Disney Wakes Up

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My springtime concerns that Disney (NYSE: DIS  ) would phone it in with its Florida theme parks are fading.

The family-entertainment giant is confirming expansion plans for its flagship Magic Kingdom park. The rudimentary blueprints that leaked into cyberspace during the summer are real. Disney's Fantasyland area is growing, and it's tacking on several new princess-themed attractions.

Some of the key additions targeted to open in 2012 include:

  • "Under the Sea: Journey of the Little Mermaid" -- a state-of-the-art family-friendly indoor ride that takes guests through scenes from The Little Mermaid. This is the same attraction that's opening at Disney's California Adventure in Anaheim in 2011.
  • "Be Our Guest" -- a theme restaurant where diners will chow down in one of three dining rooms from Beauty and the Beast.
  • Updated character-greeting areas for some of Disney's most famous princess characters. Unlike the drab "meet and greet" character queues of today, these areas will feature interactive elements and performances to make this experience more than just a snapshot and an autograph session.

A common complaint is that Disney is overextending itself with this initiative, with a costly expansion that appeals only to young girls. We heard a similar gripe when Disney announced the boys-centric "Cars Land" expansion that will launch in California come 2012.

But do you think the Mickey Mouse Company is going to sit on its pending $4 billion Marvel (NYSE: MVL  ) acquisition? There are contractual limitations as to what Disney can do in Florida with its Marvel fleet, but California is pretty much wide open. Disney would be remiss if it didn't take advantage of an opportunity when it presents itself -- whether the opportunity involves Marvel properties or its own homegrown characters.

This new plan will probably suck a large chunk of the audience to the back of the park and lighten the lines elsewhere. But if the queues at the other attractions remain just as long, then Disney will have succeeded in ramping up its overall attendance.

Disney needs this. Its Florida resort is just a dozen miles away from Universal Orlando -- the theme-park complex owned by General Electric (NYSE: GE  ) and Blackstone Group (NYSE: BX  ) that's going to draw huge crowds next summer with its ambitious Harry Potter expansion.

As a kid-friendly icon, Disney may never truly win over the thrill seekers who flock to Six Flags or Cedar Fair (NYSE: FUN  ) amusement parks. It aims for a steadier year-round flow of families who make Disney parks the centerpiece of their vacations.

However, Disney has been taking its patrons for granted lately. Its complacency forced it into some pretty dramatic resort discounts and this year's "free birthday" promotion. Disney was coasting, in part perhaps because it was less immune to the recession than are the chains that have been aggressively adding to their parks.

Disney is awake now, even if it's simply setting the alarm to truly wake up in three years.

Other ways to throw up your hands and enjoy the ride:

Disney is a Motley Fool Inside Value recommendation. Marvel Entertainment and Disney are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz loves hitting amusement parks with his family over the summer. He does own shares in Disney and units in Cedar Fair and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (4) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 14, 2009, at 3:17 PM, jtyskewicz wrote:

    As an advid Disney fan it is great to see them add attractions and update old favorites. Disney is also retheming Star Tours at both parks it will be 3-D with a new story line. California Adventure will also be adding a night time show and redo the entire front of the park to give it a more Disney-like feeling. Walt Disney said as long as their is imagination the parks will never be finished. There isn't a theme park in America that gives you what Disney provides as long as your idea of a theme park isn't high thrill roller coasters with very little else to do at these parks.

  • Report this Comment On September 14, 2009, at 3:23 PM, meade78 wrote:

    In most of the comments I see on Disney, it's rare that anyone comments on their cruise line. My wife and I cruised with them for the first time last year, and have since taken another and scheduled others. They run a first class operation for adults as well as children. Their ships receive top ratings in the cruise industry. With two new and larger ships being launched within the next couple of years, I see it only adding to their bottom line, and perhaps drawing a wider variety of people to their fold.

  • Report this Comment On September 14, 2009, at 4:59 PM, plange01 wrote:

    disney may be awake but ist stock is stuck in its current trading range and not going anywhere anytime soon....

  • Report this Comment On September 15, 2009, at 12:27 AM, Fool wrote:

    We bought Disney in 2002 as a college graduation present for our son who is crazy about Disney! The price was 29.2 at the time. We got $1,000.00 worth of shares. Although the road has been very lumpy, we have all enjoyed following the stock market, Disney trends, addition of Pixar, and now the new plans for extensions to the parks, and the "Yellow Submarine" movie to come out in the future. We have learned how the market goes way up...and (unfortunately) how it goes down. And now, how it is starting to recover. We all understand how portfolios need to be diversified...but buying just this one individual stock has been an interesting foray into the world of Wall Street, and a great topic of conversation in our family.

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