Disney to double investment in theme parks and cruises amid international resort boom

Disney (DIS) doubles down on theme park investments , cruises and experiences over the next ten years amid increasing revenue from its international theme parks.


  • Disney announced plans Tuesday to double its investments in theme parks and cruise lines to $60 billion over the next decade.
  • The money will be used to expand its presence and attract more visitors to its resorts, including others.
  • International theme park revenues in the latest quarter nearly doubled from last year, far outpacing the 4% gain generated by domestic theme parks.
  • The Resort The company's flagship Walt Disney World in Orlando, Florida, has experienced a decline in visitor attendance due to high ticket prices and increased competition.

What are Disney's expenses?

In a filing with the Securities and Exchange Commission (SEC) on Tuesday, Disney announced plans to double its investments in theme parks and cruise lines to $60 billion over the next decade. These capital expenditures will be used to increase its footprint, attract new fans to its stations and improve commercial spending at the stations. The company said it has more land available for future development in Europe, Asia and Australia.

The company also said its addressable market is more than 700 million guests, estimating that for every park visitor today, there are 10 consumers with an affinity for Disney who don't visit the parks. "

Disney's International Beach resorts are booming

International theme park revenue jumped 94.4% year over year in the most recent quarter ended July 1, far outpacing the 4.2% increase for U.S. theme parks, according to a breakdown detailed VisibleAlpha revenues. Year-to-date, Disney international theme parks have recorded 1.3 billion visits, with per-person spending up nearly 70% over the past five years.

Growth was particularly strong at Disney's Shanghai resort, which reported record revenue, operating profit and margins last quarter. The theme park had the highest operating profit growth of all Disney international resorts.

Strong growth in international theme parks helped drive a 13% annual increase in revenue from the broader parks, experiences and products (DPEP) segment.

DPEP segment revenues totaled $8.33 billion for the latest fiscal quarter ended July 1, up from $7.39 billion in the same quarter last year and almost identical to the first quarter of 2020, just before the pandemic hit.

However, not all Disney theme parks outperformed. Walt Disney World, the company's flagship resort in the United States, experienced declining attendance this summer due to high ticket prices, extreme heat, increased competition from rival theme park operators and #39;a political conflict with Florida Governor Ron DeSantis. Declining attendance at America's largest Disney resort weighed on domestic revenue growth.

Disney shares fell more than 3% from 3:50 p.m. ET Tuesday. They have fallen more than 5% so far this year, compared with a 34% gain for the broader S&P 500 consumer discretionary sector.


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Source: investopedia.com

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