Shares of The Walt Disney Company soared by 7% on May 7, 2025, following the announcement of a new theme park and resort set to be built on Yas Island in Abu Dhabi. This marks Disney's first major expansion into the Middle East, and the news coincided with the company reporting strong fiscal second-quarter earnings that exceeded analysts' expectations.
The announcement, made in partnership with local developer Miral Group, comes as Disney revealed adjusted earnings per share (EPS) of $1.45 on revenue of $23.62 billion, surpassing predictions of $1.20 and $23.17 billion, respectively. CEO Bob Iger expressed optimism about the company’s future, stating, "Following an excellent first half of the fiscal year, we have a lot more to look forward to, including our upcoming theatrical slate, the launch of ESPN’s new DTC offering, and an unprecedented number of expansion projects underway in our Experiences segment."
The proposed Disney waterfront resort will be located in a region already popular with tourists, which includes attractions like Warner Bros World Yas Island and Yas Waterworld Abu Dhabi. This area has seen significant growth, with over 34 million visits recorded in 2023, reflecting a 38% increase from the previous year.
Josh D’Amaro, Chairman of Disney’s Experiences unit, highlighted the significance of this expansion, stating, "We are excited to bring Disney’s stories to a new audience in the Middle East." The resort is expected to blend Disney’s classic entertainment with the unique cultural heritage of Abu Dhabi, creating an experience that is both "authentically Disney and distinctly Emirati," as described by Iger.
Miral will take charge of financing, constructing, and operating the resort, while Disney will oversee creative leadership and operational aspects. This collaboration aligns with Abu Dhabi's broader strategy to enhance its tourism infrastructure, which includes plans to increase the capacity of Dubai's international airport to accommodate 120 million passengers annually by 2026.
Investors have responded positively to the announcement, reflecting confidence in Disney's growth strategy and its ability to tap into new markets. Disney’s Experiences unit has seen a commitment of $60 billion over the next ten years for expansion efforts, which includes plans to double its cruise ship fleet. The company’s strategic moves come at a time when traditional television is declining, and Disney aims to bolster profits through both streaming and theme park expansions.
In addition to the new park in Abu Dhabi, Disney reported a notable increase in Disney+ subscribers, reaching 126 million in the second quarter, surpassing analysts' expectations of 123.6 million. This marks a significant turnaround from previous forecasts that anticipated a modest decline in subscribers. Disney+ added 1.4 million new subscribers in the recent quarter, while Hulu also saw an increase of 1.1 million customers.
Disney's direct-to-consumer streaming unit, which includes Disney+ and Hulu, reported operating income of $336 million, a substantial increase from $47 million a year earlier. The company also noted a 13% rise in operating income from its U.S. theme parks, driven by increased spending per guest.
Despite the positive earnings report, Disney's stock has faced challenges, falling approximately 17% since the start of the year. However, the recent announcements have provided a much-needed boost to investor confidence. Analysts have noted that while there is uncertainty surrounding macroeconomic factors and potential impacts on advertising revenue, the company's strong performance in streaming and theme parks has helped offset some of these challenges.
Disney's announcement of the new theme park is part of a broader strategy to expand its global footprint and capitalize on emerging markets. The collaboration with Miral Group is seen as a pivotal move that not only enhances Disney's brand presence but also contributes to the local economy and tourism sector in Abu Dhabi.
As Disney continues to navigate the complexities of the entertainment landscape, the company remains committed to innovation and expansion. The upcoming theme park is expected to offer a range of Disney-themed attractions, dining options, and retail experiences, all while celebrating the cultural richness of the region.
The new resort will not only serve as a significant addition to Yas Island but also as a testament to Disney's enduring appeal and adaptability in a rapidly changing market. With plans for the park still in the early stages, industry observers are eager to see how this ambitious project unfolds and what it will mean for Disney's future in the Middle East.
Overall, Disney's recent announcements and financial results reflect a company poised for growth, with a clear vision for the future. As it embarks on this exciting new venture, stakeholders and fans alike are watching closely to see how Disney will continue to enchant audiences around the world.
