Make us your home page
Instagram

New Disney hotels on hold

ORLANDO — Nearly five years after it outlined an ambitious vision of standalone hotels, niche parks and retail centers built in outposts far beyond its world famous theme-park resorts, the Walt Disney Co. today has no such projects in its public development pipeline.

That's the case after the company recently abandoned plans to build a roughly 500-room, Disney-branded hotel near Washington, D.C. Disney, which spent $11 million to buy land in the area in early 2009, said the timing simply isn't right for the project.

The move follows an early stumble at Disney's first big foray into standalone resorts: Aulani, the roughly $850 million hotel and timeshare that opened Aug. 29 on the Hawaiian island of Oahu. Disney was forced to suspend sales in the project for two months this summer after it realized it had underestimated the annual fees needed to cover the resort's operating costs; Disney will now have to subsidize the fees paid by early timeshare buyers for the next 50 years.

At the same time, Disney executives have pledged to investors to reduce capital spending once the company completes a current slate of projects that includes the Hawaiian resort, two new cruise ships and park expansions around the world. Capital spending at Disney's theme park division nearly doubled during the company's 2011 fiscal year — from $1.5 billion to $2.7 billion — and is expected to approach $3 billion in 2012.

"They have more than enough to chew on for the next three to four years," said Tony Wible, a media and entertainment equities analyst at Janney Capital Markets. "And the early headwinds in Hawaii — to put it politely — probably lead them to be less confident."

Disney says it may yet build more hotels outside Central Florida and Southern California, where it operates its massive Walt Disney World and Disneyland resorts.

"We have seen tremendous enthusiasm for Aulani, and all of our key sales locations for Aulani are performing well. Based on our experience to date, additional standalone resorts in the future are a very real possibility," Disney spokeswoman Tasia Filippatos said.

Disney said the decision to back out of Washington was entirely unrelated to Aulani's timeshare problems; the company says it never planned to include a timeshare component in the D.C. project.

To be sure, there was always an element of uncertainty for Disney's presence in Washington. Even when the company announced it had bought 15 acres along the Potomac River in May 2009, it said only that it was "considering" using the site for a hotel.

And other, more pressing projects subsequently supplanted it on Disney's priority list. For instance, seven months after buying the Washington property, Disney, after years of negotiations, signed a framework deal to build its first theme park resort on mainland China. The first phase of Shanghai Disneyland, along with two hotels and a retail district, will cost roughly $4.4 billion, though more than half of that price tag will be borne by the Chinese government.

But analysts say the decision to scrap the Washington project also reflects just how challenging it could be for Disney to sustain standalone hotels, which, after all, can't bank on theme park visitors to drive occupancy. They are a particularly heavy lift in a still-moribund real estate environment in which Disney can't bank on quick time-share sales to help sustain a resort.

New Disney hotels on hold 12/05/11 [Last modified: Monday, December 5, 2011 8:26pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Tribune News Service.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Lost Highway: As FHP struggles to recruit, speeding tickets plummet

    State Roundup

    TALLAHASSEE — The number of speeding tickets written by Florida state troopers has plunged three straight years as the agency grapples with a personnel shortage and high turnover.

    A Florida Highway Patrol Academy class in the late 1980s. Typically, graduating classes had about 80 recruits. But the most recent class has less than half that as the agency continues to struggle to fill vacancies. [

Florida: Highway Patrol]
  2. Kidpreneurs — and adults — capitalize on gooey, squishy Slime craze

    Retail

    First it was Play-Doh. Then Gak. There have been dozens of variations for sale of the oozy, gooey, squishable, stretchable kids' toy through the generations.

    Aletheia Venator and Berlyn Perdomo demonstrate the stretchiness of their slime. - Berlyn Perdomo and her friend, Aletheia Venator, both 13, make and sell slime which can be seen on their instagram site @the.real.slimeshadyy [JIM DAMASKE   |   Times]
  3. The last farmer of Florida's prized Zellwood corn is thinking of packing it in

    Consumer

    MOUNT DORA — Hank Scott steps out of his pickup between the long rows and snaps off an ear that grows about bellybutton-high on the forehead-high stalks.

    Hank Scott, co-owner of Long and Scott Farms, shucks an ear of corn on the farm in Mount Dora, Fla., on Wednesday, May 10, 2017. The farm specializes in Scott's Zellwood Triple-Sweet Gourmet Corn. LOREN ELLIOTT   |   Times
  4. Law firm's Russia ties prove nothing about Trump

    Business

    The statement

    "Law firm @POTUS used to show he has no ties to Russia was named Russia Law Firm of the Year for their extensive ties to Russia. Unreal."

    Sen. Chris Murphy, D-Conn., stands during a media availability on Capitol Hill, Monday, June 20, 2016 in Washington. A divided Senate blocked rival election-year plans to curb guns on Monday, eight days after the horror of Orlando's mass shooting intensified pressure on lawmakers to act but knotted them in gridlock anyway — even over restricting firearms for terrorists. (AP Photo/Alex Brandon)
  5. Pasco county lawyer disbarred for taking woman's money

    Real Estate

    NEW PORT RICHEY — The Florida Supreme Court on Thursday disbarred Pasco County attorney and former congressional candidate Constantine Kalogianis.

    The Florida Supreme Court on Thursday disbarred Pasco County attorney and former congressional candidate Constantine Kalogianis. 
[2016 booking photo via Pasco County Sheriff's Office]