The recovery of global cruise ships is obvious, and major cruise giants have recently released good results.
Royal Caribbean reported third-quarter revenue of $3 billion and net profit of $33 million, the first time since the pandemic, and Carnival Group lost $770 million in the third quarter, down sharply from a loss of $2.836 billion in the same period last year. In addition, higher load factors, increased cabin bookings, new cruise ship launches, and the announcement of plans to build new ships are all signs of recovery in the industry.
In the global cruise industry, in addition to the major cruise brands such as Carnival, Royal Caribbean, Norway and the Mediterranean, there is another brand that we often hear about but do not attract attention to also has a strong cruise business layout.
Disney Cruise Line (DCL) is part of Disney's Parks and Experiences and Consumer Goods (DPEP) business, which is rarely mentioned in the company's quarterly earnings reports. Due to the complexity of Disney's business, the cruise business is integrated into the DPEP business, and there is almost no cruise-related data in the details of DPEP's financial reports.
In fact, the main company corresponding to the DCL business is Magical Cruise Company, Limited, which is a company registered in London, England, and must submit relevant financial information to the United Kingdom every year.
The latest data shows that Disney's DCL business had revenue of more than $1.6 billion and net profit of more than $400 million in fiscal 2019. In fiscal 2020, due to the severe restrictions on international travel due to the pandemic, Disney Cruises was forced to suspend sailings, and revenue fell to about $700 million and a loss of $256 million.
Disney treasure four major cruise ships and related IP
There is no doubt that Disney Cruise Lines is not conspicuous in the entire financial report, but its contribution to revenue and profit cannot be ignored, and globally, the revenue and number of passengers are second only to global cruise brands such as Carnival, Royal Caribbean, Norway and the Mediterranean. With the maiden voyage of the new cruise ship in June this year, the launch of two new cruise ships in the next few years, coupled with its own strong theme park creative design capabilities and global unique IP such as Mickey Mouse, Magic Adventure, Star Wars, Prince and Frog and related event performance creation capabilities, its influence in the cruise market is expected to further enhance in the future.
Disney's inconspicuous "cash cow"
Four cruise ships generated revenue of more than 10 billion
As a cross-border media and entertainment giant, Disney's business covers movies, cable TV, online media, theme parks, animation, streaming media and other fields. In 2019, Disney's global box office exceeded $10 billion, accounting for nearly 40% of the total global box office, and the theme parks and related business in fiscal 2022 reached $28.7 billion, while the cruise business is only a part of the overall theme park business (Resorts & Vocations).
Disney Cruises consists of four cruise ships stationed in ports in North America and Europe, serving families, teenagers and adults, creating specific themed activities for each consumer group. Among them, Magic and Wonder weigh about 850,000 tons and have 875 cabins, while Dream and Fantasy weigh about 130,000 tons and have a total of 1,250 cabins. In June, the fifth cruise ship, Disney Wish, officially made its maiden voyage.
Star Wars-themed bar on Disney cruises
In 2024 and 2025, Disney plans to add two more cruise ships, the first of which is named Disney Treasure. Powered by liquefied natural gas, the two new ships weigh about 140,000 tons and have 1,250 cabins each.
Disney Cruises also owns Castaway Cay, a private island in the Bahamas, covering an area of more than 400,000 square meters, which is designated as an exclusive port of call for Disney Cruise Lines and a must-visit destination for tourists in Disney cruise vacation products. Its second private destination, at the southern tip of Ilyusera Island in the Bahamas, covers an area of more than 2.8 million square meters and is expected to open to the public in 2024. In addition, Disney operates Disney Cruise Liners Pier 8 at Port Canaveral, Florida.
For more than a decade, Disney's cruise business has been growing rapidly and occupying an increasingly important position in the global cruise market.
According to public information, in 2011, Disney's DCL business accounted for 1.95% of the global cruise market share, and by 2015, Disney accounted for 2.8% and 2.4% of the global cruise market in terms of passenger number and revenue. In 2018, the share of the global cruise market fell to 2.3% and 2.2%, respectively.
According to the latest data from Cruise Market Watch, the proportion of these two statistical indicators of Disney cruise lines in the global cruise market in 2021 was 2.2% and 2.7%, respectively. Compared with previous years, although the number of cruise passengers has decreased, the proportion of revenue has increased, and the per capita consumption has increased significantly, highlighting the positioning of Disney Cruises as a high-end consumer group.
Data show that Disney DCL's revenue in 2019-2021 was $1.604 billion, $703 million and $653 million, respectively, and the corresponding revenue from resorts and vacation products in the Disney theme park segment was $6.266 billion, $3.402 billion and $2.701 billion, respectively.
It is not difficult to find that the revenue of cruise ships has a relatively close positive relationship with the income of resorts and vacation products.
Disney's 2021 financial report showed that the revenue of the resort and vacation products business fell 21% to US$2.7 billion, of which cruise days fell by 17% as one of the main reasons. Although the overall fame and volume are not as good as the theme park, film and television business, but also "unambiguous" in terms of contributing revenue, more than 1.6 billion US dollars in 2019, more than 10 billion yuan, and a net profit of 406 million US dollars, it is not an exaggeration to call it Disney's "invisible cash cow".
The impact of the epidemic on performance was "cut off"
Per capita consumption exceeds that of the two cruise giants
Compared with Carnival's 32 luxury cruise services and Royal Caribbean's 28 world-class luxury cruise ships, Disney had only four cruise ships before June 2021, and recorded a good performance of $1.6 billion in revenue and $400 million in net profit in fiscal 2019. To some extent, Disney Cruise Lines, which has advantages in theme design, experience projects, and service quality, has its own characteristics in creating luxury cruises, and it is also a world-class luxury cruise.
Entertainment on Disney cruise ships
However, affected by the new crown epidemic, Disney decided to suspend its cruise business from March 14, canceled several of its major cruise routes, and had no business for more than 6 months in the entire fiscal year, resulting in cruise business revenue of US$703 million in fiscal 2020, down by more than half, and a loss of US$256 million, in sharp contrast to the profit of more than US$400 million in fiscal 2019.
Cruise Marcket Watch statistics show that globally, passengers on cruise ships spent an average of $214.25 per person per day in 2021, with daily fares of $152.12 and other expenses of $62.13.
The report also pointed out that the average time per passenger spent 8 days on the cruise cost $1,217 for tickets, $497 for cruises, $273 for casinos and bars, $99 for cruise ports, $50 for hot springs, and $75 for a total of $1,714.
In 2021, 312,200 passengers achieved revenue of US$653.45 million, with an average consumption of US$2,093 per passenger, significantly higher than the per capita consumption level of cruise passengers worldwide. Even compared to Carnival and Royal Caribbean, it is not lagging behind in per capita consumption. Carnival received a total of 5,842,600 passengers in 2021 and achieved revenue of $8,833 million, while Royal Caribbean received a total of 3,278,500 passengers and achieved revenue of $5,054 million, with the former spending $1,512 per capita and the latter spending $1,542.
It is worth noting that Disney's financial reports are generally the company's performance statistics from October 1 to September 30 of the following year.
Disney Magic resumed sailings on July 15, 2021, Disney Fantasy on September 11, 2021, Disney Dream on August 9, 2021, and Disney Wonders on October 1, 2021. Strictly speaking, only three cruise ships in the financial report scope have resumed sailing, and the timing seems to be relatively late, and even one resumed sailing on September 11, with only 20 days of operation included in the fiscal year 2021 report.
As the global travel market opens and the cruise market continues to recover, Disney's passenger capacity and revenue across all cruise ships will continue to increase, and with the support of new cruise ships, Disney Cruises' revenue contribution to the entire resort and vacation products is expected to catch up with or even exceed the level of 2019 in the new fiscal year.
Disney's per capita consumption is higher than that of other luxury cruise ships, largely due to its unique super IP in the world. Similar to theme parks, Disney will introduce characters from films and television such as Elsa, Mickey Mouse, and Ratatouille to restaurants and various events, and these unique IPs can drive additional additional services and secondary consumption revenue for Disney Cruises.
Themed attractions aboard Disney Wish
For example, let Mickey Mouse interact with guests who want to use food in the restaurant, create a magical and ratatouille movie scene theme restaurant, let Mickey, Goofy, Donald Duck and other IP characters participate in various performance activities, etc., and Disney is better at designing and building water cars suitable for consumers of all ages.
In addition, each Disney cruise provides special activities for consumers of different ages, such as Oceaner Club and Oceaner Lab for 3-10 year olds computer games, makeup, themed activities, experiments and other projects, Edge provides interactive play space for 11-14 year olds, and Teens-only Vibe Club provides TV, Internet, music and other social activities for children over 14 years old.
Data show that in 2021, the global cruise industry achieved revenue of US$23.8 billion, a year-on-year increase of 81.8%, but a decline of 52.9% compared with 2019; Last year's cruise passenger number reached 13.9 million, up 96.2% year-on-year, but down 49.4% compared to the same period in 2019. The cruise industry outlook report released by the International Cruise Lines Association also shows that the passenger traffic of the global cruise industry is expected to recover to 101% of the 2019 level by the end of 2022 at the earliest, and the global cruise industry will fully recover by 2023 at the latest.
Disney, the "giant" of media entertainment, can also be regarded as a veritable "crossover king", after entering the theme park, streaming media, global licensed goods and other fields and far ahead, the future may also play its own world in the global cruise market.