A quote in a recent Daily Disney article has some members of the Disney community in a frenzy. In it, Bob Iger states in reference to capital expenditure for the Parks and Resorts division:
“I think, once we get through this period, we’re probably going to drop down to what I’ll call a more steady state,” Iger said. “We don’t really project — save for Disneyland Shanghai, should be we successful in completing that agreement and building the park — we don’t really project anything as significant as this collection of investments on the [capital expenditure] front over the next decade.”
The phrase “we don’t really project anything as significant” is the one that offends. At first, it sounds like they aren’t going to make any significant capital investments in the parks and resorts for the rest of the decade. However, I believe Mr. Iger means that capital expenditure will be reduced to a level prior to the recent large investments in Disney’s California Adventure, Hong Kong Disneyland, two cruise ships (Disney Cruise Line is part of the Parks and Resorts division), Magic Kingdom’s Fantasyland expansion, and other large projects.
With the exception of Disneyland Shanghai, if it happens, don’t expect any more Fantasyland-sized expansions this decade. Instead, I think we will continue to see new attractions come to fruition. Perhaps the Monsters, Inc. roller coaster will finally see the light of day and Pixar Place will expand. Maybe Stitch’s Great Escape will finally be replaced. I do not believe Disney plans to completely rest on its laurels.
In my opinion, Mr. Iger was telling the group of analysts to expect a decline in capital spending, but not an end to it. He even referred to the current spending levels as “mildly aberrational”. If these levels are only a little unusual, then I don’t think the Parks and Resorts are going to be affected very much. Finishing a cruise ship and Aulani in Hawaii are going to be two big reductions in capital spending alone; these alone may be enough of a cut to the capital expenditure budget to bring it back to normal levels.
Special thanks to Michael Huey for the great photo of Paradise Pier!
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