Visitors wearing emblematic Mickey Mouse and Minnie Mouse ears walk in front of the Sleeping Beauty-inspired castle at Disneyland Paris, Oct. 16, 2023.
Ian Langsdon | Afp | Getty Images
Three years ago, Josh D’Amaro stood in an almost empty Disneyland.
The California theme park’s Principal Street was quiet: no cheery tunes from famed barbershop quartet the Dapper Dans, no clanging railroad bell, and no wafting scent of waffle cones from the Gibson Girl Ice Cream Parlor.
It had been greater than a 12 months for the reason that Covid pandemic had forced Disney’s domestic parks to shutter, but D’Amaro, chair of Disney’s experiences division, was confident guests would flood back in when the gates reopened.
His confidence was well founded. D’Amaro’s division is now Disney‘s best-performing segment, rebounding and offering stability in recent quarters as Disney shuffles to adapt its entertainment business to match consumer habits that modified after the pandemic.
On that quiet day in 2021, D’Amaro had been answerable for the parks, experiences and consumer products division, now just called experiences, for under a little bit greater than a 12 months. He took the helm when Bob Chapek was tapped as CEO in early 2020. D’Amaro spent much of those 12 months coping with substantial operating losses from global park closures, a docked fleet of cruise ships and a plunge in hotel visits.
Revenues fell 35% in 2020, an almost $10 billion decrease from the $26.2 billion the experiences division had tallied within the 12 months before the pandemic. Then revenue dropped a further 3% in 2021.
But so much has modified in three years. D’Amaro — sitting in a conference room in Burbank, an hour north of Disneyland and just a couple of miles from the guts of Disney’s theme park creative engine, Walt Disney Imagineering — has much to brag about.
The experiences division posted record revenue of $32.5 billion in fiscal 2023, a 16% increase from the prior 12 months. Operating income jumped 23% to $8.95 billion.
D’Amaro described the pandemic as “a possibility to take a breath” and a time for his division to “take into consideration what we wanted the long run to appear like.”
“So, as difficult as that situation was, we saw it as a platform, a latest vantage point for us to have a look at the operation,” he said.
While its parks were shuttered, Disney continued construction of its Avengers Campus themed land in Disneyland and touched up old favorites resembling the King Arthur Carousel. And it built latest rides, and refurbished others, within the years that followed.
Avengers Campus at Disneyland in California.
Christian Thompson/Disneyland Resort
World of Frozen opened in Hong Kong Disneyland in November, and a Zootopia land opened in Shanghai Disneyland in December. The corporate also launched two latest rides at Walt Disney World in Florida: a “Guardians of the Galaxy”-themed ride in its Epcot park in 2022, and a “Tron”-themed roller coaster within the Magic Kingdom in April 2023.
Moreover, the corporate has revamped attractions and themed park areas, turning the Pacific Wharf area of Disneyland’s California Adventure into San Fransokyo Square, based on the animated hit “Big Hero 6,” updating Mickey’s Toon Town at Disneyland and making major transformations at Epcot.
Those investments, coupled with latest technology in mobile ordering and the flexibility for guests to pay to skip to the front of the road for certain rides, have kept guests coming and boosted Disney’s earnings at a time when the entertainment division is struggling to recapture its late-2010s boom.
“Sitting here now, today, you’ve got seen our results; our results have been record-setting as recently because the last first-quarter earnings,” D’Amaro said. “Record revenue, record margins, record operating income. So, the recovery has been swift, it’s been strong. But more importantly, I feel the long run looks incredibly vivid for our segment — and the corporate, quite frankly.”
In 2023, experiences was the best-performing a part of Disney’s business, accounting for 36% of the corporate’s total revenue but 70% of its operating income. Meanwhile, Disney’s entertainment division, which incorporates its theatrical and streaming businesses, represented 45% of revenue but just 11% of operating income.
The flexibility to get more out of the parks in recent times was crucial for CEO Bob Iger and Disney’s board as they tried to make the corporate more profitable and improve share performance. On Wednesday, Disney beat back activist investor Nelson Peltz’s proxy fight, reelecting its full board.
At all times innovating
The division’s strength is why Disney has pledged to invest $60 billion in experiences over the subsequent 10 years — a key a part of its strategy to keep the parks fresh and relevant in a competitive segment.
D’Amaro said about 70% of that money will go toward “latest experiences” in domestic and international parks, together with cruise lines. The opposite 30% will go toward technology and infrastructure, including maintenance of existing attractions.
Innovation at theme parks has been a central goal since Walt Disney ran the corporate. Disney’s founder used to say that its theme parks would “never be finished” and would evolve to meet consumer demand and changing tastes, together with developments in technology.
Walt Disney Imagineering has long been on the innovative of development. Its innovations, from ride mechanics and animatronics to creature design and immersive architecture, have made Disney’s parks a standout within the industry.
Last 12 months, guests caught a glimpse of one among these innovations — a trio of tottering bipedal robots from Star Wars called BDX droids. First spotted at California Disneyland’s Star Wars: Galaxy’s Edge, they are only one iteration of a latest technology Disney Imagineering is developing to bring walking robotic characters to life.
Walt Disney Imagineering’s two-legged walking character platform in the shape of BDX, a Star Wars droid.
Disney
Engineers create the mechanics for the remote-controlled droids to move and balance, and work with animators to give those movements personality. The robots were designed to have childlike curiosity, reflected through cheeky head tilts and chirping beeps, together with a special emote dubbed “tantrum,” where their eyes glow red and so they emit a high-pitched squeal.
Guests who visit Galaxy’s Edge in the subsequent three months may stumble across this trio as a part of Disney’s “Season of the Force.” They add to the regular roaming character meet-and-greets with the likes of Rey, Chewbacca, Kylo Ren and stormtroopers.
Disney hopes hands-on innovations resembling the robots will keep guests coming.
“Those moments where there is a spark, there’s an emotion that’s on full display, where a guest is interacting with an attraction or a solid member or a personality, it’s very real and real,” said D’Amaro.
That emotion was on display on the South by Southwest conference in March 2023, when Disney debuted a latest iteration of its “stuntronics” robot, this time in the shape of Judy Hopps from “Zootopia.” This technology had previously been used to create the Spider-Man leap stunt at Avengers Campus. In the course of the 2023 presentation, Imagineers showed the audience how the Judy Hopps robot could balance on roller blades and perform somersaults.
The most important audience response got here at the tip of the presentation, when an Imagineer lifted the bot to sit on his shoulders and it realistically moved its legs to fit around his neck, as a toddler would. The straightforward motion — programmed only for the presentation, Imagineers told CNBC — captured something intrinsic to the human experience.
D’Amaro said those moments show why it’s essential for Disney animators to be a part of the event process: Because the Imagineers craft latest technologies, the artists may help bring them to life.
It shows in Disney’s rebrand of Splash Mountain. In each the California and Florida parks, the corporate is refurbishing the ride into Tiana’s Bayou Adventure, which can feature dozens of animatronic characters from “The Princess and the Frog.”
A preview of Walt Disney Imagineering’s audio-animatronics for the upcoming refresh of Splash Mountain, Tiana’s Bayou Adventure.
Disney
Imagineers have developed all-electronic audio-animatronics for the ride for characters resembling Lewis, the trumpet-playing alligator from the film. Disney revolutionized animatronics a long time ago with its hydraulic, or liquid-fueled, and pneumatic, or air-fueled, systems, however the electronic animatronics for Tiana’s Bayou allow for more refined and precise movement, making them appear more realistic. Similar animatronics may be seen within the rides Smuggler’s Run and Rise of the Resistance, in Galaxy’s Edge.
Interior pieces of a few of the animatronics were crafted using 3-D printing, leading to a lighter-weight material.
Telling stories within the parks
Disney’s ambitions to grow its experiences unit hinge partially on making its attractions feel more real.
“They proceed to push the envelope of storytelling and creativity,” D’Amaro said of the Imagineering team.
He cited the recently shuttered Star Wars Galactic Starcruiser, a hotel and immersive experience that took guests on a two-day “voyage” in space. It was a 48-hour interactive story that allowed fans to physically play within the Star Wars universe.
Guests arrive aboard the Chandrila Star Line’s Halcyon at Star Wars Galactic Starcruiser.
Disney
“That is something that had never been done before,” D’Amaro said. “It was difficult to even explain to the general public, and I feel it was incredibly brave for us to move into this space. … And this, to me, says Imagineering continues to be at its best today.”
High ticket prices deterred the common parkgoer, and the Galactic Starcruiser shuttered in September. Still, D’Amaro said the experiment was a learning opportunity for the corporate.
“Those learnings are being employed on the subsequent experiences, which we’ve not even announced yet,” he said.
Storytelling is at the guts of the whole lot across Disney’s experiences division.
This extends to Disney’s cruise line and hotels, in addition to its video game business. The corporate has a fleet of 5 cruise ships, and plans to add three more by fiscal 2026.
The Disney Wish, which made its maiden voyage in 2022, was the primary addition to the fleet in a decade and bet big on its powerhouse franchises to entice travelers to the high seas.
There is a “Frozen” sing-along dinner and a Marvel dining experience, in addition to a Star Wars-inspired Hyperspace Lounge. The ship also has the primary ever Disney water ride attraction on board, the AquaMouse.
Disney’s “Frozen”-themed dinner show on the cruise ship Wish.
Disney | Matt Stroshane
“That is something I feel that’s really essential, the concept of the Disney difference,” D’Amaro said. “That this company works together as one is more powerful now than I feel it ever has been — whether it’s [entertainment co-chair] Alan Bergman within the studios making a latest property that we will then take to Disney experiences and convey it to life and extend that story in brand latest ways, or franchises that are birthed out of the theme parks.”
Disney’s ‘blue sky’
Disney’s experiences division has immediate expansion plans — even before the majority of the planned $60 billion investment kicks in.
Next to open for Disney is Fantasy Springs, an eighth port on the Tokyo DisneySea park. The land shall be home to three latest areas — inspired by the movies “Frozen,” “Tangled” and “Peter Pan” — in addition to the brand new Tokyo DisneySea Fantasy Springs Hotel.
Concept and design work can also be underway for the Tropical Americas area at Disney’s Animal Kingdom in Florida. There have been no official updates on the previously announced third ride at Avengers Campus within the California Adventure area at Disneyland.
The corporate is developing what it’s dubbed “blue sky” ideas for its parks — projects that are still in early development and will ultimately not see the sunshine of day.
Disney has teased that an area based on “Coco” or “Encanto” or each may very well be underway within the Magic Kingdom. There have been also talks about opening an area of the Magic Kingdom that can be overrun by Disney villains.
In the course of the company’s investor meeting this week, Iger even teased the opportunity of an “Avatar” land at Disneyland in California.
“We’ve hundreds of acres of land still to develop,” Iger said throughout the Morgan Stanley Conference in March. “We could actually construct seven latest full lands if we wanted to all over the world, including the flexibility to increase the scale of Disneyland in California, which everybody thinks is form of landlocked, by 50%.”
Price points for these projects will vary, in the event that they do come to fruition. The recent additions of the 2 Star Wars: Galaxy’s Edge lands in Disneyland and Disney World are estimated to have cost $1 billion each.
That is where the $60 billion investment is available in.
Disney likely won’t spend it all soon.
“We even have a reasonably good idea within the near term of what is being built, but we’re purposefully not going to allocate it all,” Iger said at a media event Tuesday, according to the Los Angeles Times. “Because who knows? In five years we will find yourself with a large hit movie — think ‘Frozen’ — that we might want to mine essentially as an attraction, or a hotel or restaurant in our parks. So you wish to maintain some flexibility.”
But Iger won’t be head of the corporate in five years, if all goes according to plan. The CEO, who returned to the post in 2022, is about to step down at the tip of 2026. Disney’s board is within the strategy of succession planning.
D’Amaro is on the short list.
His track record helming Disney experiences is a component of a 26-year profession with the Walt Disney Company, during which D’Amaro has held posts as chief financial officer for consumer products and global licensing and chief industrial officer for Walt Disney World Resort.
For now, nonetheless, D’Amaro said he’s concentrating on his current post. He called it a “blessing” to have Iger back as CEO.
“I’m focused on Disney experiences,” he said when asked about potential succession plans. “And I’m focused on driving innovation and storytelling forward and paying tribute to our fans and continuing to grow this business.”