Here Are the Hidden Costs of Disney Expansion
Recent headlines shout that Disney will spend $10 billion soon.
The Walt Disney Company signed agreements with the city of Anaheim and the Central Florida Tourism Oversight District.
With both contracts, Disney promised to build entirely new developments at Disneyland and Walt Disney World.
While everyone excitedly fantasizes about the upcoming theme park attractions, Disney’s financial team must sweat the small stuff.
Here are some of the hidden costs of Disney expansion.
The Landmarks
When Star Wars: Galaxy’s Edge opened, fans flocked to the parks. They wanted to see Star Wars structures in real life.
Here’s the thing about those structures. They cost a ton of money to build.
Imagineers never skimp on its landmarks, as you can tell at Disney’s Hollywood Hotel and Disneyland.
Park officials actually built an entire fake hotel and mountain to reinforce the immersive theming of various attractions.
Similarly, at Galaxy’s Edge, you’ll find a life-sized Millennium Falcon. That’s only a small part of the experience, though.
Imagineers have crafted a believable place called Black Spire Outpost, which has planetary defense systems.
Have you ever noticed the artillery cannons at the Lightning Lane entrance for Star Wars: Rise of the Resistance?
You’ll also find TIE-fighters and starfighters here. That’s on top of the alien planet’s unique architecture.
Such theming appears to be the norm for Disney themed lands these days, with Zootopia, Arendelle, and Pandora similarly detailed.
So, Disney officials must budget for all these expenses, which leads to some strange accounting.
First, the company must build the structures that grab the attention of park guests.
Then, Disney must add the supporting infrastructure so that it all works. We’re talking about water, power, sanitation, and the like.
Hiding such utilities in plain sight is a remarkable bit of sleight of hand.
According to some estimates, the detailed theming of Oga’s Cantina cost Disney at least $12.5 million to build. And it’s just a bar!
Even the freighter ship on top of Docking Bay 7 Food and Cargo cost at least $350,000. Disney spares no expense on this stuff.
Building the Sales Points
I’m using a loose term here of sales point to describe all the Disney commerce that takes place at themed lands.
Those restaurants, bars, and gift shops cost money to build and even more to stock.
So, some of the expenses are one-time-only fixed costs, while others are recurring. We’ll ignore the latter for now.
All that matters in this area is that Disney profit margins guarantee that the recurring expenses make financial sense.
The one-time-only fixed costs are more challenging to explain.
For instance, does Docking Bay 7 really need that cargo ship on the roof?
Lesser theme parks would say no, but Disney is emphatic about the acceptable levels of immersion.
I think of this business philosophy as the Cosmic Ray’s Rule. The Tomorrowland restaurant doesn’t need Sonny Eclipse.
However, many shameless tourists like me are much more likely to visit because the Audio-Animatronic is there.
Disney employs elastic pricing, depending on how much upkeep a restaurant needs to draw crowds.
With Starlight Café, that’s Sonny Eclipse. Then, we have extreme examples like Space 220, whose upkeep is quite expensive.
When Disney adds new restaurants and stores, it allocates a budget for the interior and exterior theming.
Sometimes, the idea justifies more of a financial splurge. In other instances, Disney chooses knowns.
By this point, park officials are well aware of what it costs to build a standard restaurant/shop.
However, in the case of Galaxy’s Edge. Disney spent nearly $20 million perfecting the look of the shopping bazaar area.
Also, please remember that the sources here are filings with local governments. So, these projects may have run well over budget.
Disney would never reveal that information, at least not needlessly.
Still, you should remember that many restaurateurs go broke. Opening these places ain’t cheap.
The Show Areas
Have you watched ¡Celebración Encanto! at CommuniCore Hall & Plaza yet?
The EPCOT show is a limited-time engagement, as Disney intends to recycle this space for frequently updated presentations.
Management wants to provide guests with a new reason to visit the park each visit.
Over the years, park officials have recognized the hidden value of the Cinderella Castle courtyard and the many hangout spots at EPCOT.
Many tourists want a vibrant theme park experience, and the best way to create that atmosphere is through live entertainment.
As such, most future Disney developments will include some sort of show area.
You can think of these spaces akin to concert stages, and those aren’t cheap to build.
To wit, Jennifer Lopez and the Black-Eyed Peas both recently canceled entire tours due to low sales and high expenses.
The costs stem from renting out these concert venues, which are expensive to maintain.
Still, Disney fans have clearly indicated what they want at the parks, and it’s live performances.
I know that I stop whenever I know that the Matsuriza drummers or the Dragon Legend Acrobats are performing.
Along these lines, Disney just announced the Eat to the Beat concert series lineup, and I wish I were there to see The Fray.
I have watched stage shows like the Beauty and the Beast – Live on Stage and the Indiana Jones Epic Stunt Spectacular! many times.
Also, I’ve got a soft spot for the Frozen Sing-Along Celebration, which brings us to the important part of this conversation.
When Disney chooses staging areas, it must decide whether to build indoor or outdoor experiences.
The indoor ones cost a lot more since they require lightning and, you know, roofs.
Disney will spend at least $2.5 million for a good stage area. They’re costly builds.
Final Thoughts
You’ll dream about the nine-figure E-ticket attractions that Disney is building.
However, you’ll spend more of your time roaming these new themed lands, exploring every little detail.
For this reason, Disney must populate each section as if it’s a part of the overall story.
That stunning level of attention to detail comes at a high price, one that Universal Epic Universe won’t pay.
When Disneyland and Walt Disney World expand, those new themed lands or Neighborhoods will immerse you in a fantasy.
You’ll buy into the illusion that you’re exploring Pandora or a Star Wars outpost or Arendelle.
To tell those stories, Disney will spend hundreds of millions of dollars on things that you’ll almost take for granted.
When was the last time you thought about the bioluminescence at Pandora or the war-torn buildings at Black Spire Outpost?
Remarkably, the fact that you take it all for granted is proof that Imagineers have done their jobs.
They’ve used their budgets to create such believable realms that you’ve forgotten that they’re artificial.
That’s Disney magic, my friends. And it comes at a high cost.
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