Disney to build first standalone resort on Oahu

By Gina Keating

LOS ANGELES (Reuters) - The Walt Disney Co (DIS.N) said on Wednesday it plans to turn 21 acres of oceanfront property on the Hawaiian island of Oahu into its first mixed-use luxury family resort outside its theme parks.

The resort is scheduled to open in 2011 with more than 800 units, including hotel rooms and villas for Disney's timeshare business, Disney Vacation Club.

Disney said it would pay $144 million for the land, which will be paid in installments over several years as the resort is built. The company did not disclose the project's total cost.

Disney has forecast domestic capital expenditures for the parks division "meaningfully" below $1 billion annually.

Groundbreaking is expected in the second half of 2008.

The development on the island's western side in the Ko Olina Resort & Marina is expected to create 1,000 jobs, Disney said in a statement.

Jay Rasulo, chairman of Disney Parks & Resorts, said Hawaii was one of the most requested destinations for the Vacation Club's 350,000 members aside from the company's theme parks.

Rasulo told investors in February that the parks division was working on a concept to locate non-theme park properties in popular family vacation spots.

Rasulo said at that time that expanding beyond theme parks could help the company get a greater share of the hotel business and increase the frequency at which families visit a Disney property.

Disney said on Wednesday that beach vacations are the most popular trips for families, and Hawaii is the top destination for prospective timeshare buyers.

Disney is expected to unveil plans for the new resort by early 2008.

Disney Resorts operates 38 resort hotels with more than 35,000 hotel rooms worldwide.

Hawaii Gov. Linda Lingle and Honolulu Mayor Mufi Hanneman said in the statement they welcomed Disney to the island. The company's ABC television network currently shoots the hit TV show "Lost" in Hawaii.

Shares of Disney rose 6 cents to $34.72 in after hours electronic trade on Wednesday after the announcement.