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 former President Trump is reelected and follows through with his promise to slap new tariffs on all imports to the U.S., experts say much of the global economy could be upended. And few countries would be more vulnerable than Mexico.

The economy here is driven almost exclusively by trade, with 83% of exports sent north of the border.

Mexicans are watching the U.S. election anxiously, and bracing for a possible Trump victory over the Democratic nominee, Vice President Kalama Harris. Last week, the peso lost value after polling showed that the former president had taken a slight lead in several swing states.

Economists warn that even a small increase in tariffs on Mexico’s goods could lead to a rise in unemployment and poverty, and some say that could prompt more people to migrate to the United States.

“Even the threat of tariffs will create havoc,” said Juan Carlos Moreno-Brid, an economics professor at the National Autonomous University of Mexico. “It will further reduce Mexico’s long-term economic growth. And it could drive migration to the United States and Canada.”

Few world economies are more tightly bound than those of the U.S. and Mexico.

In 2023, U.S. exports of goods and services to Mexico totaled $367 billion and imports from Mexico exceeded $529 billion, according to the U.S. Department of Commerce. Mexico is the United States’ largest trading partner, having overtaken China in 2021.

Trump, who has long complained about the exodus of manufacturing jobs from the U.S. to countries such as China and Mexico, says that tariffs will help lure factories back to the United States.

Economists, though, are largely skeptical of that claim. And there’s some evidence that higher tariffs enacted during his presidency have cost American jobs. Many warn that U.S. companies would end up absorbing much of the new taxes, a cost they would pass on to U.S. consumers.

Some economists predict a 20% tariff imposed by Trump would end up costing the average U.S. family $2,600 each year. Harris says it could be higher, adding nearly $4,000 a year to the typical household’s bills, an increase she calls a “Trump sales tax.”

It’s difficult to say exactly what new tariffs would mean for the U.S. and the rest of the world because Trump’s proposals keep changing.

He has vowed, at various points, to impose an across-the-board tax of 10% or 20% on all goods entering the U.S. He’s also threatened tariffs of 60% or higher on imports from China.

In an interview this month with Fox News, he threatened to impose an exorbitant tax on autos imported from Mexico. A big chunk of U.S.-Mexico trade involves cars and auto parts that are transported back and forth across the border for production and final assembly.

“All I’m doing is saying, I’ll put 200[%] or 500%, I don’t care,” Trump said. “I’ll put a number where they can’t sell one car.”

New tariffs could trigger global trade wars because countries would probably retaliate with their own taxes on U.S. imports, targeting in particular farm goods because of the politically sensitive nature of that sector. The International Monetary Fund predicts growth would decelerate worldwide.

Donald Trump has vowed to impose a tariff of 10% or 20% on all goods entering the U.S. and threatened an exorbitant tax on autos imported from Mexico: “I’ll put 200[%] or 500%, I don’t care.”

(Rebecca Blackwell / Associated Press)

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But countries such as Mexico, which relies heavily on exports for economic growth, would be especially affected.

The value of Mexico’s exports and imports amounts to almost 90% of the country’s gross domestic product, according to World Bank data. Economists warn that even a small increase in tariffs on goods destined to the U.S. poses serious risks for the economy.

“Under the worst-case scenario, the Mexican economy will fall into recession, the currency will depreciate, and inflation will rise,” reads a report released this month by the economic research firm Moody’s Analytics.

The mere threat of tariffs has already scared off foreign companies from investing in Mexico. Tesla, for example, announced that it was pausing plans to build a new factory in Mexico until after the election because of Trump’s vow to levy taxes against auto imports.

Trump appears willing to target individual companies doing business here, recently threatening 200% tariffs on John Deere if the tractor manufacturer moves production and jobs to Mexico.

“The threat of tariffs and the erratic nature in which Trump might deploy them doesn’t offer any investment certainty,” said Rodrigo Aguilera, an independent economist.

As president, Trump in 2018 imposed tariffs on steel from Mexico and other countries, prompting counter-tariffs on American farm goods and straining U.S.-Mexico relations.

He also threatened broader tariffs on all Mexican goods, but backed off after American business leaders complained that it would hurt them and his administration extracted a promise from Mexican authorities to do more to stop migrants from reaching the U.S. border.

Some Mexican officials have said they don’t believe Trump will follow through with his tariff threats, which aren’t popular in the U.S. and seen as counterproductive for the American economy.

Marcelo Ebrard, Mexico’s economy secretary, told journalists recently that he believes they are just a campaign tactic. “The United States economy is not a manufacturing economy,” Ebrard said. “And I’m sorry, but it will not be that way again.”

But others fear that Trump, if he wins a second presidency, will be more likely to take dramatic measures on an array of policies because it is likely he would be surrounded by more loyalists.

“Trump is not going to be moderated by more moderate conservatives,” said Pamela K. Starr, a professor of international relations at USC. “The second presidency, I think, will be Trump unleashed.”

Rodrigo Aguilera, an independent economist, said there is no doubt that Trump will “use a tariff threat to force Mexico to collaborate on something he wants, on migration policy or security policy.”

“Mexico,” he said, “will have to try to capitulate.”

If Trump enacts tariffs on Mexico, it would be in violation of the U.S.-Mexico-Canada Agreement, a 2020 treaty that replaced the Clinton-era North American Free Trade Agreement. The new treaty, which Trump helped negotiate, calls for generally no tariffs on trade on the North American continent. If the U.S. violated the agreement, Mexico would have permission to retaliate.

When they overlapped in office, Trump and former President Andrés Manuel López Obrador came to an unexpected detente. López Obrador said the two countries’ relationship was built on mutual respect, and famously called Trump “a friend.”

Many think such a relationship may be less likely with the country’s new president, Claudia Sheinbaum, and Trump, in part because he doesn’t have a good track record of working with female heads of state.

“She’s really smart and a woman, all things that Trump seems to find threatening,” Starr said.

Sheinbaum has largely refrained from commenting on Trump’s tariff threats, except to say that it is the U.S., as much as Mexico, that would suffer if they came to pass.

Free trade, she said recently, “is as important for the United States as it is for Mexico.”

Sheinbaum, who took office this month, inherited an economy that was already on shaky ground. The country faces its largest budget deficit since the 1980s. And while the social programs carried out by her predecessor helped lift some Mexicans from poverty, 36% of the population is still poor, with 7% living in extreme poverty.

Recent developments in domestic politics in Mexico have spooked some investors. Business groups have criticized an ongoing plan to overhaul Mexico’s justice system, which some say will undermine the independence of judges.

In Mexico and much of Latin America, poverty has a direct link to immigration. A severe recession in Mexico in the 1990s contributed to some 5 million Mexicans immigrating to the U.S.

Times staff writer Don Lee contributed to this report.