by Ray Keating
News/Analysis
DisneyBizJournal.com
September 19, 2023
Theme parks are cash cows for The Walt Disney Company. As stated by the company, “Disney’s Parks business is a key driver of value creation for the company…”
Therefore, it’s not surprising that Disney announced today a vastly expanded investment commitment to double its projected capital expenditures in its Parks, Experiences and Products segment to $60 billion over the coming decade.
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The commitment will cover “expanding and enhancing domestic and international parks and cruise line capacity.”
Given stepped up competition from Universal and others in the theme park and broader entertainment industries, critics might say that Disney was a bit late in stepping forward with this.
In the Disney statement, it was noted: “Already, new Frozen-themed lands are coming to Hong Kong Disneyland, Walt Disney Studios Park in Paris and Tokyo Disney Resort, as well as a Zootopia-themed land at Shanghai Disney Resort. However, 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.”
As for potential scale, Disney pointed out that “there is significant room for further expansion on land and at sea. In fact, 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.”
And in terms of market size, the company noted:
“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. Yet 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.”
Disney is hosting an investor summit today at Walt Disney World, and more information will be forthcoming at the close of this meeting, according to the company.
Much of the future of Disney is about streaming and theme parks, along with cruise ships, movies and ESPN/sports, of course. And as always, Disney is about synergies among these endeavors, and so much of that synergy is evident in its parks and on its cruise ships. After some stagnation, the company seems ready to make investments to serve current fans (or guests, in Disney-speak) and future ones. This is much-needed, clarifying news from a company recently stuck in a fog. Naturally, though, the devil is in the details and the execution.
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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? (Keating is a Disney shareholder.)
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