The Walt Disney Company is increasing its Parks, Experiences and Products division to nearly double its capital expenditures to approximately $60 billion over approximately 10 years, including investments to expand and enhance its parks and cruises domestically and internationally. We are formulating plans to accelerate and expand investment. line capacity.
Today, senior Disney executives, including CEO Bob Iger and Josh D'Amaro, chairman of Disney Parks, Experiences and Products, visited Wall Street at the Walt Disney World Resort in Orlando, Florida. An investor summit focused on Disney's park business was held with analysts and investors from around the world. And Disney has a track record of aggressively and wisely investing in experiences that leverage its powerful and growing library of stories, and have proven to be incredibly effective.
“We are very concerned with the company's financial position, the need to continue to grow in terms of revenue, the need to invest wisely to increase our return on invested capital, and the need to maintain balance. “For a variety of reasons, the seat was discontinued,” Bob Iger said. “We can absorb these costs, continue to grow our revenues and take a broader look at how we return value and capital to our shareholders.”
“We have an ambitious growth story backed by a strong track record in our parks business and a bold vision for the future,” said D'Amaro.
At the heart of your business growth strategy is a focus on story, scale, and fans.
story
Around the world, Disney leverages an unparalleled library of intellectual property through its immersive storytelling experiences in its parks and resorts and onboard cruise ships, as well as its consumer products and licensing businesses. Parks Business serves as a powerful platform where beloved Disney stories are brought to life in innovative ways, allowing fans across generations and geographies to connect and explore beloved Disney brands and franchises, from Avatar to Zootopia. To do.
Disney is continually rethinking its theme park offerings to appeal to more guests by incorporating new stories from popular movies and series. The Disney parks include Cars Land at Disney California Adventure, Star Wars Galaxy's Edge at Disneyland Resort, Disney's Hollywood Studios at Walt Disney World, Avengers Campus at Disney California Adventure, and Walt Disney Parks.・The company has grown through large-scale investments in the past, including the addition of Disney Studios. Paris parks etc.
Now, as Disney considers future growth opportunities, its theme parks still hold deeply unexplored stories.
Already, new Frozen-themed lands have appeared at Hong Kong Disneyland, Walt Disney Studios Park in Paris, and Tokyo Disney Resort, and a Zootopia-themed land has opened at Shanghai Disney Resort. There is. But Disney plans to explore more characters and franchises, including some that have been underutilized, as it embarks on a new period of significant domestic and international growth in its parks and resorts.
“We have a wealth of untapped stories that can be leveraged across the business,” says D'Amaro. “One of the most successful and popular animated series of all time, Frozen could have a presence at the Disneyland Resort. Wakanda is still coming to life. There are a lot of storytelling opportunities.”
scale
Disney currently has the largest physical footprint of any theme park travel business in the world, with 12 parks in six locations around the world.[1] Its newest resort, Shanghai Disney Resort, opened in 2016. Disney Cruise Line visits 94 ports in 40 countries, and Disney's industry-leading consumer products division brings Disney IP into the homes of fans around the world.
Notably, Walt Disney World Resort is twice the size of Manhattan Island, Disneyland is the most Instagrammable place on Earth, and tens of millions of guests travel each year using Disney's transportation network. I am.
Disney's parks business is a key driver of value creation for the company, and the segment's strong performance in recent quarters ending in the third quarter of fiscal 2023 contributed to the strong performance of Disney's international parks, particularly in Asia. There is. Both Shanghai Disney Resort and Hong Kong Disneyland have shown strong growth from the pandemic through Q3 2023, and with expanded openings scheduled for later this year, there is further growth opportunity.
However, in addition to the development plans already underway, there is significant scope for further expansion on land and at sea.
“We're on our own when it comes to scale,” D'Amaro said. “While our scale is impressive, there is no shortage of space and regions of the world to tell new stories.”
In fact, Disney Parks has over 1,000 acres of land with potential for future development to expand theme park space across its existing grounds, which is the equivalent of approximately seven new Disneyland parks. To do.
Meanwhile, Disney Cruise Line will expand beyond its theme parks and serve as a strong ambassador for the brand in ports and markets around the world, including Australia and New Zealand for the first time later this year, showcasing Disney's range of high-quality experiences. It is expanding. As previously announced, Disney will nearly double the cruise line's global capacity over the next two years, adding two ships in 2025 and one ship in 2026, enabling further growth potential. , introducing a new market to the Disney experience. From 2025, it will make Singapore its home port and further expand its scope to the Asia-Pacific region.
fan
Disney currently holds seven of the top 10 most-visited theme parks in the world, including the No. 1 most-visited theme park on the planet for decades. This includes Walt Disney World's Magic Kingdom Park. Approximately 100 million guests visit Disney Parks each year.
However, there is still huge untapped potential to reach more consumers. According to Disney's internal research, he has an accessible market of over 700 million people with a high affinity for Disney, which Disney has yet to reach with its parks. In fact, for every guest who visits a Disney park, she says, there are more than 10 people who are familiar with Disney but don't visit the parks.[2]
“Ultimately, what's most important to us is the relationship we have with all of our guests,” says D'Amaro. “Guests can spend a day at the parks, a week at the cruise, or the rest of their lives with us through a Disney Vacation Club membership.”
As Disney expands its footprint and products, the company will not only be able to reach more existing fans, but will also generate new fans and loyal consumers.
The company will further introduce fans to its most powerful characters and stories, expand its global footprint, improve its cutting-edge commercial capabilities, and develop plans to accelerate and expand its investments in its parks business. Its unparalleled global talent allows it to connect with a new generation of fans around the world.
“Throughout our company's history, we have generated significant growth by investing the right amount of capital in the right projects at the right time,” said Iger. “We plan to further accelerate our growth with significant strategic investments in this business.”
Forward-looking statements
Certain statements in this posting, including statements of expectations, may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. strategy or focus. Guidance; Priorities. plans or opportunities (including expansion and growth) and their potential impact on future results; potential future growth or performance and anticipated drivers of growth or performance; Future capital expenditures. trend. Demand drivers. the goal. the provision of products or services (including their nature, timing, and price); consumer sentiment, behavior, or demand; Total addressable market and associated drivers. the value of our intellectual property; and other statements that are not historical in nature. Information contained in this discussion that is not historical in nature is subject to change. These statements are based on management's beliefs and assumptions regarding future events and performance at the date the statements are made. Management undertakes no obligation to update these statements.
Actual results may differ materially from those expressed or implied. Such differences may be related to restructuring or strategic initiatives (including capital investments, acquisitions or dispositions of assets, new or expanded lines of business, or discontinuance of certain operations), the implementation of our business plan (including any content we develop), may result from actions taken by us, including (including) investee intellectual property, pricing, cost structure, management and other personnel decisions), the ability to rapidly implement cost rationalization while maintaining profitability, the discovery of additional information and other business decisions, and even From development beyond that to management of the company including:
- occurrence of subsequent events.
- domestic and global economic conditions deteriorate further or do not improve as expected;
- adverse competitive conditions or competitive pressures, including competition to create or acquire content, talent, and advertising revenue;
- consumer preferences and acceptance of our content, services, pricing models and mark-ups, and corresponding subscriber additions and cancellations and markets for advertising sales on our DTC services and linear networks;
- health concerns and their impact on our operations and production;
- international, political or military developments;
- Regulatory and legal developments.
- Technology development.
- labor market and labor activities (including leave of absence);
- Bad weather or natural disasters.and
- Content availability.
Such developments may further impact the entertainment, travel and leisure business generally, and in particular (or may further impact, where applicable):
- our operations, business plans or profitability (including direct-to-consumer profitability); demand for our products and services;
- Performance of Our Content.
- our ability to create or obtain desirable content at or below the value we assign to the content;
- Program advertising market.
- Income tax expense.and
- conduct any or all of our business directly or through our influence on those to whom we distribute our products;
Additional factors are included in the Company's Annual Report on Form 10-K for the year ended October 1, 2022, under “Risk Factors,” “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and It is listed under the caption “Business Status”. ”, our quarterly report on Form 10-Q with the captions “Risk Factors'' and “Management's Discussion and Analysis of Financial Condition and Results of Operations,'' and subsequent filings with the Securities and Exchange Commission.
In this post, the terms “Disney,” “Company,” “we,” and “our” are used to collectively refer to The Walt Disney Company and its various operating subsidiaries. used.
[1] We earn royalties from revenues generated from Tokyo Disney Resort, which is owned and operated by Oriental Land Co., Ltd., a third-party Japanese company.
[2] Note: Consumer opportunities are based on analysis of minimum levels of Disney-branded spending and current park visits.
