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

[BrianLo]

I don't know the dynamics that well for some of this stuff but when they announced Lighthouse Point I thought they might make that into a more substantial offering including perhaps a more robust water park and maybe even an actual resort (DVC?) on the island. Since it is actually located on a populated island with airports and such.

I think we might see more of that out of Castaway Cay. Certainly they could at lighthouse point, but they seem to be currently positioning that destination as beach day forward. But the original point of that destination was maybe Chapek’d.

As an operator, they didn’t really need two Bahamian private islands. But it certainly now sets them up well with the ship capacity tripling to take advantage of it.

 

[lazyboy97o]

The cruise lines are hiring theme park designers to design experiences both on and off their ships. You’ll find the cruise lines at the IAAPA Expos. This isn’t just some coincidence. Part of the wide appeal of a theme park vacation is doing a variety of activities, but the desire for a variety of offerings isn’t static and absolute. There’s also an inherent appeal to seeming “do nothing” activities like spending a day swimming pool or beach side. Tourism as a whole has grown incredibly and become significantly less zero sum but there are still limits to time and money.

 

[BrianLo]

The cruise lines are hiring theme park designers to design experiences both on and off their ships. You’ll find the cruise lines at the IAAPA Expos. This isn’t just some coincidence. Part of the wide appeal of a theme park vacation is doing a variety of activities, but the desire for a variety of offerings isn’t static and absolute. There’s also an inherent appeal to seeming “do nothing” activities like spending a day swimming pool or beach side. Tourism as a whole has grown incredibly and become significantly less zero sum but there are still limits to time and money.

Exactly. I think this topic always faces an incredible amount of blowback because an individual cannot imagine themselves on a cruise for whatever variety of reasons. But they lack the vantage that so much of the market has already shifted.

If we asked this board what they engage in more often, 7 day stays at Universal in their hotel complex bubble or cruises out of Florida, I think the runner up to WDW would surprise people. If we stop thinking of WDW as exclusively a theme park complex and also a large resort/hotel complex, we see how much erosion they have already faced. It also offers a far better substitution for a family with a four year old than Universal currently does.

There’s a reason both operators are still down from pre-pandemic. I didn’t post this to be gloomy, but to contextualize why this capital expenditure is going so heavily into their cruise arm. This is a big area of growth for them over the next 5-7 years.

 

[Jrb1979]

Exactly. I think this topic always faces an incredible amount of blowback because an individual cannot imagine themselves on a cruise for whatever variety of reasons. But they lack the vantage that so much of the market has already shifted.

If we asked this board what they engage in more often, 7 day stays at Universal in their hotel complex bubble or cruises out of Florida, I think the runner up to WDW would surprise people. If we stop thinking of WDW as exclusively a theme park complex and also a large resort/hotel complex, we see how much erosion they have already faced. It also offers a far better substitution for a family with a four year old than Universal currently does.

There’s a reason both operators are still down from pre-pandemic. I didn’t post this to be gloomy, but to contextualize why this capital expenditure is going so heavily into their cruise arm. This is a big area of growth for them over the next 5-7 years.

I don't agree with all of that. What iMO is happening is those who pre-pandemic vacation was Disney/Universal have moved to cruises as they now offer what the parks/resorts used to.
That group of visitors have moved on to cruises instead.

The other thing many ignore is while Disney and Universal are down, the big regional parks have gone up. iMO people are opting to get their fix of attractions and rides as t regional parks and opting for cruises over Disney/Universal.

 

[JoeCamel]

But that's the question. If Royal Carribean is building some sort of a full on Water Park to include with their cruises, does that change things for people? If you get a 5 night cruise, where you get all the rides around the ship, plus a full on park, could that start cutting into the theme parks in Orlando even more (especially once you price out the cruise as a cheaper alternative to the Orlando parks)?

What can you put on a ship? 2-4 thousand people and it takes days to cycle them through?
That is rope drop at the MK and more pour in through out the morning then again in the afternoon and they do that every single day.
I don't think it will affect park attendance in any significant way

 

[BrianLo]

I don't agree with all of that. What iMO is happening is those who pre-pandemic vacation was Disney/Universal have moved to cruises as they now offer what the parks/resorts used to.
That group of visitors have moved on to cruises instead.

Sorry, what are you disagreeing with exactly? We agree, some of the market has shifted, which implies that some of the market is finding substitution in cruises now. Not all, not most, but some. I too think value proposition has something to do with it.

Royal keeps talking about the land-cruise value discount that they are trying to reduce in their quarterly calls.

 

[invader]

What can you put on a ship? 2-4 thousand people and it takes days to cycle them through?
That is rope drop at the MK and more pour in through out the morning then again in the afternoon and they do that every single day.
I don't think it will affect park attendance in any significant way

It won’t be individual ships (2-4k) but the growth of the cruise industry as a whole. DCL by 2031 will have increased capacity (at double occupancy, and assuming the next 4 ships are Wish equivalent size) by at least 20K.

Take that growth across multiple lines (NCL, Carnival, RCCL, Celebrity, etc etc.) and you probably have 100k people choosing between the cruise to the Bahamas and the private islands or a trip to the parks. These are fairly captive audiences that will spend $$$ thru exclusive dining, port excursions, merch, onboard experiences, spa, and so forth. It is amazing to me it has taken DCL this long to go thru this type of growth.

 

[BrianLo]

What can you put on a ship? 2-4 thousand people and it takes days to cycle them through?
That is rope drop at the MK and more pour in through out the morning then again in the afternoon and they do that every single day.
I don't think it will affect park attendance in any significant way

Utopia will accommodate 2 million passenger nights. Star more. Not just gate clicks, but overnight, closed circuit, walled garden guests.

Individually it doesn’t look like much, but quickly one new ship scales to ten.

The question isn’t so much about does WDW lose status of being the number one operator in Florida, Magic Kingdom will never lose its number one status, but does Comcast lose position 2? I think they already have. Which is why Royal is the bigger competitor in the family vacation space, even if it looks more Trojan horsed than a standard theme park complex. They are actually expanding faster in the market, just incrementally every year.

 

[MisterPenguin]

With all that sea, the cruise lines have the blessing of size.

 

[BrianLo]

Something else to chew on. Considering occupancy; WDW captures about 30 million guest nights in their owned hotels. Universal 12 million. Though both include partner operators.

DCL will add 5-6 million nights (assuming 4 ships wind up in the market - Treasure and Destiny being two already) within the next 5-7 years.

It’s not what people want at all, I get it. But it is the ‘response’ the company is making to capture more Florida vacation market share. Essentially half of current day UOR.

 

[HauntedPirate]

It won’t be individual ships (2-4k) but the growth of the cruise industry as a whole. DCL by 2031 will have increased capacity (at double occupancy, and assuming the next 4 ships are Wish equivalent size) by at least 20K.

Take that growth across multiple lines (NCL, Carnival, RCCL, Celebrity, etc etc.) and you probably have 100k people choosing between the cruise to the Bahamas and the private islands or a trip to the parks. These are fairly captive audiences that will spend $$$ thru exclusive dining, port excursions, merch, onboard experiences, spa, and so forth. It is amazing to me it has taken DCL this long to go thru this type of growth.

The next 4 DCL ships will be larger than the Wish class (160,000 tons vs 140,000 tons).

Let’s hope whoever designs the new ships A) has been on a cruise ship before and B) uses the Dream/Fantasy as templates and improves on them.

 

[MagicHappens1971]

Something else to chew on. Considering occupancy; WDW captures about 30 million guest nights in their owned hotels. Universal 12 million. Though both include partner operators.

So are the 30 million guest nights not just Disney owned hotels? Disney doesn’t use third party operators for their owned hotels.

 

[BrianLo]

So are the 30 million guest nights not just Disney owned hotels? Disney doesn’t use third party operators for their owned hotels.

I was being lazy and using Touring Plans WDW room count in my rough calculus. Which includes the partner hotels. Also DVC.

 

[LSLS]

What can you put on a ship? 2-4 thousand people and it takes days to cycle them through?
That is rope drop at the MK and more pour in through out the morning then again in the afternoon and they do that every single day.
I don't think it will affect park attendance in any significant way

Royal has ships that take over 7,500 people. They carried 6 million guests last year, so roughly 33% of what Magic Kingdom saw. That is one of the dozens of cruise companies. Do I think it's going to be a HUGE impact with this idea (over 10%)? Probably not. But, Orlando saw a 2% increase in attendance last year, which means they are down almost 14% from 2019. Cruise lines are up 17% compared to 2019 in North America, and overall they are up like 35% in the last year. The other data was showing a lot more families and millennials were starting to take cruises (can't find the exact numbers right now). I find it tough to imagine there is not at least some impact going on here, especially with the data that seems to show cruise lines are past capacity and Florida had record travel while Orlando parks AT BEST saw a much smaller increase in attendance.