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Turning Point: Disney Goes Cheap With Toy Story Land

What does the trend toward frugality mean for the future of Disney?

Image: DisneyThe dirty secret about all Disney parks is that what happened with Toy Story Land is nothing new. Whenever Disney expends a great deal of capital to build something new, budget cuts are an expected part of the process. The company's never been able to afford the financial outlay required to create a full park. To wit, Walt Disney famously had to sell his dream home to pay for Disneyland.

Back when Disney bought the land for the Florida Project, the entrepreneur knew that he must construct a theme park first. This section of E.P.C.O.T. would fund everything else. Fifty years later, the same principles apply. Shanghai Disneyland ran over budget by $1.5 billion, almost 38 percent, forcing Disney to reduce costs in its American parks, the ones that were actually earning money at the time.

Given this reality of construction costs, Disney's current situation is more reasonable. After all, they're undergoing one of the most significant expansions in the company's history. Star Wars Land at Hollywood Studios had a reported budget of $800 million at the outset, and Disney's building two of them. Simultaneously, they're building two expensive new attractions at Epcot based on Ratatouille and Guardians of the Galaxy. They've also reportedly committed $2 billion to reinvigorate Future World.

Image: DisneyAt Magic Kingdom, Disney’s building a Tron roller coaster while altering the appearance of Tomorrowland. On the other coast, Disney California Adventure is converting into a Marvel/Pixar-themed park, with multiple attractions and lands under construction. Then, there’s Disney’s recent acquisition and investment in Disneyland Paris. And Disney’s committed to part of the $1.4 billion budget for upgrades at Hong Kong Disneyland.

You don’t have to be excellent at high finance to understand that your favorite corporation is spending a LOT of money on theme park improvements right now. When you see a busted table at Woody’s Lunch Box, however, your first instinct isn’t to think, “Oh, they need that money for Millennium Falcon: Smuggler’s Run.”

Image: DisneyHigh-level executives have to think of the big picture, though. They’ve done something rare and brave over the past few years. They’ve decided to address every standing criticism of Disney theme parks. Disney California Adventure and Hollywood Studios previously had the worst reputations of the American theme parks. Now, they’re going to host some of the newest and most exciting rides.

Future World hasn’t seemed futuristic since the Reagan administration, but $2 billion will go a long way in bringing it into the 21st century. And the worst international parks, Disneyland Paris and Hong Kong Disneyland, are undergoing sweeping changes to improve their quality. If anything, Disney’s trying to do too much right now, and one of the first victims of these changes took place at Toy Story Land. Should Disney commit a bit of money to get rid of the unsightly stuff? Absolutely.

Image: DisneyTo a larger point, Disney customer service is integral to the sustained excellence of the company. Layoffs are short-sighted and diminish the Disney brand. But it’s easy for me to say that as someone who doesn’t have to distribute funds across four multi-billion divisions or pay the salaries of those employees.

Given what I know of Disney's history and their current ambitions, I don't see them cutting corners needlessly. It's more that they've cut the wrong corners. They could/should have held off on some of the projected upgrades until the Star Wars Land money started rolling in. Once that revenue stream is in place, my hope/expectation is that Disney's recent cost-cutting phase becomes a thing of the past. If corporate officials are committed to this new strategy, however, it's a huge miscalculation. Disney theme parks must maintain their magic at all costs.

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