Disney's growing FCC problem

[JoshF]

However, unless DCL provides for a reasonable opportunity for each and every person that was provided a FCC for agreeing to not seek a refund, it’s tantamount to DCL lying in an effort to secure interest-free loans from its own customers – instead of from a lending institution or stockholders, where financing needs to occur.

They are giving the opportunity for a 25% increase on your money if you take the FCC. That's more than I can earn on my money in any bank and I don't consider it an interest free loan. I do agree that they need to extend the booking window. In my case, I had one cruise cancelled and used the FCC for an October 2021 sailing. I also have a booking for an April sailing. If that cancels, I will need to book later than 5/2022 or I'd just get a refund.

 

[Chemist]

I think that Disney's FCC credit isn't that they are running out of cruises, but that they are going to have a big cash flow problem.

When cruising restarts, there are going to be a LOTS of passengers who have already PIF, they won't have a new revenue stream.

 

[Quellman]

While I do not think that the next release of cruises will be 125% of the previous costs, you can bet it will likely be more than whatever the normal average is.

I would also guess that we may see any future cruise discounts disappear as well for those getting a place holder or booking onboard.

 

[MomOTwins]

They are giving the opportunity for a 25% increase on your money if you take the FCC. That's more than I can earn on my money in any bank and I don't consider it an interest free loan. I do agree that they need to extend the booking window. In my case, I had one cruise cancelled and used the FCC for an October 2021 sailing. I also have a booking for an April sailing. If that cancels, I will need to book later than 5/2022 or I'd just get a refund.

Good point. That said, I also don't think I'd call it an interest free loan even if there were no 25% bonus. Any time you pre-pay for a component of a future vacation--whether it's buying plane tickets months before you fly, putting down a deposit on a resort stay, or a rental care, you are getting something of value for tying up your funds. That something of value can be (1) reserving your spot in case it sells out, (2) buying early to gain first dibs on a specific feature you want (e.g., stateroom type or location); (3) locking in a price because you think the airfare/room rates/cruise fare may go up.

When we booked a WDW vacation for May 2020 that was cancelled, we similarly elected to roll our deposit forward into a new booking in August 2020. We were glad we did so rather than taking a refund, because if we hadn't, we not only would have foregone the discount incentive they offered (35% off room price at any resort), we would have given up the preferred access they gave to existing resort guests to make park passes, dining, and experience reservations. I am hoping that keeping my FCC instead of getting a refund will similarly help out when Disney cruises resume, by meaning I will still have a space on the ship if they impose capacity restrictions (or am compensated if the existing books are above capacity and they need to me bump me to another cruise).

 

[tvguy]

I think that Disney's FCC credit isn't that they are running out of cruises, but that they are going to have a big cash flow problem.

When cruising restarts, there are going to be a LOTS of passengers who have already PIF, they won't have a new revenue stream.

They'll have a revenue stream from everything you spend on board. Spa treatments, extra cost dining, shirts, alcohol and smoothie sales. The cruise fare covers their fixed costs, their profit in in the extras.

 

[KVH]

Meh. Until I see a spreadsheet that actually proves an issue exists here, I don't think there is a need to worry. I'm sure the company has at least one talented cashflow analytics individual on payroll who has provided mgmt with the info needed to ensure FCC doesn't bankrupt the line. Face it, if you really want to find a problem, you surely will find one.

 

[jane01jp]

While I do not think that the next release of cruises will be 125% of the previous costs, you can bet it will likely be more than whatever the normal average is.

I would also guess that we may see any future cruise discounts disappear as well for those getting a place holder or booking onboard.

Agree. There is now $1.40 for every US dollar than existed at the start of the pandemic. That alone will likely result in inflation across the economy. Plus, DCL will have to recover costs associated with expanded cleanliness protocols, lesser capacity, etc.