People visit Shanghai Disney Resort during a media preview of the world's first Zootopia-themed land, in Shanghai, China September 5, 2023.
New York CNN —
Disney is greatly expanding its investment into theme parks and cruises, the company said Tuesday.
Over the next 10 years, it will pour $60 billion into its Disney Parks, Experiences and Products segment, according to an SEC filing which coincided with its investor summit taking place this week. That’s about twice what it spent in the most recent 10-year period.
The investment comes at a time the company is facing revenue challenges in its streaming services, movie and television assets — almost everywhere but its international theme parks.
Parks are a powerful growth engine for the company, which says the expansion should help it reach a multitude of Disney fans who aren’t already visitors. But competition is fierce, and fans might be growing impatient with what they see as Disney’s disappointingly slow-moving park strategy.
NBCUniversal’s Universal Epic Universe is slated to open in Orlando, Florida in 2025. The theme park, which was announced in 2019, is set to include restaurants, hotels and, of course, rides. It will become the third theme park within the Universal Orlando Resort, stepping up its rivalry with Walt Disney World’s four theme parks.
Construction of Universal's Epic Universe theme park, seen along Destination Parkway, on Aug. 16, 2022, in Orlando, Florida.
With the much-anticipated park under construction, Disney’s vague 10-year plan feels underwhelming, noted Alicia Stella, who runs the theme park blog Orlando Park Stop.
“Especially here in Orlando, I think a lot of theme park fans are excited for,” the new Universal park, she said. With Disney, fans are wondering, “when will we see something new? Will it be five years, six years from now?”
The announcement also failed to impress Wall Street. Disney slumped about 3% during trading hours Tuesday.
Trouble at home
Disney said Tuesday that it is focused on “expanding and enhancing” its theme parks, in the US and internationally, along with its cruise lines. The company has “over 1,000 acres of land for possible future development to expand theme park space across its existing sites,” according to a blog post published Tuesday, which didn’t go into specifics.
Even where space is limited at its original resort in Anaheim, California, Disney has launched a multi-year project called “Disneyland Forward,” in attempts to build more attractions, dining and shopping on existing square footage. While an environmental impact report is done, no specific plans are set.
Disney relies on its formidable trove of intellectual property to drive interest in its parks — and uses the parks to get people more invested in those properties. In addition to its established characters and powerhouse brands like Avengers and Star Wars the company may bring out underutilized films and characters in the future.
“Frozen, one of the most successful and popular animated franchises of all time, could have a presence at the Disneyland Resort,” noted Josh D’Amaro, chairman of Disney Parks, Experiences and Products. “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.”
The cruises, meanwhile, are a “powerful ambassador for the brand,” with global reach, the blog post said. Disney had previously announced an expansion of its fleet of cruise ships.
The Disney Dream cruise ship.
Parks have been good business for Disney, which is working to stem losses in particular in its streaming business. The parks division continues to create strong earnings and free cash flow, Interim CFO Kevin Lansberry said during the company’s third-quarter earnings call in August.
CEO Bob Iger said, during the same call, that parks in Asia are doing “exceptionally well,” but that “we saw softer performance at Walt Disney World from the prior year, coming off our highly successful 50th anniversary celebration.” Iger added that the “strong dollar is expected to continue tamping down international visitation,” to Florida, where the resort is located. Disney is also in an ongoing legal conflict with Florida Governor Ron DeSantis.
Higher prices could be a turnoff for visitors, as well. Disney World increased some ticket prices twice last year.
“Disney has a reputation in recent years for being a very expensive vacation,” said Stella, noting that locals “are a little upset with the the extra fees.”
