News Disney plans to accelerate Parks investment to $60 billion over 10 years

[Dranth]

How do you budget for completely erratic and nonsensical price increases based on nothing grounded in reality?

You don't other than assume it is short lived and delay when needed.

 

[Sirwalterraleigh]

The people you are describing are not wealthy.

They just sound like highly payed employees who thought the good times last forever.

If you can’t pay cash for something, you shouldn’t own it.

Disney parks are the billionaires playground…

Said Bob on a quarterly in 2016 when he had zero prepped excuses for dropping attendance…and the truth…which was the first sign they were out pricing their core audience…just simply wouldn’t do.

Only he can save us

 

[Gusey]

At least they've learnt from the disaster that was the Disney Decade. Instead of announcing all 10-years worth of plans in one go, they've decided this time to only announce what was supposed to open the first 5 years. With the Disney Decade, anything announced to open the first 5 years did open within 10 years of announcement barring those attractions based on failing IP (Dick Tracy) or IP contractual issues (Roger Rabbit at MGM, Muppets etc.) Some of those announced to open the first 5 years still opened by the end of the 90s, just with a delayed rollout (Boardwalk, New Tomorrowland at MK & Disneyland) whilst some of the Plan B attractions turned out to be classics (Test Track, Buzz Lightyear, Winnie the Pooh).

Of everything announced at D23 last year, I feel like anything we've had an update on at SXS/the Investor's Call last month is still going to go ahead, even if it's a more staggered timeline (Cars, Monsters, Avengers @ DCA, Lion King @ DLP), especially as R&D has already begun on these attractions + Tropical Americas construction has already begun with a closing timeframe for Dinoland already announced. That just leaves Cars 2nd attraction, Villains Land, Coco @ DCA, and Avatar @ DCA of what's announced and both Villains and Avatar seem to be the next big thing at their respective parks so will likely not be cut. If anything announced already does get cut it will likely be Cars 2nd attraction and Coco @ DCA. But the most likely option is that what was planned for phase 2 of this 10 year plan will likely be reworked now before any announcements are made at D23 2026/2028

 

[Lilofan]

The people you are describing are not wealthy.

They just sound like highly payed employees who thought the good times last forever.

If you can’t pay cash for something, you shouldn’t own it.

The can’t pay cash scenario is purely wishful thinking. These guys in my neighborhood were actually very good guys to socialize with but right on what you said - they thought the good times would last forever.

 

[el_super]

They aren’t going to hit their metrics on Epic, Disney for better or worse hasn’t really opened much product to hit metrics on and the cruise ships can be moved if the US totally implodes.

This current climate is as close to a disaster for Epic Universe as one could conjure up. You get one chance to make a first impression, and if they end up discounting tickets just to get bodies in the door, it completely undervalues the entire experience, forever. That means investing 2x as much later, to encourage repeats visits (and that's not calculating in potential cannibalization of their existing parks).

It's going to be interesting to see how they approach this. Even just discounting admission might not make sense, if you have completely lost your margins on t-shirts, popcorn buckets and souvenirs made mostly overseas. They might be better off just delaying the opening until they know more.

 

[el_super]

Given the extremely long development process that most Disney projects go through, and how far behind WDW's parks already are on capacity, a period of low attendance is actually the best time to build new things (macroeconomic conditions notwithstanding) so that the extra capacity is there and ready to go when guests return. Heck, build something popular enough and it may even draw guests despite the economy; look no further than WDW's opening alongside the oil crisis.

Extra capacity isn't all that important in this scenario. I do agree that the projects will most likely continue, but they will continue because so many of them are replacements of lagging/underutilized areas. These are areas that would be likely candidates for closure during an attendance downturn anyway.

If attendance takes a big enough hit, ridership for the riverboat or muppets would collapse anyway, as capacity for bigger name attractions opened up. They would end up on reduced operating hours or maybe even going weekends only ... ANYWAY ... so why not tear them out and plan for their replacement now?

 

[Nubs70]

How do you budget for completely erratic and nonsensical price increases based on nothing grounded in reality?

By focusing on optimizing your material inputs.

I had this discussion with my customer weeks back and got.a bunch of crap for it. Seeing they overuse my product by about 30% and my product is imported, I informed them that there would very well be a tariff based price increase on the horizon. Seeing that they use 30% too much, I suggested they take the next few weeks and learn to optimize the addition rate.

If tariff is 15% and you can decrease usage by 20%, your spend will be 5% lower than current level. When tariff is lifted, your.spend will.be 20% lower than current.

Customer could not understand.

 

[Lilofan]

This current climate is as close to a disaster for Epic Universe as one could conjure up. You get one chance to make a first impression, and if they end up discounting tickets just to get bodies in the door, it completely undervalues the entire experience, forever. That means investing 2x as much later, to encourage repeats visits (and that's not calculating in potential cannibalization of their existing parks).

It's going to be interesting to see how they approach this. Even just discounting admission might not make sense, if you have completely lost your margins on t-shirts, popcorn buckets and souvenirs made mostly overseas. They might be better off just delaying the opening until they know more.

One aspect of Universal is that they can lay off staff and cut them to the bare bones of a schedule or no schedule at all. They have no unions to represent them. At WDW union cast that are full time are guaranteed 32 hours weekly or if there are layoffs it’s done by seniority.

 

[RobbinsDad]

This current climate is as close to a disaster for Epic Universe as one could conjure up. You get one chance to make a first impression, and if they end up discounting tickets just to get bodies in the door, it completely undervalues the entire experience, forever. That means investing 2x as much later, to encourage repeats visits (and that's not calculating in potential cannibalization of their existing parks).

It's going to be interesting to see how they approach this. Even just discounting admission might not make sense, if you have completely lost your margins on t-shirts, popcorn buckets and souvenirs made mostly overseas. They might be better off just delaying the opening until they know more

Fanboys and locals will prop it up for the first few months. The Fall will tell the tale (not just for Epic but all theme park destinations).

 

[Sirwalterraleigh]

…my memories of the Disney decade must have been a fever dream

 

[Sirwalterraleigh]

I don’t think it’s just about bulk orders, I think there could be explicit exceptions for big companies:

https://finance.yahoo.com/news/how-some-big-businesses-could-escape-fallout-from-trumps-blanket-tariffs-080011229.html

There a lot of rumblings about what this is really all about…and it’s a very ugly scenario

 

[hopemax]

This is one of the primary reasons we’ve been able to do all the fun things we’ve done over the last 15 years, I bought a short sale in 2009 after the crash, prior to that I thought I’d been priced out and would be a renter for life, I got a short sale at 50% off what it sold for just a couple years earlier, hundreds a month less than I’d been paying in rent, that house is now paid off, we’re mortgage free with a ton of equity, and we’ve accumulated a sizable savings account, good timing (and a bit of luck) can have life changing results.

I remind my nieces and nephews of this frequently because they are (understandably) very discouraged with their future prospects, keep saving, cross your fingers, and wait until an opportunity presents itself.

We are also in our 2009 / 1st time homeowner credit house. Didn't expect to still be here, but life, 3% interest rate and now we're probably here for the long term. Not quite paid off, but we could if we absolutely had too. The goal is next 2-3 years depending on DH's job. Trying to stay more liquid. A big difference between then and what happens next is that there was a lot of coordinated government support for recovery I don't expect to see (and I have yet to see anyone talk about this; no one is coming to help, when in 2008 it was all hands on deck). I expect some of the same forces that kept people on the sidelines (can't compete with cash buyers) will hurt them here too. If the markets are bad places for your money... If treasuries are bad for your money because of US trust issues... Land? Maybe, still attractive, just ignore what's sitting on it. I fear it's not an option going to be accessible for the little or medium guy.

 

[Batman'sParents]

I'm not saying it is. All I'm saying is Disney parks were built like Cedar Fair parks in that they need big crowds to operate properly.

Unrelated but those Disney Dining plans might not seem like a bad idea since they lock in the cost of the food.

 

[Batman'sParents]

The people you are describing are not wealthy.

They just sound like highly payed employees who thought the good times last forever.

If you can’t pay cash for something, you shouldn’t own it.

Or hoe some people purchase DVC at interest rates if 8-10%.

 

[Dranth]

What theory?

In many parts of the country you can get a nice starter home for 300k.

This should only take you three years to save.

Why are we taking 20 years to buy a house ?

After taxes the average US household takes home well short of 100k a year. That is before any bills so how exactly are people going to buy a house with cash in three years?

 

[lazyboy97o]

By focusing on optimizing your material inputs.

I had this discussion with my customer weeks back and got.a bunch of crap for it. Seeing they overuse my product by about 30% and my product is imported, I informed them that there would very well be a tariff based price increase on the horizon. Seeing that they use 30% too much, I suggested they take the next few weeks and learn to optimize the addition rate.

If tariff is 15% and you can decrease usage by 20%, your spend will be 5% lower than current level. When tariff is lifted, your.spend will.be 20% lower than current.

Customer could not understand.

You ever look at how a steel coaster is built? You’re just advocating for the scope cuts that are whined about.

 

[Sirwalterraleigh]

Unrelated but those Disney Dining plans might not seem like a bad idea since they lock in the cost of the food.

Well they’ve been a terrible deal for years…I don’t see how that’s gonna change now

 

[Casper Gutman]

The economy collapsing being the reason some of these attractions get saved was not on my bingo card.

Why not? This was entirely predictable!

 

[Casper Gutman]

We’re going to get the portion of Tropical Americas that replaced the half of Dinoland that is already closed, and that may take years. Anything else that can be cancelled will be. Dinosaur and ROA are likely saved.

They will still close Dinosaur because that’s a savings. It will just stay closed for a long time.

 

[ManicMillennial]

I think that cuts are definitely coming but there is a chance that everything that has been announced so far will be made but with smaller budgets that expected. And most of the cuts will be cruise ships (because they just became the most expensive things to make for Disney) and projects that are being worked on but not yet publicly announced.