Ed
07-24-2007, 05:05 PM
From OrlandoSentinel.com
Disney ships may drift away from Brevard port
Jason Garcia
Sentinel Staff Writer
July 24, 2007
Nearly a decade after first setting sail, Disney Cruise Line executives are considering moving some of their operations away from Port Canaveral.
The company's inaugural contract with the Canaveral Port Authority is set to expire next summer, meaning its two ships, the Disney Magic and the Disney Wonder, could become free agents.
Representatives on both sides say they have begun negotiating a possible extension.
"We are having some discussions about the longer term," said Stan Payne, Port Canaveral's chief executive officer.
Disney officials say they have been pleased with their tenure at the Brevard County port, which sits just 60 miles from Walt Disney World and where the company waded into the industry by packaging three- and four-night Caribbean cruises with stays at its mega-resort.
But with fuel prices surging and the company planning to double the size of its fleet to four ships by 2012, they say Canaveral is no longer the only port that makes sense for their growing cruise line.
Tom Wolber, Disney Cruise Line's senior vice president of operations, said competing ports in Miami and Fort Lauderdale "are obviously other alternatives to be considered."
"As we are in negotiations, we look at all the potential opportunities that are out there. And our business model has changed over time," Wolber said. "There are pros and cons to each one."
Disney's flexibility
Disney's original deal with Port Canaveral included a number of perks.
Agreed to in May 1995, the terms required Port Canaveral to build a $26.2 million terminal to Disney's exact specifications -- Disney representatives had the right to inspect and order changes to blueprints at multiple points throughout the design stage.
Disney paid about $7.5 million last year to the port in dockage, parking and other fees. Port officials also say Disney and other big cruise lines bring millions in related spending, creating everything from concession sales to jobs.
What's more, the contract also gives Disney exclusive access to the terminal provided its ships make at least 150 calls a year, an obligation it has so far met. That prevents rival cruise ships that call on Canaveral from using Disney's terminal. It's the only time Port Canaveral has made such made an arrangement with a multiday cruise line.
Disney is likely to seek similar concessions as it discusses new terms with the port.
Payne said preliminary talks have focused on what improvements Canaveral must make to accommodate the company's two new ships -- 122,000-ton liners that will each be two decks taller and about 45 percent larger than the Magic and the Wonder.
The work will almost certainly entail millions of dollars' worth of upgrades around Disney's terminal, Payne said, from widening gangways to expanding parking lots.
"It's just a matter of planning both shoreside for a larger ship and landside for more passengers," Payne said.
Payne also expects Disney to seek a lower number of minimum visits its ships must make in order to maintain its exclusive terminal access and give the company more flexibility.
Disney appears in no rush to announce its plans. Its current deal with Port Canaveral includes options -- at Disney's sole discretion -- to extend by one year for each of the next 40 years. And the company has tacitly signaled its plans to extend at least once by accepting bookings for cruises out of Canaveral throughout 2008.
Maintaining ties
Analysts say there is almost no chance Disney would move completely out of Port Canaveral. It is, after all, the closest port to Walt Disney World.
But they do say there is a possibility the company could choose to move at least one of the ships and that it is unlikely, when the two new vessels arrive in 2011 and 2012, that they would position three at Port Canaveral.
Sailing out of Brevard County has its drawbacks. At about 200 miles north of Fort Lauderdale's Port Everglades and even farther from the Port of Miami, Port Canaveral is much farther from the Caribbean, where Disney owns an island dubbed Castaway Cay.
"With fuel prices what they are, it's a significant cost to sail that extra couple hundred miles on every cruise," said Robert LaFleur, a tourism-industry analyst with the Susquehanna Financial Group. "You're probably talking thousands and thousands of dollars on every cruise."
Others say that as Disney has become more established in the cruise industry, it is catering more to sophisticated cruisers and less to customers who want to couple short cruise trips with visits to Disney World.
Indeed, Disney Cruise Line has already experimented with itineraries on the West Coast -- near Disneyland in Anaheim, Calif. -- and in Europe. The Magic is spending this summer sailing 10- and 11-day Mediterranean cruises out of Barcelona, Spain.
"The Disney brand and franchise is clearly international in scope, and, as they have become more experienced in their operating of a cruise line and a fleet, this would translate very nicely to Europe and, at a point down the road, Asia," said David Leibowitz, an analyst with Burnham Securities.
Top officials at both the Port of Miami and Port Everglades say they have not seriously discussed hosting a ship with Disney.
Marilyn Green, the former cruise editor at Travel Trade magazine, said many industry watchers expect Disney to initially station its new, larger ships at Port Canaveral -- at least until a widening of the Panama Canal is completed -- while the two older ships are deployed to the West Coast and Europe. {emphasis added}
Rena Langley, a spokeswoman for Disney Cruise Line, said Port Canaveral will remain an important base for the company.
"We think it's one of the best terminals in the world," she said, though she added, "We're always in discussions with Port Canaveral on how to raise the bar."
Sentinel staff writer Beth Kassab contributed to this report. Jason Garcia can be reached at [email protected] or 407-420-5414.
Copyright © 2007, Orlando Sentinel
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It's important to note that this is coming to light at a time when Disney is beginning negotiations with the port authority over a new contract; it could just be that Disney is making noise to get the port authority's attention. Personally, I can't see them leaving their present ideal location.
I found the one paragraph interesting - both new ships operating out of Port Canaveral, one of the older ships out of California, and the other older one operating in Europe. Sounds very possible. Stay tuned........
Disney ships may drift away from Brevard port
Jason Garcia
Sentinel Staff Writer
July 24, 2007
Nearly a decade after first setting sail, Disney Cruise Line executives are considering moving some of their operations away from Port Canaveral.
The company's inaugural contract with the Canaveral Port Authority is set to expire next summer, meaning its two ships, the Disney Magic and the Disney Wonder, could become free agents.
Representatives on both sides say they have begun negotiating a possible extension.
"We are having some discussions about the longer term," said Stan Payne, Port Canaveral's chief executive officer.
Disney officials say they have been pleased with their tenure at the Brevard County port, which sits just 60 miles from Walt Disney World and where the company waded into the industry by packaging three- and four-night Caribbean cruises with stays at its mega-resort.
But with fuel prices surging and the company planning to double the size of its fleet to four ships by 2012, they say Canaveral is no longer the only port that makes sense for their growing cruise line.
Tom Wolber, Disney Cruise Line's senior vice president of operations, said competing ports in Miami and Fort Lauderdale "are obviously other alternatives to be considered."
"As we are in negotiations, we look at all the potential opportunities that are out there. And our business model has changed over time," Wolber said. "There are pros and cons to each one."
Disney's flexibility
Disney's original deal with Port Canaveral included a number of perks.
Agreed to in May 1995, the terms required Port Canaveral to build a $26.2 million terminal to Disney's exact specifications -- Disney representatives had the right to inspect and order changes to blueprints at multiple points throughout the design stage.
Disney paid about $7.5 million last year to the port in dockage, parking and other fees. Port officials also say Disney and other big cruise lines bring millions in related spending, creating everything from concession sales to jobs.
What's more, the contract also gives Disney exclusive access to the terminal provided its ships make at least 150 calls a year, an obligation it has so far met. That prevents rival cruise ships that call on Canaveral from using Disney's terminal. It's the only time Port Canaveral has made such made an arrangement with a multiday cruise line.
Disney is likely to seek similar concessions as it discusses new terms with the port.
Payne said preliminary talks have focused on what improvements Canaveral must make to accommodate the company's two new ships -- 122,000-ton liners that will each be two decks taller and about 45 percent larger than the Magic and the Wonder.
The work will almost certainly entail millions of dollars' worth of upgrades around Disney's terminal, Payne said, from widening gangways to expanding parking lots.
"It's just a matter of planning both shoreside for a larger ship and landside for more passengers," Payne said.
Payne also expects Disney to seek a lower number of minimum visits its ships must make in order to maintain its exclusive terminal access and give the company more flexibility.
Disney appears in no rush to announce its plans. Its current deal with Port Canaveral includes options -- at Disney's sole discretion -- to extend by one year for each of the next 40 years. And the company has tacitly signaled its plans to extend at least once by accepting bookings for cruises out of Canaveral throughout 2008.
Maintaining ties
Analysts say there is almost no chance Disney would move completely out of Port Canaveral. It is, after all, the closest port to Walt Disney World.
But they do say there is a possibility the company could choose to move at least one of the ships and that it is unlikely, when the two new vessels arrive in 2011 and 2012, that they would position three at Port Canaveral.
Sailing out of Brevard County has its drawbacks. At about 200 miles north of Fort Lauderdale's Port Everglades and even farther from the Port of Miami, Port Canaveral is much farther from the Caribbean, where Disney owns an island dubbed Castaway Cay.
"With fuel prices what they are, it's a significant cost to sail that extra couple hundred miles on every cruise," said Robert LaFleur, a tourism-industry analyst with the Susquehanna Financial Group. "You're probably talking thousands and thousands of dollars on every cruise."
Others say that as Disney has become more established in the cruise industry, it is catering more to sophisticated cruisers and less to customers who want to couple short cruise trips with visits to Disney World.
Indeed, Disney Cruise Line has already experimented with itineraries on the West Coast -- near Disneyland in Anaheim, Calif. -- and in Europe. The Magic is spending this summer sailing 10- and 11-day Mediterranean cruises out of Barcelona, Spain.
"The Disney brand and franchise is clearly international in scope, and, as they have become more experienced in their operating of a cruise line and a fleet, this would translate very nicely to Europe and, at a point down the road, Asia," said David Leibowitz, an analyst with Burnham Securities.
Top officials at both the Port of Miami and Port Everglades say they have not seriously discussed hosting a ship with Disney.
Marilyn Green, the former cruise editor at Travel Trade magazine, said many industry watchers expect Disney to initially station its new, larger ships at Port Canaveral -- at least until a widening of the Panama Canal is completed -- while the two older ships are deployed to the West Coast and Europe. {emphasis added}
Rena Langley, a spokeswoman for Disney Cruise Line, said Port Canaveral will remain an important base for the company.
"We think it's one of the best terminals in the world," she said, though she added, "We're always in discussions with Port Canaveral on how to raise the bar."
Sentinel staff writer Beth Kassab contributed to this report. Jason Garcia can be reached at [email protected] or 407-420-5414.
Copyright © 2007, Orlando Sentinel
~~~~~~~~~~~~~~~~~~
It's important to note that this is coming to light at a time when Disney is beginning negotiations with the port authority over a new contract; it could just be that Disney is making noise to get the port authority's attention. Personally, I can't see them leaving their present ideal location.
I found the one paragraph interesting - both new ships operating out of Port Canaveral, one of the older ships out of California, and the other older one operating in Europe. Sounds very possible. Stay tuned........