WEBVTT
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Okay from our studios this week in Los Angeles in Tampa. Again,
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we're still at home. This is Green tag them Park
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in thirty. I'm Philip. I'm joined as always by my
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co host Scott Swinson of Scott Swinson Creative Development.
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Scott.
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This week, you know, we have not really a follow
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up but sort of a related story to last week's
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story about the Disney Treasure coming out. We talked last
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week about the Disney Treasure and all of the incredible
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on ship experiences, and this week I thought we talked
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about an expansion that the Tokyo Disneyland operator Oriental Land
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Group plans to do. So, just for clarity, this is
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the Tokyo dis Land operator Oriental Land. It's not Disney itself.
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But yeah, you know, but it might as well be.
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Based on this story, they're kind of following following suit,
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it appears.
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Yeah, I think they're definitely taking the same direction, and
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they kind of explained more about it. What I liked
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about this story is, I want to say, in typical
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Japanese fashion, but I don't know if that's entirely correct,
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but it's the they're pretty transparent about to the reasonings
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for what they were trying to do here, so or
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into land. Plans to invest about US two billion. It's
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it's a different conversion, but after you conversion it right now,
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it's about two billion, which is a lot the US
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dollars into cruise operations. To drive medium to long term growth,
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the company intends to create an offshore theme park. They
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quite literally did say offshore theme park in the interview here.
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They plan to create an offshore theme park experience on
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a cruise ship, which is expected to start services by
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twenty twenty eight. The cruises will last you to four nights,
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departing from Tokyo Port. The company aims to develop the
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cruise ship tour business into a new revenue stream, reducing
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its reliance on the Mahama operations. Mahama is the tourism
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area there. For clarity, it contains Tokyot is Land, took
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it to DC and then the it's like basically all
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the area within the loop, you know, it's all on
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that that loop, the like subway loop, the Mahama stop.
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So it's the loop that goes around the two parts.
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It's the equivalent to it's the equivalent to Yes Island
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in Abu Dhabi, it's the equivalent to iDrive in Orlando,
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it's the yeah yeah.
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So basically, too much of their revenue is coming from
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that one area. They're not diversified at all, so they're like,
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we need to diversify, and so they're choosing cruises to
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diversify into. A Critical factor that they talked about was
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whether they can cultivate a cruise culture that is distinctly
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Japanese as opposed to the I think some of the
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American models that we have, and demand for cruises there
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in Japan has traditionally been limited to affluent, older adults,
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so that's going to be another challenge for them, is
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to broaden the appeal of the cruise culture to targeting
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younger users and families, who coincidentally make up the core
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of visitors to Tokyo Disnem Resort and cited in the
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article of real link to is a professor there that
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studies tourism locally, and he says, compared with their overseas counterparts,
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Japanese visitors tends to tend to place greater value on
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the stories behind the theme parks, and it will be
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very important for the cruise ship tours to have strong
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links to the parks, which clearly they agree with, so
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I wanted to pair this. I know last week we
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talked about the Disney Treasure, but we didn't talk too
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much about the business of tourism or as tourism on sea,
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you know, overall, and just just some interesting perspectives. So
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Disney Crew Line is obviously much smaller than its competitors,
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but if you think about it, you know, Disney Disney
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is a diverse portfolio, and I think that's exactly what
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they're talking about here, is the diversification, which is in
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this instance actually turns out I think to be good
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in this.
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Era.
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Because the cruise lines that all they do is focus
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on cruises, they have a lot of debt. We're talking
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like twenty billion dollars in debt or in excess because
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of COVID, and they had to go so much into
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debt and they had that there was such a disruption.
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But because Disney was diversified, there they're struggle. They have
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a much lower amount of debt. I think it's about
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one point two or two billion for the crew sector,
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so it's significantly lower. Now they have much less ships
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and much less market share. But because it's part of
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a larger company and it's just one leg. You know, overall,
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it's doing a lot better because they're able to you know,
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combine their assets, so they're all What they're also doing
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is we didn't talk about this last week, but they're
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reducing their content budget for Disney Plus. So presumably that's
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to help with making Disney Plus more profitable because they're
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reducing four point five billion out of the content budget,
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but they probably also realized that Disney Plus subscribers are
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going to stay subscribed even if they don't pour like
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twenty billion dollars of money into new content. But basically
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what they're doing is taking some of that money out
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of there and they're investing it into the cruise shifts,
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which we talked about Disney Treasure.
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But right, but again this is what this is what
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we've been saying for for months and months and months,
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and that is that they should be spent money on
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what's earning money and instead of spending money on trying
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to make something that is losing money earn money. And
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they're it's it's this, this is a final This finally
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makes sense. But but to stay focused on the cruise
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ship thing, it's you know, as you said, it's it's
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similar to and I want to go back, you know,
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I want to go back in history even further before
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Disney Cruise Lines. Disney was affiliated with Carnival and it
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was the Big Red Boat, and they tested the market
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to see if vacationers to Walt Disney World in Florida
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would also do cruises and they'd be able to package
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them together. And in fact, early on, you could not
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do a Big Red Boat or a Disney cruise without
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a two to three day stay at Walt Disney World.
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So they actually linked the two together. They linked the
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two together without I mean, there was no there was
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no other option. I mean we're seeing this with Epic
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University Universal now too, where they're kind of linking two
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products together so they don't steal from they don't rob
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Peter to pay Paul. But in this particular case, it
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sounds kind of like the same idea, but they're approaching
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it differently based on where we are in the world today.
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You know, one of the things when when Disney started
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to do Disney cruises and Disney Cruise Line started, they
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basically said, you know, this is for children and families
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and everybody thought, Oh, it's the kiddy cruise line, and
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you choose your cruise line based on your demographic and
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your age, and so it sounds like they're trying to
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establish that as well, because again, as the article states,
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they're all the cruise market in Japan is primarily older affluent,
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which is exactly what it was here in the US.
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And then Disney started to speed to spread out, as
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did Carnival because of their early affiliation with Disney. So
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I think it's interesting that they're following a model that
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has worked in the past. The one thing that you've
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read that that raises my eyebrow is these cruises are
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two to four days. That seems remarkably short.
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Yeah.
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Well, I just want to encapsulate that these are similar
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strategies but different, right, because we're looking at two different companies,
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Oriental Land versus Disney as a whole.
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I think that's exactly why.
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But what I'm saying is, I think that's why the
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Disney model.
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So I think that's why.
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It's because, like you mentioned, like Disney is at a
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different point in this cruise excursion or cruise whatever expansion
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where they're able, like we talked about last time, to
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add on longer trips as alternatives to Disney vacations. But
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I think what Oriental is trying to do is diversify.
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So I think that part.
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Think what you're doing is they're going back and following
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the exact same model that Disney did when they first
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started doing cruises.
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Correct, correct, Yeah, so basically they're like and also to
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make it more accessible to younger audiences too, because right
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so basically I think they're they're they're basically looking at
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it and saying, we have all these people that come
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to Myhama and they do come to Disney, so what
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we're trying to do is capture them for like a
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two day cruise to do that as an alternative or
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on top of the Disney they're going to do. Anyway,
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I don't think they're targeting. It doesn't seem like at
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least they're targeting like a lot of international or visitors yet.
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And I'm sure again they'll follow the same model where
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there they'll add more ships eventually and maybe target people
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to come to Japan via cruise and then go to
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Disney and do a whole Mahama integration thing. But it
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seems like right now they're just trying to get people
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locally to go on additional cruises so that everything isn't
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dependent on the Mahama area, which is I think exactly
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what Disney started off doing and then ex expanded now
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into longer, longer cruise nights.
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I'm kind of looking at this as the newest version
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of Galactic Star Cruiser. I mean, I really think it's
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an add on. I really think it's an add on
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to the established Disney c and Disney Tokyo.
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Yeah, for two nights, I mean that's the thing, Like
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two nights. It's like, that's not that's a staycation. Basically, well,
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that's not a cruise.
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That's that's you know, that is a theme park at sea.
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And and most you know, like in the US, for example,
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two and three night cruises are what are often called
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the cruise to nowhere because they go out into the water,
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they don't really stop anywhere, they have no other port
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other than their home porte. This happens in Florida. They
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go out into the Gulf. It's a party cruise basically
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now in much of in much of Florida, and there's
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a couple that say all out of Tampa that do that.
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I will say, those are getting less and less popular here,
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but again, we're at different points in the progression here,
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and and I think that, you know, when they say
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theme park at Sea, I think they're What they're really
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trying to do is exactly what Disney was trying to
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do when they first started venturing into the world of
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cruise lines, and that was, here's an add on to
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your theme park experience. Here's the way to make your
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theme park experience more robust. Longer, you know, the longer,
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the longer you stay. And let's be honest, when you're
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on a cruise ship, every dime you spend goes to
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the parent company, so especially on short cruises that don't
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have any ports or have few ports. So yeah, it's
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it it to me, you know, looking back at how
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Disney first started, other than the fact that Disney piloted
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it with an existing cruise line, it appears to me
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that they are trying to follow that same model but
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at a different but starting at a different time, a
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different point in the time. And they're starting when Disney started,
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not where Disney is now.
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Yep.
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Yeah, we look at Disney and I think.
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Something like you're saying, it's interesting to think about because
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I was thinking of doing this, I was like, well,
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you know, looking at how far Disney has come, They've
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come really far with their cruises, you know, to your point, like,
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I think this is essentially just the first trip or
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the first the first foray for Oriental Land. But like
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we look at how far Disney's come. Maybe we don't
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think about it as much, but they you know, they
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have their own ports, and they've developed the whole theme
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park model ecosystem, but for cruises, which.
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I think is relatively unique.
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I mean, other other cruises will like share ports or
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there's this and that, but Disney is like, no, we're
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doing our own ports.
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And Disney Disney has actually led the way. I mean,
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all other cruise lines now have their own private islands.
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Carnival is is adding them left and right, Royal Caribbean
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is adding them left and right. But it was Disney
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that first started that idea, that concept of creating their
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own their own private islands. Now other cruise lines will
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claim that they did, but they really didn't. Basically what
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they did was they had a private beach. You know,
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they basically took over a short excursion. But but Disney
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really made it their own and and and set the standard,
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you know, set the standard for the rest of the
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of the cruise lines. You know, I've I've got we've
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got a cruise planned for early January. And you know,
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it's it's always interesting to me to look at what
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the cruise industry is doing. We're pretty easy because we
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keep going back to the old style cruise on the
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smaller ships that can get into more unique ports. And uh,
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you know, and and we actually do not go on
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Disney cruise lines simply because we want to avoid the
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families and small children. So uh, it's it's a it's
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interesting that that this is the the model here that