Walt Disney Co. continued on its theme park spending spree Tuesday, unveiling a $2.4-billion expansion of Disneyland Paris that will bring some of its most popular new attractions to the French resort.
During an event with French President Emmanuel Macron in Paris, Walt Disney Co. Chairman and Chief Executive Robert Iger announced the plans, which include three new areas based on Marvel characters, the animated hit "Frozen" and its acquired Star Wars franchise.
The announcement comes only a year after Iger announced plans to buy out all shareholders in the European park and invest $1.6 billion in hopes of turning around sluggish attendance amid terrorism fears in France.
At the same time, Disney is spending about $1 billion to build a 14-acre Star Wars expansion at Disneyland, plus a similar area for another $1 billion at Walt Disney World in Orlando, Fla. — among other upgrades in its theme park empire.
Overseas, the media giant's biggest investment has been a nearly 1,000-acre, $5.5-billion development in Shanghai, which opened in 2016 and has drawn well.
Analysts say the company's focus on its parks is a smart long-term investment, given the company has the capital to do so — thanks in part to a $1.6-billion one-time benefit from the recent corporate tax cut.
"They are going to continue to invest today for 30 years down the road," said Naveen Sarma, a media and telecom analyst for Standard and Poor's. "They might as well do it from a point of strength."
Disney offered few details about the expansion but said it will roll out in three phases beginning in 2021 and will add a lake that will connect the three new areas.
Disneyland Paris is about 20 miles outside of the French capital and includes two theme parks, a Disneyland Paris similar to the Anaheim park and a TV-and-movie-focused Walt Disney Studios Park. The 5,510-acre park includes seven resort hotels, a golf course, a railway station and a large shopping mall.
The park in the Marne-la-Valleis suburb is an economic powerhouse in France, employing 16,000 and generating spending that represents 6.2% of France's entire tourism income.
However, it got off to a rocky start when it opened in 1992 as Euro Disney. Labor disputes and complaints that the park was not infused with enough European flavor dragged down attendance and spending for the first few years.
The resort anticipated 11 million annual visitors when it opened but attracted only about 9.8 million in the first full year. It was hurt by a recession that hit Europe about the same time.
After Disney invested $1.3 billion in 2014, attendance and revenue began to improve. Among the improvements were renovations to the Big Thunder Mountain, It's a Small World and Peter Pan's Flight attractions.
But the resort took a hit after the 2015 terrorist attacks in Paris. Attendance dropped nearly 10% to 13.4 million visitors in the fiscal year that ended Sept. 30, 2016, resulting in a loss of about $260 million.
The park reported marginal improvements toward the end of 2016, with a 3% increase in attendance and a 5% jump in revenue for the quarter ended Dec. 31 compared with the same period in 2015.
During the company's most recent earnings call with analysts this month, Christine McCarthy, Disney's chief financial officer, said the 25th-anniversary celebration at the Paris park last year helped boost attendance, guest spending and hotel occupancy.
"The resort set a new [first-quarter] record in revenue and has now been profitable for the last three quarters, so we are very pleased with the progress we're making there," she said.
In fact, the company's parks and resorts have been a bright spot for Disney over the last few years while its media arm has struggled at times to meet Wall Street's estimates. The major improvements underway should boost the business even more.
The Star Wars expansion under construction at the Anaheim resort will include two attractions: a ride that lets guests fly the Millennium Falcon spaceship and another that throws visitors in the middle of a battle between the Resistance and the First Order. It is slated to open next year.
During a fan exposition in July, Disney officials announced plans to develop a Marvel expansion at the California Adventure Park in Anaheim. Details have been sketchy but the new land is likely to include the Twilight Zone Tower of Terror ride, which was revamped last year and became Guardians of the Galaxy: Mission Breakout.
Disney is also making investments outside of its parks. In December, the company bid $52.4 billion to buy a big chunk of 21st Century Fox's TV and media assets, including a 39% interest in European pay-TV provider Sky.
But on Tuesday, rival Comcast Corp. launched a $31-billion bid to buy the remaining stake in Sky, which Fox has been stymied from acquiring by British regulators. That move could make it more expensive for Disney to take full control of Sky.
Shares of Disney stock closed Tuesday at $104.86, down nearly 5 cents, or 4.5%.
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3:55 p.m.: This article was updated throughout with more details on the park expansion and other Disney theme park projects.
1:05 p.m.: This article was updated to include more details about Disneyland Paris and the closing stock price for the Walt Disney Co.
12:25 p.m.: This article was updated to include background on Disney's foreign investments and other details.
11 a.m. This article was updated with comments from analyst Naveen Sarma and earning numbers from Disney's fiscal first-quarter report.