Sunday, 7 February 2016

A good sign when another river line heads to the open seas?

A good sign when another river line heads to the open seas?


Last month, Scenic announced that it will enter the ocean cruise market with the launch of the 228-passenger luxury mega yacht Scenic Eclipse in 2018, effectively making Scenic the second river cruise line after Viking to head to the open seas.
The fact that Viking and Scenic have invested in some serious ocean-going hardware can be viewed through many different lenses.
Michelle Baran
Michelle Baran
On the one hand, it may indicate some nice profits coming out of their river cruise endeavors, allowing for expansion. We can’t know for sure - these are private companies and investments (and capital) can come from many different sources - but there’s a case to be made that they wouldn’t be able to shell out for blue water product if their river cruise business one wasn’t holding up nicely. It may also be that these companies are looking for ways to bring a loyal customer base to destinations that they can’t via inland waterways. 
But there’s also a case to be made that they might be heading into the ocean market to diversify their portfolios and reduce the risk of being fully invested in rivers, which has become a very bloated market over the last few years.
If you look at investment in the opposite direction, from ocean to river, the fact that Crystal Cruises is bankrolling a new fleet of river cruise ships could be seen as an indicator that the river cruise industry does show signs of continued promise into the near, and perhaps longer-term. But it also means a further inflation of the river bubble.
In the river cruise industry, there are some signs of headwinds in 2016; some increased discounting taking place, some post-Paris attacks challenges, and I’ve already written about a relative slowdown in shipbuilding momentum.
And it remains to be seen whether these recent river-to-ocean crossover moves are signs of further headwinds or rather indicate that the river cruising industry still has plenty of wind in its sails.