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Disney spends more on theme parks than on Pixar, Marvel and Lucasfilm combined

11/19/2018| 5:30:06 PM| 中文

Michael Nathanson, a longtime media analyst, estimates that Disney will spend $24 billion on new attractions, hotels and ships over the next five years. That’s more than Disney paid for Pixar, Marvel and Lucasfilm combined.

Now Disney World - and Disney’s global vacation empire - is about to get much, much bigger.

With its television business facing significant challenges in the streaming age, and lots of popular movie franchises to put to use, Disney is spending billions to supercharge its theme park division, which has emerged as a surprisingly strong moneymaker.

For the 2018 fiscal year, Walt Disney Parks and Resorts had an operating profit of $4.5 billion, an increase of more than 100% from five years earlier. For comparison, Disney Media Networks, home to ESPN and ABC, had a profit of $6.6 billion, a 3% decline.

Each of Disney’s six theme park resorts around the world is undergoing major expansion, along with Disney Cruise Line. Michael Nathanson, a longtime media analyst, estimates that Disney will spend $24 billion on new attractions, hotels and ships over the next five years. That’s more than Disney paid for Pixar, Marvel and Lucasfilm combined.

Disney faces an enviable challenge: Even with steady price increases for peak periods — single-day peak tickets at Disneyland in California now run $135 — visitor interest often exceeds capacity at some properties. “You can only let so many people in a park before you start to impede on satisfaction level,” Mr. Chapek said.

So Disney’s expansion plan is more ambitious than building a “Black Panther” roller coaster here or introducing an “Incredibles” character there. The goal is transformation — adding significant capacity to Disney’s most popular parks (Disneyland, Tokyo DisneySea) and giving others major upgrades (Epcot, Disney Studios Park at Disneyland Paris) to help attract visitors more evenly throughout the empire.

An abundance of popular Disney film franchises makes this kind of mega-expansion possible, Mr. Chapek noted. “Frozen” and Marvel rides are coming to multiple resorts.

‘Star Wars’ is in a galaxy all its own

In terms of attracting crowds and creating excitement, nothing quite compares to the “Star Wars” franchise.

In 2019, Disney World and Disneyland will open matching 14-acre “lands” called Star Wars: Galaxy’s Edge. On one lavish attraction, guests will board an Imperial Star Destroyer, where roughly 50 animatronic stormtroopers await in formation. On another, guests will be able to pilot an interactive Millennium Falcon.

The Millennium Falcon ride will use real-time video rendering technology invented by Industrial Light & Magic that responds to the way guests use 200 cockpit controls.

Increased investment means increased risk

The theme park business will always be sensitive to swings in the economy, said Jessica Reif, an analyst at Bank of America Merrill Lynch. Disney has greatly increased security in recent years, deploying undercover guards and installing metal detectors, but these teeming resorts could become relative ghost towns if a violent incident took place.

Even so, Ms. Reif said she was pleased that Disney was spending so heavily on its parks. “It’s the highest return on investment that Disney has,” she said.

Disney Cruise Line will also nearly double in size by 2023. Disney has ordered three new ships costing an analyst-estimated $1.25 billion apiece. It is buying 746 acres on a Bahamian island to build a second Caribbean port. (Disney already has one private island port.)

A seventh resort is ‘an inevitability’

Robert A. Iger, Disney’s chief executive, told analysts in May that there was “an inevitability” to Disney’s building a seventh theme park resort in China or another country, although he cautioned that no plans were on the horizon.

“But we’re going to look,” he said. Mr. Iger’s bullishness reflects the strong response to Shanghai Disneyland, which opened in 2016 at a cost of $5.5 billion. With its growing middle class, China is a particularly important growth market for Disney.

Even so, a couple of Disney’s older overseas parks have never lived up to their promise, and Mr. Iger wants to fix those headaches once and for all. That’s one reason Hong Kong Disneyland is undergoing a $1.4 billion expansion, with half of the bill paid by the local government, which is a co-owner.

The Hong Kong park, which opened in 2005, has lost money for three years running, in part because of a regional tourism slump. To turn the property around, Disney is adding two “Avengers”-themed attractions; building the entire “Frozen” kingdom of Arendelle, with two icicle-covered rides; and supersizing the park’s castle.

Can’t travel to space? Disney brings it to you

One of the most anticipated additions to Disney World is not a ride. It’s a hotel — one that will have no windows.

The still-unnamed property, code-named Project Hubble by Disney Imagineering, will simulate what it might be like to sleep on board a luxury “Star Wars” starship as it zooms through the galaxy. Every window will be a video screen offering a “space view.” Guests will be encouraged to dress in “Star Wars” costumes.

The hotel reflects a push by Disney to provide more immersive and personalized experiences. Now even your hotel stay becomes an attraction that is “unique to Disney, that you cannot get down the street,” Mr. Chapek said.

He is applying the same thinking to Disney World transportation. Instead of relying on lumbering buses to get around, for instance, people can now use the Lyft app to hail a polka-dotted S.U.V. called a Minnie Van.

Building the future, but living history

Beloved as they may be, these properties are businesses, and Disney must be mindful of relevance. Parents may have a soft spot for Epcot’s creaky, 36-year-old Spaceship Earth ride, but their children — Disney customers of the future — most likely do not.

“The bar for what our guests expect is getting higher,” said Bob Weis, president of Imagineering, Disney’s theme park design division.

The relevance factor is one reason that Disney has built so many “Toy Story” attractions in recent years.

Woody and crew are continuously freshened by new films; “Toy Story 4” is set for release on June 21. The Disney executives working to upgrade Epcot say they are guided by a slogan “Disney, Relevant, Timeless, Family.” For his part, Mr. Chapek talks about “relentless innovation” across the board, using technology to make attractions more relevant wherever possible.

“We want to be the disruptor, not the disruptee,” he said.

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TAGS: Disney | theme park
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