Disney's expansion in the cruise ship segment: Potential to double revenue by 2027

Company The Walt Disney Company $DIS plans to significantly expand its cruise fleet and double revenue from this segment by 2027. Cruises are becoming a key part of the company's growth strategy, with the goal of competing with flagship segments such as ESPN.

Key expansion points:

1. Rapid fleet growth:

- Disney Treasure Departs December 21, 2024 with capacity 4,000 passengers a 1,555 crew members.

- More will be added by 2031 seven new shipsincreasing the number of cabins from 5 500 to more than 10 000 by 2026.

2. Increasingprofitability of $DIS:

- High ship occupancy and a focus on family vacations are supporting margin growth.

- Disney Treasure first cruise prices start at $8,511 per person and all cabins are sold out, signaling strong demand.

3. Experience segment as a growth engine:

- Cruises are becoming an important part of the experiences division, which also includes theme parks and consumer products.

- Revenue growth in this division is expected to be 6-8 % per year from 2025.

Financial Outlook:

According to analysts Morgan Stanley:

- Cruise revenues are expected to reach USD 9 billion by 2032.

- Operating profit could reach USD 2.3 billionwhich is comparable to the results of the sports segment in 2023.

- Operating margins, which prior to the pandemic ranged between 20-25 %are set to rise again thanks to expansion and optimisation.

Challenges and opportunities:

- Competitive advantage: High return on investment and unique experiences linked to well-known Disney brands.

- Potential risk: Potential decrease in demand for theme parks due to price increases may be offset by an increase in demand for cruises.

Conclusion:

$DIS is focused on diversifying its portfolio through cruise ships, which is not only a strategic move to increase revenue but also a significant source of future profitability. With planned investments and strong demand for experiential vacations, the cruise segment is well on its way to becoming one of the company's growth pillars.