnership will yield twenty new versions of the Nickelodeon hotel-water park combo, the first to be built in San Diego by 2010 (concept art above).

Eyeing the success of the Nickelodeon Hotel, Disney decided to mimic it but one-up it by including also an E-Ticket ride (think of the Desperado roller coaster at Buffalo Bills, on the California-Nevada border, for an instance of a hotel with a premier ride attached). This is one of those ways that Disney being reactive (rather than proactive) can still be a benefit for the consumer. The nature of this free market is such that Nickelodeon’s innovation will be mimicked and improved upon, and the customer always wins with an enhanced product.

Could the Animal Kingdom Lodge concept be successfully exported?

There’s another side to adding an E-Ticket attraction: you might actually lure people to your LBE property who aren’t even staying there. Let’s go back mentally to Chicago or New York, and envision the LBE hotel somewhere near the convention center. You’ve already got whole families staying there, in many cases the families of people who had to go to New York for the convention anyway, and decided to bring along the whole brood because of this new Disney hotel offering. Those folks are the easy marks to come spend the day at your entertainment offerings.

But that convention mentioned above would also draw conventioneers who are staying at other hotels, and this crowd might also come to the LBE hotel/park for a few hours just to ride the E-Ticket. Oh, but darn... they are wearing suits and don’t want to get wet, so maybe they won’t go after all.

Enter the magic of Imagineering: they’ve cooked up a high-tech way (probably with radio frequency and GPS and the like) to know if a particular vehicle should get wet or not, and will turn off the water effects accordingly. That means things like dampeners and shields on the drops so that no water gets into the vehicle, and any other water effects that might otherwise get the people wet will also be turned off. Thus, you could ride safely in your business attire and not get the least wet. Those people staying at the hotel or who otherwise do want to get wet, meanwhile, simply wait for a ride vehicle that WILL get wet. Customizable vacations, made to order.

A reverse view of a drop on Splash Mountain. The ride vehicles, said to be a cross
between flume logs and round "rapids" boats, will know whether you want to get wet or not.

There’s another recent Disney initiative, Adventures by Disney (a Disney-organized tour and vacation of popular non-Disney locales around the world, where you are pampered and led around but pay a premium for it). Taken together with Adventures by Disney, the LBE hotel/park concept really means a fundamental shift in the way the company expects people to consume Disney entertainment. The old model was firmly anchored in Disneyland and Disney World. Come to one of the coasts, and enjoy a vacation in these "hardened" locations. But the new model is much more decentralized, flexible, and "soft" locations.

It’s an open question, and one sure to be hotly debated, just how much this will cannibalize the theme park attendance. What if these LBE hotels are popular and become a draw? Well, let’s imagine a family in Provo, Utah decided on its trip for 2009. They eyeball Disney World, which is where they usually go. But for a fraction of the price, they could go to Phoenix and enjoy a water park and a ride. It would be a shorter vacation, but they’d save enormous amounts of money. What do they decide?

There may not be a DisneyQuest coming soon to a city near you,
but there may be a Disney ride of some kind.

It’s also possible, of course, that the LBE hotels will have the opposite effect, that they will "advertise" rather than "cannibalize." That, I’m sure, is the goal in the first place. People will visit the LBE hotel in Dallas and get their appetites whetted for a real Disney vacation in Orlando. Should this occur, the idea of "forward bases of operations" for the parks will have been a remarkably successful leap of faith, especially considering the DisneyQuest fiasco a few years ago.

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© 2007 Kevin Yee