New Disney ships?

[speded]

Has anyone heard if there will be any new ships in Disney Cruise line in the future? I hope they don't wait 10 years to add to their fleet!

 

[Horace Horsecollar]

Has anyone heard if there will be any new ships in Disney Cruise line in the future? I hope they don't wait 10 years to add to their fleet!

If and when Disney ever makes arrangements with a shipyard for additional ships (or to replace the DIsney Magic and Disney Wonder with newer ships), Disney and the shipyard will publicly announce it.

Disney has not announced any fleet expansion beyond the four ships now in the fleet.

It's already been more than five years since Disney and Meyer Werft announced the letter of intent (LOI) for what are now the Disney Dream and Disney Fantasy: http://www.meyerwerft.de/page.asp?lang=e&main=3&subs=0&did=1365

 

[lockedoutlogic]

Has anyone heard if there will be any new ships in Disney Cruise line in the future? I hope they don't wait 10 years to add to their fleet!

the cruiseline industry is not doing particularly well...the other cruiselines don't even bother with "full price" cruise listings anymore.

and disney's boat budget limits funds available for resort expenditures - at least that's what they try to tell us...

So the answer to the original question is "God no...I hope not"

 

[Horace Horsecollar]

and disney's boat budget limits funds available for resort expenditures - at least that's what they try to tell us...

Yes, Disney Cruise Line falls under the Disney Parks and Resorts business segment of The Walt Disney Company. The other businesses are Media Networks, The Walt Disney Studios (which includes Marvel, Pixar, and other brands), Disney Consumer Products, and Disney Interactive.

However, major capital spending is determined at the Corporate level. Parks and Resorts had operating income (profit) of more than $1.5 billion in the fiscal year 2011. The profit all flows to Corporate, which determines how best to invest in the future.

Meanwhile, there are ways of financing capital expenses other than from profits. For example, if Disney could make a business case that two additional chips would generate a high return on investment, Disney could sell bonds, issue additional stock, or seek loans.

If Disney Cruise Line's current fleet allows profitable operations and the limited capacity prevents the need to discount deeply, then the current DCL fleet may be fine for the foreseeable future.

If the Disney Dream and Disney Fantasy have added too much new capacity, then Disney could remove the Disney content from the Disney Magic and/or Disney Wonder and sell the ship(s) to another cruise line, probably in Europe or Asia.

If Disney feels that DCL is leaving significant money on the table by having only four ships, then the fleet could grow.

If I had to place a bet on the future fleet size, my bet would be that the DCL fleet will remain at four ships for many years.

 

[speded]

I'm a big fan of big ships and was excited when the Dream and Fantasy were launched, but in comparing to Royal Caribbean's Oasis it made it hard to decide which to go with since the Oasis has so much more on board. Of course I'm Disney through and through and made the decision to go with the Fantasy and hope that the experience is a step above the Magic.

 

[lockedoutlogic]

Yes, Disney Cruise Line falls under the Disney Parks and Resorts business segment of The Walt Disney Company. The other businesses are Media Networks, The Walt Disney Studios (which includes Marvel, Pixar, and other brands), Disney Consumer Products, and Disney Interactive.

However, major capital spending is determined at the Corporate level. Parks and Resorts had operating income (profit) of more than $1.5 billion in the fiscal year 2011. The profit all flows to Corporate, which determines how best to invest in the future.

Meanwhile, there are ways of financing capital expenses other than from profits. For example, if Disney could make a business case that two additional chips would generate a high return on investment, Disney could sell bonds, issue additional stock, or seek loans.

If Disney Cruise Line's current fleet allows profitable operations and the limited capacity prevents the need to discount deeply, then the current DCL fleet may be fine for the foreseeable future.

If the Disney Dream and Disney Fantasy have added too much new capacity, then Disney could remove the Disney content from the Disney Magic and/or Disney Wonder and sell the ship(s) to another cruise line, probably in Europe or Asia.

If Disney feels that DCL is leaving significant money on the table by having only four ships, then the fleet could grow.

If I had to place a bet on the future fleet size, my bet would be that the DCL fleet will remain at four ships for many years.

now, Horace....i know all that....

but my comment was tongue in cheek to say: Cruiseships...i believe...are part of the problem, not the solution

 

[crazy4wdw]

There was a recent article in the Orlando Sentinel that indicated that bookings for the Disney Fantasy were lower than bookings on the Dream.

 

[Horace Horsecollar]

now, Horace....i know all that....

but my comment was tongue in cheek to say: Cruiseships...i believe...are part of the problem, not the solution

I know that you know that.

I just thought that this might be a good opportunity to give readers of this forum a reality check on the relationship between DCL, Parts & Resorts, The Walt Disney Company, and the financial side of things.

If the return on investment (ROI) for new DCL cruise ships and for new major park expansions were both high enough, these investments would not have to be mutually exclusive. The Walt Disney Company could do both.

Are the Disney Fantasy and Disney Dream producing the ROI that they are supposed to? Has the substantial increase in DCL's capacity been accompanied by a corresponding increase in demand for DCL cruises? What would happen if the DCL fleet grew even larger?

 

[arthuruscg]

hummm...... I wounder about the profitability of DVC cruise ship.

 

[Horace Horsecollar]

hummm...... I wounder about the profitability of DVC cruise ship.

My guess is that DCL's operating profit is very good, but that the high cost of building the ships (combined cost of Fantasy and Dream exceeded $1.8 billion) makes it a challenge to get an acceptable return on investment -- especially because the ships depreciate over time.

 

[lockedoutlogic]

My guess is that DCL's operating profit is very good, but that the high cost of building the ships (combined cost of Fantasy and Dream exceeded $1.8 billion) makes it a challenge to get an acceptable return on investment -- especially because the ships depreciate over time.

true...but unlike carnival, royal caribbean, norwegian, etc. - disney has not pursued an aggressive "revitalization" schedule on their ships that the main operators have.

To be clear: they don't have a choice. if royal caribbean - for example - doesn't gut the older, smaller ships with new state of the art amenities and systems - then nobody gets on the boat.

disney, at least with the wonder and the magic, haven't really had to do so. And that's because of the label on the can...the ears.

That's why they still get away charging double what the other operators do...and that's why they felt comfortable getting into this gig in the first place.

So while the upfront cost is huge and it takes a longtime to pay that off...they aren't looking at a near-mandatory drydock gut of the ship in 5 years...as the carnival fantadreamabration is right now.

 

[TheRustyScupper]

Has anyone heard if there will be any new ships in Disney . . .

1) If you listen to Ogre (oops, I mean Iger), there is
. . . receiverShip
. . . guardianShip
. . . prtoectorShip
2) That is why they need to save money.
3) I think it is brinksmanShip.

 

[KINGBOBOFTHENORTH]

There was a recent article in the Orlando Sentinel that indicated that bookings for the Disney Fantasy were lower than bookings on the Dream.

Disney is able to charge double to triple the tariff that Royal Caribbean and Carnival charge for the same length of cruise. So the ships are very profitable. But the article pointed out that Disney Fantasy is operating 7-night cruises to distant ports while Disney Dream is operating the 3/4-night cruises to the Bahamas. The shorter cruises will always operate at a higher capacity because they're far cheaper and because many people don't have the time for the longer cruises.

BobK/Orlando

 

[Euphscott]

but my comment was tongue in cheek to say: Cruiseships...i believe...are part of the problem, not the solution

Oh I'd disagree.
Prior to the DCA enhancements and Lasseter's involvement, I felt the real Disney Magic was happening on the oceans. With stagnant parks and lots of repetition, much of my Disney spending has been with DCL lately. And if you ever made me choose between land or sea, I'd say goodbye to the parks forever!

DCL is a terrific product, and while prices are listed very high in comparison to other lines, bargains can be found with a savvy customer - I am paying less for my DCL cruise in December than my recent Carnival 7 day trip. But try to find a cheap parks vacation? That is NOT gonna happen!

 

[lockedoutlogic]

Oh I'd disagree.
Prior to the DCA enhancements and Lasseter's involvement, I felt the real Disney Magic was happening on the oceans. With stagnant parks and lots of repetition, much of my Disney spending has been with DCL lately. And if you ever made me choose between land or sea, I'd say goodbye to the parks forever!

DCL is a terrific product, and while prices are listed very high in comparison to other lines, bargains can be found with a savvy customer - I am paying less for my DCL cruise in December than my recent Carnival 7 day trip. But try to find a cheap parks vacation? That is NOT gonna happen!

i'm not commenting on the quality of DCL...that seems to be a great product.

What i'm commenting on is that TWDC for accounting purposes lumps them in with WDW, DL, and DLP as "Destinations" or "Attractions" or "Resorts"...or whatever shield they want to label it as...

Those ships are great...but they have absolutely nothing to do with any park and its an apple and orange comparison.

It allows them to use the financial shell game - as in they can lump spending on one end and use it as credit to prop up the other.

As was recently done with a 2 billion dollar investment in ships. I'm glad they did that...but don't give me a combo number on parks and ships - they don't apply.

 

[Euphscott]

I agree they should be one thing or another.

I just don't believe the ships are a burden to any part of the company. And if they make that argument, they are hiding. Those ships do depreciate, but if sold well, they take in plenty to pay for themselves. If anything they are a pretty decent shill for other segments (movies and characters on board, proximity to Orlando so vacationers attempt to extend vacation with a stop at a park or two...) of the company.

 

[Euphscott]

dupe..

 

[Horace Horsecollar]

i'm not commenting on the quality of DCL...that seems to be a great product.

What i'm commenting on is that TWDC for accounting purposes lumps them in with WDW, DL, and DLP as "Destinations" or "Attractions" or "Resorts"...or whatever shield they want to label it as...

Those ships are great...but they have absolutely nothing to do with any park and its an apple and orange comparison.

It allows them to use the financial shell game - as in they can lump spending on one end and use it as credit to prop up the other.

As was recently done with a 2 billion dollar investment in ships. I'm glad they did that...but don't give me a combo number on parks and ships - they don't apply.

Corporations with multiple, distinct businesses report their financial results by business segment. "Pure play" companies whose entire business involves a single category of business don't have business segments.

For The Walt Disney Company, the five business segments are:

Parks and Resorts
Media Networks
The Walt Disney Studios
Disney Consumer Products
Disney Interactive

From a financial reporting perspective, it makes perfect sense. Disney Cruise Line is not a broadcast/cable network or a movie/television studio or something on a retail shelf or a digital product/service. The floating resorts of DCL really are vacation destinations where guests eat, sleep, and are entertained, just like at the other Disney destinations. Thus... Parks and Resorts,

You can second-guess whether Disney is investing too much, too little, or just the right amount in its theme parks, whether the balance between lodging and the parks themselves is appropriate, and whether the balance between various destinations is as it should be.

However, I would not accuse Disney of a "financial shell game." They're reporting financial results according to the expected standards and practices of a publicly-held corporation.

 

[CandyMandy]

If I had to place a bet on the future fleet size, my bet would be that the DCL fleet will remain at four ships for many years.

I'm with you on that. Back when the Fantasy and Dream were commissioned, I and others were saying short of Disney coming with a new pricing strategy, they were making a somewhat risky bet on adding that amount of additional capacity (and that was before the recession hit).

The universe of those willing to pay a premium for a Disney themed cruise product is not unlimited and may well have already been pretty much saturated with four ships.

And unlike the theme park operation, DCL has plenty of active competitors - which exacerbates pricing pressures, particularly in this sort of economy. As Horace pointed out, if the expected ROI for the current fleet (particularly the new ships) falls below plan, that kaboshes any new interest in further expansion.

 

[arthuruscg]

That is where a DVC ship comes in.