Will DCL go bankrupt?

[T & R]

I think it's more likely that DCL may cancel one or two of their upcoming ship builds rather than go bankrupt. I do not think they will cancel the Wish since it's already having parts built for it and is pretty far along but the other 2 un-named ships may get consideration for being cancelled.

 

[Maggie'sMom]

I am not sure how much financial clout the Bahamian government has to be able to bail out a business the size of DCL, especially when its own economy is heavily dependent on the tourism industry. I am not arguing DCL will take the BK route, but I think corporate Disney would be more likely to keep DCL afloat than the Bahamian government.

LAX

And I don't think that the Bahamian government would bail out DCL, but what I was saying is that the Bahamian government may look at their bankruptcy laws and see what might be done to support the cruise companies (in general, not just DCL) operating under Bahamian law so that they can restructure their debt and keep operating while they work through the financial mess. I could see short term accommodations being made to help these companies in business.

 

[apathetic]

It's pretty complicated. Sure, Disney is a huge company that could easily carry the cruise side. Except, Disney as a whole is taking massive hits. Parks are closed, cruises are canceled and movies aren't being made. They have payouts for ESPN but no games are happening. It's safe to say, they have a very small fraction of expected revenue rolling in now. And all of the above are going to be affected for at least the rest of 2020. Disney probably won't go bankrupt, but it doesn't mean they won't suffer massive financial hits and eventually shed some parts to stay afloat.

From the cruise end, you have the public confidence in cruising. Until a vaccine becomes reality, many people are going to stay home. Now, DCL has a rabid fanbase and if prices stay reasonable, ship should stay busy. But, much of that also depends on how quickly the economy recovers. Further, will they have anywhere to go? The Caribbean hasn't exactly been open to ships lately. Will these destinations reopen to boost economies or stay closed to avoid sick people? Will people risk getting on a ship then being stuck at sea for a month because nobody will let them dock? Nobody knows yet.

There are a lot of factors and one thing can greatly affect several other things. Disney is in better shape than other cruise companies because they have other streams of revenue. Or they hope they will. I have a cruise later this year and I really don't know the right answer.

 

[Quellman]

I am not sure how much financial clout the Bahamian government has to be able to bail out a business the size of DCL, especially when its own economy is heavily dependent on the tourism industry. I am not arguing DCL will take the BK route, but I think corporate Disney would be more likely to keep DCL afloat than the Bahamian government.

LAX

And I don't think that the Bahamian government would bail out DCL, but what I was saying is that the Bahamian government may look at their bankruptcy laws and see what might be done to support the cruise companies (in general, not just DCL) operating under Bahamian law so that they can restructure their debt and keep operating while they work through the financial mess. I could see short term accommodations being made to help these companies in business.

But DCL uses the Bahamas as place of registration for the ships. DCL was incorporated in 1996 as Magical Cruise Company Limited and is domiciled in London, England, with their operational headquarters located in Celebration, Florida. So they aren't Bahamian either.

 

[xuxa777]

The short answer is absolutely not. No need to worry about them going bankrupt.

 

[kaseyC]

It's pretty complicated. Sure, Disney is a huge company that could easily carry the cruise side. Except, Disney as a whole is taking massive hits. Parks are closed, cruises are canceled and movies aren't being made. They have payouts for ESPN but no games are happening. It's safe to say, they have a very small fraction of expected revenue rolling in now. And all of the above are going to be affected for at least the rest of 2020. Disney probably won't go bankrupt, but it doesn't mean they won't suffer massive financial hits and eventually shed some parts to stay afloat.

We need to throw Adventures by Disney in the mix as well. They have had to cancel land trips, river cruises and cruise add ons.

 

[gotomu212]

I don’t think anyone can say with certainty whether DCL would decide to restructure through bankruptcy, or even which laws will govern it, without knowing if people will be sailing in May or October (and not just whether allowed but whether 10k people a week will show up to cruise.

That said, I personally wouldn’t want to tie up $5,000+ with a company for a year (it’s one thing when PIF is a few months out, but I wouldn’t prepay a $5k or $10k cruise a year out which is basically what moving a cancelled cruise is doing.

I also think it’s more likely that prices will tank after we get through the glut of rebookings and people who aren’t cancelling yet but will. Rather than pay (what I consider) very inflated prices for 2021 and tie up that much cash for 1 year, I personally would take a refund and rebook closer to sail date.

 

[Kirbo]

I would take the refund. And I’m not saying that out of any fear that DCL will go bankrupt. I don’t think they will. I would rather take the cash and cruise again when I’m ready than take an FCC with restrictions which may not even be enough to cover the future cruise I choose because DCL prices go up so much every year. The cash is far more valuable right now.

This.

I would not want my money tied up and have the possibility of none of the times working out right. Also, I think that there will be a lot of folks that decide not to cruise and that the prices will come down. We are all diehard cruisers, but there are far more folks that do a one and done cruise that will now decide not to cruise because of the publicity around it. And we're also looking at a very high unemployment rate and fewer folks being able to vacation in the same manner for the next few years.

We took our first cruise with our kids when we were in the middle of the financial meltdown a few years back and it was so much cheaper. Prices have skyrocketed (and actually priced us out of DCL, after five fabulous cruises with them, we've been taking our teens on RCI for the last few years) and I feel pretty confident that prices will actually come down (I know that cruise bookings are up for next year, but I think there will be a lot of cancelations before final payments are due).

I can't imagine DCL will go bankrupt, but I'd take a refund and then wait until there was a vaccine and go then.

 

[Maggie'sMom]

But DCL uses the Bahamas as place of registration for the ships. DCL was incorporated in 1996 as Magical Cruise Company Limited and is domiciled in London, England, with their operational headquarters located in Celebration, Florida. So they aren't Bahamian either.

Quite the tangled web. But I think my general point still stands that I don't see the cruise industry as a whole disappearing. There is too much money at stake and too many jobs at risk. The industry as a whole will look very different when it emerges from this, but it will still be there.

 

[smmco]

How much debt does DCL have?

 

[SL6827]

So when is the Wish coming out? Maybe I should wait for her to sail?

 

[bbel]

It's pretty complicated. Sure, Disney is a huge company that could easily carry the cruise side. Except, Disney as a whole is taking massive hits. Parks are closed, cruises are canceled and movies aren't being made. They have payouts for ESPN but no games are happening. It's safe to say, they have a very small fraction of expected revenue rolling in now. And all of the above are going to be affected for at least the rest of 2020. Disney probably won't go bankrupt, but it doesn't mean they won't suffer massive financial hits and eventually shed some parts to stay afloat.

From the cruise end, you have the public confidence in cruising. Until a vaccine becomes reality, many people are going to stay home. Now, DCL has a rabid fanbase and if prices stay reasonable, ship should stay busy. But, much of that also depends on how quickly the economy recovers. Further, will they have anywhere to go? The Caribbean hasn't exactly been open to ships lately. Will these destinations reopen to boost economies or stay closed to avoid sick people? Will people risk getting on a ship then being stuck at sea for a month because nobody will let them dock? Nobody knows yet.

There are a lot of factors and one thing can greatly affect several other things. Disney is in better shape than other cruise companies because they have other streams of revenue. Or they hope they will. I have a cruise later this year and I really don't know the right answer.

All this, plus any changes that the cruise industry maybe forced to make.

 

[dclpluto]

So when is the Wish coming out? Maybe I should wait for her to sail?

jam 2022 was the plan. Don’t know if this virus will push it back a few months.

 

[SL6827]

jam 2022 was the plan. Don’t know if this virus will push it back a few months.

When were her sail dates supposed to have originally been released? We sailed a few months into the Dreams debut and I might consider just this.

 

[daedelus]

When were her sail dates supposed to have originally been released? We sailed a few months into the Dreams debut and I might consider just this.

I asked about this at the future cruise desk on board. They just don't know, especially based on the plague and any delays that might introduce. I'd say at least as far in advance as they release the normal schedules. That said, I would submit to you that pretty much everyone on that maiden voyage and the first several weeks of sailings on Wish will be platinum, due to the early bookings. Very similar to the Hawaii cruises.

 

[Quellman]

How much debt does DCL have?

They've paid off the Dream and Fantasy. They did that far ahead of schedule. Some of the other users @truck1 or @PrincessShmoo might remember better than I do on that. They could still have debts on any of the renovations and updates that have occurred over the past few years. The new stage show development and costumes still probably has a few years before break even. Of course any delinquencies in port costs, (fuel, provisions), missed passenger capacities, excursions etc that don't account for pandemics, in contracts. They have also probably have a line of credit open on the construction of the new ships. Finally just operating costs, the website, call center, employees, ships and personnel insurance,. Lots of things would show up on the expense side of the balance sheet. No way of knowing what the revenue side shows.

When were her sail dates supposed to have originally been released? We sailed a few months into the Dreams debut and I might consider just this.

The general thought is that the booking dates for when the Wish enters service would not be released with the schedule for the rest of the fleet. Reason being is it generates a lot of PR for the release of the ship and chances are a lot of people will want to be on it. Besides it may be later in the construction cycle before they know when they will ACTUALLY sail.

 

[T & R]

The general thought is that the booking dates for when the Wish enters service would not be released with the schedule for the rest of the fleet.

I wonder if they're going to do the tiered booking like they normally do with Platinum first day, Gold next, etc.? If so, the Wish's first public sailing will be entirely Platinum cruisers. Unless DCL holds some cabins back or something, I cannot see how any new bookings for the Wish's first sailing would make it to the Gold and Silver rounds.

 

[JM_97]

DCL is a division of one of (if not THE) largest and most powerful conglomerates right now. "Mickey" and all of his entities should be fine. They will definitely take a hit for a period of time due to people not wanting to vacation or more importantly, just not having the disposable income. But their fleet is smaller and they have the insurance of having the "Disney" name attached to it. The Wish and all the other un-named ships will get delayed, but that is out of anyone's control. Overall, DCL should be okay in the long run.

It'll be interesting to see how other cruise lines do though. I'm mostly interested in Norwegian since that is the other cruise line I've taken.

 

[randumb0]

I don't really have a choice. I paid for my cruise in gift cards and I have no need for thousands of dollars in gift cards unless it's for a cruise so I will rebook.

 

[SL6827]

Ya, I bet the Wish could be pushed out well past its previous release date? I will just keep an eye on things.