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.
Disney could grow again now. I have a smaller position in the portfolio and have long-term confidence in the company, so we'll see how the company does in 2025.
I have a smaller and smaller position and the current growth makes me happy, so I hope this performance now $DIS lasts for a while.
Disney is doing quite well right now and it looks like things are picking up and the company will start to do well again.
I have Disney stock and will put a hold on it. Ships are an interesting but complicated business. Since they've had practice at it, they might be able to pull it off.
Disney is a great company and the business model isn't bad at all, but it's just obvious that the best company in this sector is Netflix