Disney's Gamble: More Cruise Ships, Parks, and Premium Prices

The Walt Disney Company has two key bets regarding its cruise line and theme parks. It believes it can nearly double its cruise ship capacity while sustaining premium pricing. It also thinks that international visitors will continue flocking to its properties, especially in Asia.

While both goals carry execution risks, early signals are promising. Disney's Parks and Experiences unit posted a 30% revenue bump over five years, reaching $34 billion.

"Bookings are up in the summer right now," Hugh Johnston, chief financial officer, said Wednesday on an earnings call.

The company has more advance bookings than at this point last quarter. That news comes despite price hikes, such as Disney boosting single-day theme park tickets by up nearly 6%.

Disney Cruise Line Buildout

Disney is nearly doubling its fleet, adding six ships by 2031. The expansion will test whether the company's premium pricing power can hold up at scale. 

In October 2024, the company debuted Disney Treasure, a 140,000-ton vessel with 1,250 staterooms.

"Disney Treasure is off to a spectacular start," Johnston said, noting strong room bookings and guest satisfaction ratings "very much in line with the rest of our ships."

The ship is already receiving guest satisfaction ratings comparable to the rest of Disney's fleet and is expected to achieve profitability in its first quarter of operation.

"Certainly, in terms of selling out the rooms, we've done terrifically well," Johnston said.

Two more ships are slated for 2026, including the supersized Disney Adventure at 200,000 tons.

Beyond these additions, Disney has four more cruise ships under contract for construction between 2027 and 2031.

A novel partnership with Oriental Land Co. (OLC) to operate Japan-based cruises by 2029 marks Disney's first international licensing of its cruise brand. The move opens new revenue streams but potentially risks quality control.

A Bet on Private Islands

To complement its expanding fleet, Disney has unveiled new private island destinations. Disney Lookout Cay at Lighthouse Point, a 600-acre island in Eleuthera, The Bahamas, opened in June 2024, offering guests an exclusive tropical retreat.

This joins Disney’s Castaway Cay, a long-standing private island experience that remains a hallmark of Disney’s cruise offerings. Disney joins Royal Caribbean and Carnival in believing that If your customers are leaving your ships to spend money on land excursions and activities, you should own the beaches and attractions.

More profitable operations would be helpful as a cushion against one-time cost hits. In the fourth quarter, the domestic unit's operating income fell 5% year-over-year, impacted by what was described as a "9 percentage-point adverse impact" from hurricanes and pre-opening expenses related to its newest cruise ship.

Disney's Pricing Power

Higher ticket prices and surging international attendance helped counter domestic headwinds from severe weather and the cost of cruise line investments.

In 2024, Disney reported a per-person spending growth of 7% on park admissions, indicating the guests have tolerated recent price hikes.

Even merchandise, food, and beverage sales ticked up 4% despite some increases in prices. Premium offerings such as Lightning Lane access and exclusive experiences were popular.

Spending on merchandise, food, and beverage segment also rose.

Revenue from resorts and vacations also rose 5% year-over-year, benefiting from higher hotel occupancy rates and increased room rates.

Despite the domestic challenges, Disney believes the overall Parks & Experiences division will grow between 6% and 8% this year, CFO Hugh Johnston told analysts. 

More Theme Parks Worldwide

Strategic investments in theme parks internationally have shown good early signs.

In the latest quarter, Disney’s theme parks saw robust growth, with attendance surging 9%. Shanghai Disney Resort and Tokyo Disney Resort were key drivers of this momentum, bolstered by new attractions and a rebound in global tourism.

Hong Kong Disneyland's new World of Frozen attraction is pulling in crowds, while Paris preps for its own Frozen-themed expansion in 2026.

Disney is also carefully expanding its premium Lightning Lane offering across parks, though executives stressed they're taking a measured approach.

"We are marketing it very gently initially," Johnston said, emphasizing the importance of maintaining experience quality for all park guests.

International operations provided a bright spot, with operating income jumping 28% in the quarter compared to the same period last year.

One wild card that executives didn't discuss is if geopolitical surprises might hurt some international visiors interest in visiting the best-known American brands.

Yet over five years, the Experiences division has had a good track record of navigating many surprises. The unit is more profitable now, with a 36% increase in operating income, even though the cost of operations has risen, largely due to inflation, higher labor costs, and increased spending on new technology​.