Walt Disney (DIS.N) announced plans on Tuesday to launch a new cruise ship that will set sail from Tokyo beginning in fiscal 2028, adding a ninth vessel to the company’s growing fleet. The new ship, modeled after the Disney Wish, the largest vessel in the fleet, is a partnership with Oriental Land Company (OLC), the operator of Tokyo Disneyland. This move is part of a 10-year, $60 billion expansion of Disney’s theme parks and cruise business.
Disney currently operates five cruise ships and has plans for three others, including one that will sail from Singapore in 2025. The new Tokyo-based ship, whose name has not been revealed, will have a maximum capacity of 4,000 passengers and is expected to generate about 100 billion yen ($621.77 million) in annual sales within several years of its launch, according to OLC.
“To set sail from Japan will make Disney vacations at sea more accessible to Japanese guests, who we know are some of our biggest fans,” Thomas Mazloum, president of Disney Signature Experiences, told reporters.
The cruise line expansion coincides with a rebound in the industry following the global shutdown during the COVID-19 pandemic. The Cruise Lines International Association anticipates the number of passengers to reach 34.7 million this year, a 17% increase from 2019.
Disney’s cruise ships cater to families, a segment of the cruise market the company has tapped into effectively. “Forty percent of the people on those ships today will say, ‘The only reason I’m on a cruise ship today is because Disney’s here,’ which means we’re creating a market,” said Josh D’Amaro, chairman of Disney Experiences.
Disney’s experiences business, encompassing domestic and international parks and the cruise line, accounted for over one-third of the company’s revenue in the March quarter and nearly 60% of its operating income.
The company’s stock experienced a decline in May after Chief Financial Officer Hugh Johnston flagged “global moderation” in travel during the fiscal third quarter and other factors like higher wages and pre-opening expenses for new cruise ships and the upcoming vacation island, Lookout Cay.
UBS analyst John Hodulik noted that the expansion of Disney’s cruise capacity could help offset any weakness in the company’s domestic theme park business. Disney reported a second-quarter booking occupancy of 97% for all five of its existing ships.
In addition to the Tokyo cruise ship, Disney’s recent investments include three new areas at the Tokyo DisneySea theme park, recreating the worlds of “Frozen,” “Tangled,” and “Peter Pan,” the opening of a “Frozen” themed land at Hong Kong Disneyland, and a “Zootopia” experience in Shanghai. The company is expected to announce plans for new attractions at Disneyland in California and Walt Disney World in central Florida in August at its D23 fan convention.