The Cruise Industry Invests and Expands

The Cruise Industry Invests and Expands

Spotlight 2016: From new brands to newbuilds, the cruise industry is dramatically ramping up its spending and markets By: Marilyn Green
<p>Carnival Cruise Lines’ Carnival Vista will be the line’s biggest ship. // © 2015 Carnival Cruises</p><p>Feature image (above): Seven Seas Explorer...

Carnival Cruise Lines’ Carnival Vista will be the line’s biggest ship. // © 2015 Carnival Cruises

Feature image (above): Seven Seas Explorer will be the largest ship in Regent Seven Seas Cruises’ fleet. // © 2015 Regent Seven Seas Cruises

This year has been one full of eventful announcements within the cruise industry, with reverberations likely to continue well beyond 2016. The luxury sector is expanding dramatically, adding some of its largest ships ever. New brands — such as Viking Ocean Cruises, Crystal River Cruises, Crystal Yacht Cruises and Virgin Cruises — are emerging or anticipated. China is quickly becoming a dominant market in the game, as additional cruise lines pour in new tonnage and partnership agreements. In the midst of it all is also the long-awaited emergence of a stronger Caribbean market. 

Worldwide luxury expansion is booming, with new ships launching from Viking Ocean Cruises, Regent Seven Seas Cruises, Silversea Cruises and Seabourn Cruise Line, along with the explosive announcements of new cruise products from Crystal Cruises’ new owner and the expected newbuilds coming out of Ponant’s sale. 

Most of the ships coming into the market are large, and often the largest in a fleet. Norwegian Cruise Line’s Norwegian Escape is the company’s biggest ship. Royal Caribbean International is debuting the 4,180-passenger Ovation of the Seas, the third Quantum-class vessel, and the Oasis-class 5,400-passenger Harmony of the Seas. Regent’s 738-passenger Seven Seas Explorer will be the largest ship in the company’s fleet, as will Holland America Line’s 2,650-guest Koningsdam. With capacity for 604 passengers, the new Seabourn Encore will be around 34 percent larger than the rest of the line’s ships, and the 4,000-guest Carnival Vista from Carnival Cruise Lines will be the largest vessel in cruising’s biggest fleet. 

Meanwhile, Cruise Lines International Association’s (CLIA) economic impact analysis last year showed that China is a main driver of passenger growth in Asia, adding 480,000 more cruise travelers since 2012, a nearly 80 percent compound annual growth. CLIA also reported that cruise tourism in Asia is growing at double-digit rates, both in capacity and as a passenger source market.

Cruise lines are getting the message. Carnival Corporation & plc is creating a new line based in China, working with the nation’s largest shipbuilder to construct vessels within the country. Royal Caribbean announced that capacity will be up again next year with the addition of Ovation of the Seas in Tianjin and the year-round presence of Quantum of the Seas in Shanghai. New ships, some originally expected in the North American market, are being sent to China, including Princess Cruises’ Majestic Princess. Carnival has reported that ships from its brands Carnival Cruise Lines and AIDA will also be moving into the Chinese market. In September, MSC Cruises announced that it is partnering with Caissa Touristic, which also works with Princess, Royal Caribbean and Costa Cruises, to place its first ship in China next year. And in mid-October, Norwegian threw its hat into the ring, declaring that it will bring its 2017 newbuild (formerly planned as Norwegian Bliss and now to be renamed) to China, as well.

In an October earnings call, Royal Caribbean International reported that the strength it is seeing in the Caribbean this year will continue into 2016, and Caribbean sailings of all lengths continue to remain popular. The company will have three Oasis-class ships sailing in the region by the end of next year, when the new Harmony of the Seas will join Oasis and Allure for the winter of 2016 and 2017. 

According to Royal Caribbean, its booking window has increased by approximately 30 days over the last two years. This may be related to the company’s policy of internally banning any new discounts in the U.S. and Canada in the final 10, 20, 30 or 40 days before cruises embark — a policy that will soon extend into the U.K.

The industry looks extremely robust in all segments, with diverse new ships coming in for the next two years and beyond — a great contrast to the choppy waters a few years ago.