|By Jason Garcia, The Orlando Sentinel,
Fla.McClatchy-Tribune Regional News
Nov. 28, 2011--The Walt Disney Co. has canceled plans to build a Disney-branded hotel near Washington, D.C., less than three years after spending $11 million to buy land for the project.
"Given the full slate of expansion currently underway at Walt Disney Parks and Resorts, the timing isn't right to proceed with another new project of this scale," Disney spokeswoman Kristin Nolt Wingard said in a prepared statement issued Friday, over the long Thanksgiving holiday weekend.
The decision was first reported by The Washington Post.
Disney acquired the property -- 15 acres in a development called National Harbor, just outside the District of Columbia -- in May 2009 as part of a strategy to develop standalone hotels or smaller, niche theme parks in markets beyond its well-known theme-park resorts in Orlando and Anaheim, Calif.
But the plans never progressed beyond a vague outline for a 500-room "resort hotel for families and others visiting the national capital region."
In the interim, Disney finished building a roughly $850 million hotel and time-share resort called Aulani on the Hawaiian island of Oahu. That resort, which opened this summer, has had a rocky start; Disney was forced to suspend time-share sales there for about two months after discovering an error in financial planning for the project.
Disney has been under some pressure from analysts and investors to curb capital spending following a wave of construction projects that include, among other things, a $950 million cruise ship that began sailing this year and another that will launch early next year; Aulani; a $1.1 billion makeover to the Disney California Adventure theme park; $1 billion or more in technology-infrastructure upgrades at Walt Disney World; and preliminary construction of the $4.4 billion Shanghai Disneyland Resort in China.
Total capital spending at Walt Disney Parks and Resorts ballooned 78 percent during Disney's just-concluded 2011 fiscal year, from $1.5 billion to $2.7 billion.
Walt Disney Co. Chief Financial Officer Jay Rasulo, speaking to analysts on a conference call earlier this month, sought to reassure them by saying the current surge of construction "has really created a bubble for us that is not our long-term plan."
Annual capital spending, Rasulo added, will in the coming years be "much lower than the $2.5 [billion] to $3 [billion] we have been at."
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