Disney to add new ship in Tokyo to expanding cruise business (updated)

ORIENTAL LAND

09/07/2024 08:21

(Adds executive comments, details from 5th paragraph)
    By Dawn Chmielewski and Lisa Richwine
       URAYASU, Japan, July 9 (Reuters) - Walt Disney  DIS.N 
unveiled plans on Tuesday to launch a new cruise ship that will
set sail from Tokyo starting in fiscal 2028, adding a ninth
vessel to the brand's growing fleet.
    The new ship, to be modelled after the Wish that is the
largest vessel in the group, is a partnership with Oriental Land
Company (OLC), the operator of Tokyo Disneyland. It is part of a
10-year, $60 billion expansion of Disney's theme parks and
cruise business.
    Disney currently has five cruise ships in operation. In
addition to the Tokyo-based vessel, it has plans for three
others, including one that will set sail from Singapore in 2025.
    The ship, whose name was not revealed, will have a maximum
capacity of 4,000 passengers and is expected to bring in about
100 billion yen ($621.77 million) in annual sales within several
years of launch, OLC  4661.T  said.
    "To set sail from Japan will make Disney vacations at sea
more accessible to Japanese guests, who we know are some of our
biggest fans," Thomas Mazloum, president of Disney Signature
Experiences, told reporters.
    The cruise line expansion comes as the industry is enjoying
a rebound from a global shutdown during the COVID-19 pandemic.
The Cruise Lines International Association expects the number of
passengers to reach 34.7 million this year, up 17% from 2019.
    Josh D'Amaro, chairman of Disney Experiences, told Reuters
in a recent interview that the ships provide the opportunity to
bring themed entertainment to places that are not close to the
company's theme parks, such as Melbourne or Vancouver. 
    Disney also reaches a segment of the cruise market that had
gone unaddressed - families.
    "Forty percent of the people on those ships today will say,
'The only reason I'm on a cruise ship today is because Disney's
here,' which means we're creating a market," D'Amaro said.
    "When we are in Singapore, with this unbelievable ship that
we're building, the same thing is going to happen," he added.
"We know there's an insatiable demand for everything Disney."
    Disney's experiences business, which includes its domestic
and international parks and cruise line, accounted for more than
one-third of the company's revenue in the March quarter, and
nearly 60% of its operating income.
    The company's stock tumbled in May after Chief Financial
Officer Hugh Johnston warned about a "global moderation" in
travel in the fiscal third quarter and other impacts, including
higher wages and pre-opening expenses related to two of the new
cruise ships and the new vacation island, Lookout Cay.
    The rising tide for Disney's cruise lines could help offset
any softness in the company's domestic theme park business, UBS
analyst John Hodulik said. The company said its second quarter
booking occupancy is at 97% for all five ships.
    The rapid expansion of Disney's cruise capacity "helps
de-risk the medium-term outlook" for the parks business, Hodulik
said.
    Disney's other recent investments include three new areas at
the Tokyo DisneySea theme park, recreating the worlds of
"Frozen," "Tangled," and "Peter Pan," the opening of a "Frozen"
themed land at Hong Kong Disneyland, and a "Zootopia" experience
in Shanghai. 
    The company is expected to announce plans for new
attractions at Disneyland in California and Walt Disney World in
central Florida in August, at its D23 fan convention.

($1 = 160.8300 yen)

 (Reporting by Dawn Chmielewski and Lisa Richwine in Los
Angeles; Additional reporting by Rocky Swift in Urayasu; Editing
by Christopher Cushing)
 ((lisa.richwine@thomsonreuters.com; Follow me on Twitter
@LARichwine; 1-424-434-7324; Reuters Messaging:
lisa.richwine.thomsonreuters.com@reuters.net))