Disney competes in the cruise industry which is dominated by cruise lines such as Carnival, Royal Caribbean and Norwegian. The amount of money made in the cruise industry depends on three key factors:
- The number of cruise ships operated
- The capacity and occupancy of ships
- The average spend per day on accommodation, food, beverages and entertainment
Disney currently only operates two cruise ships with 877 staterooms each. The company is expecting to introduce two more by 2012 (one in 2011 and one in 2012) with 1,250 staterooms each. Interestingly, occupancy on a cruise ship is often greater than 100% since full occupancy is based on 2 passengers per stateroom and some cabins can accommodate additional passengers. Carnival Cruises, for example, reported nearly 106% occupancy in 2008. In comparison, Disney’s average hotel occupancy is about 90% in its international resorts.
However, the number of cruise ship staterooms pales in comparison to the 29,413 hotel rooms that Disney operates worldwide as part of its parks and resorts business. The new cruise ships will hardly make an impact on the hotel revenues generated by Disney.
In fact, hotel revenues for Disney are a fraction of what the company makes on attendance for its parks and resorts. Disney’s Parks & Resorts segment constitutes about 16% of the Trefis price estimate for the company and is influenced most by two factors:
(1) number of guests
(2) per capita guest spend (admission, food, beverages, merchandise)
Make a selection above to see how much that forecast impacts Disney’s stock price.
