Disney Cruise Line navigates around high fuel costs
No part of Walt Disney Co.'s vast corporate empire has been buffeted more by record oil prices than the 10-year-old Disney Cruise Line.
Although Disney has never broken out separate financial results for its cruise line, which has its headquarters in Celebration, company executives recently disclosed to investors that they expect its fuel bill will grow by $20 million this year.
It is a substantial increase for a cruise line of just two ships. And it has Disney making adjustments.
Those adjustments include possible changes to the company's cruise itineraries. Disney executives are studying their existing schedules in hopes of finding more efficient sailing routes between ports that stretch from St. Maarten in the eastern Caribbean to Cozumel just off Mexico's Yucatan Peninsula.
"All the ports would remain the same. We're just looking at whether it would make sense to rearrange the order," said Disney Cruise Line spokeswoman Christi Erwin Donnan.
Disney has already made one notable schedule change. The company's four-night Caribbean sailings were rerouted this summer to include two stops at the company's private Bahamian island Castaway Cay, rather than one stop at the island and one day sailing at sea.
But Disney, which announced the double-dip Castaway Cay cruises in December, says that change was made solely because guests were clamoring for more time on the island.
That particular schedule change "does not represent a fuel savings for us," Donnan said.
Disney is also making changes to the ships themselves. Next month, for instance, the 2,700-passenger Disney Magic cruise ship is scheduled to spend nearly three weeks in a Norfolk, Va., dry dock for maintenance. While it is there, the company intends to cover the ship's hull with a sleek new coating designed to reduce resistance as it sails through the water.
The company had the same coating applied to the Disney Wonder in October 2006, a move that earned Disney plaudits from Conde Nast Traveler as part of that magazine's "2008 World Savers Awards."
Bob Simonson, a cruise- industry analyst with William Blair & Co., said such coatings are becoming an increasingly popular way for cruise operators to reduce fuel consumption.
"Normally, you just paint the hull. But over time, you get barnacles and all kinds of buildup on the hull, and that creates friction, which takes more fuel to move the ship through the water," Simonson said. The new coating "is very slippery, so things don't get stuck on it."
Like other cruise lines, Disney has also reduced its cruising speeds so its ships burn less fuel. The slower speeds allow cruise ships to reduce the number of engines they use at sea.
The fuel savings are well worth the longer travel times between ports of call, particularly because cruise ships already have plenty of ways to keep passengers entertained — and spending money — onboard, said Warren Miller, a leisure-industry analyst with Morningstar Inc.
"If it means getting into port an hour later, I think they're willing to sacrifice that," Miller said.