At the end of March, two of the world’s largest cruise companies each made strong statements about upcoming new ships. Royal Caribbean Cruises Ltd. designated the Quantum-class Ovation of the Seas, which had been expected to go to the North American market, to be home-based in Tianjin, China, located about 100 miles from Beijing. Carnival Corporation & Plc announced nine new ship orders over four years, starting with 2019.
The timing of Royal Caribbean’s announcement indicates that advance sales in China are very strong. With the arrival of the 4,180-passenger Ovation next April — along with the new Quantum of the Seas, which will arrive in Shanghai this May — Royal Caribbean will have five ships based in China. The two new ships join will join Mariner of the Seas, Voyager of the Seas and Legend of the Seas, to comprise the largest fleet deployment for any cruise brand in China, according to the company. The five ships will home port in Shanghai, Tianjin, Hong Kong and Xiamen and primarily sail three- to 12-night itineraries to destinations in Japan, Korea, Taiwan and Vietnam.
Robin Farley, an analyst for USB Investment Research, noted that this could mark a game-changing shift in cruise capacity that could reduce capacity growth in more mature North American markets. Royal Caribbean’s existing ships in China are already the most profitable in the fleet, according to Farley.
The announcement reduced 2016 capacity growth for North America from 5 percent to 4 percent, which is expected to help drive up pricing.
“While China gets the newest Quantum Class, North America is getting the newest Oasis Class, Harmony of the Seas,” said Michael Bayley, president and CEO of Royal Caribbean International. “There will be three Oasis-class ships sailing from two Florida ports starting in 2016, in addition to Anthem of the Seas from Cape Liberty, N.J.”
Royal also has created a curriculum with Tianjin Maritime College and already hired more than 3,000 graduates. The company is looking into building Chinese dry-dock facilities to revitalize Legend of the Seas as early as 2018, as well as an inbound tourism business model to bring North American vacationers to China. Royal Caribbean’s summer 2016 Asia adventures will open for booking this August.
Carnival’s enormous move to order nine new ships is less single-market-oriented and involves what the company describes as “groundbreaking new ship design,” customized for each brand and market. Five of the vessels will be built by Fincantieri shipyards in Monfalcone and Marghera, Italy. Four will be constructed by Meyer Werft shipyards in Papenburg, Germany, and Turku, Finland.
Promising more details soon, Arnold Donald, president and CEO of Carnival Corporation & Plc, described the new designs as “the most efficient ships we have ever built.” “The great guest experience will create even more excitement around cruising, helping new cruisers realize the superior vacation experience and value that cruising offers vs. land-based vacations,” he added.
Carnival Corporation’s portfolio of cruise brands includes 101 ships in North America, Europe, Australia and Asia, distributed among its brands: Carnival Cruise Line, Holland America Line, Princess Cruises, Seabourn Cruise Line, AIDA Cruises, Costa Cruises, Cunard Line, P&O Cruises (Australia) and P&O Cruises (U.K.).
The Details
Carnival Cruise Lines
www.carnivalcorp.com
Royal Caribbean International
www.royalcaribbean.com
