Cruise Order book Hits Record Level

Cruise Order book Hits Record Level

Cruise lines seem to have abandoned their cautious approach to ordering new ships this summer as the cruise orderbook has achieved record level, with the sector hoping to take advantage of the mobility of its assets to tap the enormous potential in emerging markets, according London-based industry analyst Clarksons Research.

Since the start of last year, 24 firm orders for new vessels, including 15 with capacity in excess of 3,000 passenger berths, have been recorded. The order book now consists of 41 vessels with a combined berth capacity of 120,664, equivalent to 25% of the current fleet.

In the 3,000+ berth sector the orderbook is equivalent to 73% of the current fleet.

According to Clarksons, the continued focus on is evident from the orders noted so far this year.

Namely, has ordered another Quantum-Class, 4,200 passenger ship for delivery in 2019. Elsewhere, Carnival Corporation has firmed the first four of a previously announced plan for a nine-ship order.

“These will be the largest ships contracted by Carnival at 180,000 GT, and while not as large as the Royal Caribbean Oasis-Class ships (225,000 GT), they will have a higher total passenger capacity (6,600), giving Carnival at least a claim to having the largest cruise ships afloat,” Clarksons said.

In the past 20 years, there have three distinct phases of expansion, with the orderbook exceeding 100,000 berths in early 2001, in 2007-08 and again in 2015. The two previous peaks were followed by a sharp drop as investment in new vessels was abruptly cut off by economic slowdown in the established key markets in North America and Europe.

In the short-term, Clarksons expects the performance of the cruise sector to remain closely linked to that of the major “western” economies. Last year North American and European passengers accounted for 55% and 29% of the global market of 22 million respectively; these markets will continue to exert an important influence.

However, the outlook may be shaped by developments further east. Thus far, relatively few of Asia’s rapidly growing middle class have been exposed to cruises, but the cruise lines believe they can develop significant demand growth in this region.

In 2015 the number of mainland Chinese tourists cruising is expected to pass 1 million for the first time, and according to industry sources in 2014 the number of cruises based at a Chinese ‘home port’ grew by 9% y-o-y to 366, while another 100 cruises called at a Chinese port (up 41%).

“So, the cruise sector once again seems to be in rapid expansion mode. This time, the question is whether the establishment of new Chinese brands, the deployment of vessels specifically designed for Chinese operation and further investment in Asian cruise ports could drive a more sustained phase of ship investment,” Clarksons adds.