Disney Begins Three-Pronged Expansion Strategy
The Walt Disney Company did more than merely announce intended theme park expansion.
Disney filed paperwork with the SEC. That’s the difference between saying you’ll buy a car versus pulling out of the car lot in your new vehicle.
One could be cheap talk with no follow-through; The second is as specific as you can get.
Yes, Disney just shook the foundations of the other theme park industry by announcing the equivalent of another Disney Decade in the offing at the parks.
In the process, Disney unveiled a three-pronged theme park strategy. Let’s talk about Disney’s bold announcement.
Here’s What Disney Just Confirmed
Let’s start with what Disney has confirmed. That’s important to clarify, given Disney’s recent tendency to tap-dance around specifics.
Here’s the crux of the filing that I’ve truncated at times for clarity:
“The Walt Disney Company is providing the following update regarding its plans for capital expenditures at its Disney Parks, Experiences and Products (“DPEP”) segment.”
The Company is developing plans to accelerate and expand investment in its DPEP segment, to nearly double, as compared to the previous approximately 10-year period…”
“(This will happen over ten years at a cost of) approximately $60 billion…by investing in expanding and enhancing domestic and international parks and cruise line capacity.”
“We believe that the Company’s financial condition is strong and that its cash balances…provide adequate resources to fund…” (future and current park/expansion expenses.)
I’ve broken up some of the sentences to make it more readable on phones, but that’s Disney saying it’ll spend $60 billion on its theme parks over the next decade.
Before you get too excited, Disney has already made a significant distinction.
During the most recent decade, Disney spent $30 billion, and that happened even after Disney reduced capital expenditures due to the pandemic.
In short, once we factor in a decade of inflation, this proclamation isn’t as jaw-dropping as it sounds.
Disney’s First Plan
Let’s begin with a reminder that the next decade will include new cruise ships in the next three years.
With Disney Cruise Line exploding in popularity, the possibility remains that it’ll build more ships as well.
Even if Disney Cruise Line stops for a while after those three ships, we’re still discussing nearly $3 billion in investments right there.
Disney also references upcoming improvements at Disney’s Fort Wilderness and Disney’s Polynesian Village Resort.
Construction is already underway at both, but they’re significant in that they provide a reminder that Disney will spend money on hotel expansion, too.
If/when Disney expands Disneyland Resort and Walt Disney World, it’ll need a place to host thousands more guests.
Importantly, this statement doesn’t exclusively apply to Disney’s American parks.
Some of the expansion projects will occur at Hong Kong Disneyland, Shanghai Disneyland, and Disneyland Paris.
Since The Oriental Land Company owns Tokyo Disney Resort, that’s the one place we know the money won’t go.
Still, Disney has signaled that it’ll expand its theme park empire dramatically.
I would describe Disney’s plan here in Field of Dreams terms. “If you build it, they will come.”
Disney has witnessed the high-profit margins at its parks as well as Universal Studios, and it recognizes that the demand outweighs the supply.
Earlier this year, Universal Studios announced a new theme park in Texas and a permanent Halloween Horror Nights installation in Las Vegas.
We also recently learned more about Universal Epic Universe, which will arrive in the summer of 2025.
Now, Disney is announcing the intent to go even bigger than its smaller competitor.
Disney’s Second Plan
In some circles, the belief is that Universal is gaining on Disney. While the numbers don’t support that assertion much, there’s one valid argument here.
During the pandemic, Universal’s Orlando parks gained in popularity, while Walt Disney World stagnated.
Part of Disney’s problem is that its parks have also stagnated. Yes, Disney has sprinkled in new stuff, but it took forever due to the pandemic.
Disney announced the reimagining of EPCOT in 2016. It’s September 2023, and that project still hasn’t finished yet!
When Tron Lightcycle / Run finally opened, I felt like popping a bottle of champagne to celebrate. I’d been describing it as coming soon since 2017!
As I recently discussed, Disney was in danger of running out of attractions soon.
At the end of 2024, once Tiana’s Bayou Adventure debuts, Walt Disney World will run out of announced projects.
That’ll be the first time it’s happened since before New Fantasyland construction began.
Driving home this point, Universal Orlando Resort will open an entirely new theme park in 2025.
Walt Disney World currently promises no new attractions. Which place sounds more vibrant and future-thinking to you?
So, the other part of Disney’s plan is to remind people why it’s by far the most popular theme park company on the planet.
During Destination D23, Josh D’Amaro hinted at major theme park enhancements like these.
Then, a DisneylandForward filing suggested a third Disneyland Resort theme park in the offing.
Disney has downplayed that and indicated that the expansion will involve new themed lands instead, something I’ll discuss soon.
Even so, one of Disney’s plans is to assert dominance over the competition.
Disney’s Third Plan
Look, I’m absolutely giddy about what Disney has revealed here. I’ll write about the subjects extensively in the coming days and weeks.
Still, we shouldn’t overlook the tactical portion of Disney’s announcement.
I don’t need to remind you that Disney is currently suing the state of Florida in state and federal court.
The parties recently agreed to reduce the scope of the lawsuit to a First Amendment issue.
As part of that lawsuit, Disney will seek financial compensation for damages incurred.
I’ve referenced this aspect before, as it explains why Disney CEO Bob Iger suddenly started using precise financial terms.
When discussing potential Florida expansion, Iger and his lieutenant, Josh D’Amaro, stated $17 billion in park expenditures over a decade.
Now, Disney has bumped up that total. Earlier this month, parks officials wrote the following:
“We will continue to fight vigorously to defend these contracts because these agreements will determine whether or not Disney can invest billions of dollars and generate thousands of new jobs in Florida.”
Part of what Disney’s doing right now is an attempt to increase Florida’s potential legal liability in that lawsuit.
The Central Florida Tourism Oversight District’s board has already struggled with its budget in year one, cutting popular programs.
Disney’s plan pressures these individuals even more, as Florida and the CFTOD face double the legal exposure now.
Somehow, Disney’s announcement has proven extraordinarily beneficial to its fans and totally ruthless to its enemies. Color me impressed.
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