DCL Buys Unfinished Mega Cruise Ship - Genting Golden Dream ???

[esskay]

That price point now makes it clear why they bought it. An amazing bargain for Disney there. Even with the extra $1bn they plan to spend on completing it it's still way cheaper (and more importantly quicker) than building from scratch.

It'll be interesting to see what they do with it. If they do indeed end up using it for Asian destinations then the existing layout (if any) might not change all that much given it was destined for that market anyway.

 

[Skibum1970]

The only thing that confuses me is this. If the ship was 75% complete, why does Disney need to spend another billion on it? I ask this honestly with no snark. I literally have no idea.

One addition. I understand that they need to add some Disney set pieces and they probably need to refresh what was already built since it has sat unworked on for a while.

 

[CaptainAmerica]

It'll be interesting to see what they do with it. If they do indeed end up using it for Asian destinations then the existing layout (if any) might not change all that much given it was destined for that market anyway.

They've already announced they're changing the configuration, that wasn't just rumor. It was originally designed for 9,000 and they're reconfiguring it for 6,000.

 

[Andrew C]

That price point now makes it clear why they bought it. An amazing bargain for Disney there. Even with the extra $1bn they plan to spend on completing it it's still way cheaper (and more importantly quicker) than building from scratch.

It'll be interesting to see what they do with it. If they do indeed end up using it for Asian destinations then the existing layout (if any) might not change all that much given it was destined for that market anyway.

 

[CaptainAmerica]

The only thing that confuses me is this. If the ship was 75% complete, why does Disney need to spend another billion on it? I ask this honestly with no snark. I literally have no idea.

They need to undo some of the 75%.

 

[CastAStone]

That price point now makes it clear why they bought it. An amazing bargain for Disney there. Even with the extra $1bn they plan to spend on completing it it's still way cheaper (and more importantly quicker) than building from scratch.

It'll be interesting to see what they do with it. If they do indeed end up using it for Asian destinations then the existing layout (if any) might not change all that much given it was destined for that market anyway.

The Fantasy cost about $1bn in 2009-2012 dollars, and that’s a documented cost from a. Disney financial filing. Accounting for inflation, and the fact that the ship is much bigger, $1,041MM is an incredible deal.

 

[ToTBellHop]

The only thing that confuses me is this. If the ship was 75% complete, why does Disney need to spend another billion on it? I ask this honestly with no snark. I literally have no idea.

One addition. I understand that they need to add some Disney set pieces and they probably need to refresh what was already built since it has sat unworked on for a while.

Almost all of the interior needs to be redone. The staterooms were not built to the DCL standard so dramatic changes will be necessary. But, they still bought the ship itself for pennies. This was a very smart move. Chapek’s first and last, by my count.

For DCL to build a ship of this size from scratch, to their standard, would probably approach $2 billion.

 

[D.B.]

That price point now makes it clear why they bought it. An amazing bargain for Disney there. Even with the extra $1bn they plan to spend on completing it it's still way cheaper (and more importantly quicker) than building from scratch.

It'll be interesting to see what they do with it. If they do indeed end up using it for Asian destinations then the existing layout (if any) might not change all that much given it was destined for that market anyway.

The cruise market in China is unlike the rest of the world.
To get the millions of Chinese to go on a Cruise they want things to be done the Way they expect. That means dining Family Style at group tables and staff who speak Chinese. That’s not a racist comment but what I have observed in my years of travel to China.
They don’t mind crowds and want Asian/Chinese entertainment and Big Casinos.
If Disney is smart they will not make the mistake other cruise lines have made by thinking the average working class Chinese will embrace a Western style cruise experience.

 

[Skibum1970]

Almost all of the interior needs to be redone. The staterooms were not built to the DCL standard so dramatic changes will be necessary. But, they still bought the ship itself for pennies. This was a very smart move. Chapek’s first and last, by my count.

For DCL to build a ship of this size from scratch, to their standard, would probably approach $2 billion.

And it saves a heck of a lot of time as they aren't building keel up. I wasn't trying to insinuate anything bad about the cost to redo the ship but it just seemed like a lot. I'm not a cruise person but the size of this ship is staggering.

 

[monothingie]

It’s actually pretty easy to see how much they’re going to spend. Capex for DPEP is projected at to be up 37% for FY2023. Nothing new has happened with DPEP that we don’t know about except for the purchase of the floor model ship.

 

[monothingie]

The floor model ship has to be out of the shipyard by the end of 2024. So they have very limited time to design and complete construction.

 

[CaptainAmerica]

It’s actually pretty easy to see how much they’re going to spend. Capex for DPEP is projected at to be up 37% for FY2023. Nothing new has happened with DPEP that we don’t know about except for the purchase of the floor model ship.

Didn't that capex projection precede this purchase?

 

[CastAStone]

It’s actually pretty easy to see how much they’re going to spend. Capex for DPEP is projected at to be up 37% for FY2023. Nothing new has happened with DPEP that we don’t know about except for the purchase of the floor model ship.

Capex for all of Disney for 2023 is +37%, I don’t see where they broke it down by division. The total increase is nearly $2bn

 

[CastAStone]

Didn't that capex projection precede this purchase?

No, that’s from the 10-K they released last night.

 

[monothingie]

Capex for all of Disney for 2023 is +37%, I don’t see where they broke it down by division. The total increase is nearly $2bn

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Historically DPEP has taken up the majority of CAPEX within the company.

 

[Sirwalterraleigh]

Who else was gonna buy it? MSC, Carnival, Royal, Norwegian all want class-based boats for efficiency and less consumer confusion. The specialty cruise lines would never want a boat that big (and frankly I’m not sure Norwegian or Carnival would either).

The only logical buyer is a cruise line that operates like a specialty cruise line but still attracts huge numbers of guests.

Oh, and it needs a strong balance sheet post-Covid to take on a $1bn+ investment.

Disney was probably bidding against 1-2 scrap yards and literally no one else.

Even still, I will say this one time and only because he’s gone, good job here Bob Chapek.

You gotta get on some more boats…

Disney is not like silverstar or some elite, luxury cruise…

They just aren’t. They’re nice but the price is inflated due to the brand…not the substance

 

[Sirwalterraleigh]

Historically DPEP has taken up the majority of CAPEX within the company.

$2 bil with their bloated allocations won’t get you much…like a turning red spinner or something?

 

[monothingie]

$2 bil with their bloated allocations won’t get you much…like a turning red spinner or something?

Just do a copy/paste job of the existing fleet with some things for the Asian cruise market and it’s good.

Did you really think they’d come up with an original concept?

This is going to be mass market cruising built on the cheap and quick.

Of course assuming China will be even a viable market in the next 2 years…

 

[CastAStone]

Norwegian and Royal both made ships for the China market in the late 2010s and neither is sailing in China. Norwegian spent $50M Americanizing the Joy 18 months after it launched, while Royal is just using the Quantum of the Seas up and down the West Coast of the US while pretending it’s not weird that there’s Chinese names above all the restaurants and shops.

So I’m not banking on Disney’s success in that market. I think the US will have a nice big new Disney cruise ship by 2027.

 

[CaptainMickey]

Norwegian and Royal both made ships for the China market in the late 2010s and neither is sailing in China. Norwegian spent $50M Americanizing the Joy 18 months after it launched, while Royal is just using the Quantum of the Seas up and down the West Coast of the US while pretending it’s not weird that there’s Chinese names above all the restaurants and shops.

So I’m not banking on Disney’s success in that market. I think the US will have a nice big new Disney cruise ship by 2027.

That's the nice thing about cruise ships vs. theme parks. If things don't work out so well with the current location, you can just move the ship.