News Disney plans to accelerate Parks investment to $60 billion over 10 years

[lentesta]

The bulk of payments for Cruise ships are at the order phase and the delivery phase.

Disney announced that it was ordering 4 cruise ships in August 2024. With their 2025 Fiscal year starting in October, it is likely that the deposit for these ships would come due in FY2025.

Is there something in the 10K that would indicate when Disney locked-in the construction price?

I ask because IIRC they try to optimize the timing based on the cost of steel. I'm not sure how that works.

 

[monothingie]

Is there something in the 10K that would indicate when Disney locked-in the construction price?

I ask because IIRC they try to optimize the timing based on the cost of steel. I'm not sure how that works.

Disney lumps in DCL with the rest of the experiences segment so there is no direct breakdown.

I looked at the RCCL's 10-K for comparison, since that's all they do. They note the following for their material cash requirements for the FY with regard to ship construction.

Amounts are based on contractual installment and delivery dates for our ships on order. Included in these figures are $4.5 billion in final contractual installments, which have committed financing covering 80% of the cost of the ships on order for our Global Brands, all of which include sovereign financing guarantees. Amounts do not include potential obligations which remain subject to cancellation at our sole discretion or any agreements entered for ships on order that remain contingent upon completion of conditions precedent.

FY 2024 it was $1.9B
FY 2025 (Est)$2.3B
FY 2026 (Est)$1.3B

It seems as though each company can have different priorities. For RCCL, their main concern is optimizing their long-term debt obligations as a result of these massive expenditures. That being said, whatever individual corporate priorities are present, seem to be ironed out during contract negotiations. It seems that the bigger priority is to secure production slots, given the length of time to build and limited number of commercial cruise ship production yards.

 

[BrianLo]

I ask because IIRC they try to optimize the timing based on the cost of steel. I'm not sure how that works.

The ships are built in Germany, they are not subjected to American tariffs and Canada will likely shunt a certain portion of its steel to that market. I expect steel prices to actually marginally drop in the EU.

 

[JoeCamel]

The ships are built in Germany, they are not subjected to American tariffs and Canada will likely shunt a certain portion of its steel to that market. I expect steel prices to actually marginally drop in the EU.

Germany is no longer known for it's steel? That is the world's loss

 

[BrianLo]

Germany is no longer known for it's steel? That is the world's loss

You’ve lost me? I never said it wasn’t.

Its own steel will also be marginally cheaper as the American market tries to reduce importation demand.

 

[JoeCamel]

You’ve lost me? I never said it wasn’t.

Its own steel will also be marginally cheaper as the American market tries to reduce importation demand.

That was my question, if it is being made in Germany why not use German steel it is (or was) some of the best in the world.
I can understand that steel through Canada would be cheaper and that is the largest cost in a ship but I'd think when in Germany do like the Germans do

Maybe you mentioned Canada as an influence on the world market not that they were shipping steel to Germany to be used and I didn't get that

 

[BrianLo]

That was my question, if it is being made in Germany why not use German steel it is (or was) some of the best in the world.
I can understand that steel through Canada would be cheaper and that is the largest cost in a ship but I'd think when in Germany do like the Germans do

Maybe you mentioned Canada as an influence on the world market not that they were shipping steel to Germany to be used and I didn't get that

Yup, meant the latter! Just that outside the US I suspect the price of steel goes slightly down.

 

[JD80]

You are correct. It's mostly what they've been spending in Capex shortly before the pandemic.

Altho... what they were spending on Capex shortly before the pandemic is a heck of a lot more than what they spent in the previous decades of the Great Dry Spell.

Someone should list all the stuff built right up to the start of COVID which also includes the capitol outlay for what was about to happen at EPCOT. It's a lot.

 

[HauntedPirate]

I wish I could find my post with the combined net profit of the Parks division for the decade before it became DPEP, and thus muddled with consumer products, compared with what they invested in the domestic parks. The numbers, IIRC, were astounding. And not tipped towards park investment in the slightest.

 

[CJR]

Not so sure about increases on cruises. They are already high for the industry and the audience is being very actively courted by a number of other lines such as Royal Caribbean, Carnival and NCL who are marketing right to this demographic. Getting into new markets for Disney by having more ships makes sense but that wont last forever either. Marie

Don't forget MSC. We got status matched straight up to their Diamond status with just ten Disney cruises behind us. Got some great benefits, but the Yacht Club experience was cheaper than an inside room on DCL (at least at the time). We went straight to the top area of the ship for the same budget. Nice private island too.

 

[wannabeBelle]

Don't forget MSC. We got status matched straight up to their Diamond status with just ten Disney cruises behind us. Got some great benefits, but the Yacht Club experience was cheaper than an inside room on DCL (at least at the time). We went straight to the top area of the ship for the same budget. Nice private island too.

A few years back some of the other agents at Kingdom Konsultant and I were talking about this very thing and we priced out a cruise for a number of different family groups and it was crazy on the pricing difference between Royal and Disney. I have done Disney as well, as some of the other brands (Havent gotten to MSC yet) and certainly each has it's positives. There are a few negatives for me with Disney, pricing is among them, as well as limited itineraries as they only have a certain number of ships. Also the beds on the DIsney ships do not split, and as I usually travel with friends or family, I prefer a bed that can be split into two as opposed to sleeping on a pull out bed. The Wonder and the Magic had that when they were first out, but with the Dream and the Fantasy, that changed and when the bedding was replaced on the older ships they switched that over as well. Not a plus for my style of travel at all. Every other line out there does have the option to split the beds into two twins, into the higher end river cruises as well. That is pretty much industry standard, but when I asked about it I was told that this is what the Disney Cruise line clients wanted. Marie

 

[CJR]

A few years back some of the other agents at Kingdom Konsultant and I were talking about this very thing and we priced out a cruise for a number of different family groups and it was crazy on the pricing difference between Royal and Disney. I have done Disney as well, as some of the other brands (Havent gotten to MSC yet) and certainly each has it's positives. There are a few negatives for me with Disney, pricing is among them, as well as limited itineraries as they only have a certain number of ships. Also the beds on the DIsney ships do not split, and as I usually travel with friends or family, I prefer a bed that can be split into two as opposed to sleeping on a pull out bed. The Wonder and the Magic had that when they were first out, but with the Dream and the Fantasy, that changed and when the bedding was replaced on the older ships they switched that over as well. Not a plus for my style of travel at all. Every other line out there does have the option to split the beds into two twins, into the higher end river cruises as well. That is pretty much industry standard, but when I asked about it I was told that this is what the Disney Cruise line clients wanted. Marie

I hear that, actually. MSC doesn't split either, if I recall correctly.

Completely agree though that all lines have their strengths. For us, MSC gave us a butler, private pool area with two hot tubs, premium food and snacks, premium beverage package, a bottle of alcohol in our room, access to the thermal suites, and a few other things like wifi, for about the same price as a non-suite on DCL. The biggest downside for us was the shows and loss of rotating dining rooms. The food was fantastic, but it's in the same place each night. I believe Disney is the only cruise line with rotating dining rooms, Virgin is good too, but it's adults only and we have a kid.

We still sail on multiple lines. We're doing Disney in April, Royal Caribbean in the fall, MSC again next year. Royal is fun too, just because of the Aqua Theater and ice skating shows, solid full Broadway shows on some ships too. I actually love the entertainment on Royal more than any cruise line, including Disney. Still, Disney is great all around (especially in service), but at a price.

 

[Sirwalterraleigh]

$60B Future Value spread across Experiences pber 10 years is not that transformative.

And of course…there is not one bit of guarantee behind this. TOTS

You are correct. It's mostly what they've been spending in Capex shortly before the pandemic.

Altho... what they were spending on Capex shortly before the pandemic is a heck of a lot more than what they spent in the previous decades of the Great Dry Spell.

Indeed…you are correct

Someone should list all the stuff built right up to the start of COVID which also includes the capitol outlay for what was about to happen at EPCOT. It's a lot.

But as the bird said above…it was catchup for nuttin for along time. That decade of basically nothing prior is what has caused most of their park problems which they can’t get back ahead of now.

 

[wannabeBelle]

I hear that, actually. MSC doesn't split either, if I recall correctly.

Completely agree though that all lines have their strengths. For us, MSC gave us a butler, private pool area with two hot tubs, premium food and snacks, premium beverage package, a bottle of alcohol in our room, access to the thermal suites, and a few other things like wifi, for about the same price as a non-suite on DCL. The biggest downside for us was the shows and loss of rotating dining rooms. The food was fantastic, but it's in the same place each night. I believe Disney is the only cruise line with rotating dining rooms, Virgin is good too, but it's adults only and we have a kid.

We still sail on multiple lines. We're doing Disney in April, Royal Caribbean in the fall, MSC again next year. Royal is fun too, just because of the Aqua Theater and ice skating shows, solid full Broadway shows on some ships too. I actually love the entertainment on Royal more than any cruise line, including Disney. Still, Disney is great all around (especially in service), but at a price.

There is something similar to the rotational dining in the Edge class ships In the Celebrity brand. There are four different dining rooms with the same dishes in each of the four that change each day. Each of the four has a few items that are exclusive to that location and those items do stay the same for the length of the cruise. So for example, in the Normandie dining room they have Coquilles Saint Jacques as one of their specialties on the appetizer selection. The other locations don't have this item on their menus, however they have the items that are on the main dining options for that night and their own specialties. It is a nice option to kind of have the best of all worlds. Also if nothing on the Main Dining suits, the buffet is open for dinner as well and on the last few sailings I have been on, had some excellent choices. The Edge class of ships is the only grouping that have this option of the different dining rooms so far though. Marie

 

[Sirwalterraleigh]

I don’t get this fascinating this fascination with “rotating dining”

That’s Disney’s gimmick because they don’t have the upsell locations…which is the way to go

Unless you’re on a better line like celebrity

 

[Sirwalterraleigh]

If carried through, I’d call it significant. With inflation baked in it’s 150% more investment decade on decade, where last decade was pretty good portfolio wide. It also depends how that is spread around.

What we are seeing with the longer term roadmap in things like DCL I would actually call on the precipice of transformative for that specific arm. 7 new ships and a private island during the window (and one more bonus from their partner). In theory we could still get another 1-2 vessels before the fiscal 2033 rollover. They are transforming from a niche cruiseline to a major player.

As of now we aren’t remotely seeing out of WDW what I would expect for the numbers thrown around. I’m seeing maybe 5B-6B of spend earmarked through Villains with announced projects. Certainly not 17.

Even if they spend that (they won’t…at least not the way fans hope)…it’s diluted by the timeframe

As you mess around…what you already rots.

The only way to actually sttengthen parks is to let it rip and get things done

 

[rd805]

Don't forget MSC. We got status matched straight up to their Diamond status with just ten Disney cruises behind us. Got some great benefits, but the Yacht Club experience was cheaper than an inside room on DCL (at least at the time). We went straight to the top area of the ship for the same budget. Nice private island too.

MSC is a miserable company, with some of the poorest reviews & experiences around. You did the right thing by going to Yacht club though, as they really do cater to you as opposed to virtually ignoring / awful service in anything else.

 

[DisneyHead123]

I don’t get this fascinating this fascination with “rotating dining”

That’s Disney’s gimmick because they don’t have the upsell locations…which is the way to go

On vlogs, it’s usually explained as being a positive because your server gets to know you. I can see the extroverts in my family liking that a lot. On the other hand, for my socially anxious self, the group dining situation every night is a potential dealbreaker from ever cruising Disney. Depends a lot on the personalities involved I guess.

I also wonder if the rotational dining was originally part of a general overall community theme, when paired with the “neighborhoods” (lounges in one area, shops in one area, etc.) Group dining, getting to know your server, smaller “neighborhoods” - I could see that being a great environment for extroverted, sociable types. That was the environment where things like fish extenders started, after all, so I imagine there was a community feel there. I think with the impersonal environment of the bigger ships some of that is probably lost though, and people getting excited about having the same server suddenly makes less sense.

 

[wannabeBelle]

Forbes Travel just announced their winners for this year and four of the Celebrity Ships made the cut. Two of the ships, The Ascent and The Millenium have made the 4 star rating and two others, The Apex and the Flora have made the Recommended rating. I have been on the Apex and the Millenium and both were awesome ships. The Apex just seems to keep going to where I want to go so I have been on that one three times and the Millenium twice. Marie

 

[CJR]

I will say, Disney definitely comes across as a premium product compared to the others. We got our luggage tags in the mail today, I forgot that they did that still. Pretty much all of the other cruise lines just send you an email and have you print them off. Disney has a lot of little things that set them apart. They come at a cost, but there's a lot of them.

Regarding the rotational dining, yes, all modern cruise ships have specialty dining, what I love about Disney's basic rotational dining though is that you have the same people serving you each night. They learn about you and by the end of the cruise, at least for us, offer amazing accommodation without even asking. I have yet to receive the level of dining service that I get on Disney anywhere else. To be fair, I haven't done Celebrity because while kids can go on them, it's not the most interesting brand for families with kids - definitely a more adult oriented brand (although not adult only like Virgin). Maybe when I'm older (and if they keep up their status match with Royal Caribbean).