Economics of Cruise Line

[Keyser]

This isn't exactly rumor or news, but is something I started wondering about when thinking about the possibilities for a "high $" park. People already pay lots of $ for the Disney Cruises, which seem to make lots of money for the company. What I'm wondering about is how the economics of a cruise line tend to work, and whether it's even feasible to consider something like a "cruise on land" - hotels/theme parks that are run more like a cruise line than like current parks. I think there's a lot of cool things that could be done with such a setup - it could be made far more immersive than anything built to this point, or than a cruise line (I won't go into details of what's possible, just the bare-bones requirements):

I'm imagining something where people basically check into the resort for X number of days, and are "stuck" there for that time - no going to other parts of WDW/wherever. The entire resort would be self-contained: all lodging, dining, entertainment, etc. would be there. There might be "ports" that would be smaller-scale theme parks just for those at the resort. Again, think something like a cruise, but in one place. Without going into details of what would be done, how would something like this compare to a cruise ship:

• Dining - I would guess that this would come out about the same as on a cruise line - similar amounts and levels of food and service. Am I missing anything?
• Lodging - I would guess that the land lodging would be cheaper to construct than cruise lodging, but people would probably have higher expectations for the lodging, particularly space. In the end, it might come out about the same in terms of cost/guest. Again, though, does anyone have anything more specific?
• Entertainment - I would expect that "on-board" entertainment/activities would be about the same on land as on sea, in terms of cost to run/construct. "Off-shore" entertainment might be a lot different. How much does it cost Disney to run, say, Castaway Cay, or how much does it pay in docking fees at the ports?
• Mechanical - I would guess that there'd be a significant savings in not having to build/maintain/operate the ship. There would still be a lot of maintenance required on land, but I expect it's lower. Does anyone have any idea about relative costs here?
• Labor - this is the big one. I don't know whether cruise ships come anywhere close to meeting U.S. labor laws. I get the impression that cruise line workers work much more and for lower pay than standard resort workers. On the other hand, Disney would not need to construct and pay for housing for all of these workers on-site, as they do on the cruise ship. Does anyone know how the working hours/pay compare here?

In the end, I guess my main question is whether (ignoring whether it's even a good idea or if people would come) a cruise-line economic model could translate to a land-based model?

 

[mrsR123]

Isn't this essentially the business model of an all inclusive resort a la Sandals?

 

[KINGBOBOFTHENORTH]

The biggest thing is the cost of labor. Cruise ships are flagged in other countries and the amount paid for labor is very small and working hours very long. Most employees on ships (engine room, stewards, bar staff, wait staff) are from third world countries and the money they make (for many, largely in tips) is good money compared to home. On U.S. land Disney couldn't pay less than minimum wage and would have to pay overtime beyond 40 hours per week. That makes the cost of doing business prohibitive because the rates they would have to charge is much more than competitive. You'll find that nearly all all-inclusive resorts are in other countries; rarely in the United States.

NCL America is an American-flagged cruise line based in Hawaii. Because it goes within the islands only without a foreign stop they have to use an American-flagged ship with American crews. They began with 3 ships and they're now down to 1. They have to pay American seaman wages and the cost of business is quite high. In addition they've had great difficulty retaining American workers because the pay was too low and the hours too long. And most Americans have alternatives. Many of the "American" workers on NCL America are from Guam and other Pacific territories. They're American alright but barely.

BobK/Orlando