Star Wars Land announced for Disney's Hollywood Studios

[DVCOwner]

@Master Yoda was on the right track, but I'll modify his answer slightly. Wall Street doesn't really care about how long it takes to complete individual projects, they care about capital spending in total. It's also a mistake to assume they want to see small capital expenditures. What they really care about most is that capital expenditures are relatively smooth. In other words, they like to see steady, robust investments in capital assets. They do not want to see peaks and valleys of huge spending followed by inactivity. Predictability good, volatility bad.

With that in mind, it's easy to see why long projects that overlap here and there are more attractive than quick-burst projects that are banged out quickly. The Disney Dream gave way to the DCA relaunch and Cars Land, which gave way to the Disney Fantasy (with MM+ going along the whole time in the background), which gave way to New Fantasyland, which gave way to Avatar (with Shanghai going on the whole time in the background), which will give way to Star Wars, which...

It's always better to have a revolving list of ongoing projects. As projects wrap up, others are beginning, and the cycle continues.

If I could add to this only one thing. There is also a point of the project costing more if spread out to far, so the job is managing your capital investment with increasing the cost be doing construction to fast or to slow.

A lot of people have complained about the cost of Avatar, but looking at the photos I think the cost is in the details. In this case the rock work. You could build these two rides much cheaper of you are not concerned with the details. Details cost money. Just as if you are building a home and you start adding crown molding, chair rails, hard wood flooring, granite tops, etc. You can build a house a lot cheaper if you are not worried about the details.

 

[rioriz]

Great logical and sound information provided gentlemen!

Of course there still is reason to disregard Disney's approach to expansion as just plain incompetence however I can see the business side of how it can work better for them.

It is unfortunate that the conglomerate is so insanely huge that the Success/Failure I one project can have a rippling effect through all departments around the world.

 

[DVCOwner]

It is unfortunate that the conglomerate is so insanely huge that the Success/Failure I one project can have a rippling effect through all departments around the world.

I think that is the point that some are trying to make. You spread out Capital spending to keep from having spikes and valleys, so that you reduce the effects on profits and reduce the changes of one unsuccessful project causing everything to stop. I am sure that some of the reduced cash follow that is being talk about so much on this web site is due to the delay in opening of Shanghai Disney Resort.

 

[Stripes]

The notion the notion that Disney builds attractions slower than Universal is bull. Every land Disney has built is larger than Universal's so you have to set equalizing ratios to account for scope of the projects. The size of Cars Land is 12 acres. The size of Hogsmeade in California and Florida (excluding Dragon Challenge for obvious reasons) is 6 acres. It took Disney 3 years to build Cars Land, and it took Universal 2.5 years to build each Hogsmeade. This is true for every Disney project excluding Avatar, which was announced prematurely to satisfy News Corp's investors, similar to Universal's Nintendo dilemma. Also, with all the projects Disney has going on, the idea that Universal is expanding faster than Disney will die by 2020. With the successful launch of Shanghai, Disney will have even more money to expand the domestic parks.

 

[Stripes]

The notion the notion that Disney builds attractions slower than Universal is bull. Every land Disney has built is larger than Universal's so you have to set equalizing ratios to account for scope of the projects. The size of Cars Land is 12 acres. The size of Hogsmeade in California and Florida (excluding Dragon Challenge for obvious reasons) is 6 acres. It took Disney 3 years to build Cars Land, and it took Universal 2.5 years to build each Hogsmeade. This is true for every Disney project excluding Avatar, which was announced prematurely to satisfy News Corp's investors, similar to Universal's Nintendo dilemma. Also, with all the projects Disney has going on, the idea that Universal is expanding faster than Disney will die by 2020. With the successful launch of Shanghai, Disney will have even more money to expand the domestic parks.

BTW, long time reader, first time commenter. Love this forum!

 

[danlb_2000]

The notion the notion that Disney builds attractions slower than Universal is bull. Every land Disney has built is larger than Universal's so you have to set equalizing ratios to account for scope of the projects. The size of Cars Land is 12 acres. The size of Hogsmeade in California and Florida (excluding Dragon Challenge for obvious reasons) is 6 acres. It took Disney 3 years to build Cars Land, and it took Universal 2.5 years to build each Hogsmeade. This is true for every Disney project excluding Avatar, which was announced prematurely to satisfy News Corp's investors, similar to Universal's Nintendo dilemma. Also, with all the projects Disney has going on, the idea that Universal is expanding faster than Disney will die by 2020. With the successful launch of Shanghai, Disney will have even more money to expand the domestic parks.

The size of the land doesn't automatically mean it should take longer to build. Yes, there is more work to be done on a larger land, but it also means that more things can be done in parallel.

 

[Stripes]

The size of the land doesn't automatically mean it should take longer to build. Yes, there is more work to be done on a larger land, but it also means that more things can be done in parallel.

Uhh...yeah it kinda does. Yes, it may not be exactly proportional, but the time it took to build my house was a lot shorter than it took to build the neighborhood. Take the entire Wizarding World at Universal, that took 6 years to build minus 2 years of no construction. In total, Wizarding World includes 2 new E-tickets, several other restaurants, etc. so 4 years to build 12, maybe 13, acres. There are a lot of parallels between WWOHP and SWL, 2 e tickets, restaurants, roughly same size, also same projected completion time frame-4 years.

 

[Master Yoda]

Uhh...yeah it kinda does. Yes, it may not be exactly proportional, but the time it took to build my house was a lot shorter than it took to build the neighborhood. Take the entire Wizarding World at Universal, that took 6 years to build minus 2 years of no construction. In total, Wizarding World includes 2 new E-tickets, several other restaurants, etc. so 4 years to build 12, maybe 13, acres. There are a lot of parallels between WWOHP and SWL, 2 e tickets, restaurants, roughly same size, also same projected completion time frame-4 years.

No it doesn't. The size and complexity of the building and or buildings is the biggest factor in determining the construction time. A smaller plot can actually make construction time take even longer.

I guarantee you that you can build a 100,000 square foot warehouse on a 2 acre plot much quicker than you can build a 5000 square foot luxury home on a 1/4 acre plot at the beach.

 

[danlb_2000]

Uhh...yeah it kinda does. Yes, it may not be exactly proportional, but the time it took to build my house was a lot shorter than it took to build the neighborhood. Take the entire Wizarding World at Universal, that took 6 years to build minus 2 years of no construction. In total, Wizarding World includes 2 new E-tickets, several other restaurants, etc. so 4 years to build 12, maybe 13, acres. There are a lot of parallels between WWOHP and SWL, 2 e tickets, restaurants, roughly same size, also same projected completion time frame-4 years.

Yes, I would assume your house took less time, but it wasn't a simply formula of Number of Houses * Time to build one house. I bet many houses in your development were all being worked on at one time, the limiting factor is how much labor they wanted to throw at it. Epcot took 3 years to build, and Avatar is going to take more then that. The Tangled restrooms at Magic Kingdom took 22 months, Wizarding World 29, and Transformers only 11. There is a lot more that goes into the equation of build time then simply the size of the project.

Also, I doubt Star Wars land will take 4 years. Avatar isn't likely to even reach that number.

 

[doctornick]

With the successful launch of Shanghai, Disney will have even more money to expand the domestic parks.

I do think that Shanghai opening will allow for more domestic spending in theory, but don't they also have two more cruise ships planned? That is capital intensive and may suck up a good bit of capital in upcoming years.

 

[doctornick]

The size of the land doesn't automatically mean it should take longer to build. Yes, there is more work to be done on a larger land, but it also means that more things can be done in parallel.

No it doesn't. The size and complexity of the building and or buildings is the biggest factor in determining the construction time. A smaller plot can actually make construction time take even longer.

I guarantee you that you can build a 100,000 square foot warehouse on a 2 acre plot much quicker than you can build a 5000 square foot luxury home on a 1/4 acre plot at the beach.

This is certainly true and is one of the reasons I hate it when people bring up Epcot's build time in relationship to other projects ("they built a whole theme part in 3 years despite being a smaller company" type comments). With larger projects, you can often build different aspects at the same time, it just requires more workers and materials. What makes construction longer for larger projects is if parts need to be done sequentially because one aspect builds upon another aspect.

 

[danlb_2000]

Indeed. Which makes the completion of RSR, a much more impressive attraction than the projection screens of Forbidden Journey, in just 3 years, even more impressive. Either way, Micechat is reporting that things are moving extremely quickly on Star Wars Land in California, in comparison to their other recent projects.

Nevertheless, my original argument was that Universal does NOT build similarly advanced/sized attractions faster than Disney. danlb_2000 commented that Transformers took "only 11 [months]". Well, what do you expect? All they had to do what install the little bits of theming, the projection screens, and the ride system. Poof done.

You are very much underselling what it took to build Transformers. They had to tare down and existing building, build a new one, install a multi-level ride system, elevators, projection screens, props, sets and do all the interior and exterior (as simple as it was) theming on a plot of land entirely landlocked in an operating park. By contrast Disney will have taken almost 20 months to install a third track for TSMM in an existing building and that is a much simpler ride system.

 

[Stripes]

You are very much underselling what it took to build Transformers. They had to tare down and existing building, build a new one, install a multi-level ride system, elevators, projection screens, props, sets and do all the interior and exterior (as simple as it was) theming on a plot of land entirely landlocked in an operating park. By contrast Disney will have taken almost 20 months to install a third track for TSMM in an existing building and that is a much simpler ride system.

You are comparing apples and oranges. TSMM is a minor expansion, with 0 reasons to dedicate a large number of workers to the project. Transformers, was a new major attraction, nowhere near Disney-quality, but major. Also, adding an expansion to existing facilities without compromising the guest experience is much more difficult than constructing a building "on a plot of land entirely landlocked". If Disney opened an E-ticket attraction as cheap as Transformers people would be ticked.

 

[marni1971]

With the successful launch of Shanghai, Disney will have even more money to expand the domestic parks.

You really think that don't you?

 

[marni1971]

Transformers took "only 11 [months]". Well, what do you expect? All they had to do what install the little bits of theming, the projection screens, and the ride system. Poof done.

Couldn't be further from the truth....

At least if you're going to be blatantly biased try and hide it.

 

[ToTBellHop]

You are comparing apples and oranges. TSMM is a minor expansion, with 0 reasons to dedicate a large number of workers to the project. Transformers, was a new major attraction, nowhere near Disney-quality, but major. Also, adding an expansion to existing facilities without compromising the guest experience is much more difficult than constructing a building "on a plot of land entirely landlocked". If Disney opened an E-ticket attraction as cheap as Transformers people would be ticked.

0 reasons to dedicate enough workers to TSMM? You mean besides a park that is in trouble due to lack of capacity during construction?

Silver lining: if they had rushed TSMM we would probably be getting Guardians of the Tower in 6 months.

 

[Stripes]

You really think that don't you?

All you have to do is look at the already released evidence. Don't be so cynical.

 

[marni1971]

All you have to do is look at the already released evidence. Don't be so cynical.

Cynical? No. Realistic? Yes.

At least try and play nice now you've signed up.

 

[Stripes]

Couldn't be further from the truth....

At least if you're going to be blatantly biased try and hide it.

I'm not saying the attraction wasn't impressive. But, by the conditions on which it was dreamt, it would inherently be a cheap-to-build attraction.

 

[marni1971]

I'm not saying the attraction wasn't impressive. But, by the conditions on which it was dreamt, it would inherently be a cheap-to-build attraction.

Is $85 million cheap?

I think not.