Where's the Wonder Nov-Dec 2022?

[Ravenclaw78]

Very good point because 1 almost every single day is not enough! Day six looks like the sad relation in my plans with nothing booked!



So one of the cruise lines is doing a round trip Panama cruise through just the first one or two docks I believe and back again. Its 10 nights from Miami so there are options for ones that don't do the full transit just not sure if this is something that happens much from the west coast.

The reason it only happens from the East Coast is the same as the reason why they do it at all instead of just sailing through the other set of locks. Those lines have very few ships left that are short enough to fit under the Bridge of the Americas. IIRC, Disney has designed the Triton class to be just a few inches shorter than the Dream/Fantasy so that it will fit under the bridge if they ever need it to.

 

[Ravenclaw78]

Yep! Kids on break, bring the whole fam without having to pull the kids from school two weeks. BUCKETS OF CASH.

I'm skeptical about that, honestly. A huge draw for that cruise is precisely that the ship ISN'T full of people bringing the whole fam. I think they'll lose more bookings than they'd gain by making the timing more accessible, especially given a 14-night cruise is considerably more expensive than many DCL families with multiple kids can afford, doesn't (at least for the past few years, hopefully they'll switch back) stop at Castaway Cay, and much more likely to bore their kids (and maybe the parents too) to death without the constant go-go-go of the short Caribbean cruises with port stops every day. (Our kid loves having that many at-sea days to just chill, but we're a much slower-paced family than most.)

 

[_auroraborealis_]

I'm skeptical about that, honestly. A huge draw for that cruise is precisely that the ship ISN'T full of people bringing the whole fam. I think they'll lose more bookings than they'd gain by making the timing more accessible, especially given a 14-night cruise is considerably more expensive than many DCL families with multiple kids can afford, doesn't (at least for the past few years, hopefully they'll switch back) stop at Castaway Cay, and much more likely to bore their kids (and maybe the parents too) to death without the constant go-go-go of the short Caribbean cruises with port stops every day. (Our kid loves having that many at-sea days to just chill, but we're a much slower-paced family than most.)

A huge draw for the current version of the PC cruises is the reduced kid load. There's only the one each year, so I think you'd see a new audience if there were sailings at more advantageous times.

I'm not saying "don't do a PC cruise in shoulder season" as DCL's approach. I'm saying add PC cruises and reach new groups for buckets o' cash, especially if no one is sure it's long term. There are a lot of families who cruise concierge and the suites, so money is definitely out there. There are also so many families who talk about how much their kids love the clubs who would be just fine with more sea days to park the kids in the clubs.

 

[Intr3pid]

For Disney, the full transit cruises are a necessity to make Alaska work with a small fleet. Their timings mean the load factors are low, and Disney doesn't really make much money (if any) on them.

If they schedule longer cruises in the holiday season and charge the same price per night as shorter cruises (their opportunity cost), they will price most families out. This is specially true for the Caribbeans where there are so many cheaper options. (Unlike Europe in the summer when everything is expensive.)

 

[iannovich]

For Disney, the full transit cruises are a necessity to make Alaska work with a small fleet. Their timings mean the load factors are low, and Disney doesn't really make much money (if any) on them.

I have become more and more convinced lately that Disney doesn't have any trouble making money on any cruise. Their expenses shouldn't be significantly more than any other cruise line, but they charge much more. To me that says that they can sail at an even lower capacity than the other lines, and still do just fine (understanding that Disney doesn't have a Casino, which definitely is a factor for those other lines).

On top of the cruise fares, getting more people onboard equals more Mixology, Palo, Bibbity Bobbity, DVC, and Bingo dollars, so 'Special Offer' fares to get more people on board mean that they'll make back any 'discounts' they seem to be offering. I think Disney does just fine and wouldn't necessarily need any Panama Canal cruises to offset any West Coast cruises, least of all the Alaskan itineraries.

 

[Intr3pid]

I have become more and more convinced lately that Disney doesn't have any trouble making money on any cruise. Their expenses shouldn't be significantly more than any other cruise line, but they charge much more. To me that says that they can sail at an even lower capacity than the other lines, and still do just fine (understanding that Disney doesn't have a Casino, which definitely is a factor for those other lines).

On top of the cruise fares, getting more people onboard equals more Mixology, Palo, Bibbity Bobbity, DVC, and Bingo dollars, so 'Special Offer' fares to get more people on board mean that they'll make back any 'discounts' they seem to be offering. I think Disney does just fine and wouldn't necessarily need any Panama Canal cruises to offset any West Coast cruises, least of all the Alaskan itineraries.

Mostly incorrect. And here is simple math behind it.

To start, the load factors on PC transit cruises are barely above 2 guests per room. On an October cruise in out of San Diego, they will easily be above 3 - if not more.

The EBPC cruise fare (minus taxes) for a verandah is about $4,500 pp in double occupancy, or $9,000 per room. That's about $650 total per night per room.

A similar Mexico cruise fare in October for 3 guests in a room - using the additional load factor - is $2,800 per room but for just three nights. That's about $930 total per night per room.

Most of the PC transit cruisers are Platinums and Golds using OBB discounts, so that's another 10% off those transit fares. Most of the 3-night cruisers are first timers or Silvers, and definitely those not using any discounts. Those first timers also splurge a lot more on onboard activities. Photos, excursions, boutiques, and everything else you noted.

The net effect is that Disney gets anywhere from 30% to 50% less revenue per night on their transit sailings than those out of, say, San Diego (or Florida).

Their parks/experiences division (of which DCL is a part) has a 26% operating profit margin (pre COVID). All that margin is gone on the transit cruises! Doesn't necessarily mean they are bleeding money on the transits - maybe because the cruises are higher-margin than the parks in the first place - but the opportunity cost is huge. If they can, they WILL try and avoid the transits.

BTW, Disney's ship operating costs are MUCH higher than those of other cruise lines. Entertainment, characters, theming, IP, training, sheer number of activities, fireworks, events, and the list goes on. Just like the parks. And a lack of casino revenue doesn't help.

 

[iannovich]

Mostly incorrect. And here is simple math behind it.

Well, I disagree with you, but I guess I was just more polite about it. I'm not calling anybody wrong. I simply have a different opinion, reached using different logic. Maybe I am wrong. That could be the case and I'm cool with that.

To start, the load factors on PC transit cruises are barely above 2 guests per room. On an October cruise in out of San Diego, they will easily be above 3 - if not more.

Which just supports my reasoning that they make more money on any given cruise than we give them credit for. If people think the San Diego cruises aren't lucrative, I think they're mistaken. All of my math is based on only 2 people per room. I admit the math is dirty.

The EBPC cruise fare (minus taxes) for a verandah is about $4,500 pp in double occupancy, or $9,000 per room. That's about $650 total per night per room.

A similar Mexico cruise fare in October for 3 guests in a room - using the additional load factor - is $2,800 per room but for just three nights. That's about $930 total per night per room.

Most of the PC transit cruisers are Platinums and Golds using OBB discounts, so that's another 10% off those transit fares. Most of the 3-night cruisers are first timers or Silvers, and definitely those not using any discounts. Those first timers also splurge a lot more on onboard activities. Photos, excursions, boutiques, and everything else you noted.

Using your math of $650 per night per room average that is roughly $568k per night or around $8m gross fare revenue for the full 14 day transit. I'll deduct your 10% Placeholder credit for absolutely everyone onboard. That leaves $7.2m in just gross fare revenue per transit. I'm not going to buy that Disney ever feels 'forced' to transit the canal.

We're Platinum and Gold and splurge just as much as first time or Silver cruisers... I could argue that we splurge more because we actually know about all the little extras to spend money on. On my first several sailings Mixology and Palo were not even ever on my radar while I took advantage of and experienced all the free activities and the MDRs. I didn't have any clue about Rainforest Rooms or Couples Retreats. There wasn't any knowledge to say "nah, I'll skip the (free) MDR Pirate Night Menu and book Palo or Remy instead." Now I'm booking every class/tasting/experience that I can grab the literal minute that they become available us and I can't wait to drop $300 each the next time we get a chance to do Be Our Chef. We actually are both hunched over keyboards at midnight Eastern Time with a plan and strategic priorities to book: ("Did you get Palo Brunch???!!" "Got it! Did you get Mojito and Caiprihna?") and we're still finding a lot of those experiences are sold out for pre-booking before we can grab them all. That's not Silver or First Timers causing us to miss something we were hoping to book, that's another Platinum cruiser with faster fingers. That's how it was pre-covid and that held true for the two San Diego sailings we're booked on for 2021.

I specifically didn't include Excursions or Spa expenses as revenue sources, since I think Disney only gets to 'wet their beak a little' for those. #DonFanucci

The net effect is that Disney gets anywhere from 30% to 50% less revenue per night on their transit sailings than those out of, say, San Diego (or Florida).

But Disney regularly offers 30% fares to Florida residents and on top of that we cannot say that every non Panama Sailing ends up sold out, so is it really so drastic a reduction? We do know that all the last several Panama Canal cruises have been sold out, and fairly quickly. But let's say that it is so drastic: I still maintain that Disney does just fine on those sailings.

Their parks/experiences division (of which DCL is a part) has a 26% operating profit margin (pre COVID). All that margin is gone on the transit cruises! Doesn't necessarily mean they are bleeding money on the transits - maybe because the cruises are higher-margin than the parks in the first place - but the opportunity cost is huge. If they can, they WILL try and avoid the transits.

I do think they operate at a higher margin and I just don't believe that the Panama Canal Cruises are not profitable to them. Based on how the Canal cruises continually sell out, it says to me that if they needed to, they would raise the fares until they found the sweet spot where they were no longer attractive and then back them off a little. That they haven't done this suggests to me that they don't need to and they're happy with them as they are.

BTW, Disney's ship operating costs are MUCH higher than those of other cruise lines. Entertainment, characters, theming, IP, training, sheer number of activities, fireworks, events, and the list goes on. Just like the parks. And a lack of casino revenue doesn't help.

I do think their operating costs are high, but I don't necessarily think that they're so much higher than any other line. With the exception of fireworks, those are all the same costs you will find on other ships. The DCL Entertainment Cast Members probably work harder though, since they double and triple up the shows, characters and events. Troll Number Three from the Frozen show is helping you get a picture with Mickey and they're not getting paid anything extra to do that, for better or worse, it's part of the gig.

 

[KVH]

Y'all should read the annual reports. Way too many wrong assumptions and some questionable guesswork here. Not to mention only one side of the equation being discussed. If no one knows what the costs are, how does anyone get to decide what is profitable?

Considering they got to keep a quarter out of every dollar they made in 2019, I'd have to think the C-suite is doing a pretty good job lately. Then again, looking at P&L history, it's as much a function of their revenue as anything. Especially since they barely broke even a decade ago and revenue to profit ratio has been variable over the years. Meaning a whole LOT of factors that no one has even thought of mentioning yet impact the numbers.

 

[iannovich]

Y'all should read the annual reports. Way too many wrong assumptions and some questionable guesswork here. Not to mention only one side of the equation being discussed. If no one knows what the costs are, how does anyone get to decide what is profitable?

Considering they got to keep a quarter out of every dollar they made in 2019, I'd have to think the C-suite is doing a pretty good job lately. Then again, looking at P&L history, it's as much a function of their revenue as anything. Especially since they barely broke even a decade ago and revenue to profit ratio has been variable over the years. Meaning a whole LOT of factors that no one has even thought of mentioning yet impact the numbers.

I have read the financial reports. I am a stockholder in Disney so I do read them and listen to the earnings calls (but I'll admit I only pay strict attention to the stuff I find really interesting, and skip the boring stuff).

DCL (by itself) made a profit of $406m on $1.6b revenue in 2019. So expenses would be about $1.2B. That's roughly 25% profit margin. He's wasn't that far off and was actually generous at 26% That means expenses are (very roughly) about 75% of gross revenue. I've admitted my math is rough and I've said that people are making assumptions about what is and isn't profitable (myself included).

I don't know if my assumptions are wrong, but for sure they are assumptions, so there's every chance that I'm 100% wrong. And all my guesswork is definitely questionable. Logical, but questionable. I own that.

DCL hasn't taken a loss since 2012 (which is when I started playing Bingo. Coincidence? Yes. It is, but still). The 2020 report is going to be something special I'm sure.

 

[KashasMom]

There are a number of cruise lines that do Panama Canal cruises as round trips from FL ports. These go through the locks on the Atlantic side, spend the day in Gatun Lake/Panama, and then go back through the same locks to the Caribbean. These cruises only require a foreign port stop, since they are closed loop, returning to the same US port. Both Holland America and Princess do these round trip from Ft. Lauderdale with stops in Central America and the Caribbean.

I think those are the partial transit cruises that only go halfway through the canal.

 

[Intr3pid]

To start, my response is to what you are writing. Not who you are. I apologize if I came across as calling you something. I am only calling out what's written!

Which just supports my reasoning that they make more money on any given cruise than we give them credit for. If people think the San Diego cruises aren't lucrative, I think they're mistaken. All of my math is based on only 2 people per room. I admit the math is dirty.

No one is saying that San Diego cruises are unprofitable. We are discussing a lack of profits on the transit cruises.

If a San Diego cruise generates $1 in revenue, it keeps about 25-30 cents in operating profit. Let's use 30 cents as the number. That is, of $1 in revenue, 70 cents are operating costs. Most of these costs are fixed. So, if a transit cruise is going to generate just 70 cents of revenue in the first place, the 70 cents of mostly fixed cost will wipe out any profit.

The only question is, whether these cruises actually incur 70 cents of cost or whether they are more profitable than the overall division. Even if they are - which we don't know - Disney makes materially more money on, say, the San Diego cruises So, their opportunity cost on the transit cruises is very high. We are talking almost a full month out of a year (EBPC + WBPC) of minimal profits, so the premium on another sailing - such as Alaska - must pay for it.

Don't mistake a "sold out" cruise for a profitable cruise. Things sell out when they are attractive to the buyer - not the seller.

Using your math of $650 per night per room average that is roughly $568k per night or around $8m gross fare revenue for the full 14 day transit. I'll deduct your 10% Placeholder credit for absolutely everyone onboard. That leaves $7.2m in just gross fare revenue per transit. I'm not going to buy that Disney ever feels 'forced' to transit the canal.

To clarify - and respectfully - I hope we understand the difference between revenue and profit. Do you think it's possible to lose money even if you are generating $7 million of revenue?

We're Platinum and Gold and splurge just as much as first time or Silver cruisers... I could argue that we splurge more because we actually know about all the little extras to spend money on. On my first several sailings Mixology and Palo were not even ever on my radar while I took advantage of and experienced all the free activities and the MDRs. I didn't have any clue about Rainforest Rooms or Couples Retreats. There wasn't any knowledge to say "nah, I'll skip the (free) MDR Pirate Night Menu and book Palo or Remy instead." Now I'm booking every class/tasting/experience that I can grab the literal minute that they become available us and I can't wait to drop $300 each the next time we get a chance to do Be Our Chef. We actually are both hunched over keyboards at midnight Eastern Time with a plan and strategic priorities to book: ("Did you get Palo Brunch???!!" "Got it! Did you get Mojito and Caiprihna?") and we're still finding a lot of those experiences are sold out for pre-booking before we can grab them all. That's not Silver or First Timers causing us to miss something we were hoping to book, that's another Platinum cruiser with faster fingers. That's how it was pre-covid and that held true for the two San Diego sailings we're booked on for 2021.

"Because I did this, everyone must do this" can be used to justify the most unrealistic of the arguments. The entire cruise industry is known for having terrible loyalty benefits. Disney specifically targets the first timers - see the 3-/4-night sailings - because they know they can squeeze more money out of them.

I specifically didn't include Excursions or Spa expenses as revenue sources, since I think Disney only gets to 'wet their beak a little' for those.

Excursions are big money makers for cruise lines. The transit cruises have very few over the 14 days - when half the cruise is sea days. Disney can do two San Diego cruises in those 7 days and bring home top coin from the excursions. And, make no mistake, that excursion markup is huge.

But Disney regularly offers 30% fares to Florida residents and on top of that we cannot say that every non Panama Sailing ends up sold out, so is it really so drastic a reduction? We do know that all the last several Panama Canal cruises have been sold out, and fairly quickly. But let's say that it is so drastic: I still maintain that Disney does just fine on those sailings.

Now, this should tell us precisely the maximum discount they are willing to offer. The 30% discount matches the margin I quoted you. Since the transit cruises fare 30%-40% lower in revenue, they are at their rock bottom.

I do think they operate at a higher margin and I just don't believe that the Panama Canal Cruises are not profitable to them. Based on how the Canal cruises continually sell out, it says to me that if they needed to, they would raise the fares until they found the sweet spot where they were no longer attractive and then back them off a little. That they haven't done this suggests to me that they don't need to and they're happy with them as they are.

Based on what facts? I provided pretty exact numbers. I can't claim to know how precisely profitable each cruise is, but there is a big difference between the two types!

I do think their operating costs are high, but I don't necessarily think that they're so much higher than any other line. With the exception of fireworks, those are all the same costs you will find on other ships. The DCL Entertainment Cast Members probably work harder though, since they double and triple up the shows, characters and events. Troll Number Three from the Frozen show is helping you get a picture with Mickey and they're not getting paid anything extra to do that, for better or worse, it's part of the gig.

Like I said, Disney's costs are materially higher.

We know the costs for the entire division, which clock considerably higher than those for other operators. (Compare with Six Flags, for example.) At the cruising level, that premium is also apparent in relative cruise fares (Disney's vs other cruise lines), so the cruise costs should follow this logic too.

--------------------

To conclude, we don't know what precise profit there is on each cruise. What we can say, however, is the panama canal/transit cruise brings in much less revenue than the others - as much as 30%-40% less. It's equivalent to the max discount Disney is willing to offer elsewhere.

That said, even if the transit cruises make minimal money (if any), they are necessary because they enable other high-margin cruises - such as Alaska in the summer.

 

[iannovich]

No one is saying that San Diego cruises are unprofitable. We are discussing a lack of profits on the transit cruises.

Respectfully, this whole thread is about what the Wonder may do this Fall, and what could possibly happen in 2022 after the currently scheduled sailings are completed.

Don't mistake a "sold out" cruise for a profitable cruise. Things sell out when they are attractive to the buyer - not the seller.

In my opinion, for any cruise that Disney allows to get to a sold out point, they're doing it at a profit. Especially given the additional onboard revenue generated by those extra guests.

To clarify - and respectfully - I hope we understand the difference between revenue and profit. Do you think it's possible to lose money even if you are generating $7 million of revenue?

Yes, I understand the difference. Understanding that difference (and how to maximize both) is precisely what allows me to splurge on DCL (and DVC/WDW/DLRP/DLR) as I do. Unfortunately, I haven't got that ABD money though...

"Because I did this, everyone must do this" can be used to justify the most unrealistic of the arguments.

Apologies if I came across as meaning that, just because I spend like crazy as a Gold or Platinum member, everyone else does too. It was actually meant as the opposite. You implied that Gold and Platinum don't spend money, while Silver and new cruisers splurge. I was simply stating that I spend far more now than I did when I was new to DCL. I'm not saying that is everyone, but I'm probably not alone.

Excursions are big money makers for cruise lines. The transit cruises have very few over the 14 days - when half the cruise is sea days. Disney can do two San Diego cruises in those 7 days and bring home top coin from the excursions. And, make no mistake, that excursion markup is huge.

Ok, I'll accept that. So add what excursions they can do to the profitability of the transit. The WBPC has 7 Port stops out of 14 days, My 5 night Baja only has 2, the 7 night Baja only has 3 ports. For the WBPC, 7 doesn't seem all that much off.

I'm not sure how you reached the conclusion that I was saying that the Transits are equal to or more profitable than the San Diego cruises. I'm simply saying that I think the Canal Cruises are profitable and Disney does not begrudge them.

To conclude, we don't know what precise profit there is on each cruise. What we can say, however, is the panama canal/transit cruise brings in much less revenue than the others - as much as 30%-40% less. It's equivalent to the max discount Disney is willing to offer elsewhere.

I'm not sure we can say that. I simply disagree. Doesn't seem like either of us is going to convince the other. No biggie.

 

[Intr3pid]

Respectfully, this whole thread is about what the Wonder may do this Fall, and what could possibly happen in 2022 after the currently scheduled sailings are completed.


In my opinion, for any cruise that Disney allows to get to a sold out point, they're doing it at a profit. Especially given the additional onboard revenue generated by those extra guests.


Yes, I understand the difference. Understanding that difference (and how to maximize both) is precisely what allows me to splurge on DCL (and DVC/WDW/DLRP/DLR) as I do. Unfortunately, I haven't got that ABD money though...


Apologies if I came across as meaning that, just because I spend like crazy as a Gold or Platinum member, everyone else does too. It was actually meant as the opposite. You implied that Gold and Platinum don't spend money, while Silver and new cruisers splurge. I was simply stating that I spend far more now than I did when I was new to DCL. I'm not saying that is everyone, but I'm probably not alone.


Ok, I'll accept that. So add what excursions they can do to the profitability of the transit. The WBPC has 7 Port stops out of 14 days, My 5 night Baja only has 2, the 7 night Baja only has 3 ports. For the WBPC, 7 doesn't seem all that much off.


I'm not sure how you reached the conclusion that I was saying that the Transits are equal to or more profitable than the San Diego cruises. I'm simply saying that I think the Canal Cruises are profitable and Disney does not begrudge them.

Honestly, the recurring words I am reading in this post are "In my opinion", "I simply disagree", "I think they are profitable".

Nothing wrong with the phrases per se; they just make it very difficult to have a fruitful discussion.

Look, profitability is about numbers. There are very few facts or numbers presented in your post. In fact, we can boil your argument down to this: "Every Disney cruise is adequately profitable because, well, it is just running. No proof needed - even if the numbers paint a different picture."

So, you are right - this is not going to convince many. You seem to be replying simply because you have dug into your position.

For example:

To this:

"To conclude, we don't know what precise profit there is on each cruise. What we can say, however, is the panama canal/transit cruise brings in much less revenue than the others - as much as 30%-40% less. It's equivalent to the max discount Disney is willing to offer elsewhere."

Your response is:

I'm not sure we can say that. I simply disagree.

Well, what exactly do you disagree with, and why? With which one (or more) of the following?

1. "We don't know what precise profit there is on each cruise."
2. "Panama canal/transit cruise brings in much less revenue than the others - as much as 30%-40% less."
3. "It's equivalent to the max discount Disney is willing to offer elsewhere."

If it's #2, you have my numbers in the prior post. Why don't you point out which ones are incorrect and why?

 

[iannovich]

Honestly, the recurring words I am reading in this post are "In my opinion", "I simply disagree", "I think they are profitable".

Nothing wrong with the phrases per se; they just make it very difficult to have a fruitful discussion.

That's just me being polite. I won't be so arrogant as to make an absolute declaration that my opinion is the only correct one. I always leave some room for the possibility that I am mistaken. It wouldn't be the first time, and will certainly not be the last.