One of the juicy nuggets out of Thursday morning's annual shareholder meeting at Disney (NYSE:DIS) is that Star Wars Land will break ground at Disney World and Disneyland next month. It probably isn't a surprise that the world's largest theme park operator is moving quickly to build out the 14-acre expansion that will breathe new life to Disney's Hollywood Studios in Florida and keep the record crowds coming to California's Disneyland. It's been closing several attractions at both parks in recent weeks to make room for the new area, and it can't afford to be skimpy on rides and attractions for too long when it's dramatically raising ticket prices.
It still refuses to provide an opening date for Star Wars Land. It's also been mum on the state of Toy Story Land, another substantial upgrade for Disney's Hollywood Studios.
Fans and shareholders alike will have to wait. When it broke ground on its Avatar-themed expansion at Animal Kingdom in January 2014, it unveiled a projected opening date of 2017. That is pretty much where things appear to be heading at the moment. If Star Wars Land will take three years to build out -- or less -- you can expect Disney to announce that date next month when it actually breaks ground. If it doesn't come through with an actual date, it's only natural to assume that a 2020 or even 2021 opening may be in the cards. Disney can't afford to mess this one up. It's Star Wars.
However, don't be surprised if it opens in phases. Disney's Hollywood Studios bumped its one-day ticket prices to as much as $114 -- up from $97 -- last weekend. It's been shuttering attractions in the sections that will one day occupy Toy Story Land and Star Wars Land. It's going to be hard to justify that 17.5% hike for peak holiday periods with so little to do as it completes its transformation. Disney has turned to cheap Star Wars-themed prop exhibits, meet-and-greet stations, and shows, but that isn't going to make the park worth $114 for day guests during the next several years of construction, much less what the next couple of years of price increases will take the price to ahead of the full opening.
It's quite possible that Disney makes the most accessible part of the proposed Star Wars Land available as early as late next year, in time for the eighth installment of the Star Wars franchise. That could be where themed shops, dining venues, richer meet-and-greet stations, and perhaps even the inevitable cantina open. That would buy the media giant time as the expansion's two signature rides go up in time for 2019's proposed release of the ninth -- and perhaps final -- installment of the Star Wars movie series.
Attraction debuts obviously don't need to coincide with movie openings. Comcast's (NASDAQ:CMCSA) (NASDAQ: CMCSK) Universal Orlando may have opened the first phase of its Wizarding World of Harry Potter a year before the final movie in that franchise hit theaters, but subsequent expansion and stellar attendance growth have come long after the multiplex run of J.K. Rowling's book series played out. Comcast will expand the concept to Universal Studios Hollywood next month.
The payoff for nine-figure investments in new lands is obviously a wager that takes years to play out. However, Disney will feel the pressure to give park guests something to do once they tire of Star Wars-themed fireworks, parades, and stage shows. This is why breaking ground in a few weeks can't be the beginning of a three-year or possibly four-year lull. The transformation at Animal Kingdom hasn't been a deal breaker because it took place in a forgettable chunk of the original park with its most popular attraction moving to a new home. Comcast spaced out its park-to-park Potter expansion with most of its more popular attractions intact. It's a different story at Disney's Hollywood Studios, and that's why it wouldn't be a surprise if a few of those 14 acres are accessible to satisfy park guests as early as late next year, inspiring future visits when the entire area is complete. Disney's new ticket pricing requires the quality that the park giant is known for, but those same stiff cover charges won't provide guests with the patience required to get it right.