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

Sep 19, 2023 in "The Walt Disney Company"

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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JoeCamel29 days ago

Nothing like 3000 people flooding into a port area - magic! Recalls the joy of rope dropping a park or being first on a new ride - magic!

HauntedPirate29 days ago

And likely why Disney is ordering three smaller ships after their third (mistake of) copying the Wish.

etc9830 days ago

I think part of the problem is with these huge ships, there are a limited number of ports that can accommodate them, so they’re stuck going to the same ones over and over again. Smaller ships have a much larger number of ports they can visit.

wannabeBelle30 days ago

I agree, I tend toward Celebrity but like Royal for a lot of it's offerings as well. It is a tough choice but a good one to have!! With the status matching between the two lines though, it is an easy choice to select one of those two lines. Marie

DisDude3330 days ago

There is some stuff being torn down in AK and word on Main Street is that prep work is about to begin in MK. So, yeah?

Indy_UK30 days ago

I haven't really been around for a little while... Are they Turbocharging investment and building yet?

MR.Dis30 days ago

I have cruised with my daughter and her 2 kids three times (fourth this May). The 2 boys are 6 years apart. The younger goes to the kid's club and gets upset when we come to get him for dinner because he is having too much fun. The older one who is now a teenager, goes to the Teen club, makes friends, and disappears for hours doing whatever teenagers do. They look forward to going, which if anyone has a teenager is very strange since they normally complain about everything- LOL.

TheMaxRebo31 days ago

Definitely found that with Utopia that was more of a party vibe and just doing the 3 adn 4 day sailings and Icon and Star are really just doing a lot of repeat ports ... I am glad they announced their newest Icon class ship, Legend of the Seas, will be doing some different options - starting in Europe for a few months and then will do 6 day western and 8 day southern Caribbean. Not amazingly unique but at least different options form where the other mega ships are going - so I think they have got the hint they need to mix up the ports a bit

BrianLo31 days ago

Definitely. DCL’s problem remains market share. They can get away with their prices because they are such a niche line. Royal (just the line, not the parent company) has like 5.5X more tickets to sell. Therefore price budges. I don’t want to say I foresee them becoming cheaper, just that I foresee the delta between them and maybe Celebrity to become more similar again. DCL historically wasn’t that out of lock step, but they (until now) haven’t had an expansion plan to keep up with their growing demand. I very much expect we’ll see them still have new ships annually even beyond 2031. Royal I think is definitely the best for families, especially with slightly older kids. Unfortunately (a me problem) they are really exclusively going for that demo these days and it’s making their itineraries way too short and repetitive. Hard product I want them to be my favourite line, but the soft product doesn’t match. But that’s what Celebrity covers nicely.

TheMaxRebo31 days ago

We haven't cruise a lot but we have done Disney, Royal Caribbean, and Viking. There are definitely things that DCL does better/very good (service, included food, entertainment, etc) plus has the Disney characters, etc - so if the things they do well are important to you I can see it being worth it. We find for our family Royal Caribbean is the best as there is a lot more variety to the offerings, especially entertainment (some of the stage shows are just as good/better than what Disney does) and it is quite a bit cheaper (though newer ships are getting a bit pricier). Just every time I price out a Disney Cruise I just can't justify the price. We are a family of 5 so either need two rooms or cram in a family room (which are more expensive) so that is probably part of it, but still ... I get them being at a premium price but for us just not worth *how* much more it is - for people that think it is worth it for them though I do get it

HoustonHorn31 days ago

Our first cruise was a group of 12 - 6 adults, 6 children. The adults did Enchante, and the night before, we told our team we wouldn't see them the next night and that we'd just take the kids to the buffet. Our lead server said to just send the kids (4-10 at the time) to them, and they would take care of them and get them to the kids' club after. We thought he was joking, but that's exactly what we did. The kids absolutely loved it, and we were able to have an awesome meal with no worries. Fast forward a year, and we did another cruise with the same families, and the main thing that the kids cared about was whether they were going to get their kids' dinner without us. The other thing I like is that by night 2, they would just bring our drinks and knock stuff off of dishes that we didn't like without being reminded. So I'm a big fan of the rotational dining.