2 New DCL Ships Announced!

[eroller]

Ernie,

 

 

 

That's an excellent point... I was really assuming that DCL would jump on the China bandwagon, especially since they are moving in that direction with the Parks. But I don't really seem them customizing one ship for the Chinese market by shrinking the size of the kids club space on that ship, and adding a huge casino.

 

 

 

But you're right... 5 years is a long time for a new cruise market... things can certainly change. Maybe a huge casino won't be "required" for the Chinese market then. What did people think about the lack of a casino when DCL first launched the Magic? I don't gamble, and I wasn't really paying attention to the cruise industry at all when I was in my 20's. I don't even remember if there was a casino onboard NCL's Skyward when I took my first cruise back when I was a kid in the 80's.

 

 

 

-karl

 

 

Karl,

It's so hard to say how things will be in five years, especially in China. Perhaps as you mentioned cruising habits will change there where shopping and gambling won't be primary attractions to cruising anymore? It's also possible the cruise market will become over saturated and it won't be the huge boom cruise line execs are hoping for. Itineraries from mainland China are limited and not great, especially for the shorter cruises that are popular with the Chinese. Right now 7 days is as long as the Chinese market will sustain and even that can be a stretch. Weather is often not great on these itineraries especially in the winter, and there are port infrastructure concerns to overcome as well. Lastly the distribution system of how cruises are booked by the Chinese will eventually have to evolve.

 

So lots of challenges but as you know every cruise line is racing to construct and send custom built tonnage to the Chinese market. There are obviously a lot of opportunities but all is not rosy. I do hope the Chinese market takes off like every cruise executive seems confident it will, but I have some reservations.

[Ex techie]

5 Years! The Magic will be 23!

 

Too late!

 

ex techie

[Ex techie]

IMO they have missed the boat on this one. (pun intended)

Too little too late.

 

I think they have pushed their prices too far and now are starting to feel the repercussions and having to change downpayment's and add more 20% off cruises.

Here are some current discounts for cruises reported by disneycruiselineblog.

 

There are a some interesting changes this week. In addition to a few new sailings for U.S. Military Personnel and Florida Residents, Disney added a couple more dates to their 20% off offer. The FLR and MTO rates are available to book today through Sunday, February 28, 2016, while inventory lasts. The 50% off deposit offer remains for anyone to book.

 

http://disneycruiselineblog.com/2016/02/special-offers-disney-cruise-line-sailings-leap-day-2292016/

 

ex techie

[c-cruise]

I don't know... 20% off on a handful of sailings and a reduced deposit on 7 night and longer cruises doesn't exactly raise red flags for me. Prices and demand seem plenty healthy on the sailings I am looking at for 2017.

 

Agree 5yrs is an unusually long time to wait after announcing a new build, but shouldn't be surprising with all the other money Parks and Resorts has going towards Shanghai, Avatar, Star Wars/ Toy story lands, etc. Plus 2021 could have been the earliest slot they could get at Meyer Werf. There are plenty of ships and options already on the books into 2020 and beyond.

[eroller]

I don't know... 20% off on a handful of sailings and a reduced deposit on 7 night and longer cruises doesn't exactly raise red flags for me. Prices and demand seem plenty healthy on the sailings I am looking at for 2017.

 

Agree 5yrs is an unusually long time to wait after announcing a new build, but shouldn't be surprising with all the other money Parks and Resorts has going towards Shanghai, Avatar, Star Wars/ Toy story lands, etc. Plus 2021 could have been the earliest slot they could get at Meyer Werf. There are plenty of ships and options already on the books into 2020 and beyond.

 

 

No red flags for me either. Prices on DCL generally speaking are as high as I've ever seen them, which means demand is very strong. Ships are going out full even at these very high per diems. Other cruise lines would kill to get the per diems that DCL does. Yields are obviously strong enough that parent company Disney feels that two new ships are warranted.

 

I'm very glad Disney is once again using Meyer-Werft instead of "Tincantieri". Meyer-Werft is known for quality construction and is a perfect fit for Disney. They are a busy yard though with limited construction capacity. I'm guessing the slots five years away are the soonest that Meyer-Werft was able to guarantee delivery. Disney probably had no choice unless they went with another shipyard. I'm guessing they didn't want to because of their great relationship with Meyer-Werft.

 

DCL survived as a two-ship fleet for a long time, then a 4-ship for a long time. They are not one to rush. Measured growth seems to be their strategy and I think it's a good one. Overbuilding only leads to deterioration of yields which is what so many other cruise lines are experiencing.

Edited March 7, 2016 by eroller

[Winston Wolf]

I believe that the goal of Carnival or NCL is to get people on board at a cheap price and then make their money on the add on items/upcharge restaurants' date=' etc. after boarding.[/quote']

 

and casinos

[ducklite]

The Chinese are also pushing the en premiere pricing of First Growths and Cults to the point of ridiculous, but that doesn't mean every family has interest in that. I also mentioned the Japanese market which has always had a strong love affair with Disney, and Korea is another market with a growing segment of citizens with plenty of disposable income. Add in Aussies and Kiwis who might find travel to an Asian embarkation point more palatable than the 12+ hours to Long Beach, and a possible market share from Dubai and you've got a pretty good chance of filling ships at each sailing. On top of that you might find Americans, Canadians, and Brits booking those sailings for some change of pace in ports. Many have been quite vocal about being pretty tired of the same old, same old.

[amscene1]

The Chinese are also pushing the en premiere pricing of First Growths and Cults to the point of ridiculous, but that doesn't mean every family has interest in that. I also mentioned the Japanese market which has always had a strong love affair with Disney, and Korea is another market with a growing segment of citizens with plenty of disposable income. Add in Aussies and Kiwis who might find travel to an Asian embarkation point more palatable than the 12+ hours to Long Beach, and a possible market share from Dubai and you've got a pretty good chance of filling ships at each sailing. On top of that you might find Americans, Canadians, and Brits booking those sailings for some change of pace in ports. Many have been quite vocal about being pretty tired of the same old, same old.

 

 

True, but they will get the magic and wonder if anything. The new ships stay here

[gatour]

In regards to China.

 

That was my first thought, due to the Disney parks.

 

However, there is gambling. When RCCL moved a ship to China they actually put the ship back into a shipyard shortly after it was built, to expand the casino.

 

Disney isn't big into gambling.

[c-cruise]

True, but they will get the magic and wonder if anything. The new ships stay here

 

That was the trend in the industry up until a couple years ago - send the older ships to Asia and Australia that the North American market was done with. Now pretty much everybody is sending new builds to Asia / Australia. Not saying Disney will do this, but I wouldn't be comfortable guaranteeing the new ships will both go into the North American market. So much can change in 5 years that its all just speculation at this point I am sure.

[eroller]

That was the trend in the industry up until a couple years ago - send the older ships to Asia and Australia that the North American market was done with. Now pretty much everybody is sending new builds to Asia / Australia. Not saying Disney will do this, but I wouldn't be comfortable guaranteeing the new ships will both go into the North American market. So much can change in 5 years that its all just speculation at this point I am sure.

 

 

This is so true, especially in the case of the Chinese. Australia still uses all second tier tonnage handed down from North America or Europe, but they will finally get their first custom built newbuild in 2019 from P&O Australia (part of Carnival Corp).

 

China is quite different than pretty much any other emerging market. They are basically demanding the newest and best right from the get go. The Chinese are not interested in clapped out second tier tonnage. Cruise lines are racing to custom build ships for China which means huge casinos, tons of shopping, and modified kitchens which can prepare authentic Chinese cuisine.

 

I would be surprised if Disney sent a ship to China year round, but if they did it would have to be one of the newbuilds to really compete. It would also have to be heavily modified to include things not typical of Disney, like a large casino , designer boutiques, and plenty of authentic Chinese food. At least that is the trend in China now. In five years is anyone's guess.

[OneParticularHarbour 71]

I haven't looked into this but am curious what the pricing is like on other lines for their China sailings? Are they comparable to their European and North American sailings? I wonder how DCL pricing would be.

[eroller]

I haven't looked into this but am curious what the pricing is like on other lines for their China sailings? Are they comparable to their European and North American sailings? I wonder how DCL pricing would be.

 

 

It's actually difficult to find pricing for the dedicated China ships. Cruise lines are not permitted to advertise or book directly, and all sales go through specific Chinese tour operators that essentially charter the ships. They sell all the tickets. My understanding is that yields for ticket sales are ok and cruise lines are satisfied, but the big money is made onboard with casino and shop revenue. Bar revenue is actually down as the Chinese don't drink much.

 

If Disney went in there without casinos and high end shops, I just don't see them being successful, at least not the way things are today.

[johnlisac]

This makes no sense. I have a friend that works for Disney cruise lines and he tells me that sales are way down from last year in part because of recent policy changes such as the new alcohol policy and lack of real adult entertainment and smoking. Why in the world would build new ships?

 

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[eroller]

This makes no sense. I have a friend that works for Disney cruise lines and he tells me that sales are way down from last year in part because of recent policy changes such as the new alcohol policy and lack of real adult entertainment and smoking. Why in the world would build new ships?

 

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I think your friend is wrong. Although Disney doesn't break down results for DCL, they fall under Parks & Resorts which is doing extremely well. Just look at Disney's quarterly results and annual report.

 

If sales were truly hurting, we would see deep discounting like you see with other lines and ships not going out full. That isn't happening.

 

Apparently Disney is happy enough with the results they are willing to finance two newbuilds.

[johnlisac]

Nope your wrong cruise line had taken a hit and yes fares are being reduced just not to the general public. They unsold staterooms are given to Travel agents in blocks.

 

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[eroller]

Nope your wrong cruise line had taken a hit and yes fares are being reduced just not to the general public. They unsold staterooms are given to Travel agents in blocks.

 

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Think what you want. The financial results tell another story and they certainly wouldn't be ordering new ships if the cruise division was doing poorly.

 

As someone that cruises often and on all the lines, I'm constantly comparing pricing. I have seen very little discounting with DCL and prices are generally high. Not saying there is no discounting, but it's minimal compared to other lines and not nearly as steep. I have yet to see DCL throw in free gratuities, a free beverage package, free internet, free shore excursions, or free specialty dining like most other lines are doing, on top of already lower rates and deep discounting. Perhaps when that happens I might be inclined to think somehow sales are hurting, along with reading it in the quarterly results. Hasn't happened yet.

 

Here is a excerpt from the Q1 2016 financial report from Disney. Notice the part regarding higher ticket prices for the parks and Disney Cruise Line, which have resulted in higher earnings.

 

Parks and Resorts revenues for the quarter increased 9% to $4.3 billion and segment operating income increased 22% to $981 million. Operating income growth for the quarter was due to an increase at our domestic operations, partially offset by a decrease at our international operations. Parks and Resorts operating results benefited from the timing of our fiscal quarter end relative to the New Year’s holiday. The current quarter included one week of the holiday period that fell in the second quarter of the prior year.

 

Higher operating income at our domestic operations was due to guest spending and attendance growth, partially offset by higher costs. The increase in guest spending was due to higher average ticket prices at our theme parks and cruise line, increased food, beverage and merchandise spending and higher average hotel room rates. Cost increases were due to labor and other cost inflation, new guest offerings, higher depreciation associated with new attractions at Walt Disney World Resort and expenses incurred for the dry-dock of the Disney Dream in the current quarter.

Edited March 8, 2016 by eroller

[johnlisac]

Well I guess there's no get thru to some people. Just ask yourself why the new ship are going to be ported in other countries. And this it I'm done next subject.

 

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[Ex techie]

Well I guess there's no get thru to some people. Just ask yourself why the new ship are going to be ported in other countries. And this it I'm done next subject.

 

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John, I would be interested in your views and opinions on where you think or hear that the new ships will be home ported.

 

ex techie

[johnlisac]

Like I said I know someone who works for the cruise line. And yes on the corporate level and that is the plan.

 

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[Ex techie]

Like I said I know someone who works for the cruise line. And yes on the corporate level and that is the plan.

 

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I know, I was given info a few years back that the Magic would be sent to Asia and used as a floating hotel docked or cruising out of Hong Kong to tie up with DHK.

 

I'm not debating you, just interested in your opinions and thoughts.

 

ex techie

[Ex techie]

Think what you want. The financial results tell another story and they certainly wouldn't be ordering new ships if the cruise division was doing poorly.

 

As someone that cruises often and on all the lines, I'm constantly comparing pricing. I have seen very little discounting with DCL and prices are generally high. Not saying there is no discounting, but it's minimal compared to other lines and not nearly as steep. I have yet to see DCL throw in free gratuities, a free beverage package, free internet, free shore excursions, or free specialty dining like most other lines are doing, on top of already lower rates and deep discounting. Perhaps when that happens I might be inclined to think somehow sales are hurting, along with reading it in the quarterly results. Hasn't happened yet.

 

Here is a excerpt from the Q1 2016 financial report from Disney. Notice the part regarding higher ticket prices for the parks and Disney Cruise Line, which have resulted in higher earnings.

 

eroller,

Without QOQ or YOY breakdowns for each part of the parks and resorts portfolio, it is impossible to know the impact any changes on DCL have made.

 

Using blanket statements such as increased spending due to higher ticket prices does not show any losses due to higher ticket pricing.

 

For example and keeping figures low for ease, if in 2015 Q1 Guests spent $1 per head on a Dream cruise sailing full that's $4000.

 

If the Dream sails with 3000 Guests spending $1.10 but they have 1000 spaces not filled or discounted for last minute cruises and the spend per head is only 90c, the increase overall is $200 above the $4000.

 

Therefore the statement made of higher earnings is true, but the price point exceed demand and they had to discount to achieve full sailings at a reduced profit of $4200 vs. the $4400 they would have made if that price achievable?

 

I'm surprised they have vacant veranda sailings on the Dream during Easter weekend, when I would have thought that sailing would have been sold out many months ago.

Prices and bookings numbers for 2017 are nothing to go by until past the PIF date and people haven't backed out and received their deposit back (Concierge excepted)

 

ex techie

[johnlisac]

eroller,

Without QOQ or YOY breakdowns for each part of the parks and resorts portfolio, it is impossible to know the impact any changes on DCL have made.

 

Using blanket statements such as increased spending due to higher ticket prices does not show any losses due to higher ticket pricing.

 

For example and keeping figures low for ease, if in 2015 Q1 Guests spent $1 per head on a Dream cruise sailing full that's $4000.

 

If the Dream sails with 3000 Guests spending $1.10 but they have 1000 spaces not filled or discounted for last minute cruises and the spend per head is only 90c, the increase overall is $200 above the $4000.

 

Therefore the statement made of higher earnings is true, but the price point exceed demand and they had to discount to achieve full sailings at a reduced profit of $4200 vs. the $4400 they would have made if that price achievable?

 

I'm surprised they have vacant veranda sailings on the Dream during Easter weekend, when I would have thought that sailing would have been sold out many months ago.

Prices and bookings numbers for 2017 are nothing to go by until past the PIF date and people haven't backed out and received their deposit back (Concierge excepted)

 

ex techie

Yeah what he said. Lol

 

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[eroller]

Well I guess there's no get thru to some people. Just ask yourself why the new ship are going to be ported in other countries. And this it I'm done next subject.

 

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Personally I don't think even DCL has made a decision about where the two new ships will be home ported. It's five years away and generally cruise lines don't make specific deployment decisions that far in advance. There are too many variables that impact the global travel market to lock in a deployment strategy that far in advance. The only exception would be if they specifically design one of the new ships for deployment in China. That would mean casinos, high end retail, fewer bars, and kitchens that specialize in preparing authentic Chinese cuisine. Certainly not typical of a Disney Cruise experience today.

[johnlisac]

Yeah what he said. Lol

 

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And I also had no problem booking a veranda room for our trip in Aug pretty much had my pick.

 

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