Disneyland In Johor?
Trumping Singapore (Again)

Prime Minister Badawi is in Japan at the moment. Word on the street has it that he will be meeting with the Japanese partner for Tokyo Disneyland, with the aim of bringing Disneyland to Nusajaya, near the Second Link in southern Johor. Apparently, officials from UEM Land, a 100% subsidiary of UEM World, are tagging along with Badawi in Tokyo for the pitch. The PM's contingent also includes Azman Mokhtar, the MD of Khazanah, which is also UEM World's largest shareholder. Badawi is said to have already met top Disney officials early this month when he was attending the World Congress for IT 2006 in the US. People familiar with the Disneyland-Nusajaya overture believe that Abdullah's team is in Tokyo to make a serious pitch, with sweeteners that may include offering Disney an internationally competitive package of incentives. Should the pitch be successful, any announcement of Disney making an entry into Malaysia would improve dramatically the values of land near Nusajaya. UEM World is the biggest landowner in Nusajaya. This rumour has a high level of reliability and a decent chance of success. The ramifications are aplenty should it be successful, let's have a look at a few interesting points:

1) Style, Culture, Execution - Having met Disney officials earlier, the Malaysian team is now meeting the Japanese operator, Oriental Land. Chances are Disney will be positive for the project going ahead provided Malaysia rope in the Japanese operator as a partner. Oriental Land has an excellent track record with Disney - first park in Urayasu, Chiba in 1983, and the DisneySea a later addition, both still highly successful. By engaging Oriental Land, Disney would have a higher chance of successful execution should nthe project go to Nusajaya. It would also ensure for proper follow-through and a strict adherence to management style and operational culture. These are the bigger concerns, not just the financial viability alone.

2) Slap In The Face For Singapore - The two Integrated Resorts / Casinos will cost the bidding companies a bomb in Singapore. None of the bidders for the two IRs manage to rope in Disney as partner for the IR. The likely winner for Marina Bay IR is likely to be between Harrah's (my favoured team) or MGM. Genting should get the Sentosa IR with Universal Studios as its partner. Should Disneyland be erected at Nusajaya, it will have a free ride on the incoming tourists to the two IRs. The attrition will be greater for the Sentosa project as you are basically comparing Disney with Universal Studios theme parks - no fight, plus the Disney one will be able to price their products / services a lot cheaper in Nusajaya. The main reason why none of the IR bidders could rope in Disney is that it does not want to be associated with gambling, which will hurt Disney's image - Nusajaya hence becomes a very viable alternative. So, inadvertently and in all probability, Singapore has helped Malaysia get Disneyland.

3) Critical Mass & Feeder Traffic - Chances for success is high for Nusajaya as the critical mass study would reveal the same pitch for the Marina Bay and Sentosa IR projects. There are two potential international landing strips in Johor which will further boost AirAsia / MAS visibility and feeder services. Already AirAsia is very successful ferrying regional travelers at very attractive rates. Imagine the ability to offer routes from Phuket, Bangkok, Haadyai, East Malaysia, HK, Bali, Jakarta to KL/JB for less than RM200 return (US$55) - which is their current pricing structure or thereabouts. Bodes well for AirAsia and could sway Disney's decision. Malaysia's population on its own is insufficient to justify a Disneyland but with AirAsia/MAS, that could seal the deal - wonder if Tony Fernandes is also part of the contingent with Badawi? (He should be, you know).

4) Size, Cost & Cannabalising - The land in Nusajaya is huge. Big enough to fit in 5 or 6 Disneylands with rooms for resorts and hotels. Disney and Oriental Land hold the aces, Badawi and UEM World will probably agree to most requests - free land, waiver of 30% bumiputra holdings, tax incentives .... but its worth it. As for Disney, they are running out of room to grow after HK Disney. They may do one in Shanghai and a Nusajaya Disney would be far enough away from HK, Tokyo and Shanghai to capture the regional crowd without cannabalising the crowds at other Disneys. As for cost, well, the land could come free for all UEM World could care. Compare that to the hundreds of millions each successful bidder will have to pay for the IRs in Singapore - it would be very silly for Disney NOT to do the project.

Credibility & Success Factor: 80%
(Yes, UEM World will benefit, but please don't go overboard until the project is secured and figures have been released).