Disney said on Tuesday, September 19, that the company plans to nearly double investment in its parks and resorts division to $60 billion over the next 10 years. Disney is the world's largest theme park operator. Disney said on Tuesday it has more than 1,000 acres of land it could develop, citing rising profits over the past few years from investments in rides, cruises and other attractions tied to its movies and characters.
Disney also plans to launch more cruise ships and establish a new homeport in Singapore.
Disney said visitor spending at its theme parks has grown at record levels over the past two years, with significantly fewer tickets being sold at discounted prices than before the pandemic.
However, the market reacted negatively to the news, with Disney's stock price falling more than 3% during the session.
After the COVID-19 epidemic is over, Disney's parks, experiences, and product businesses have once again become the company's cash cow businesses, providing financial support for the company's transformation as the streaming media business continues to lose money.
In the third fiscal quarter ending July 1 this year, Disney's park, experience, and product business revenue increased 13% year-on-year to US$8.33 billion, higher than market expectations of US$8.25 billion. Among them, the revenue of Disney Parks and Experiences in North America increased by 4% year-on-year to US$5.65 billion, and operating profit decreased by 13% year-on-year to US$1.44 billion; the international revenue of Disney Parks and Experiences increased by 4% year-on-year to US$1.44 billion in Shanghai and Hong Kong. Driven by this, it surged 94% year-on-year to US$1.53 billion, and operating profit turned from negative to positive, to US$430 million; consumer product revenue fell 3% year-on-year to US$1.15 billion, and operating profit fell 6% year-on-year to US$560 million.
However, according to media reports in July, Disney theme parks are emptier than usual this summer. Industry analysts and travel consultants say that's partly to blame for Disney raising ticket prices. Disney executives said they expect revenue from its U.S. theme park business to decline this year.
Disney rival Comcast Corp. has also been investing in its Universal Studios theme park business, with plans for smaller parks in Texas and Nevada and a massive new resort in Orlando.
Disney has been grappling with seismic changes in its TV and movie businesses as consumers watch more shows and movies on streaming services rather than on traditional TV and in movie theaters. Disney management has said the company may sell traditional TV channels such as ABC and is looking for a strategic partner in ESPN. The market expects that Disney’s increased investment in the park business is also to achieve the company’s transformation into a streaming media business.