Disney's theme parks generate the most revenue for the company, and it intends to invest $60 billion to maintain its position as the top earner.

• Disney's theme parks are the most profitable part of the company's business as it adjusts to changes in movie and TV viewing preferences.
• Disney is investing $60 billion in its parks division over the next decade, with Josh D'Amaro leading the changes and additions.
• Disney is seeking novel approaches to attract visitors to its parks, including advancements in robotics and animatronics, as well as enhanced storytelling experiences.

Three years ago, Josh D'Amaro stood in a nearly empty Disneyland.

The Dapper Dans' cheerful tunes were absent, the railroad bell was silent, and the scent of waffle cones from the Gibson Girl Ice Cream Parlor was missing on Main Street at the California theme park.

Disney's domestic parks had been closed for more than a year due to the Covid pandemic, but D'Amaro, head of Disney's experiences division, was optimistic that guests would rush to return when the parks reopened.

D'Amaro's division is now Disney's best-performing segment, rebounding and offering stability in recent quarters as the company adapts its entertainment business to match changing consumer habits after the pandemic.

In 2021, D'Amaro was the head of the experiences, parks, and consumer products division for only over a year. He took charge when Bob Chapek became CEO in early 2020. During his tenure, D'Amaro had to manage significant operating losses due to global park closures, a docked fleet of cruise ships, and a sharp decline in hotel visits.

In 2020, the experiences division experienced a 35% decline in revenue, resulting in a nearly $10 billion decrease from the previous year's $26.2 billion. This was followed by an additional 3% decrease in revenue in 2021.

In three years, a lot has changed. D'Amaro, sitting in a conference room in Burbank, has much to brag about.

In fiscal 2023, the experiences division recorded a revenue of $32.5 billion, which was a 16% increase from the previous year. Additionally, the operating income increased by 23% to $8.95 billion.

D'Amaro viewed the pandemic as a chance to pause and consider what the future should entail for his division.

Despite the challenges we faced, we viewed the situation as an opportunity to gain a fresh perspective on our operation, he stated.

Disney continued construction of its Avengers Campus themed land in Disneyland and refurbished old favorites such as the King Arthur Carousel. It also built new rides and touched up old ones in the years that followed.

In November, Hong Kong Disneyland opened the World of Frozen, while Shanghai Disneyland launched its Zootopia land in December. Additionally, Disney World in Florida debuted two new rides in 2022 and 2023, including a "Guardians of the Galaxy" ride in Epcot and a "Tron" roller coaster in the Magic Kingdom.

Disneyland has revamped its attractions and themed park areas, turning Pacific Wharf into San Fransokyo Square, updating Mickey's Toon Town, and making major transformations at Epcot.

Disney's earnings have been boosted by the combination of new technology in mobile ordering and the option for guests to pay to skip the line for certain rides, despite the entertainment division's struggles to recapture its late-2010s boom.

"Our recent first-quarter earnings have set new records for revenue, margins, and operating income, indicating a swift and strong recovery. Looking ahead, I believe the future is bright for our segment and the company as a whole."

In 2023, Disney's experiences business was the top-performing part of the company, contributing 36% to its total revenue and 70% to its operating income. On the other hand, Disney's entertainment division, which includes its theatrical and streaming businesses, accounted for 45% of the company's revenue but only 11% of its operating income.

Disney's board, led by CEO Bob Iger, was determined to increase the company's profitability and improve share performance by enhancing the utilization of its parks. On Wednesday, Disney successfully fended off activist investor Nelson Peltz's proxy battle, retaining its entire board.

Always innovating

Disney's commitment to investing $60 billion in experiences over the next decade is a reflection of the division's strength, which is a crucial element of its strategy to maintain its competitive edge in the entertainment industry.

D'Amaro stated that approximately 70% of the money will be allocated towards "new experiences" in both domestic and international parks, as well as cruise lines. The remaining 30% will be invested in technology and infrastructure, including the maintenance of existing attractions.

Since its inception, innovation has been a key focus for theme parks, as Walt Disney envisioned them as constantly evolving to meet the needs and preferences of consumers, as well as advancements in technology.

Disney's parks are a standout in the industry due to Walt Disney Imagineering's cutting-edge innovations in ride mechanics, animatronics, creature design, and immersive architecture.

Disney Imagineering is developing walking robotic characters, as seen last year with the BDX droids from Star Wars at California Disneyland's Star Wars: Galaxy's Edge.

Engineers and animators collaborate to create remote-controlled droids with childlike curiosity, which is reflected through their movements and special emotes. The droids are programmed to have a "tantrum" emote, where their eyes glow red and they emit a high-pitched squeal.

Visitors to Galaxy's Edge in the upcoming three months may encounter this trio as part of Disney's "Season of the Force." They enhance the usual roaming character meet-and-greets with characters such as Rey, Chewbacca, Kylo Ren, and stormtroopers.

Disney hopes hands-on innovations such as the robots will keep guests coming.

D'Amaro stated that when there's a spark, the emotion is fully displayed during guest interactions with attractions, cast members, or characters, making it very real and genuine.

In March 2023, Disney unveiled a new version of its "stuntronics" robot at the South by Southwest conference, featuring Judy Hopps from "Zootopia." This technology had previously been used to create the Spider-Man leap stunt at Avengers Campus. During the presentation, Imagineers demonstrated the Judy Hopps robot's ability to balance on roller blades and perform somersaults.

The presentation's most significant audience response occurred when an Imagineer positioned the bot on his shoulders and it mimicked human-like leg movements, as if it were a child hugging its parent. The seemingly basic action, specifically designed for the presentation, resonated with viewers on a fundamental level, according to Imagineers.

As Imagineers develop new technologies, Disney animators can help bring them to life.

Disney is transforming Splash Mountain into Tiana's Bayou Adventure in both California and Florida parks, featuring numerous animatronic characters from "The Princess and the Frog."

Disney has revolutionized animatronics with its hydraulic, pneumatic, and electronic systems. The all-electronic audio-animatronics developed by Imagineers for Tiana's Bayou ride allow for more refined and precise movement, making them appear more realistic. Similar animatronics can be seen in Smuggler's Run and Rise of the Resistance, in Galaxy's Edge.

Some animatronics' interior parts were made using 3-D printing, resulting in a lighter material.

Telling stories in the parks

Disney aims to expand its experiences division by making its attractions more immersive.

D'Amaro stated that the Imagineering team continues to push the boundaries of storytelling and creativity.

The recently closed Star Wars Galactic Starcruiser was 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 in the Star Wars universe.

"D'Amaro stated that the task at hand was unprecedented, making it challenging to communicate it to the public. He believed it took great courage for them to venture into this new territory. In his opinion, this demonstrated that Imagineering is still at its peak today."

Although high ticket prices discouraged typical visitors, the Galactic Starcruiser closed in September. Nonetheless, D'Amaro stated that the experiment was a valuable lesson for the company.

He stated that the experiences we have not yet announced will utilize the knowledge gained.

Storytelling is at the heart of everything across Disney's experiences division.

Disney's cruise line, hotels, and video game business are all part of the company's expansion plans. By fiscal 2026, Disney aims to add three more cruise ships to its existing fleet of five.

The Disney Wish, launched in 2022, was the first new ship in a decade and relied heavily on its popular franchises to attract travelers to the ocean.

The ship offers a "Frozen" sing-along dinner, a Marvel dining experience, a Star Wars-inspired Hyperspace Lounge, and the first ever Disney water ride attraction, the AquaMouse.

"D'Amaro believes that the idea of Disney working together as one is more powerful than ever, with Alan Bergman in the studios creating new properties that can be brought to life in Disney experiences and extended in brand new ways, or franchises born out of the theme parks."

Disney's 'blue sky'

Disney's experiences division is planning to expand immediately, even before the majority of the $60 billion investment begins.

An eighth port at Tokyo DisneySea, Fantasy Springs, is set to open next to Disney. The land will feature three new areas based on "Frozen," "Tangled," and "Peter Pan," along with the new Tokyo DisneySea Fantasy Springs Hotel.

The Tropical Americas area at Disney's Animal Kingdom in Florida is currently undergoing both concept and design work. Meanwhile, there have been no official updates regarding the previously announced third ride at Avengers Campus in the California Adventure area at Disneyland.

The company is working on "blue sky" ideas for its parks, which are in the early stages and may not be realized.

Disney has hinted at the possibility of creating a new area in the Magic Kingdom inspired by "Coco" or "Encanto," or both. Additionally, there have been discussions about establishing a villain-infested zone within the park.

At the investor meeting this week, Iger hinted at the possibility of an "Avatar" land at Disneyland in California.

"Iger stated during the Morgan Stanley Conference in March that we have thousands of acres of undeveloped land, and we could potentially construct seven new full lands globally, including expanding Disneyland in California by 50%."

The estimated cost for the two recent Star Wars: Galaxy's Edge lands in Disneyland and Disney World is $1 billion each. The price points for these projects may vary if they are completed.

That's where the $60 billion investment comes in.

Disney likely won't spend it all soon.

"Iger stated at a media event on Tuesday that although they have a good idea of what is being built in the near term, they are not allocating all of it. This is because they want to maintain flexibility in case they end up with a giant hit movie in five years, like 'Frozen', that they may want to mine as an attraction, hotel or restaurant in their parks."

Disney's board is currently planning for the CEO's departure at the end of 2026.

D'Amaro is on the short list.

D'Amaro's track record of managing Disney experiences is a part of his 26-year career with the Walt Disney Company, where he has held positions as chief financial officer for consumer products and global licensing and chief commercial officer for Walt Disney World Resort.

Iger's return as CEO is a blessing for D'Amaro, who is currently focusing on his role.

"He stated that his focus is on Disney experiences and driving innovation and storytelling forward while paying tribute to fans and growing the business when asked about potential succession plans."