Disney Cruise Line is expanding its reach and enhancing brand visibility in new regions, as revealed by CEO Bob Iger during Disney’s fiscal Q3 earnings call.
The highlight of this expansion is the introduction of the Disney Adventure, the largest cruise ship in Disney’s fleet. Set to sail from Singapore starting in December, the Disney Adventure boasts a capacity of 6,000 to 7,000 guests, significantly more than the 4,000-passenger capacity typical of Disney’s Wish-class ships. Iger emphasized that this expansion is a strategic move to immerse a new audience in the enchanting world of Disney.
“This will give us an opportunity to float the Disney brand in all of its glory into a region that we think has a huge Disney brand affinity,” Iger stated, pointing to the immense potential for engagement in the Asian market.
In addition to the Adventure, the upcoming Disney Destiny, which is Disney’s third Wish-class ship, is scheduled for a November debut in Fort Lauderdale. Meanwhile, the Disney Treasure, which began operations last December, has performed exceptionally well and continues to achieve high occupancy rates. CFO Hugh Johnston reported that forward bookings are strong across the fleet, with occupancy levels remaining high.
Strong Financial Performance in Disney Experiences
Disney Cruise Line operates under the Disney Experiences division, which encompasses theme parks, hotels, and consumer products. The division has showcased remarkable performance this fiscal quarter, with operating income climbing 13% to $2.5 billion. Domestic operations surged by 22%, reaching $1.7 billion, primarily driven by increased guest spending at parks and resorts, complemented by growth in cruise passenger numbers attributed to the Treasure.
This financial surge also includes a $40 million boost from Easter holiday celebrations that occurred during this quarter. However, the Disney Experiences segment incurred higher costs, including approximately $30 million in pre-opening expenses linked to the upcoming Destiny and Treasure ships, alongside an expected $50 million in additional pre-opening cruise costs in the forthcoming quarter.
Thematic Celebrations Propel Domestic Park Performance
Disney’s theme parks have seen robust performance, particularly in the United States, aided by significant anniversaries at Disneyland and Hong Kong Disneyland, enhancing guest engagement through special in-park celebrations. Walt Disney World reported record revenue during fiscal Q3, fueling optimism within the company. When questioned about the impact of international visitation trends or competition from Universal Orlando’s Epic Universe, Johnston confirmed that the overall guest mix remains stable without notable disruptions.
Furthermore, Disneyland Paris continues its strong performance, with plans for a new World of Frozen land slated to open next year, promising to attract even more visitors. However, Johnston noted that Disney has encountered challenges in China, primarily attributed to decreased guest spending rather than a decline in attendance.
