* Disney Dream is company's third cruise ship
* Bigger ship offers chance of higher profit margins
* Fourth Disney ship expected to set sail in 2012
By Barbara Liston
ORLANDO, Fla., Jan. 4 Walt Disney Co. rolled
out a new 4,000-passenger cruise liner on Tuesday, joining
other cruise operators in adding bigger and potentially more
profitable ships to their fleets.
Disney (DIS.N), a niche player in the international retail
cruise business, operates several ships catering to the family
The new Disney Dream, which cost more than $900 million and
features a high-speed water slide that takes riders out over
the side of the ship and back, docked in Port Canaveral in
central Florida in preparation for its Jan. 26 maiden Caribbean
The Dream is the third ship in the Disney Cruise Line fleet
following the launch of the Disney Magic and the Disney Wonder
in the late 1990s. A fourth ship, the Disney Fantasy, is under
construction and scheduled for its maiden voyage in March
"The bigger ships take you in the direction of a better
return on your investment," said Janet Brashear, an analyst at
Bernstein Research. "Even though Disney is a small player, they
outpunch their weight by the fact they have a strong known
"If you look at the pricing on Disney ships versus others,
they're pricing above where other ships might price," she
The company's new liners are about 50 percent bigger than
the original Disney ships and are scheduled to travel on
popular Caribbean routes with stops at Disney's private island
in the Bahamas, Castaway Cay.
Like their predecessors, the new cruise ships are designed
to evoke the golden age of cruising, with early 20th-century
Art Nouveau and Art Deco styling. Passengers enjoy larger than
average rooms and family-friendly features along with
Over the last year-and-a-half, leading cruise lines,
including Carnival Corp & Plc (CCL.N)(CCL.L) and Royal
Caribbean Cruises Ltd (RCL.N), have rolled out bigger ships.
Royal Caribbean's Oasis of the Seas, which set sail in late
2009, is the world's largest, capable of carrying more than
6,000 passengers and over 2,000 crew members. The same company
added a twin, the Allure of the Seas, last year.
Michael Driscoll, editor of the Cruise Week newsletter,
said the new Disney options will help lure back returning
"It gives their repeats (customers) something different to
do. Their kids are older. It's a logical way for them to
progress," he said.
While some other cruise lines have added ships rapidly and
saturated their markets, resulting in ticket price cuts,
Driscoll described the Disney expansion as conservative.
However, Brashear said Disney, whose movie characters are
big children's attractions, can expect to face increased
competition in their niche from other cruise carriers.
"Other carriers are introducing characters to compete with
the Disney model," she said. "But Disney performs extremely
well on brand."
(Additional reporting by Kevin Gray; Editing by Kevin Gray and