Does Disney Cruise Line Have Plans to Purchase Abandoned Cruise Ship?

[OKW Lover]

Dunno - those 3 major lines are literally swimming in debt - the most recent bond offering was sold at junk yields I believe - how would they fund this ? Plus Not sure they want more ships especially with a recession staring them in the face.

No, that doesn't hold water. (not a pun)
The major lines may have a lot of debt, but they also have their own robust building program. Why wouldn't they consider buying a cheaper hull to replace or postpone one in their current building plans?

 

[mlayton14]

No, that doesn't hold water. (not a pun)
The major lines may have a lot of debt, but they also have their own robust building program. Why wouldn't they consider buying a cheaper hull to replace or postpone one in their current building plans?

Even greater capital investment a wise move right now? Because that would commit them to additional cabins to fill? You have a brighter outlook on consumer discretionary spending than I do.

 

[OKW Lover]

Even greater capital investment a wise move right now? Because that would commit them to additional cabins to fill? You have a brighter outlook on consumer discretionary spending than I do.

Replacing a more costly new build with a less expensive hull? Seems to equate to a lower capital investment right now.

 

[tee11]

Only want to comment that I read the source article in German language, and perhaps some things are lost in translation. To me, this is a lighthearted article that is merely circumstantial. The large ship of a now bankrupt company is supposed to be finished at Meyer Werft instead of being demolished. There is not even confirmation of interest or of inquiry by DCL about this ship, or any other connection with Disney and DCL, other than the authors of the article pointing out that Meyer Werft has built ships for DCL. That is all they say. Well, famous Meyer Werft is building ships for a very large number of international cruise lines, including RCI, AIDA, Norwegian...

 

[slindamood]

I would assume the cabins, as designed, are quite small to get that many people on that size ship. I would assume DCL would make them into one bedrooms family suites or combine them. It could end up half the passenger capacity. Was on a cruise in Asia and the inside cabins were quite small making the number of passengers onboard quite high for the size ship.

 

[Annabell]

Don´t think DCL would be interested, need lots of rebuild to suit for the US market.

 

[mlayton14]

Replacing a more costly new build with a less expensive hull? Seems to equate to a lower capital investment right now.

Replacing? I don’t think a cruise line can just say “I don’t want this planned ship anymore” without a significant penalty which for all intents and purposes would add to the cost of the fire sale ship which wasn’t even designed by said cruise line.

 

[jrapps]

I would assume the cabins, as designed, are quite small to get that many people on that size ship. I would assume DCL would make them into one bedrooms family suites or combine them. It could end up half the passenger capacity. Was on a cruise in Asia and the inside cabins were quite small making the number of passengers onboard quite high for the size ship.

Actually, they have very large cabins, among the largest at sea at close to 20 sq-m. That's larger than the rooms on the DCL Magic which are around 18 sq-m.

The ship is about the same size as an RCL Oasis-class, but 300-500 less cabins than that class. My guess is the thought here was slightly larger rooms, and max the capacity at 4-5 guests per cabin.

 

[OKW Lover]

Replacing? I don’t think a cruise line can just say “I don’t want this planned ship anymore” without a significant penalty which for all intents and purposes would add to the cost of the fire sale ship which wasn’t even designed by said cruise line.

We might quibble about the cost to delay a ship already committed then. But your argument works against DCL being the buyer as well since they have 2 more ships in the pipeline.

 

[Scalemaster34]

Dunno - those 3 major lines are literally swimming in debt - the most recent bond offering was sold at junk yields I believe - how would they fund this ? Plus Not sure they want more ships especially with a recession staring them in the face.

Agree... Norwegian, Carnival, Royal, MSC are all running in the red in a big way. And most these lines have orders already placed on ships they have to pay for and find ways of adding into their currently bloated fleets. MSC especially is on the hook for six new ships.

And many of the lesser know lines/group, are gone now. The few others still operating are more niche type cruises (adult, adventure, river, luxury) that likly aren't looking for a ship this large, as they tend to utilize smaller vessels.

I really feel bad for these ship builders... as new orders for cruise ships seems to be drying up beyond 2027, and I really don't see that changing for awhile. And if we really are looking a several years of a economic recession or depression... might be years before we see the level of building that has gone on the last decade.

 

[nikem3]

Agree... Norwegian, Carnival, Royal, MSC are all running in the red in a big way. And most these lines have orders already placed on ships they have to pay for and find ways of adding into their currently bloated fleets. MSC especially is on the hook for six new ships.

And many of the lesser know lines/group, are gone now. The few others still operating are more niche type cruises (adult, adventure, river, luxury) that likly aren't looking for a ship this large, as they tend to utilize smaller vessels.

I really feel bad for these ship builders... as new orders for cruise ships seems to be drying up beyond 2027, and I really don't see that changing for awhile. And if we really are looking a several years of a economic recession or depression... might be years before we see the level of building that has gone on the last decade.

I think they will be fine. Icon of the Seas was fully shown off today and it is generating a bunch of hype. Cruise industry seems to be slowly getting back to normal. We are seeing packed ships in October during school season. I think come next year we will see demand return to normal and there will be wants and needs for more ships again.

 

[nikem3]

Don´t think DCL would be interested, need lots of rebuild to suit for the US market.

I don't think its as much as we'd think. There really isn't a huge difference between the US market and Asian market ships as we've learned. These ships are built for generational families with bigger rooms, but no one in the US market will complain about having extra room. Ceiling heights seem normal, so I don't know if there would be any major difference and from all understandings, it seems this ship was built to be able to travel globally. From a decor perspective and theme perspective definitely needs to work, but from a design perspective they can absolutely make it work. All we know right now is that it seems Disney IS interested in this. If they can get this ship for a fraction of the cost

 

[jrapps]

Agree... Norwegian, Carnival, Royal, MSC are all running in the red in a big way. And most these lines have orders already placed on ships they have to pay for and find ways of adding into their currently bloated fleets. MSC especially is on the hook for six new ships.

And many of the lesser know lines/group, are gone now. The few others still operating are more niche type cruises (adult, adventure, river, luxury) that likly aren't looking for a ship this large, as they tend to utilize smaller vessels.

I really feel bad for these ship builders... as new orders for cruise ships seems to be drying up beyond 2027, and I really don't see that changing for awhile. And if we really are looking a several years of a economic recession or depression... might be years before we see the level of building that has gone on the last decade.

New ship builds are rarely scheduled more than 5 years out. I don't think it's fair to say that cruise ship building is going to dry up after 2027. You have no way of knowing that. How many of the ships that are coming out now were even announced more than 6-7 years ago?. Most, like the Disney Wish, RCL Wonder of the Seas, and other recent ships were ordered 5-6 years ago and that was with a 2-year delay in shipbuilding with the pandemic. Most ships are completed within 3-4 years of being announced. So we wouldn't expect to see 2027 orders until next year.

Between Royal, NCL, Carnival, Disney, MSC, and all the smaller players out there, there are over 2 dozen ships on order in the next 5 years. No reason to think that is going to dry up. In fact, most cruise lines don't operate like Disney, waiting 10 years between builds. Most of them build new ships fairly continuously. I would expect that in 2023 you will see some builds announced for 2027, in 2024 you will see announcements for 2028, etc, etc.

 

[Jocelynaus]

I think it makes sense for Disney if it can fast track plans for growth. As beloved as they are, at 25 Magic and Wonder are in their twilight years. Add 3 ships and take away 2, in the years that will take the line has only grown one ship. Adding an extra ship that’s progressed will put them ahead of plans to grow the line.

the Disney CFO said this in the last earnings call which highlighted the high price DCL customers pay, having a small market share and liking high ship capacity. I think it would make sense to add a ship that’s progressed to fast track that growth to sail to more locations/a wider audience.

The Wish is our newest ship, and that has gone with very, very high capacity. And that one – it's just very well received.
But we have a competitive position overall in the cruise business, especially the family cruise market. So we generate pricing that's well above the industry average. And our cruise ships deliver for us one of the highest rated guest experiences across all of our parks and experiences offerings.
And, this is a really interesting comment that we received from our cruise passengers. 40% of them say that they would not have chosen to go on a cruise vacation if it weren't a Disney Cruise.
So, we're a unique product, and we're still a relatively small share of the cruise market. And we're positioned for growth. And the other four ships are all sailing, and their occupancy is improving week by week.

 

[Scalemaster34]

New ship builds are rarely scheduled more than 5 years out. I don't think it's fair to say that cruise ship building is going to dry up after 2027. You have no way of knowing that. How many of the ships that are coming out now were even announced more than 6-7 years ago?. Most, like the Disney Wish, RCL Wonder of the Seas, and other recent ships were ordered 5-6 years ago and that was with a 2-year delay in shipbuilding with the pandemic. Most ships are completed within 3-4 years of being announced. So we wouldn't expect to see 2027 orders until next year.

Between Royal, NCL, Carnival, Disney, MSC, and all the smaller players out there, there are over 2 dozen ships on order in the next 5 years. No reason to think that is going to dry up. In fact, most cruise lines don't operate like Disney, waiting 10 years between builds. Most of them build new ships fairly continuously. I would expect that in 2023 you will see some builds announced for 2027, in 2024 you will see announcements for 2028, etc, etc.

When was the last order for a new cruise ship made? MSC Cruises alone has twelve new ships on the books to be built in the next five years, last deal I could find... was signed eleven days after COVID started back in Jan 2020. That doubles their passenger capacity, and none of their existing ships are as old as Magic and Wonder. The Company lost $1.1 Billion in 2020 and again in 2021... and is tracking to lose that much this year as well. Will they be able to fill all those ships, without discounting to levels that aren't profitable?

Last I heard cruising was somewhere close to 2006 levels... long way from where it was in 2019. Problem is most the decision to build all these ships, were based on projections back in 2017 - 2019 that had growth happening at nearly 30% per year. I don't know what the future holds, but I see a lot more capacity than they are customers.

Economic, War, and COVID all have a part in the uncertainly of the next few years.

 

[mlayton14]

When was the last order for a new cruise ship made? MSC Cruises alone has twelve new ships on the books to be built in the next five years, last deal I could find... was signed eleven days after COVID started back in Jan 2020. That doubles their passenger capacity, and none of their existing ships are as old as Magic and Wonder. The Company lost $1.1 Billion in 2020 and again in 2021... and is tracking to lose that much this year as well. Will they be able to fill all those ships, without discounting to levels that aren't profitable?

Last I heard cruising was somewhere close to 2006 levels... long way from where it was in 2019. Problem is most the decision to build all these ships, were based on projections back in 2017 - 2019 that had growth happening at nearly 30% per year. I don't know what the future holds, but I see a lot more capacity than they are customers.

Economic, War, and COVID all have a part in the uncertainly of the next few years.

Totally agree , some previous posters fail to appreciate the economic turmoil ahead. Just keep building?? New bonds just issued at higher interest rates just to service their EXISTING debt. So, borrow even more to take on a half built ship when they have more in the ship yard still awaiting delivery? Disney is a different situation, they are a boutique brand catering to a specific group of people that no other cruise line can serve in the same way. I have no crystal ball but it seems crazy that one of the large mass market line would benefit from a purchase like this. We will find out soon enough

 

[jrapps]

When was the last order for a new cruise ship made? MSC Cruises alone has twelve new ships on the books to be built in the next five years, last deal I could find... was signed eleven days after COVID started back in Jan 2020. That doubles their passenger capacity, and none of their existing ships are as old as Magic and Wonder. The Company lost $1.1 Billion in 2020 and again in 2021... and is tracking to lose that much this year as well. Will they be able to fill all those ships, without discounting to levels that aren't profitable?

Last I heard cruising was somewhere close to 2006 levels... long way from where it was in 2019. Problem is most the decision to build all these ships, were based on projections back in 2017 - 2019 that had growth happening at nearly 30% per year. I don't know what the future holds, but I see a lot more capacity than they are customers.

Economic, War, and COVID all have a part in the uncertainly of the next few years.

I have no doubt that orders for new ships hit pause due to Covid. So yeah, the last ships ordered were just before the pandemic. There is enough backlog to keep the shipyards busy thru 2026/2027. There was no need to order any more ships once the pandemic hit. That said, I still believe you will see new ships ordered in 2023/2024 timeframe for a 2027+ delivery.

From what I have read (and seen on the cruises I have been on recently) demand is at an all time high, and many cruises are sailing at full capacity, well above 2019 (and 2006) levels. Plus, since lines like Carnival, Royal, etc have such large fleets, they have more older ships that will age out faster than DCL and need to be replaced. Yes, building a $1B ship is expensive, but as they build new ships and retire old ones, overall capacity goes up, and thus so does potential revenue.

Will they need to do steep discounts to fill the ships? no idea. Personally I doubt it...Disney is selling out the Wish, even the expensive concierge areas. Royal sells out their suites on Oasis class ships. There are plenty of people willing to part with their $.

Of course, I also wouldn't mind seeing steep discounts here and there..makes it easier for me to cruise!

So what does this all have to do with the potential for Disney, or anyone else, to buy the Global Dream...I think all of the cruise lines are planning future growth and Disney is realizing that they will need to add more capacity at a faster rate than they have in the past. Buying this ship could increase the entire fleet capacity by 50% in little over a year. Makes a compelling argument. Right now Disney is leaving money on the table. With such a small fleet, they consistently sell out capacity. If they doubled their fleet overnight, they'd still sell out to capacity. With people like Chapek running the show now, my gut tells me they are looking at how they can add as many ships as possible in as short a timeframe as possible.

 

[jrapps]

When this thread first started, I thought the top deck of the Global Dream was just a mess, too much going on with the theme park/slides/etc. Now that Royal has released the Icon of the Seas info, the Global Dream looks tame!

Icon:

 

[CaseyCruiser]

When this thread first started, I thought the top deck of the Global Dream was just a mess, too much going on with the theme park/slides/etc. Now that Royal has released the Icon of the Seas info, the Global Dream looks tame!

Icon:

View attachment 712228

That picture makes me nervous

 

[nikem3]

Last I heard cruising was somewhere close to 2006 levels... long way from where it was in 2019. Problem is most the decision to build all these ships, were based on projections back in 2017 - 2019 that had growth happening at nearly 30% per year. I don't know what the future holds, but I see a lot more capacity than they are customers.

You have to remember, cruising is JUST getting back to normal. Demand is absolutely pent up though and its showing. Even from a Disney perspective you can tell they are not having issues filling up cruises. A few months ago, there were 20+ travel agent rates. Today, there are significantly less. We've seen what has happened to theme parks and the demand that was generated and crowds as of late. This is JUST starting with cruises.