Disney, Challenged Elsewhere, Plans to Spend $60 Billion on Parks and Cruises

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Amid uncertainty for the company’s movie and TV divisions, the concern implicit the adjacent decennary doubles the outlay successful the past 10 years.

People locomotion  done  a parkland  successful  Disney World successful  the evening, with a ample  works  statue of a kneeling pistillate   and Epcot Center successful  the background.
Disney’s main executive, Robert A. Iger, has called its parks part — including Disney World, supra — “a cardinal maturation engine.”Credit...Todd Anderson for The New York Times

Brooks Barnes

Sept. 19, 2023, 9:02 a.m. ET

Disney’s taxable parks volition make an estimated $10 cardinal successful nett this year, up from $2.2 cardinal a decennary ago. Not atrocious for a 68-year-old business, particularly considering the devastation wrought by the pandemic conscionable a mates of years ago.

But however overmuch roar is left?

Last month, erstwhile Robert A. Iger, Disney’s main enforcement officer, singled retired the parks part arsenic “a cardinal maturation engine” connected an earnings-related league call, Wall Street furrowed its brow. Disneyland successful Anaheim, Calif., has agelong been viewed arsenic maxed out, with small country to expand. Walt Disney World adjacent Orlando, Fla., has go a question mark, fixed that Mr. Iger has said the company’s legal conflict with Florida’s governor, Ron DeSantis, could imperil $17 billion successful planned enlargement astatine the edifice implicit the adjacent decade. Disney’s overseas parks — speech from Tokyo Disney Resort, which it receives royalties from but does not ain — person sometimes struggled to crook a profit.

On Tuesday, Disney offered a clearer representation of the accidental it sees, which tin lone beryllium described arsenic colossal: The institution disclosed successful a information filing that it planned to walk astir $60 cardinal implicit the adjacent decennary to grow its home and planetary parks and to proceed gathering Disney Cruise Line. That magnitude is treble what Disney spent connected parks and the cruise enactment implicit the past decade, which was itself a play of greatly accrued investment.

In the past decade, Disney has opened the Shanghai Disney Resort, much than doubled its cruise enactment capableness and added rides based connected intelligence properties similar “Star Wars,” “Guardians of the Galaxy,” “Tron,” Spider-Man, “Avatar” and “Toy Story” to its home parks. Disney has besides poured wealth into its Paris and Hong Kong parks, with themed expansions tied to “Frozen” and different Disney films scheduled to unfastened soon. Three much water liners are connected the way, bringing the Disney fleet to 8 ships, and Disney is nearing completion of a new port connected a Bahamian island. (Disney already has one backstage land port.)

If that is what $30 cardinal tin buy, ideate what $60 cardinal mightiness bring.

“There are acold less limits to our parks concern than radical think,” Mr. Iger said successful an email.

“The maturation trajectory is precise compelling if we bash thing beyond what we person already committed,” helium continued, referring to attractions and ships that person been announced but are not yet operational. “By dramatically expanding our concern — gathering big, being ambitious, maintaining prime and precocious standards and utilizing our astir fashionable I.P. — it volition beryllium turbocharged.”


Josh D’Amaro, president of the parks division, noted that films similar “Coco” and “Zootopia” had not yet been incorporated into the parks successful a meaningful way.Credit...Todd Anderson for The New York Times

Disney is expanding the concern aft a agelong of occupation successful astir each its divisions. Cable television, including ESPN, has go a shadiness of its erstwhile self, the effect of cord cutting, advertizing weakness and rising sports programming costs. Disney had a disappointing summer astatine the container office, with movies similar “Indiana Jones and the Dial of Destiny” and “Haunted Mansion” selling sharply less tickets than anticipated. The company’s Disney+ streaming work continues to suffer money; Mr. Iger has said it volition beryllium profitable by autumn 2024, but immoderate investors are skeptical.

Disney shares closed connected Monday astatine $85. Their terms was $197 successful 2021.

In contrast, Disney’s parks and cruise concern has been a agleam spot, successful galore ways propping up the full company. In the astir caller quarter, Disney Parks, Experiences and Products generated $2.4 cardinal successful operating income, an 11 percent summation from a twelvemonth earlier. Disney Media and Entertainment Distribution had $1.1 cardinal successful operating profit, an 18 percent decline.

Spending per impermanent astatine Disney parks has accrued 42 percent since 2019, successful portion due to the fact that of higher prices for tickets, food, merchandise and edifice rooms.

“The banal is inexpensive fixed however bully the parks are,” Michael Nathanson, an expert astatine SVB MoffettNathanson, said connected Monday, earlier the enlargement was announced.


An attraction based connected “Moana” astatine Disney World is among those that person already been announced but are not yet unfastened to the public.Credit...Todd Anderson for The New York Times

Still, accrued concern successful taxable parks brings accrued risk. It is simply a concern that volition ever beryllium delicate to factors beyond Disney’s control: swings successful the economy, state prices, hurricanes, earthquakes, hostility betwixt the United States and China. Disney has greatly accrued security, deploying undercover guards and installing metallic detectors, but these teeming resorts — Disney parks attracted an estimated 121 cardinal visitors past twelvemonth — could go shade towns if a convulsive lawsuit took place.

Josh D’Amaro, president of Disney Parks, Experiences and Products, said radical who focused connected specified risks overlooked the resilience of taxable parkland fans. He noted that customers had travel flooding backmost erstwhile Disney parks reopened during the pandemic.

“Every clip determination has been a infinitesimal of situation oregon concern, we person managed to bounce backmost faster than anyone expected,” helium said.

Mr. D’Amaro declined to specify however the institution planned to walk the $60 billion. But helium gave hints, noting that Disney movies similar “Coco,” “Zootopia,” “Encanto” and others had not yet been incorporated into the company’s parks successful meaningful ways.

“Imagine bringing Wakanda to life,” helium said, referring to the fictional “Black Panther” kingdom. “In presumption of bringing the latest Disney-Marvel-Pixar intelligence spot to the parks, we haven’t travel adjacent to scratching the surface. And we person learned that incorporating Disney I.P. increases the instrumentality connected concern significantly.”


A rendering of an country adjacent to Disneyland successful California that Disney wants to redevelop, adding rides based connected movies similar “Avatar.”Credit...Disney

Disney owns 1,000 undeveloped acres crossed its existing taxable parkland resorts, Mr. D’Amaro noted. (For comparison, helium said, that’s the size of 7 Disneylands.) One of the biggest areas of opportunity, helium said, involves the archetypal Disneyland, which opened successful 1955. If the institution tin persuade the City of Anaheim to alteration a plan, adopted successful the 1990s, that limits wherever hotels, parking tons and attractions tin beryllium built, Disney intends to redevelop onshore adjacent to Disneyland, greatly expanding capacity. Disney besides plans to crook a parking country southbound of the parkland into a themed shopping, eating and edifice district.

Disney released a 17,000-page environmental interaction study for the task past week. The Anaheim City Council is expected to ballot connected the changes successful mid- to precocious 2024.

How overmuch Disney invests successful Florida whitethorn beryllium connected the courts, wherever the institution is battling Mr. DeSantis and his allies for power implicit Disney World’s maturation plan. Angered implicit Disney’s disapproval of a Florida acquisition law, Mr. DeSantis successful April ended the company’s long-held quality to self-govern its 25,000-acre edifice arsenic if it were a county. Disney maintains that anterior contracts sphere its quality to power development, however.

“We privation to support increasing and investing and person ambitious plans successful Florida,” Mr. D’Amaro said. “For the payment of our guests, our formed members and the system of cardinal Florida, we anticipation the conditions volition beryllium determination for america to bash so.” He declined to remark further.

At the moment, Disney does not program to physique parks successful caller countries oregon cities. (In the past, the institution looked astatine gathering a parkland successful India, for instance, and expanding beyond Hong Kong and Shanghai successful China.) Rather, the institution volition absorption connected processing caller ports for its ships.

Starting successful 2025, a caller cruise vessel — the biggest successful Disney’s fleet truthful far, with abstraction for much than 6,000 guests — volition beryllium based successful Singapore. Disney’s ships person grown progressively themed, with characters and artwork from franchises similar “Frozen,” “Star Wars” and Marvel’s Avengers incorporated into restaurants and amusement zones.

“It’s similar bringing a taxable parkland to a caller portion of the world,” Mr. D’Amaro said of Disney Cruise Line, which has precocious been booked to 98 percent of capacity.

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