Here's why Universal should get into the cruise business

November 8, 2024, 8:59 PM · Universal is about to open a multibillion dollar investment in its Orlando theme parks. Universal Epic Universe promises to shake up the us theme park market, bringing millions of additional visitors to the Central Florida market.

But Orlando is not the only place where Universal is expanding. Also next year, the company will enter the Las Vegas market with its Universal Horror Unleashed attraction - a year round Halloween horror nights experience. The year after that, Universal will expand to Texas, opening Universal Kids Resort outside Dallas. And the company is pursuing approval for a new theme park in England, bringing the brand to the United Kingdom.

These three expansions seem to bring Universal to markets not yet developed by Universal’s archrival, Disney. But that is a simplistic take. Sure, Disney has focused on building mega resorts such as Walt Disney World, Disneyland in California, and elsewhere in Paris, Hong Kong and Shanghai. (It licenses its brand and IP for a resort in Tokyo, too.) Ever since Disney abandoned its DisneyQuest brand, it has not pursued a physical attraction presence in smaller markets across the country and around the world, like Universal now is doing.

Except… that it has. Disney has been in Texas for years. It’s been in the UK. It’s in Canada, Europe, Australia, and starting next year, in Singapore, too – practically next door to a Universal Studios theme park.

You might have figured out by now that I am talking about the Disney Cruise Line. If you’ve not sailed on DCL before, do not make the mistake of dismissing the appeal of Disney’s ships. Because “a cruise” is not the DCL’s product. Its product is “Disney” - just like at the theme parks.

The Disney Cruise Line enables Disney to bring a physical Disney vacation experience to more guests from more destinations around the world. It’s a tool that Universal currently lacks in its Destinations and Experiences portfolio, but one that Universal would do well to consider adding.

No, Universal does not need to copy everything that Disney does. Universal finds success when it goes its own way and creates innovative new experiences for its guests, from The Amazing Adventures of Spider-Man to The Wizarding World of Harry Potter and Volcano Bay and, soon – I suspect – with Epic Universe. But a cruise line would allow Universal an opportunity to continue to innovate while expanding into new markets, without having to pay to develop a new resort in each.

Disney got into the cruise business with co-branded sailings on the old Premier Cruise Lines from 1985 to 1993. Five years after that relationship ended, Disney launched the Disney Magic in 1998. One might suggest that Universal start by co-branding cruises with an existing operator, as Disney did, but I would advise against that.

The biggest lesson that Disney learned from its relationship with Premier was that Disney needed to control its own show. There’s no need for Universal to risk diluting its brand to learn that now-obvious lesson. If Universal needs specific expertise about running its own cruise line, LinkedIn is filled with former and current DCL cast members that Universal could hire.

Disney’s entry into the cruise business coincided with the “Disney decade” of the 1990s. That’s when Disney began to make the leap from a family-oriented movie and TV studio into the lifestyle brand that it is today. The development of the DCL helped Disney to define exactly what a “Disney” experience is for consumers. Because on a Disney cruise ship, the sum truly is more than its parts, even more so that it is within the theme parks.

A cruise line provides a needed creative challenge for Universal at this moment in the brand’s evolution. Say “Disney,” and people know what you are talking about. “Universal” remains far from that level of brand identity. Designing a cruise line – from the ships to the experiences upon it – provides Universal with a powerful opportunity to craft a more impressive brand identity for the company, one that has the potential to create a halo effect that boosts the appeal of its theme parks and regional attractions going forward.

Yes, this would be a multi-billion dollar endeavor. Universal would need to design its ships and contract with a shipbuilder. It would need to contract berths in home ports, as well as ports of call. The competition not just to access but also to control ports of call has sparked a bidding war in the cruise industry right now, as company pay to develop private ports for their ships. And with Disney expanding from its current five to 13 ships over the next decade, available space at the world’s ports promises to become even tighter, and more expense, for competitors.

I know that some people within Universal’s theme park division have advocated to get into the cruise business. And that others within the company have resisted that call. So I am not writing anything today that people within the company do not know already.

But I think it’s important for Universal fans – and, frankly, Disney fans, too, because there is huge overlap there – to have their voices heard in this conversation. I like a lot of what Disney does different from other cruise lines (no casinos, no unlimited drink packages, rotational dining), and I would love to see what operational innovations Universal might bring to the industry. Plus, I would love this additional opportunity to spend time experiencing Universal’s IP.

So, as a fan, I would love to see Universal get into the cruise business. Heck, maybe a Universal Cruise Line might actually apply some price pressure on cruise fares that Disney does not feel from other cruise lines.

If Universal does not get into the cruise business, Disney will continue to be able to use its cruise line to put more distance between its attractions business and those of its competitors, led by Universal. Yes, this business costs billions. But it makes billions, too. And more importantly, it allows Disney to spread its brand to markets all over the planet, in ways that Universal will not be able to without a cruise fleet of its own.

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Replies (9)

November 9, 2024 at 7:36 AM

Universal has done an excellent job over the past decade of beginning to build a base of devoted guests, "super fans" and annual passholders. But they have a long way to go to reach the level of dedication and momentum Disney has gained over the past many decades. I think you'd need a large, dedicated fan base to support the high cost of a crusie vacation. As a family, we've very much enjoyed a Disney cruise about once every 10 years or so. We consider it the gold standard. But it is an expensive vacation.

Open Epic, continue to build the base and reach the point where generational nostalgia kicks in and parents want to return with their kids, and I think this is very viable for Universal.

November 9, 2024 at 10:26 AM

One much cheaper way to extend the brand would be to expand Kabletown’s existing relationship with Loews to non Universal Hotels. Loews owns an impressive portfolio of luxury resorts in high population cities desirable to tourists. Add Jurassic World, Minions and HTTYD suites, dining experiences and attractions where space allows. Give families a staycation alternative close to home. I’d try this first before building billions of dollars in boats in a very competitive and risky travel segment.

November 9, 2024 at 11:45 AM

Comcast can't even build new theme park attractions at USF and IOA. But they should build cruise ships? I suspect Leo and Billy Zane would be cast in any film version of Comcast Cruise Line's maiden voyage.

November 10, 2024 at 5:11 PM

Zarex brings up an excellent point: while there is value and opportunity in running a cruise business, first Universal needs direct experience running a hotel. Nearly all of their resort hotels are operated by Loews or another 3rd party. You would think a company that understands theme park demand, capacity, and pricing should be able to transfer that knowledge to hotels, but alas.

I think it's a tall order to have Universal thrust into the hotel operations business with the added complexity of constructing the hotel to float on international waters while also ensuring a cohesive theme.

Imagine a Jaws experience with Bruce on the edge of the ship, or a Harry-Potter-on-water experience, perhaps with the long sought-after Great Hall dining experience. There are absolutely possibilities--but first Universal needs hands-on expertise in running a hotel.

November 10, 2024 at 10:07 AM

If the WB could figure out to do it. They could be a real competitor to Disney cruise with all of their IP like DC, Looney Tunes, Hanna Barbera, Potter and more.

November 10, 2024 at 10:57 AM

Kingsislqndcentral: "If the WB could figure out to do it. They could be a real competitor to Disney cruise with all of their IP like DC,"

Me: Disney will have eight ships.on the water at the beginning of 2026. It will be tough for anyone to ever be a "real competitor" for DCL.

November 11, 2024 at 9:22 AM

This is way outside of Universal's wheelhouse. Universal doesn't even operate their own hotels, so how would they be able to operate an entire cruise ship or fleet of cruise ships. Now, I could see Universal licensing their owned IPs (Monsters, HHN, F&F, and others - though they don't fully own Dreamworks or Illumination, and have just licensing rights for HP) to cruise operators like Royal Caribbean or Norwegian, but running a cruise line is VERY different from running a theme park.

Also, while I agree that Disney sells an experience, Universal sells attractions and their "experience" is not unique (aside from HHN) and is not translatable to a cruise ship because of the size needed to deliver the thrills associated with the brand. This is just a massive non-starter. Let's see how Universal delivers their HHN experience in Vegas, and maybe that's something that could be applied to a cruise ship.

November 12, 2024 at 8:46 AM

Universal doesn't operate its own hotels yet has very successful resorts and theme parks around the world. So it's a non sequitor that it needs to operate its own hotels in order to have a successful cruise line.

November 12, 2024 at 9:18 AM

@Daniel - Don't you think being able to run a hotel or a travel agency would be a prerequisite for running a cruise line? Operating a theme park is very different than a hotel, resort, or cruise ship. Yes, they're all within the travel and hospitality industry, but require completely different skill sets and experience.

The cruise industry is very mature right now, so it would take a massive investment in order to pry even a miniscule market share away from the current players (Disney has taken 2 decades to get to where they are now and they're still a relatively small operator in the market - estimated 4.2% market share currently). If Universal does want to enter this market, they need to look at what Disney did when they entered the market when they partnered with an existing line and sprinkled some Pixie dust on existing ships and sold combo packages with short cruises paired with multi-day theme park stays. Once they are able to show proof of concept, then they might look into the massive expense of buying their own ship and noodle out the logistics of actually operating a travel agency, something Disney had been doing for decades before they created DCL.

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