"Investing in Profitable Businesses" Disney to Invest 80 Trillion Won in Amusement Parks and Cruises

Investment Over the Next 10 Years... Twice Compared to the Previous Decade
Disney Faces Challenges in Recent Streaming and TV Business

Disney announced that it will make a massive investment of approximately 80 trillion won in its core business areas such as theme parks and cruises over the next 10 years. This strategy aims to focus more on highly profitable theme parks and experiential businesses as its film, TV, and broadcasting network businesses face difficulties.

[Image source=AFP Yonhap News]

According to the Wall Street Journal (WSJ) and others on the 19th (local time), Disney stated in a report submitted to the U.S. Securities and Exchange Commission (SEC) that it plans to increase capital expenditures for the Disney Parks, Experiences and Products (DPEP) segment to $60 billion (about 80 trillion won) over approximately 10 years. This is nearly double the spending of the previous decade.

This plan comes as Disney struggles with its streaming service launched in 2019 and one of its existing core businesses, the film, TV, and broadcasting network sector.

Disney explained, "While adhering to the principle of allocating capital in a prudent and balanced manner, we prioritize projects expected to generate strong returns," adding, "We will invest in expanding the capacity of domestic and international theme parks and cruise lines."

In the third quarter, the DPEP segment's revenue rose 13% year-over-year to $8.3 billion, and operating income increased 11% to $2.4 billion. Notably, the revenue growth of Disney resorts in Shanghai and Hong Kong stood out.

Disney mentioned plans to add rides themed around the animations Frozen and Zootopia to theme parks outside the U.S., including Hong Kong, Paris, Tokyo, and Shanghai. It also added that it plans new investments such as bringing Black Panther’s Wakanda to life.

Although Disney did not disclose specific plans, it raised expectations by stating, "We own more than 1,000 acres of land available for future development to expand theme park spaces."

However, following Disney’s announcement, its stock price fell more than 3% on the New York Stock Exchange that day. This was due to concerns that increased theme park investments could pressure cash flow in the short term. Disney has recently implemented major changes related to theme park operations, including ticket price hikes, but overall U.S. theme park revenue is expected to record a decline this year.