Disney next month will reopen Star Tours, the Reagan-era simulator ride that is undergoing its first major upgrade since it debuted in Disney's Hollywood Studios in 1989 — six years after the third film in the original Star Wars trilogy had arrived in movie theaters.
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But Disney is banking on Star Tours to do more than deliver crowds this summer. It also hopes the ride will stoke renewed interest in a long line of Star Wars merchandise — from Goofy-as-Darth-Vader figurines to build-it-yourself light sabers — much the way that the Wizarding World of Harry Potter has fueled record souvenir sales at Universal. Disney says it will have more than 400 Star Wars-themed items for sale in its parks following the reopening of Star Tours — nearly twice as many as it had three years ago.
The strength of the Star Wars brand could go a long way toward helping Disney improve guest spending in its theme parks; sales are only beginning to recover after cratering during the global recession. Per-capita spending rose 8 percent in Disney's U.S. theme parks during the company's first fiscal quarter, though the gains were primarily driven by higher ticket prices and increased spending on food, rather than souvenir sales.
Combined merchandise, food and beverage sales across Walt Disney Parks and Resorts totaled $3.5 billion last year, up a fraction of a percent from a year earlier but still 5 percent below a pre-recession peak of nearly $3.7 billion.
"Our guests have an affinity for Disney characters. But Star Wars folks are particularly fond of their characters," said Rilous Carter, the Disney vice president in charge of Disney's Hollywood Studios.
If Disney can replicate even a fraction of the merchandise success that Universal has had with Harry Potter, executives will be thrilled. Disney licenses the rights to Star Wars from Lucasfilm, while Universal licenses Potter from Warner Bros. and author J.K. Rowling.
The smaller resort has set all-time guest-spending records in the past year, thanks primarily to the popularity of the more than 600 specialty Potter souvenirs it designed — from magic wands to golden snitches — and which it sells in intricately themed shops that have become attractions themselves. Annual merchandise sales skyrocketed 70 percent, from $83 million to $141 million, even though Wizarding World didn't open until halfway through the year. Ticket revenue, by contrast, rose 40 percent to $587 million.
Two years ago, Universal generated an average of $17.46 in souvenir and food sales for every admission to its parks. Wizarding World pushed that to $22.58 per admission in 2010.
Even some Disney executives, who closely study Universal's public financial documents, privately acknowledge that they were taken aback by the dramatic gains in merchandise sales.
"We've made merchandise as much a part of the guest experience as everything else. Beyond that, we are the only place in the world where many of these items can be found," Universal spokesman Tom Schroder said. "Our guests have shown us that they appreciate all of that.
"Everything about the Wizarding World of Harry Potter and the enthusiasm our guests show for it continues to exceed our expectations," Schroder added. "That includes our merchandise."
Ray Braun, a principal with Entertainment Culture Advisors in Beverly Hills, Calif., said Star Wars may be the only individual intellectual property that can match Potter's success in a theme park.
"Those are the top two. They're just such fully realized stories, because of the six films for Star Wars and the eight films for Harry Potter and the way they've been sustained over time," Braun said. "That sort of storytelling continuation makes for an excellent product for our industry."
Although not quite as extensive as Universal's line of Potterabilia, Disney has significantly expanded the Star Wars merchandise available in its parks in recent years. And resort officials say they will introduce another 25 new items, from clothes to toys to pins, tied to the May 20 relaunch of Star Wars.
Disney says Star Wars has proven to be a strong seller in the past. "Tatooine Traders," the gift ship through which Star Tours riders must exit, is typically the No. 2 retail location in Hollywood Studios, trailing only a larger gift shop at the entrance to the theme park. And Disney says the store has exceeded internal sales projections since Star Tours closed in August, buoyed by the popularity of "build-your-own" light sabers, the top-selling souvenir.
"It's a handful of stores that are generating merchandise [in Disney's theme parks], but they are very successful stores," said Howard Roffman, president of Lucas Licensing, the Lucasfilm unit that has cultivated Star Wars into a $20 billion consumer-products juggernaut.
There is a downside for the theme parks: While Star Wars and Harry Potter souvenirs are very popular, they're not necessarily as profitable as other park merchandise because of the hefty royalties Disney and Universal must pay for rights to the properties. That's a particular drawback for Disney, which has a vast library of popular, internal content — from Mickey Mouse to Buzz Lightyear — and which licenses comparatively less content overall than Universal does for its theme parks.
Although both companies closely guard the financial terms of their licensing deals, regulatory filings show that Universal's minimum annual payments for intellectual-property licenses has more than doubled, from $4.6 million to $10.8 million, since 2007, the year it struck its deal for Harry Potter. And those payments do not include volume-based fees.
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