Why Disney is buying the unfinished ship from MV Werften

The ship, which is 75 percent complete, was intended for the Asian market by the former MV owner, the Chinese cruise group Genting Hong Kong. The “Global Dream” was originally intended to accommodate around 9,500 people, making it the world’s largest ship in terms of passenger numbers. During the pandemic, however, the MV shipyards and later the parent company went bankrupt.

The group not only operates amusement parks and is active in the streaming market with its Disney+ platform, for example. The entertainment giant already owns five cruise ships, and the “Global Dream” would be the sixth. The renovation is scheduled to be completed in 2025. Disney plans to rename the ship and base it outside of the Americas, the company announced.

In the cruise industry, Disney is a small player. Market leader Carnival, to which the ships from Costa or Aida belong, counted 95 ships at the beginning of the year. The Royal Caribbean Group with its brands Tui or Hapag-Lloyd Cruises has 60 ships.

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Disney wants to differentiate itself from the competition with a focus on families. Many cruises begin in Florida, travel through the Caribbean and call at the company’s Castaway Cay. Disney characters such as Mickey Mouse play an important role on the ships, and in-house films and series are also shown.

Entered the cruise business in 1998

The group entered the cruise business in 1998. The group does not give business figures for this. Disney’s resort and vacation segment, which includes ships and hotels, accounts for eight percent of total sales. The division has been one of the fastest growing areas in recent quarters.

“Disney is very successful in expanding its business profitably from theme parks to the management of the surrounding restaurants and hotels,” says Francois Godard, analyst at the consulting firm Enders Analysis, the Handelsblatt. The same basic idea applies to the ships, here too families are in contact with the entire Disney universe.

“The beauty of the business model is that it has leverage outside of the video and theme park businesses,” says Godard. Disney is ahead of the competition with this approach.

Streaming expert Bernd Riefler sees Disney’s cruise strategy as an addition to its core business. “Disney diversifies its sources of income in this way and can address customer groups differently, which can then also be enthusiastic about other offers from the group,” says the founder of the Munich analysis house Veed Analytics.

Space for 6300 passengers and 2300 crew members

Disney is investing in a growing market. The international cruise association CLIA announced that demand had already exceeded the pre-crisis level by the end of September. Due to the restrictions imposed by the pandemic, the number of guests worldwide fell by 81 percent between 2019 and 2020.

The “Global Dream” was actually planned as a floating casino. Disney is having the 342 meter long and 46 meter wide ship converted into a family steamer. It will then offer space for 6,300 passengers and 2,300 crew members on 20 decks.

Disney does not comment specifically on the purchase price and the amount of the conversion costs. The blog entry suggests that the sum should be well below the estimated value of the ship of 1.3 to 1.6 billion euros. In view of the bankruptcy of the shipyard, Disney got a “good deal” from the creditors. Even with the cost of the conversion, Disney wrote that it’s a “quick and affordable way” to expand the fleet.

Great importance for the shipbuilding location Mecklenburg-West Pomerania

The sale of the cruise giant is of great importance for the shipbuilding location Mecklenburg-West Pomerania. After the insolvency of the MV Werften Group in January, 900 former employees are still in a transfer company. This was last extended until the end of November.

Now they have a medium-term perspective with the planned prefabricated building by the Papenburg Meyer shipyard at the Wismar site. “An impending dismantling would not have been a good option for the shipyard and the industry,” said CLIA Germany boss Helge Grammerstorf. The new solution would “guarantee another piece of the future for many shipyard employees”.

Meyer-Werft is already doing good business with Disney. The Papenburg-based company has already built three ships for the Florida company, and according to Disney, two more are being planned.

Disney recently disappointed its investors with its quarterly figures. The investment costs for setting up the streaming business in particular had a negative impact. Net income rose just 1 percent to $162 million. In addition, it was recently announced that Disney is planning a hiring freeze. Employees are also to be laid off, the extent of which is not yet known.

More: A new start with armaments: Thyssen-Krupp takes over MV Werft and switches to submarines

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