Closing Disney World’s Star Wars: Galactic Star Cruiser in September will enable them to claim a write-down of nearly $300 million, Disney Parks President Josh D’Amaro said during the JPMorgan global technology, media and communications conference.
$300 million tax write-off
Disney Parks President Josh D’Amaro spoke during the JP Morgan Global Technology, Media and Communications Conference today. He pointed out that Star Wars: The Galactic Starcruiser wasn’t doing as well as Disney had hoped, but would eventually result in a huge tax cut for the company.
After the hotel closes, depreciation is expected to accelerate at a rate of $100 million to $150 million per quarter over two quarters.
I don’t think we’ve talked about this before, but both in the third and fourth quarters, as we accelerate amortization on this Starcruiser, we should expect $100-150 million acceleration in amortization.
Josh D’Amaro, President of Disney Parks
Josh D’Amaro also spoke about the excellent guest experience found on Star Wars: Galactic Starcruiser; However, because Halcyon didn’t bring in enough guests, the immersive experience will end this fall.
Although on the surface this depreciation may appear negative, the company is happy to depreciate it due to taxes. According to the IRS, “Depreciation is the annual income tax deduction that allows you to recover the cost or other basis of a particular property during the time you use the property. It is an allowance for wear, damage, or obsolescence of the property.” By devaluing the Galactic Starcruiser, Disney would be required to pay less taxes on the property overall.
Star Wars: Closing the Galaxy Starcruiser
Last week, Disney made the surprising announcement that it was permanently closing its themed hotel aimed at immersive storytelling after only a year and a few months in operation. The Starcruiser has been overburdened since before it opened, beset by financial problems, budget cuts, price hikes, low occupancy, and inconsistent levels of satisfaction when people compare what was delivered to what was initially promised in the conceptual stages. Above all, the struggling resort was far too expensive for the vast majority of potentially interested guests, with costs often exceeding several thousand dollars for a short two-night stay.
Several days ago, the last ride sold out in late September.
Star Wars: Galactic Starcruiser also has the distinction of winning the 2022 TEA Thea Award for Outstanding Achievement in Brand Experience.
Curious about the full experience? Check out our guide to everything Star Wars: Galactic Starcruiser and our honest, in-depth review.
Take a look at our recent Star Wars: Galactic Starcruiser coverage using the links below:
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