Tuesday, the Walt Disney Co. (DIS) is planning to spend $1.1 billion over a period of five years to overhaul its theme park Disney's California Adventure reports WSJ. The theme park cost about $1 billion to build and Disney has already spent in excess of $100 million trying to improve it.
The report quoting people familiar with the things said that the Disney's board has recently approved the investment hoping to turn the park around by making it more like its successful neighbor, filled with references to company founder Walt Disney.
The new-look park also will be expanded by around 12 acres and is expected to add more features, with special emphasis on animated movies created by Pixar, including "Cars" and "Toy Story."
When Walt Disney created Disneyland in 1955, parks were powerful brand builders. But it is unclear whether that is still the case in the 21st century, when kids are more attracted to the Internet.
In 1991, Disney originally announced it was working on a plan to build Westcot, a West Coast version of Disney's Florida park, Epcot, which had opened nearly a decade earlier. But Westcot came with a price tag of as much as $3 billion. In 1995, Disney ditched Westcot.
In the summer of that year, Disney's then chief executive Michael Eisner held a three-day retreat in Aspen, Colo., where about 30 executives came up with an idea for a California-themed park, say people at the meeting. Eisner chose Disneyland chief Paul Pressler to oversee a $1.4 billion project in Anaheim that included California Adventure, a retail district and hotels.
He positioned the new park as a contemporary alternative to Disneyland. When the park opened in 2001, visitors complained that the new park lacked the imagination of Disneyland. As a brigade of Web sites savaged the park, a perception set in that it was a dud.
The Disneyland resort as a whole, especially the Downtown Disney retail district and hotels, succeeded in increasing visitors' average stay from one day to two. But attendance at California Adventure languished, while Disneyland was bursting at the seams.
Bob Iger, who took over as Disney chief executive in 2005, asked the company's designers to come up with a plan about a year ago, according to people involved in the planning. An initial idea was to combine Disneyland and California Adventure. But the investment in infrastructure to transport visitors around that area proved to be too expensive, so they focused instead on creating a second Disneyland.
This summer, Disney hired theme-park consultant Bob Weis to oversee the new project. Disney plans to keep California Adventure open during the five-year project. Though prices vary, an adult ticket for a day at either park now costs $66, while a combined ticket is $91.
Weis will add a new area called Cars Land, which will re-create the fictional town of Radiator Springs from the 2006 Pixar movie "Cars," say people familiar with the plans. It is still unclear what will happen to the name, as the company sees appeal in the words "Disney," "California" and "Adventure," these people say.
Disney maintains its parks are a good return on investment. In fiscal 2006, they accounted for almost 30% of the company's total revenue of $34 billion and reported 30% growth in operating income.
DIS closed Tuesday's regular trading session at $35.01.
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