Thousands of people camped on the street overnight waiting to get in. Media coverage by more than 400 print, online and broadcast outlets. Dozens of costumed characters foxtrotting to Ain’t We Got Fun. Fireworks at 8am.
This is what a Disney do-over looks like.
With military-style precision on Friday morning, Walt Disney Co unveiled its US$1.1 billion improvements to its California Adventure park in Anaheim, a “reopening” intended to fix what CEO Robert Iger recently described as “a brand eyesore.”
Photo: Reuters
Adjacent to Disneyland, but greatly lagging it in name recognition and profits, California Adventure has new features that include a 5-hectare expansion dedicated to Pixar’s Cars movies and the lavish re-theming of the park’s entrance, where 1920s-era references to Walt Disney have replaced contemporary California imagery.
Iger arrived for the opening ceremony on a red trolley car, leaning from a window and beaming as he flashed a thumbs-up sign.
“I think we’ve pretty much nailed it,” he said afterward, watching guests race from the front gates to Cars Land.
Wall Street certainly hopes so. As the entertainment conglomerate leans harder on its US$12 billion theme park business for growth, California Adventure is under pressure to at long last live up to its promise — a tall order given the fragile economy. Opened 11 years ago on the old parking lot of the original Disneyland, California Adventure was intended to complement its sister park and turn Anaheim into a multiday vacation hub — a kind of miniature Orlando, Florida, where Disney has six theme parks and three dozen hotels.
The idea was to induce people to come not just for a day, but for a whole weekend or longer, preferably sleeping at Disney-owned hotels and eating in Disney-owned restaurants. Or so Iger’s predecessor, Michael Eisner, envisioned.
However, the new park, which had its own ticketing, restaurants and rides and thematic areas like a beach boardwalk and a Hollywood section, was a colossal disappointment. Visitors and the news media complained that the property lacked the company’s trademark over-the-top design touches. Disney characters popped up infrequently. Moreover, the overall premise fell flat: California-themed rides for a California customer base?
The focus of the overhaul, five years in the making, was adding what Iger called “Disney DNA” — more characters and experiences painstakingly engineered to tug at emotions. To that end, new rides are built around Toy Story and The Little Mermaid, and an US$80 million fountain show combines music, lighting and 1,200 programmable jets of water to bring Disney characters to life.
California Adventure attracted about 6.3 million visitors last year, a trickle compared with the 16.1 million who swarmed Disneyland. Disney hopes the improved California Adventure will take some of the stress off its vaunted neighbor, which is often so crowded that guests are unpleasantly packed elbow to elbow.
However, higher profit is the main goal and that will come primarily from higher ticket prices. In preparation for the opening, Disney increased the cost for a two-day “park hopper” pass in Anaheim to US$200 for visitors age 10 and up, compared with US$173 previously. A successful California Adventure would lift spending at Disney’s three hotels here, which were recently expanded and refurbished.
Disney does not report financial information for specific resorts, but its broader park operation has become a center for growth. Last year, Disney’s parks reported operating income of US$1.6 billion, up 18 percent from a year earlier, on about US$12 billion in revenue.
Disney is spending heavily to expand its vacation empire. Recent investments include the opening of an US$850 million resort in Hawaii and two cruise ships built at a cost of more than US$1.8 billion. It is also spending about US$1 billion to expand its Magic Kingdom resort in Florida and add an Avatar expansion to its Animal Kingdom park there.
The expansion comes as the US economy sputters anew and Europe’s fiscal crisis worsens, creating fears of a decline in consumer spending. During the recent recession, Disney discounted room rates to prop up attendance. In a recent research note, Todd Juenger, an analyst at Sanford C. Bernstein & Co, cautioned that so much expansion spending “limits Disney’s flexibility to reduce costs/capital in response to worsening economic conditions.”
However, California Adventure may prove attractive enough for families to find the money to go even if they have to cut back in other areas, said analysts, several of whom raised their outlooks for Disney’s stock price after viewing the expansion.
“The park has been fully transformed from a random collection of a couple great rides into a true Disney-worthy themed world,” Juenger said, adding that he thought it would be “increasingly impossible for a guest to visit Disneyland and not want to spend an entire day and night” at California Adventure as well.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure