Could Gen Z's Travel Trend Decimate Disney's Profits?

It’s clear that The Walt Disney Company sees its cruise line as an area of growth over the next decade.

©Disney

The sixth ship in Disney’s fleet — the Disney Treasure — sets sail in December 2024, and two more ships — the Disney Destiny and Disney Adventure will start cruising in 2025. Disney has said these ships will double its worldwide capacity.

And the cruise industry in general is growing at a similar clip. Sixty new cruise ships will enter service in the 5-year period between 2023 and 2028, increasing capacity by 43%, according to Cruise Industry News. With more capacity and more competition from newer ships on other cruise lines, you may be wondering if Disney will be able to compete.

©Disney | Disney Destiny Concept Art

The cruise industry needs to convince millions of people to take their first cruise over the next couple of years, and they will need to look to younger generations to do it — including Gen Z. Cruise lines have been adding options to try to lure young adult travelers. Sun Princess and several other new Princess ships have added dedicated Pickleball courts. Virgin Voyages offers free wifi for all passengers.

©Virgin Voyages

According to a study by StudentUniverse, there are three big travel trends that might hurt Disney Cruise Line’s bottom line as it tries to market to this generation of young adults. Let’s take a look at them here!

Sustainable Travel

More than 50% of those surveyed said that they want to book travel that is eco-friendly. In the past, that may not have included a cruise, because large cruise liners have had a bad reputation for generating carbon emissions, plastic waste, and more. But the cruise industry has been making changes to its practices both big and small to boost sustainable operations on the ships, and Disney is no exception. With the introduction of the Disney Wish, DCL joined other cruise lines including Carnival, Royal Caribbean, MSC and Princess in building ships powered by Liquified Natural Gas rather than diesel or marine fuel.

Disney Wish

The new fuel reduces greenhouse gas emissions and eliminates harmful sulfur oxide emissions. Disney also cites other environmental considerations — including demand-based heating and cooling systems, recycling of condensation to use in its laundry facilities, LED lighting, and passenger-facing changes such as a switch to washable dinnerware over disposable options and installing more water stations to encourage water bottle re-use.

The new Disney Treasure and Disney Destiny are also being built to use LNG as fuel. Disney Cruise Line has pledge to have net-zero emissions — meaning carbon emissions will be counterbalanced by carbon removal — by 2030.

Less Alcohol Consumption

Gen Z young adults of drinking age are drinking less than their older counterparts. The survey results showed they drink 20% less than Millenials, and prefer visiting cultural landmarks and exploring the landscape over clubbing on vacation.

A tropical drink at Castaway Cay

It’s no secret that Disney — and all cruise lines — make much of their profit from selling alcohol on their ships. Estimates for daily spending on a cruise ship range from $200 to $500 per person, per day. And it’s safe to assume that a hefty percentage of that spending in on alcohol. So, if Gen Z cruise passengers (who have reached drinking age) are drinking less than their older counterparts, will that hurt Disney’s bottom line?

It certainly could, but Gen Z is also enjoying more mocktails and non-alcoholic spirits. A study by advertising tech firm NCS showed that 37% of Gen Z consumers had increased their consumption of mocktails in 2023. DCL’s main dining menus include non-alcoholic specialty drinks for an extra fee, and the “drink of the day” offerings at bars around the ship also include a non-alcoholic option.

“Different” Destinations

Twenty percent of the StudentUniverse survey respondents said they had turned to an AI Chatbot or recommendations from Tik Tok in search of “off the beaten path” destinations. This segment of travelers don’t want to go to the “usual” places. That could hurt DCL and other cruise lines in their quest to book Gen Z on traditional Caribbean itineraries, as well as in well-trod Alaskan and European ports.

Castaway Cay

However, Disney’s expansion to Australian itineraries, as well as the new home port of Singapore for the upcoming Disney Adventure ship, could offer more exotic locales that some Gen Z travelers are seeking. DCL could also capture the desire for “off-the-beaten-path” adventure with creative excursions to exclusive/hidden spots in their usual ports.

There are indications that the average age for a cruiser is getting younger — it was age 46 in 2024, according to trade group CLIA. These are some changes — more sustainability efforts, more mocktails, and more exotic itineraries — that we expect to see at Disney Cruise Line as an effort to lure newly minted Gen Z adults to cruising as it introduces these new ships.

Goofy at Castaway Cay

One thing is for sure: DCL is focused on big expansion right now, and that will need to include younger generations. At Disney’s latest quarterly earning call, CEO Bob Iger called the company’s cruise business “extremely positive,” and said the company was looking “expansively” at more possible expansion beyond the three ships already on order.

Keep following DFB for the latest cruise news!