The cruise line expansion comes as the industry is enjoying a rebound from a global shutdown during the COVID-19 pandemic. The Cruise Lines International Association expects the number of passengers to reach 34.7 million this year, up 17 per cent from 2019.
Josh D’Amaro, chairman of Disney Experiences, told Reuters in a recent interview that the ships provide the opportunity to bring themed entertainment to places that are not close to the company’s theme parks, such as Melbourne or Vancouver.
Disney also reaches a segment of the cruise market that had gone unaddressed – families.
“Forty percent of the people on those ships today will say, ‘The only reason I’m on a cruise ship today is because Disney’s here,’ which means we’re creating a market,” D’Amaro said.
“When we are in Singapore, with this unbelievable ship that we’re building, the same thing is going to happen,” he added. “We know there’s an insatiable demand for everything Disney.”
Disney’s experiences business, which includes its domestic and international parks and cruise line, accounted for more than one-third of the company’s revenue in the March quarter, and nearly 60 per cent of its operating income.
The company’s stock tumbled in May after Chief Financial Officer Hugh Johnston warned about a “global moderation” in travel in the fiscal third quarter and other impacts, including higher wages and pre-opening expenses related to two of the new cruise ships and the new vacation island, Lookout Cay.
The rising tide for Disney’s cruise lines could help offset any softness in the company’s domestic theme park business, UBS analyst John Hodulik said. The company said its second quarter booking occupancy is at 97 per cent for all five ships.
The rapid expansion of Disney’s cruise capacity “helps de-risk the medium-term outlook” for the parks business, Hodulik said.
Disney’s other recent investments include three new areas at the Tokyo DisneySea theme park, recreating the worlds of “Frozen,” “Tangled,” and “Peter Pan,” the opening of a “Frozen” themed land at Hong Kong Disneyland, and a “Zootopia” experience in Shanghai.
The company is expected to announce plans for new attractions at Disneyland in California and Walt Disney World in central Florida in August, at its D23 fan convention.
