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Business News/ Companies / Walt Disney nearly doubles parks spending, to invest $60 billion over next decade
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Walt Disney nearly doubles parks spending, to invest $60 billion over next decade

Disney plans to invest $60 billion in its parks business over the next decade to drive long-term growth.

Walt Disney plans to nearly double its capital expenditure for its parks business, allocating around $60 billion over the next 10 years. (AFP)Premium
Walt Disney plans to nearly double its capital expenditure for its parks business, allocating around $60 billion over the next 10 years. (AFP)

Walt Disney said on September 19 that it intends to almost double its capital expenditure for its parks business. It further plans to allocate around $60 billion over the  next10 years said Disney CEO Bob Iger and Josh D'Amaro, the company's parks chief, during an event held at Walt Disney World Resort in Orlando, Florida, focused on the company's parks business, reported Reuters.

Disney's parks have become a reliable source of profit for the company, helping offset losses in its streaming business, which is expected to turn profitable next year. Bob Iger described the parks as a "tremendous business" for the California-based global entertainment giant.

Also read: Disney gambles on free cricket to turn the tables in India streaming war

Disney's parks, experiences, and products segment has shown robust growth, with a combined annual growth rate of 6% since fiscal 2017, generating $32.3 billion in operating income over the past 12 months, according to a regulatory filing presentation.

Disney's investments in the parks, including the addition of attractions like Cars Land at Disney California Adventure and Disney's Hollywood Studios in Orlando, have led to increased attendance, as highlighted in a recent Disney blog post.

Also read: Disney explores strategic options for its business in India: Report

Insider Intelligence analyst, Paul Verna said, "The political risks of doing business in Florida won't stop Disney from continuing to invest in its most lucrative U.S. destination." Despite facing political challenges in Florida, Disney plans to invest $17 billion in the state over the next decade, Iger said. The company is also outlining long-term strategies for new attractions and amenities at its Disneyland Resort in Anaheim, California.

Disney has over 1,000 acres of land available for future development across its six existing theme park locations worldwide. The company aims to attract approximately 700 million consumers identified as Disney fans who have yet to visit one of its theme parks, according to its internal research.

Disney stated that it possesses a strong balance sheet and sufficient borrowing capacity to finance its growth initiatives, according to the regulatory filing. In addition to the park investments, Disney plans to almost double the capacity of its cruise line by adding two ships in fiscal 2025 and another in 2026.

Following the announcement, Disney's stock experienced a 3.0% decline on the day. Chairman at Great Hill Capital, Thomas Hayes said, "Today's price weakness is a short-term, knee-jerk reaction to a decision that will yield long term value to customers and owners alike." 

(With inputs from Reuters)

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Published: 20 Sep 2023, 08:15 AM IST
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