Disney's Parks Bring in Most Of Its Money and Its $60 Billion Splurge Will Keep the Cash Flowing
Three years ago, Josh D’Amaro found himself in an almost empty Disneyland. The place was eerily quiet—there was no train bell ringing, no waffle cone aromas from the Gibson Girl Ice Cream Parlor, and none of the Dapper Dans's usual lively music. The Covid outbreak forced a lengthy shutdown of Disney's parks, but D'Amaro, who managed Disney's experiences, was optimistic that visitors would return when the gates reopened.
Josh D'Amaro's confidence paid off as his division became Disney's top performer, offering stability during the pandemic's aftermath. He took charge of the parks, experiences, and consumer products sector just over a year earlier in 2021, facing significant challenges such as a sharp drop in sales. Despite this, there was a remarkable turnaround, with the division achieving record revenue of $32.5 billion in fiscal 2023, marking a 16% increase from the previous year. Operating income also rose by 23% to $8.95 billion, showcasing the division's ability to adapt and bounce back despite the challenges posed by the outbreak.
Expansions and enhancements
In November 2023, Hong Kong Disneyland opened the World of Frozen, and in December 2023, Shanghai Disneyland introduced a Zootopia park. Meanwhile, at Walt Disney World in Florida, two new rides have started operating. These expenditures increased Disney's revenue and encouraged repeat business along with features like mobile ordering and the ability for guests to pay to avoid queues for particular rides. Record highs in sales, margins, and operating income were mentioned by Josh D'Amaro, who was upbeat about the future.
Disney's experiences division, which accounts for 36% of overall sales and 70% of operating profitability in 2023, is the company's strongest business unit. Disney reaffirmed faith in its leadership by reelecting the entire board, successfully fending off pressure from activist investor Nelson Peltz.
Investment in innovation
Disney intends to invest $60 billion in its experiences segment over the next 10 years to keep its theme parks current and competitive. The majority of this investment—roughly 70%—would go into developing fresh experiences for theme parks all over the world, including cruise lines. The remaining 30% will go toward infrastructure and technological advancements, such as maintaining the park's current attractions. At Disney theme parks, innovation has always been a core value, motivated by Walt Disney's concept that the parks should adapt to changing customer tastes and technological improvements. Walt Disney Imagineering is renowned for its groundbreaking work in immersive architecture, animatronics, and ride mechanics. It is still pushing the envelope in theme park development.
Immersive experiences and prospects
Disney's goal of improving its experiences division depends on building attractions that have a more authentic feel. Josh D'Amaro credited the Imagineering team for stretching the bounds of imagination and narrative. He emphasized Imagineering's ongoing greatness by highlighting the now-closed Star Wars Galactic Starcruiser, an immersive experience and groundbreaking hotel that let customers immerse themselves in a two-day "voyage" in space.
Although the Starcruiser's exorbitant ticket costs resulted in its termination in September, D'Amaro believes Disney learned a great deal from the event, which will inspire future experiences that have not yet been revealed. Disney's experiences segment, which includes its cruise line, hotels, and video game company, continues to value storytelling highly.
Disney's upcoming expansion includes Tropical Americas at Disney's Animal Kingdom in Florida and Fantasy Springs at Tokyo DisneySea. They're also exploring new ideas like areas inspired by "Coco" or "Encanto" and the potential for an "Avatar" land at Disneyland in California.
Disney aims to stay flexible for future projects while continuing its tradition of innovation with a $60 billion investment over the next decade, per CNN. With Josh D'Amaro's extensive experience, he's seen as a potential successor to CEO Bob Iger although Iger is set to leave in 2026. For now, D'Amaro remains focused on driving storytelling and innovation in his current role.