But I Want to Ride the New Spaceship Earth - Theme Parks and Hotels
Coming in at 17% of operating income, the theme parks represent the traditional Disney brand that every kid and dad with an open wallet tends to remember, and they are growing. Shanghai Disneyland, is slated to open in 2016 in one of the world’s fastest growing economies[i] and a new Fantasyland is slated to open at Disney World in the fall of 2012. Although Disney theme parks tend to metastasize indefinitely, once these park expansions and associated costs are complete, revenues should flow like train cars on Big Thunder Mountain Railroad as the company realizes additional cash flows.
Waning attendance issues troubled the parks in 2010 and early 2011 as a result of lackluster consumer confidence, but the parks have reported strong fourth quarter results in which revenues Increased 11% to $3.1 billion and segment operating income increased by 33%.[ii] I can personally vouch for the Christmas 2011 attendance levels as at one point on my vacation, the gates to the Magic Kingdom were shuttered because it was “at capacity.”
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