Tuesday, 5 January 2016

Cruise Outlook by industry sector

Cruise Outlook by industry sector


Tracking where cruise ships will go in a given year increasingly means looking at global growth. Cruise fleets have become so large and cruise companies so adept at sourcing globally that the game has become one of matching assets to the regional economies where they can reap the most benefit.
Or suffer the least damage.
There’s no better example than China, where cruise companies are determined to take advantage of relatively strong economic growth and an underdeveloped market.
The International Monetary Fund forecasts growth in China of 6.3% in 2016, down from 6.8% this year but still more than double the expected rate of growth in the U.S.
Responding to that growth, Royal Caribbean International will send a second newbuild, the Ovation of the Seas, which will sail from Tianjin, joins the Quantum of the Seas, which will sail its first full year from Shanghai in 2016, and the Legend of the Seas, which will sail from Tianjin and Quingdao.

Legend of the Seas
Carnival Corp.’s China deployment will grow from four ships to six, as the Costa Fortuna joins the Costa Serena, the Costa Atlantica and the Costa Victoria, while Princess Cruises will deploy the Golden Princess to join the Sapphire Princess. In all, Carnival expects to carry close to 1 million passengers in China next year.
Closer to home, the IMF expects economic growth in the U.S. of 2.8% in 2016, enough to support North Americans buying cruises in the Caribbean and Alaska.
Economic growth in Europe is forecast at 1.6% next year, while Latin America and the Caribbean will grow at a 0.8% rate, up from negative growth this year.
The weak showing in Latin America is reflected in the decision by Royal Caribbean Cruises Ltd. to pull the Pullmantur Empress back to the Royal fleet next year, where it will sail as the Empress of the Seas starting in the spring. Royal also canceled the scheduled transfer of the Majesty of the Seas to Pullmantur.
In 2016, Pullmantur will be a two-ship line focused on Spain instead of Latin America.
Across their markets, cruise executives are optimistic about pricing in 2016, having laid the groundwork by filling ships in 2015 to minimize the need for last-minute discounts. Both Carnival Corp. and RCCL say the booking curve has lengthened.
In a Sept. 22 conference call, CFO David Bernstein said that despite an almost 3% capacity increase in the first half of 2016, Carnival had less remaining inventory to sell than it did at the same time a year ago.
Royal executives said in an Oct. 23 call that 2016 load factors were the highest in the company’s history, and average per diems were ahead of the same time a year earlier.
The diplomatic opening with Cuba forged by President Obama this year is poised to pay dividends for cruisers, with several lines saying they will try Miami-Havana routes in 2016.
The most closely watched of those will be Fathom, Carnival’s new social impact brand, which also will be cruising to the Dominican Republic starting in April. Fathom has generated more than 18 billion media impressions since it launched and is drawing more attention to the Caribbean in general, Carnival CEO Arnold Donald said.
In the Dominican Republic, Fathom’s ship will dock at the $85 million Amber Cove private port opened by Carnival in October on the country’s north coast near Puerto Plata.
Another big private port is expected to open in 2016 when Norwegian Cruise Line Holdings inaugurates Harvest Cay, a $50 million island in Belize with sandy beaches, a water sports lagoon, an island-style village and an excursion staging area.
Having just added the Norwegian Escape to its fleet, Norwegian Cruise Line is one of the few big lines that won’t be adding new tonnage next year.
One of the most anticipated ships is the 2,650-passenger Koningsdam, which in April will become the biggest Holland America Line ship and its first new vessel since the Nieuw Amsterdam in 2010.
The Koningsdam’s new features include a circular theater with LED panels surrounding the audience, a large culinary arts center, a wine mixing experience and a two-level pool area.
Also replete with new features will be the 3,936-passenger Carnival Vista. Passengers will be able to ride a recumbent bicycle suspended from an 800-foot-long oval track, watch an IMAX movie or take advantage of a families-only lounge.
Viking Ocean Cruises’ second ship, Viking Sky, is scheduled to be delivered in March. In September, the line’s first ship, the Viking Star, will make its debut in North America, with a cruise to Montreal ahead of its winter season of 11-night Caribbean sailings from San Juan.
The first Oasis-class ship from Royal Caribbean in seven years, the Harmony of the Seas, will sail in Europe after a June delivery before heading for its homeport in Fort Lauderdale, freeing the Oasis of the Seas to sail from Port Canaveral.
In the luxury segment, Regent Seven Seas Cruises will get its first new capacity in 13 years with the July debut of the 750-passenger Seven Seas Explorer.
The ship is on track to be christened in Monaco and sail in the Mediterranean for the summer before moving to Miami in December for its winter season.
Also new in 2016 will be the Seabourn Encore, a cousin to the line’s three Odyssey-class ships. The Encore, due out in December, will have an extra deck, giving it a passenger capacity of 604, up from the 450 carried by the other Odyssey-class ships.
Senior editor Tom Stieghorst covers the cruise industry for Travel Weekly.