After years of secrecy surrounding their $1 billion technology project known as "Next Generation Experience," Walt Disney Co. executives say they expect to reveal more concrete details early next year.
"Because we're in thetesting phase to make sure the technology is working the way we both expectand need it to work, we've been hesitant to roll outmore details to you, and to the public, for that matter," Disney Co. President and Chief Executive OfficerBob Iger said during a conference call with analysts last week to discuss Disney's fiscal fourth-quarter earnings.
"There has been a fair amount of chatter about the features of this technological advancement or investment, but we've been hesitant to give details ... before it's ready for prime time, so to speak."
Disney has so far discussed only very high-level details, such as "NextGen" including a new system that will allow guests to reserve ride and show times from home and to bypass hotel check-in desks when they arrive in Orlando.
Disney is beginning to face more pressure from Wall Street analysts to discuss NextGen in more detail in large part because spending on the initiative is at least temporarily eroding profitability.
For instance, Disney Co. Chief Financial Officer Jay Rasulo told analysts that skyrocketing growth during the past quarter at Disneyland -- which has been realizing huge returns from a new "Cars Land" at Disney California Adventure -- was "largely offset" by higher costs at Walt Disney World.
What's more, Disney expects some of its biggest recent investments -- primarily Cars Land, the Disney Fantasy cruise ship, and the Fantasyland expansion at Disney World -- to generate $500 million in new revenue during its new fiscal year. But that revenue will be completely offset by continued spending on NextGen in Orlando and early construction work on Shanghai Disneyland.
Rasulo predicted Disney would begin to see some sales gains from NextGen next year, as Disney is likely to use core elements of the project to try drive higher bookings for its on-property hotels, though those increases will be more than wiped out by continued start-up costs.
Upbeat about Orlando
Travel to Disney World slumped during the most recent quarter, with Disney executives acknowledging a "modest" attendance decline.
But executives say they are confident a rebound is ahead. Iger told analysts that "we feel good about expected attendance at Disney World for the year."
"We have seen some pretty decent Christmas bookings," Iger said. "We also feel really good about Fantaslyland rolling out. ... The product is already open in some cases and doing really well, and we think that's going to drive some attendance gains."
Iger also said bookings at the new Disney's Art of Animation Resort hotel "have been great."
And while overall attendance shrank, Rasulo said international travel to Disney World was "very strong" during the fourth quarter. Rasulo said that growth was "fundamentally" driven by visitors from Brazil and Argentina, but even traffic from the United Kingdom, which has struggled in the past year, was up for the quarter.