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Interview with head of Disney Parks

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Posted 01 February 2003 - 04:06 PM

Here's an interview with Jay Rasulo, the new head of Disney parks.

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LOS ANGELES -- In his first three months on the job, Jay Rasulo, the new chief of Disney's theme parks, has seen tourism falter -- just as it seemed about to bounce back from one of the worst slumps in a decade.

"We continue to be in a period of multiple uncertainties," Rasulo said in his first in-depth interview since replacing Paul Pressler, who resigned last year to become CEO of Gap Inc. "We think the comeback will be slow in 2003."

A sagging economy, waning consumer confidence and a possible war with Iraq could forestall any hopes for a quick turnaround in an industry that was devastated by the Sept. 11 terrorist attacks.

On Thursday, Disney reported a 42 percent drop in profit to $256 million, compared with a profit of $438 million a year earlier.

A stronger showing by theme parks in the latest quarter, in comparison with the same period a year ago, helped profits meet analysts' expectations.

Theme-park revenue rose 8 percent to $1.5 billion and operating income rose 20 percent to $225 million.

Much of the increased attendance at Walt Disney World reflected a bad quarter last year, when cancellations, deferrals and reduced travel weighed on results.

In such an uncertain climate, the 17-year Disney veteran is drawing heavily on his international-marketing expertise to find new ways of luring visitors to the company's 10 theme parks around the globe.

Rasulo has set about overhauling the company's theme-park marketing strategy by changing the way it markets to domestic and international travelers, and tailoring entertainment to suit the individual tastes of vacationers.

Promotes live shows

He also is looking to promote more live shows in theme parks, such as the Broadway-style Aladdin show at Disney's California Adventure park.

If successful, the show could find venues at other Disney parks and become a model for other Broadway-style versions of classic Disney fare.

Industry analysts say Rasulo's strategy is prudent for the market. "The idea for live-entertainment shows is smart because it's less risky than putting in a $100 million attraction," said veteran leisure-industry consultant Steve Baker. "I think they've squeezed the parks too much. Now they've got to get back to concentrating on the show and that's what they seem to be doing."

Big rides coming

Disney, however, hasn't given up on the big so called E-ticket rides. Later this year, the company opens Mission: Space, a $120 million space-flight simulation attraction at Epcot.

Next year, California Adventure will add Twilight Zone Tower of Terror. The new attractions come after a period of heavy belt-tightening across Disney's parks.

Rasulo, a 47-year-old New Yorker who is fluent in French and a connoisseur of fine wine, came to his current job after two years as CEO of Euro Disney, where he helped to transform Disneyland Paris into the most popular tourist destination in Europe.

Drawing on his international experiences, one of Rasulo's top priorities has been to change the way Disney markets its parks in Europe.

"The idea is to motivate a desire to go to a Disney destination," he said, adding that a similar approach might be used to jointly promote Walt Disney World and Disneyland.

Through what Rasulo terms "portfolio marketing," Disney also is looking to create more cross promotions among Disney's parks. One idea: create global promotion around the theme of Disney princesses.

"Every one of our parks has a princess. Why not blow that into a global theme-park initiative for a year," he said.

To counteract the steep falloff in international travel that ensued after Sept. 11, Disney also has aggressively stepped up its marketing in Europe, Canada and Asia.

Disney develops database

Following a practice common in the lodging industry for years, Disney also is venturing into the practice of database marketing. Walt Disney World has developed a database called "Destination Disney" that tracks demographics and vacation preferences of its customers.

"This allows us to communicate with our guests and get to know them better so we can create a resort experience tailored to their families' needs and desires," Rasulo said.

The marketing approach comes as Disney takes a breather after a period of hefty investment since 1990.

It was then that CEO Michael Eisner outlined a 10-year plan to do "nothing less than reinvent the Disney theme park and resort experience." The expansion continued into the new millennium, with Disney opening three new parks in Anaheim, Calif.; Paris and Tokyo in 18 months.

Overseas push is costly

The overseas push continued last month with the groundbreaking of Hong Kong Disneyland, set to open by 2006. The 310-acre project at Penny's Bay on Lantau Island represents a stepping-stone to tap into the potentially lucrative market of China, where Mickey already is a household name.

"Hong Kong is such a vast market in terms of the potential," Rasulo said. Outside of Hong Kong, however, Disney has neither the capital nor the inclination to spend hundreds of millions building theme parks in the next decade.

Instead, the company will focus on rounding out existing attractions and finding ways to entice vacationers and keep them coming back, Rasulo said.

To that end, Rasulo is pushing for more live entertainment across all of Disney's properties. The test case is the Aladdin musical show at Disney's California Adventure, an elaborate, 40-minute stage show produced under the direction of New York theater veteran Anne Hamburger.

The 40-minute show, based on Disney's animated hit movie, goes well beyond the kind of live entertainment Disney has previously offered at its theme parks.

The attraction is part of a strategy to invigorate Disney's California Adventure, which has struggled to meet attendance projections.

"I see this as an evolution for us in entertainment," Rasulo said.

Richard Verrier can be reached at richard.verrier@latimes.com or 1-800-528-4637, Ext. 77936.

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