Disney looks to enhance theme parks & cruises with $60B investment
The Burbank-based Walt Disney Co. plans to double its investment in its theme park and cruise ship businesses over the next 10 years, with plans to spend about $60 billion to expand and enhance its destination attractions.
"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,'' Disney CEO Bob Iger said during a conference with investors and analysts at Walt Disney World in Orlando, Florida. "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.''
The expanded investment in parks and cruises is seen as an effort to capitalize on their continued popularity among the vacationing public, compared with the relatively waning success of the company's television networks.
Iger and Josh D'Amaro, chairman of the company's Parks, Experiences and Products division, pointed to the company's vast land holdings that could be used for expansion of its existing theme parks. They noted the company's parks division has more than 1,000 acres of available expansion space, roughly the equivalent of seven Disneyland parks.
"We stand alone when it comes to scale,'' D'Amaro said. "And while our scale is impressive, we have no shortage of space or regions of the world in which to tell new stories.''
The company also pointed to the strong financial strength of its park business, noting strong performance in recent earnings reports, particularly at Shanghai Disney Resort and Hong Kong Disneyland.
Disney previously announced plans for its worldwide cruise line, by adding three more ships over the next three years and introducing a home port in Singapore in 2025 "to expand its reach further into the Asia Pacific region."
Despite the existing popularity of Disney parks and attractions, company officials said in a statement that its research shows there is an "addressable market of more than 700 million people with high Disney affinity it has yet to reach with its parks."
"Throughout our history, we've created enormous growth by investing the right amount of capital into the right projects at the right moment,'' Iger said. "We are planning to turbocharge our growth yet again with a robust amount of strategic investment in this business."
Iger and D'Amaro said the company's parks have a lush pool of "stories" from which to choose to fuel expansion, by adding themed lands based on popular films -- in the model of Cars Land at Disney California Adventure and Star Wars Galaxy's Edge at Disneyland.
"We have a wealth of untapped stories to bring to life across our business,'' D'Amaro said. '"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."
