Exploring Disney’s $60 Billion Strategy to Enhance Its Parks and Cruises

In a heavily secured warehouse in Glendale, California, an extraordinary project is underway. Behind an unassuming black curtain, a life-sized model of Walt Disney, who passed away in 1966, is being meticulously crafted. Dressed in one of his favorite ties and a pair of his old shoes, this model is positioned at a desk replicating Disney’s former office, the birthplace of legendary animations and iconic theme parks like Disneyland. A special light accentuates the model’s face, attempting to spark a twinkle in Disney’s eye.

Tom Fitzgerald, a senior creative executive at Walt Disney Imagineering, expressed the passion behind this endeavor during a recent tour. His team is leveraging advanced audio-animatronic technology to create a version of Disney that can move, speak, and tell stories, standing up from the desk. Innovative methods are being employed to animate the model’s hands and fingers, along with advanced techniques that aim to make the skin appear incredibly lifelike, knowing that visitors armed with cameraphones will want to capture close-ups of the model’s face. As Fitzgerald remarked, “It’s a new world for us, new challenges. But as Walt would say, it’s kind of fun to do the impossible.”

This innovative spirit embodies the essence of Disney Experiences, the division overseeing the company’s non-media businesses. Disney operates an impressive network of 12 theme parks across six locations on three continents, owns five cruise ships with four more under development, manages numerous hotels, and creates countless attractions. Collectively, the Experiences division generated $32.5 billion in revenue last year, accounting for approximately 37% of the company’s total sales.

Disney is placing significant emphasis on its Experiences division, particularly its resorts, as vital to sustaining growth. During the most recent D23 fan festival in Anaheim, experiences chairman Josh D’Amaro announced plans for considerable expansions across various parks, including Disneyland, Walt Disney World in Orlando, and locations in Paris, Shanghai, and Hong Kong. Over the next decade, D’Amaro is overseeing an ambitious $60 billion investment strategy into parks and cruise lines.

With the necessity for strategic spending, Disney’s parks division remains crucial to the company’s overall profitability, offsetting costly investments in streaming services like Disney+ and Hulu. Hollywood analyst Matthew Belloni pointed out that many other media firms would envy Disney’s robust financial returns from its parks. However, increasing ticket prices inevitably create challenges. Economic downturns can drastically impact park attendance, as evidenced by Disney’s recent earnings report, which noted flat attendance at domestic parks, despite a 2% rise in overall experiences revenue. They voiced concerns about a “moderation of consumer demand” for their parks.

Despite still being remarkably profitable, these warning signs present a daunting challenge for D’Amaro, who has been part of the Experiences division for 26 years. As speculation mounts about CEO Bob Iger’s impending retirement in 2026, D’Amaro finds himself among the potential successors, placing additional scrutiny on his actions. He manages a global workforce of 180,000 while ensuring seamless guest experiences for millions of tourists. Achieving the proverbial “magic” daily across all attractions is no small feat, but D’Amaro remains determined, asserting, “We always have some magic in our back pocket.”

D’Amaro’s dedication to both the parks and the brand is paralleled by his personal interactions, as he actively engages with guests and absorbs their feedback. A case in point involved his decision during the preparation for the opening of the Star Wars: Galaxy’s Edge attraction when he weighed the historical significance of a tree obstructing pedestrian flow. Ultimately, he decided to relocate the tree to appease devoted fans aware of every detail in the parks.

The integration of emotional connections into Disney’s experiences is of paramount importance to D’Amaro. He recognizes that while watching a movie brings entertainment value, walking through a theme park and engaging with beloved characters creates profound emotional bonds with guests. During a recent tour of the Imagineering offices, a whiteboard bore the question: “What drives emotional reactions to characters?”

Successful answers to such inquiries foster deeper relationships with millions of loyal customers. Inside the R&D laboratory, engineers tested interactive robotic characters from the Star Wars universe, ensuring that their performance resonated with guests just as effectively as it did during initial testing in the lab. Imagineering’s president and chief creative officer, Bruce Vaughn, remarked on the recent fabulous growth of Disney’s international parks, citing the remarkable expansion of Disneyland Paris and the success of Tokyo DisneySea’s Fantasy Springs area.

At the D23 festival, D’Amaro unveiled numerous upcoming attractions, committing to at least a dozen new additions to the U.S. parks, including an Avatar-themed land and a Coco attraction. Highlighting the collaboration with Epic Games for a Disney universe within Fortnite, he presented Disney’s expansive reach across land, sea, and online platforms.

While Disney’s Experiences division vividly manifests in physical environments, the company takes a long-term perspective on its investments. Launching new attractions can be an intricate process involving collaboration across departments. D’Amaro acknowledged that during the creation of a new Lion King land for Disneyland Paris, the stakes are high, as these experiences can remain part of the park for generations. New attractions, like the animatronic Disney model, resonate with guests on an emotional level, fostering lifelong connections.

On the eve of the D23 festival, D’Amaro expressed a deep sense of responsibility, drawn from the memories of Walt Disney displayed prominently in his office. His enthusiasm, combined with a clear focus on current challenges—such as enhancing the guest experience—demonstrates his commitment to the legacy of Disney while paving the way for future growth and innovation.

Source: Fortune