Disney plans to expand parks investment to $60 billion over 10 years

Sep 19, 2023 in "The Walt Disney Company"

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Posted: Tuesday September 19, 2023 9:32am ET by WDWMAGIC Staff

The Walt Disney Company is developing plans to accelerate and expand investment in its Parks, Experiences and Products segment to nearly double capital expenditures over the course of approximately 10 years to roughly $60 billion, including by investing in expanding and enhancing domestic and international parks and cruise line capacity.

Senior Disney executives, including Chief Executive Officer Bob Iger and Disney Parks, Experiences and Products Chairman Josh D’Amaro, are gathered today with Wall Street analysts and investors at Walt Disney World Resort in Orlando, Florida for an investor summit focused on Disney's Parks business.

"We’re incredibly mindful of the financial underpinning of the company, the need to continue to grow in terms of bottom line, the need to invest wisely so that we're increasing the returns on invested capital, and the need to maintain a balance sheet, for a variety of reasons," said Bob Iger. "The company is able to absorb those costs and continue to grow the bottom line and look expansively at how we return value and capital to our shareholders."

"We have an ambitious growth story that is supported by a proven track record and a bold vision for the future of our Parks business," said D'Amaro.

Disney shares fell just over 2% in early trading following the announcement.

Speaking in April 2023 at the Walt Disney Company Annual shareholder meeting, Disney CEO Bob Iger said that Disney plans to spend $17 billion over the next ten years in Walt Disney World, bringing 13,000 new jobs to the area. It isn't clear how today's announcement impacts those numbers, or how much of this $60 billion is earmarked for Walt Disney World.

Disney's Parks business is a key driver of value creation for the company, and positive segment results in recent past quarters through FY23Q3 have come in part from strong performance at Disney’s international parks, particularly those in Asia. Shanghai Disney Resort and Hong Kong Disneyland, which have both shown meaningful growth coming out of the pandemic through Q3 FY23, have even further growth opportunities with the expansions set to open later this year.

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Disney says that its business's growth strategy for the parks over the next ten years will be a focus on stories, scale, and fans.

Stories

Disney will explore even more characters and franchises, including some that haven’t been leveraged extensively to date, as it embarks on a new period of significant growth domestically and internationally in its parks and resorts.

"We have a wealth of untapped stories to bring to life across our business," said D'Amaro. "Frozen, one of the most successful and popular animated franchises of all time, could have a presence at the Disneyland Resort. Wakanda has yet to be brought to life. The world of Coco is just waiting to be explored. There's a lot of storytelling opportunity."

Scale

Disney Parks has over 1,000 acres of land for possible future development to expand theme park space across its existing sites – the equivalent of about seven new Disneyland Parks.

"We stand alone when it comes to scale," said D'Amaro. "And while our scale is impressive, we have no shortage of space or regions of the world in which to tell new stories."

Fans

Today, Disney has seven of the top ten most attended theme parks in the world, including Walt Disney World’s Magic Kingdom Park, which has been the #1 attended theme park on earth for decades. Disney Parks welcome approximately 100 million guests each year.

Disney says there is still enormous untapped potential for reaching more consumers. According to Disney’s internal research, there is an addressable market of more than 700 million people with high Disney affinity it has yet to reach with its Parks. In fact, for every one guest who visits a Disney Park, there are more than ten people with Disney affinity who do not visit the Parks

"Ultimately what is most important to us is the relationship that we have with every guest," said D'Amaro. "Guests can spend a day with us at our Parks, a week with us on a Cruise, or the rest of their lives with us through Disney Vacation Club membership."

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flyerjab5 days ago

Could not have answered this better. Spending money, and spending money wisely, are two…different…topics.

MisterPenguin5 days ago

You're conflating two things. 1. "whatever amount people would like to believe is going to be spent" shows a skepticism that money won't be spent either in part or in whole. Insiders have told us that in some cases they know of, in which it seems money was cut, the fact is that the money was spent in full, only that some of the things had cost overruns leaving not enough money to do all the things they had hoped to do. All the money was spent, but we got less than than we hoped for from it. Which leads to your second point... 2. "...is going to be spent wisely" goes to your point that there are indeed cost overruns. Was the scope of the build too big? Were the estimates the result of gross incompetence? Was the supervision of the construction grossly incompetent? I certainly don't know what the cause of the systemic cost overruns are. But I acknowledge they exist. So, when people moan that they doubt the full $60B will be spent -- despite showing up in a plenitude of SEC filings and mentioned by many execs over and over doubling down on it really happening -- by implying that Disney will secretly not spend that much... that's just uncalled for. It's point-scoring against Disney for whatever reason they have for point-scoring. Billions have been spent over the past decade, and so that kind of skepticism rings hollow. Very, very, very hollow. However, if they want to make the point that the $60B isn't going to buy us all the stuff they say (which, by the way, is very little so far... we have a bunch of insiders relaying a lot of wishes and hopes, but that's not official Disney); then that is indeed borne out by history of cost overruns. Which is a worthy critique to lob at Disney.

Disstevefan15 days ago

This will be interesting to watch. Disney can talk about investment in the parks but will just have to see what happens in reality. In my opinion, the investment talk was mostly for the proxy fight which Iger easily won anyway, never a doubt. I am selfish so I want everything for my favorite, WDW. As many have said, there are a lot of variables, a lot of external factors that may change the course Disney will go. We have seen Disney change/modify, even completely stop things they where well into or completed, like then Play pavilion and the Galactic Starcruiser. Who knows what and who knows how long we will be waiting for whatever we get. On the bright side, I am loving to watch the break neck speed Universal is working on EPIC. At least I will have a great park to go to and have fun while I am waiting for Disney to do whatever they are planning to do after the cut/change/eliminate things.

LSLS5 days ago

I will point to the words "Can Be"

imagineer975 days ago

Some on these boards haven't gotten wise to it, or maybe they've just got blinders on.

fgmnt5 days ago

There is something to be said for the prices of Disney products increasing and apparently zero efficiencies being successfully wrung out in developing the products. Every $150 million movie or D2C project needs $50 million of reshoots to still be a dud. Every ride needs to cost $100 million even if it’s built inside of an existing building and a painted warehouse. Really stunning lack of improved inputs on the upper management end over the last decade. Luckily the board has gotten wise to this and turned over a lot of the upper management staff 😉

HauntedPirate5 days ago

If anyone can point out the posts where people have stated, "Disney hasn't spent money on the parks", I'm all eyes. If you want to discuss how the money has been spent in the parks, that's been done ad naseum and no one is changing anyone's mind. I'm of the opinion that the spending has been grossly mismanaged and misguided. As such, I have little-to-no faith that whatever amount people would like to believe is going to be spent over the next decade (knowing plans can and do change, not to mention economic climates and financial situations) is going to be spent wisely.

flyerjab5 days ago

Agreed. Prior to Covid, we watched major additions happen at all 4 parks - NFL, Pandora plus park wide enhancements at DAK, DTD evolve into DS, TSL and SW:GE, new DVC, Gran Destino, Skyliner, Rat and the France Pavilion expansion with both Guardians, Moana and Tron having started before the world shut down for a bit. FoF parade, HEA fireworks, Frozen fireworks, Star Wars night time show, Disney Enchantment, Harmonious (a definite miss) and Luminous, as well as the Festival the Arts all started during this time as well. People can argue regarding fonts, how dirty or not dirty Tiana’s car should be (honestly, I can’t even believe I typed that) and whatever other minutia is tied into theming. That is everyone’s right. But please, to say that we are doomed is silly. This company does spend money on parks. The last decade proved that. And the fact that they admitted that this part of the company makes money and that they want to inject more money into it this decade is a good thing. And with Bruce Vaughn leading Imagineering and Rohde helping a bit, I am confident that he will push back in a good way to allow for some thematic cohesion with some of these projects in the next ten years.

MisterPenguin5 days ago

Yeah definitely. Considering how WDW never got around to adding any new rides or attractions in any of the WDW parks for over a decade, we can conclude that nothing else will get done. Good point you make!!

Disstevefan15 days ago

Translation - WDW is screwed.

JoeCamel5 days ago

Fast?

LSLS5 days ago

Honestly I think a lot of the haters on this board have been screaming the same thing. Feels like a win/win. It can be done pretty cheap and fast, but will absolutely help with the crowds all over the park while giving people other things to do.