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  • #21
    Re: DCA Phase 1 = $700 Million

    They are spending now so they don't TOTALLY lose when they originally invested
    Sunk costs are immaterial to future spending decisions. The only thing relevant is whether they think they can get an acceptable rate of return on that 1.1 billion If they didn't think they could, they wouldn't be spending it regardless of what they put into it before.

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    • #22
      Re: DCA Phase 1 = $700 Million

      Originally posted by WSVR View Post
      Sunk costs are immaterial to future spending decisions. The only thing relevant is whether they think they can get an acceptable rate of return on that 1.1 billion If they didn't think they could, they wouldn't be spending it regardless of what they put into it before.
      Correct, all capital investments are "go forward" investments meaning the return on capital thresholds are based on the investment at hand not sunk costs The caveat being when the original investment has a chance of being impaired or written off (which is not the case here), but even that is calculated into the benefit of the go forward investment.

      I think the market's lack of reaction is telling - an approximately $1B investment (huge even by Disney standards) will require significant (in the millions) incremental visits and customer spending. Remember, these must be incremental guests not transfering from one park to another - so if a local AP comes 10 times and today goes 7 times to DL and 3 to DCA and now goes 5 and 5 apiece, that is zero incremental.

      This is not a local play but a play to get incremental domestic/international guests as you can't get there on the math by driving that many more million incremental locals offset against the inherent Disneyland cannibilization.

      Will be interesting to see if they have the stomach for all this investment after the returns on the first wave are in...

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      • #23
        Re: DCA Phase 1 = $700 Million

        So is the Hollywood/Grizzly Peak/Condor Flats lanscaping as well as Mickey's PhilharMagic in this 700 Million Dollars as well or do we have to wait for that stuff till 2013?
        "Walt Disney World may have more than Disneyland, but Disneyland has quality, and quality triumphs over quantity" -DL_CRAZE
        __________________________________________________________

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        • #24
          Re: DCA Phase 1 = $700 Million

          As I understand it, Philharmagic and Hollywood will occur in Phase 1. Grizzly Peak and Condor Flats are slated for Phase 2.

          Not confident but that's what I have been reading.
          Last edited by ROBONICS95; 10-19-2007, 08:15 PM.
          "If you build it right, they will come." - Bob Iger

          "I'm not a literary person. As far as realism is concerned, you can find dirt anyplace you look for it. I'm one of those optimists. There's always a rainbow." - Walt Disney



          "I don't care about critics. Critics take themselves too seriously. They think the only way to be noticed and to be the smart guy is to pick and find fault with things. It's the public I'm making pictures for." - Walt Disney

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          • #25
            Re: DCA Phase 1 = $700 Million

            Originally posted by ROBONICS95 View Post
            As I understand it, Philharmagic and Hollywood will occur in Phase 1. Grizzly Peak and Condor Flats is slated for Phase 2.

            Not confident but that's what I have been reading.
            It sucks too bad we are not getting Grizzly River Run with animatronics, Pan for Gold attraction, Grizzly Peak Railroad or Country Bear Jamboree, that would have made Grizzly Peak a longer stay and chalk full of attractions.

            The least they can do for us is take out the narly rapids/river rafting theme, that does not fit to the 1920's/Pixar theme at all.
            "Walt Disney World may have more than Disneyland, but Disneyland has quality, and quality triumphs over quantity" -DL_CRAZE
            __________________________________________________________

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            • #26
              Re: DCA Phase 1 = $700 Million

              I am totally impressed with what will come with the first 700 million phase. It still outbeats the entire construction of the park in the first place.

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              • #27
                Re: DCA Phase 1 = $700 Million

                Originally posted by DL_CRAZE View Post
                It sucks too bad we are not getting Grizzly River Run with animatronics, Pan for Gold attraction, Grizzly Peak Railroad or Country Bear Jamboree, that would have made Grizzly Peak a longer stay and chalk full of attractions.

                The least they can do for us is take out the narly rapids/river rafting theme, that does not fit to the 1920's/Pixar theme at all.
                I am just as excited about Grizzly Peak changes and upgrades but I do feel that this area is one of the better themed areas of DCA as is.

                If WDI was given one shot to prove themselves and to try to bump up attendance, then I feel that the current Phase 1 was the better choice.

                This may guarantee the Phase 2 project.
                "If you build it right, they will come." - Bob Iger

                "I'm not a literary person. As far as realism is concerned, you can find dirt anyplace you look for it. I'm one of those optimists. There's always a rainbow." - Walt Disney



                "I don't care about critics. Critics take themselves too seriously. They think the only way to be noticed and to be the smart guy is to pick and find fault with things. It's the public I'm making pictures for." - Walt Disney

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                • #28
                  Re: DCA Phase 1 = $700 Million

                  Originally posted by jmuboy View Post
                  I'm in theme park mgmt and I know how quickly 700 million goes out the door. So look at what was announced and what else we "know" is coming in phase 1 .... and that's a lot. Carsland and this entrance re-make and the mermaid ride and the lagoon show and changes in the pier. It's not cheap....not at all.

                  They could save a few dollars and cut the Mickey face from the Sun Wheel. I oppose the Mickey face in case anyone cares. LOL.

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                  • #29
                    Re: DCA Phase 1 = $700 Million

                    Well, the Carsland rund around 300 Million

                    Walt Disney Plaza around 75 Million

                    World of Color around 65 Million

                    The Little Mermaid around 100 Million

                    Adds up to 550 million roughly, anyone else wanna help me out on this?

                    Still not covered: PhilharMagic, Pier Landscaping, Sun Wheel/Sky Skool/Beer Gardens, new stores/restaraunts.
                    "Walt Disney World may have more than Disneyland, but Disneyland has quality, and quality triumphs over quantity" -DL_CRAZE
                    __________________________________________________________

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                    • #30
                      Re: DCA Phase 1 = $700 Million

                      Originally posted by bfdf55 View Post
                      If everything they have just announced (even with the exception of the previously budgeted Midway Mania and lagoon show) is just phase one and only gets $700 million, there is actually even less to accomplish all the grand ideas they have shown.

                      First of all, historically they set aside 35-40% for contingency. But, giving the benefit of the doubt and cutting that in half, that brings actual working funds down to around $500 million.
                      Could the contingency have already been established and perhaps be the reason as to why WDI was allotted the $700 million out of the $1.1 billion initially? Which would give WDI the entire $700 million to work with.
                      "If you build it right, they will come." - Bob Iger

                      "I'm not a literary person. As far as realism is concerned, you can find dirt anyplace you look for it. I'm one of those optimists. There's always a rainbow." - Walt Disney



                      "I don't care about critics. Critics take themselves too seriously. They think the only way to be noticed and to be the smart guy is to pick and find fault with things. It's the public I'm making pictures for." - Walt Disney

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                      • #31
                        Re: DCA Phase 1 = $700 Million

                        Congratulations; your relentless pragmatism has successfully harshed my squee and saved me the trouble of making vacation plans. I salute you. (And why don't we have a saluting smilie?)
                        Current hat total: 100 of 100 - completed!

                        Duckland
                        : Stroll through downtown Duckburg, making sure to tour Scrooge's Money Bin, then cross the Audubon Bay Bridge to St. Canard. Visit Liquidator's Splash Pool, and don't forget a stop by Bushroot Gardens!

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                        • #32
                          Re: DCA Phase 1 = $700 Million

                          Originally posted by ROBONICS95 View Post
                          Could the contingency have already been established and perhaps be the reason as to why WDI was allotted the $700 million out of the $1.1 billion initially? Which would give WDI the entire $700 million to work with.
                          Generally, contingency is not above the budget. that's what makes it so frustrating.

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                          • #33
                            Re: DCA Phase 1 = $700 Million

                            Originally posted by bfdf55 View Post
                            Generally, contingency is not above the budget. that's what makes it so frustrating.
                            Understood...
                            "If you build it right, they will come." - Bob Iger

                            "I'm not a literary person. As far as realism is concerned, you can find dirt anyplace you look for it. I'm one of those optimists. There's always a rainbow." - Walt Disney



                            "I don't care about critics. Critics take themselves too seriously. They think the only way to be noticed and to be the smart guy is to pick and find fault with things. It's the public I'm making pictures for." - Walt Disney

                            Comment


                            • #34
                              Re: DCA Phase 1 = $700 Million

                              Originally posted by EmeralineDragon View Post
                              Congratulations; your relentless pragmatism has successfully harshed my squee and saved me the trouble of making vacation plans. I salute you. (And why don't we have a saluting smilie?)

                              Comment


                              • #35
                                Re: DCA Phase 1 = $700 Million

                                ^ Very True.

                                These posts are all initial reactions, theories, thoughts, and opinions. While WDI does have quite a task in front of them, there is no way to completely determine the outcome.

                                At least there is time to watch this development, it will be a few years until we can start to get an idea of the level of execution of this project.
                                "If you build it right, they will come." - Bob Iger

                                "I'm not a literary person. As far as realism is concerned, you can find dirt anyplace you look for it. I'm one of those optimists. There's always a rainbow." - Walt Disney



                                "I don't care about critics. Critics take themselves too seriously. They think the only way to be noticed and to be the smart guy is to pick and find fault with things. It's the public I'm making pictures for." - Walt Disney

                                Comment


                                • #36
                                  Re: DCA Phase 1 = $700 Million

                                  Originally posted by DisneyMickey View Post
                                  I am totally impressed with what will come with the first 700 million phase. It still outbeats the entire construction of the park in the first place.
                                  Really? So if DCA would have opened with just Cars Land, a little mermaid ride, two small "c" rides, and an entrance plaza you would have said it was a great park?

                                  If that is all that they can get out of $700M then DCA was an incredible bargain as you have to imagine that a huge amount of that budget was just for infrastructure (converting parking lot to theme park - plumbing, electrical, IT, etc.) and still being able to build Soarin', Screamin', GRR, Muppets, Paradise Pier, Hyperion, etc., etc., etc.

                                  For me, the math on this new investment doesn't make sense unless WDI is even less productive than has been reported here.

                                  Comparing the two investments is like comparing buying a plot a land and grading it and building a house vs. remodeling the kitchen.
                                  Last edited by rgrant999; 10-19-2007, 10:15 PM.

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                                  • #37
                                    Re: DCA Phase 1 = $700 Million

                                    Sorry to derail the thread, but I have a quick question...
                                    Will DCA close in it's entirety for certain projects?
                                    sigpic


                                    Originally posted by Phonedave
                                    Well, if your parents can't teach you, maybe you can learn from a taser.

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                                    • #38
                                      Re: DCA Phase 1 = $700 Million

                                      Originally posted by WDW Monorail View Post
                                      Sorry to derail the thread, but I have a quick question...
                                      Will DCA close in it's entirety for certain projects?
                                      What has been stated is no. There are going to keep DCA open for the renovation, just shift things around. One of Al's last columns mentions shifting the entrance area with temporary turnstiles to fix the entrance plaza. So, Disney is going to try and keep this open during the refurb.
                                      It's a Zip-A-Dee-Doo-Dah...Tip for Today!









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                                      • #39
                                        Re: DCA Phase 1 = $700 Million

                                        Originally posted by yoyoflamingo View Post
                                        What has been stated is no. There are going to keep DCA open for the renovation, just shift things around. One of Al's last columns mentions shifting the entrance area with temporary turnstiles to fix the entrance plaza. So, Disney is going to try and keep this open during the refurb.
                                        Thanks Yoyo.
                                        sigpic


                                        Originally posted by Phonedave
                                        Well, if your parents can't teach you, maybe you can learn from a taser.

                                        Comment

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