When Cal State Fullerton professor Andi Stein set sail on her first Disney Cruise trip to the Bahamas for research more than a decade ago, she was on the fence about the idea. Unsure what it would be like voyaging with so many youngsters, she booked a short four-day journey.

By the time she came back, Stein was hooked. She booked another Disney cruise to the Mexican Riviera aboard the Disney Wonder with her mom about two months later. Her fandom has persisted since then. Last year, she took a seven-day cruise on the Disney Fantasy to the Caribbean.

“Disney really understands entertainment, and that carries through onto their cruise ships,” said Stein, who wrote a book about the Disney brand. “But they add the luxury experience that a cruise can provide that you’re not necessarily going to get in the theme parks.”

Walt Disney Co. is banking on winning over more vacationers like Stein, and it’s spending big bucks to do so.

Disney plans to expand its five-ship fleet to eight ships by next year. By 2031, the company will have 13 ships worldwide, Disney experiences chairman Josh D’Amaro said in August at the D23 fan event in Anaheim.

“Expanding our fleet gives more people, in more parts of the world, the opportunity to experience a vacation at sea like only Disney can provide,” he said at the event.

The fact that the company is investing heavily in the cruise line indicates that it sees future opportunity there, said Brent Penter, associate analyst at investment banking firm Raymond James. He expects Disney’s capital expenditures to rise 27% to $7 billion companywide next year, an increase driven primarily by final payments for the new ships.

Penter said the ships are “billion-dollar investments,” but they’re worth the expense.

“It’s a business that’s still small enough that demand really outstrips supply,” he said. “We think they’re doing the smart thing by investing in this business so that they can serve a lot more of that demand.”

Though still a relatively small business, the Disney Cruise Line is becoming an increasingly important part of the company’s financial picture, and is currently a bright spot as the firm’s parks segment begins seeing signs of softening demand.

The Burbank media and entertainment giant doesn’t break out financial results for the cruise line, but Raymond James estimates it brings in about $3 billion a year, comprising 3% of Disney’s overall 2023 revenue.

Disney in August said the cruise line, among other segments, had “improved results” compared to the prior year for Disney’s fiscal third quarter while its overall “experiences” division reported a 3% decrease in operating income. (That division includes the theme parks, merchandise and travel and leisure offerings such as the Aulani resort and spa in Hawaii.)

Disney is willing to take a short-term financial hit from its investment in an expanded fleet. The company warned analysts during its third-quarter earnings call that its fourth-quarter results would reflect pre-launch costs for two of its new ships.

“The business, even prior to COVID, … continues to generate double-digit return on investment for our shareholders,” said Thomas Mazloum, president of Disney’s New Experiences Portfolio and Disney Signature Experiences, which includes the cruise line. “With our expansions, we certainly expect similar, attractive returns from our future ships.”

The cruise industry was growing before the pandemic, but took a big plunge once the virus spread. Demand for such tourist voyages have since rebounded. Last year’s global passenger volume was up 6.8% to 31.7 million, compared to 29.7 million in 2019, according to a May report from the Cruise Lines International Assn. trade group. By 2027, the number of cruise passengers is expected to reach nearly 40 million.

“It’s part of the total pent-up demand for tourism coming out of COVID,” said Andrew Coggins, Jr., a cruise industry analyst who teaches at Pace University’s Lubin School of Business. “The industry is very bullish about what’s coming up ahead.”

That’s why many cruise lines, ranging from major players such as Royal Caribbean and Carnival Corp., which is the biggest cruise parent company, to smaller operators like Disney, are building new ships and expanding their business.

For Disney, that’s meant adding new routes, particularly in the Asia market, and new onboard attractions. The company now represents about 5% of the total Caribbean market and 2.5% of the worldwide market, Mazloum said.

He called the cruise line a “significant contributor” to the experiences division, with a “long runway left.”

After launching in 1998, the Disney cruise line has capitalized on the company’s virtuous cycle strategy of having parks and experiences fuel interest in its movies and TV shows, and vice versa.

Disney cruises offer themed experiences at sea that focus on characters from popular franchises such as Pixar, Star Wars and Marvel. Guests interact with Disney characters aboard, hear talks from animators, eat at themed restaurants, and watch Disney stage productions.

Disney views the cruise line as a “movable asset” that serves as an ambassador of the company’s brand, Mazloum said. The ship allows guests from all areas of the U.S. and world to interact with Disney characters outside of the parks and combines that experience with travel destinations, he said.

“This growing fleet … truly enables us to bring that experience — that Disney experience, that vacation experience — to new audiences and new places all around the world,” Mazloum said.

While some have groused that Disney theme park prices have gotten too expensive, the same hasn’t been said of the cruise line, according to a survey conducted this summer by Raymond James. A recent two-day cruise aboard the Disney Magic from Auckland, New Zealand, for one person started at $728.

Only 31% of respondents said the cruises were overpriced, despite Disney cruises being about two to three times more expensive than that of competitors, according to the survey, which interviewed 20 Disney “superfans,” annual passholders, travel agents and local business owners. Though comments acknowledged that the cruises were expensive, respondents felt it was worth it because of the “all-in” price.

David Hahn of Dothan, Ala., has been on many cruises and said he was willing to pay the high price for Disney’s quality of service. He tells family members to choose a Disney cruise over a visit to the theme parks because it’ll be enjoyable with less stress.

For years, Hahn channeled his love for all things Disney through the company’s sprawling parks, visiting Walt Disney World hundreds of times. But as the magic wore off in recent years because of massive crowds and long lines, this 37-year-old waste hauling operations manager turned to cruises instead. (He also worked at Disney’s resorts for several years until 2020.)

He’s taken three Disney cruise trips so far, sailing to the Bahamas aboard Disney ships and in 2019 proposing to his now-wife, April, aboard the Disney Dream. The crew helped him get his room ready for the proposal, with rose petals, champagne and towels shaped into hearts and animals.

“When you go on the ship, you’re kind of secluded, you’re surrounded by all the Disney, the atmosphere, you get that feeling of great hospitality,” said Hahn. “You’re going to pay for it, of course, … but you’re going to get what you pay for.”

Gov. Gavin Newsom unveiled a proposal Sunday to more than double the annual amount of money allocated to California’s film and TV tax credit program as Hollywood struggles to compete with other production hubs dangling lofty incentives.

The governor declared his intent to expand the annual tax credit to $750 million, up from its current total of $330 million, which would make California the top state for capped film incentive programs, surpassing even New York. If approved by the Legislature, the increase could take effect as early as July 2025.

“California is the entertainment capital of the world, rooted in decades of creativity, innovation, and unparalleled talent,” Newsom said in a statement. “Expanding this program will help keep production here at home, generate thousands of good-paying jobs, and strengthen the vital link between our communities and the state’s iconic film and TV industry.”

The announcement comes as Newsom and other elected officials have been under increasing pressure to act as Hollywood production struggles to rebound after the pandemic and last year’s dual strikes by writers and actors.

Productions have increasingly opted to film in other states due to higher tax incentives, putting a damper on California’s signature film and TV industry. Underscoring the state’s competitive disadvantage, about 71% of projects that were rejected by California’s film and TV tax credit program chose to film out of state, the governor’s office said.

California’s film and TV tax credit program was established in 2009 as a way to prevent film and TV production from fleeing to other states. Back then, the credit was restricted to $100 million per year.

Five years later, the roof was raised to $330 million a year, awarding studios tax credits of up to 25% to offset qualified production costs such as set construction, stunt equipment and wages for crew members. The credit can be applied to any tax liability companies have in California.

In 2023, Newsom extended that version of the program for another five years and added a “refundable” feature entitling studios to cash payments from the state when their credits exceed their tax bills.

Although Newsom’s Sunday proposal would represent a substantial increase in funding, it doesn’t remove other restrictions in the state’s incentive program, including a provision that excludes the salaries of actors and other above-the-line costs that are a big portion of film budgets. Georgia and other rivals do not have such restrictions.

But such a move is considered politically untenable in California, where the film incentive program has faced opposition from critics who argue that subsidizing entertainment comes at the expense of other worthy causes, such as education and healthcare.

Members of Los Angeles’ entertainment community have recently been urging the government to pump more funds into the film and TV tax credit program in order to curb so-called runaway production and stimulate jobs.

As previously reported by The Times, industry insiders and experts overwhelmingly agree that relatively weak incentives are the main reason California is losing significant ground to Georgia, New York, Canada, the United Kingdom and other filming hot spots around the world.

New York’s film and TV tax credit program, for example, is capped at $700 million; and Georgia — a popular production destination for Marvel and Netflix — doesn’t have a limit at all.

“I believe the best filmmakers in the world are right here in Los Angeles, but it’s being outsourced because of the tax credits,” Mike DeLorenzo, president of Santa Clarita Studios, told The Times last month.

The sluggish activity in Southern California has been fueled by other factors as well, notably an overall pullback in production that reached a peak during the so-called streaming wars and cost-cutting by the major media companies.

Earlier this month, Los Angeles film permit office FilmLA reported that production levels in the area fell by 5% in the third quarter of 2024 compared with the same stretch in 2023, when scripted production came to a near standstill because of the Hollywood strikes.

Times staff writer Stacy Perman contributed to this report.

If you’re a physician and a neighbor asks you a medical question, you’re probably happy to share your professional expertise. If you’re a heating and cooling contractor and a friend asks you about her furnace, you likely do the same. In that spirit, I think it’s time for business people to share what we know about immigration: that it powers economic growth and provides many other benefits to the country.

At a time when many politicians are falsely scapegoating immigration for society’s ills — crime, housing shortages, labor issues and more — people with experience working alongside immigrants, employing them and relying on them for the success of their business should speak up and set the record straight.

If that description fits you, here are some handy talking points:

• The United States has plenty of unfilled jobs. The Inflation Reduction Act and the CHIPS and Science Act, both signed by President Biden in 2022, offered incentives for firms to create manufacturing jobs. As of July, the country faces unprecedented labor shortages: The U.S. Chamber of Commerce reports 8 million job openings, substantially more than the total number of unemployed workers, about 6.8 million.
• Immigrants act more as “job creators” than as “job takers.” A 2020 study published by the National Bureau of Economic Research found that immigrants create jobs and enhance the economy for native-born workers. Foreign-born founders — including Google co-founder Sergey Brin (Russia), Intel co-founder Andrew Grove (Hungary) and Facebook co-founder Eduardo Saverin (Brazil) — play pivotal roles in high-growth entrepreneurship. Because immigrants found companies at a higher rate than native-born Americans, they create more jobs than they take.
• Immigrants often fill jobs U.S. citizens don’t want. Most native-born Americans eschew low-paying, physically demanding work in agriculture, construction and food production and processing. Immigrants play a crucial role in supplying workers in these sectors, allowing employers to fill jobs without overheating the economy or accelerating inflation.
• Higher-skilled immigrant workers contribute to innovation and the workforce, boosting productivity. A study of U.S. patents granted from 1990 through 2015 found that immigrants made up 16% of U.S. inventors and produced 23% of innovation output.
• Immigrants are less likely to engage in criminal behavior than U.S.-born citizens. A recent study based on data from 1870 to 2020 found consistently lower incarceration rates among immigrants. Moreover, immigrant incarceration rates have declined since 1960 compared with those of native-born Americans: Today immigrants are 60% less likely to be incarcerated than their U.S.-born counterparts. The recent surge of immigration across the U.S.-Mexico border has not been accompanied by a corresponding increase in crime rates in sanctuary cities such as New York and Denver.
• “Zero sum” notions of a fixed number of American jobs are simply false. The more people work and spend their wages, the more our economy grows and provides jobs for everyone, regardless of where they were born. According to a July Congressional Budget Office report, an increase in immigration from 2021 through 2026 is projected to boost federal revenues as well as spending. This is expected to lower federal deficits by a net $900 billion over the next decade, primarily because new arrivals work, pay taxes and stimulate economic growth, increasing incomes and tax revenues for everyone. That will boost the gross domestic product by $9 trillion by increasing population, labor force participation and productivity.

Most business people who rely on American labor and consumers are well aware of many of these forces. They know that expelling immigrants would shrink the U.S. economy and make it less competitive with other nations.

We know the consequences of immigration bans from experience dating to the Chinese Exclusion Act of 1882, enacted in an era of racial violence such as the 1871 massacre that killed 19 in Los Angeles’ Chinatown. A recent study showed that the act not only significantly reduced the number of Chinese workers of all skill levels in the country but also diminished the quality of jobs held by white and U.S.-born workers, the intended beneficiaries of the law. It led to a 62% decline in manufacturing output and hindered economic growth in the Western states most affected by the law for the next 50 years.

As a proud U.S. citizen who immigrated to the country in 1981, I urge other Americans who understand business and the economy to spread the good word about immigration.

Christopher Tang is a university distinguished professor at the UCLA Anderson School of Management.