Disney's $500M Avatar Theme Park Opens This Week (DIS)

Walt Disney Co. (DIS) is gearing up to open its much hyped and awaited Avatar theme park addition this week, hoping the $500 million expansion will continue the red hot growth the entertainment company has been enjoying from its theme parks in recent years.

Disney has a lot riding on the new attraction’s success given the sheer cost and the fact that Pandora—World of Avatar is based on “Avatar” a movie that came out eight years ago but went on to gross close to $2.8 billion, according to the Wall Street Journal. The media giant is opening the new attraction at its Walt Disney World’s Animal Kingdom near Orlando, Florida, marking its largest expansion of a U.S. based theme park in more than 10 years. With Animal Kingdom typically a couple-of-hours type resort it is hoping the addition will keep park goers there longer. (For more, see also: Disney Offers to Share Cost of Hong Kong Expansion.)

According to a report in the Wall Street Journal, the large amount of money the company spent on World of Avatar signals it thinks it can continue to grow the resort business amid record quarterly profits. Revenue in the unit has increased 31% to close to $17 billion in the last four years, noted the WSJ. “Avatar” was a huge hit in 2009 largely because it relied on technology that was groundbreaking at the time. Still, the Pandora—World of Avatar lacks a much loved character like say “Frozen” or “Toy Story”—two films that have their own Disney park attractions.

Whether or not consumers are still in love with the film, executives at Disney are confident it can draw a lot of park goers to the new area. After all, the 12-acre attraction includes a flight simulator, a river journey and a mountain that looks as if it is floating in mid-air.

Although time will tell how successful the company is with the new attraction, at least one analyst is bullish on the stock partly because of that and the blockbuster hit that the live remake of “Beauty and the Beast” has been for the company. In April, Goldman Sachs added the entertainment giant to its conviction buy list saying it should have record film studio profits this year and next and should set new records with its theme parks this year and next because of Avatar in Florida, Toy Story Land in China, Disney Shanghai and Star Wars Land which will make its debut in both the Florida and California Disney resorts in a couple of years. (For more, see also: Wall Street Tug-of-War Over Disney Revenue Forecasts.)

Take the Next Step to Invest
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.