© Reuters. FILE PHOTO: Sleeping Beauty Castle is pictured at dusk at Disneyland Park in Anaheim, California, U.S., July 24, 2021. Picture taken July 24, 2021. REUTERS/Mario Anzuoni/File Photo
By Dawn Chmielewski
(Reuters) -Walt Disney said on Tuesday it would nearly double its capital expenditure for the parks business to about $60 billion over the next 10 years.
Disney CEO Bob Iger and parks chief Josh D’Amaro announced the accelerated pace of investment at a gathering of Wall Street analysts and investors at Walt Disney (NYSE:) World Resort in Orlando, Florida.
The parks business has become a reliable profit engine for the company and has helped cushion losses in the Disney+ streaming business, which is expected to become profitable only next year. Iger has described the parks as “a tremendous business” for Disney.
Disney said its parks, experiences and products segment has expanded at a combined annual growth rate of 6% since fiscal 2017, and generated $32.3 billion in operating income over the last 12 months, according to a presentation included in a regulatory filing.
Periods of significant investment — including the addition of Cars Land at Disney California Adventure or Disney’s Hollywood Studios in Orlando — have spurred attendance, Disney notes in a blog post Tuesday.
Disney says it has more than 1,000 acres of land for future development globally, roughly the equivalent of about seven new Disneyland Parks, as it seeks to appeal to what it says are some 700 million consumers who are Disney fans but have yet to visit one of its theme parks.
The investment follows a slowdown at Walt Disney World in Orlando, Florida, as attendance surges at its parks around the world, particularly at Shanghai Disney Resort and Hong Kong Disneyland.
Disney said it also plans to nearly double the capacity of its cruise line, adding two ships in fiscal 2025 and another in 2026.
The company’s stock fell 2.6% in morning trading, following the announcement.