Carnival Executives Detail Latest Ship Sales

Carnival Executives Detail Latest Ship Sales

Carnival Corporation has sold two ships this year, as the Seabourn Sojourn will be transferred to Mitsui Ocean Cruises next year, and the Costa Fortuna will sail for Margaritaville in late 2026.

“Over time, since ships get older, we will sell them to other parties,” said David Bernstein, CFO, speaking on the company’s second quarter earnings call.

“We do not feel that those parties come back to compete against us because they are generally in different marketplaces with different brands,” he continued.

Neither Bernstein nor Josh Weinstein, CEO, would comment on the sales prices of either ship, although Weinstein said it was “nicely over book value.”

“People came to us looking for ships and gave us prices that we thought were in the best long-term interest of the company,” Weinstein said.

He also explained that the Costa Fortuna's departure from the fleet does not impact Costa’s core program in Europe, as the Serena will take its place in the market.

Costa Serena to Sail from Taiwan to Japan this Fall

Costa Serena to Sail from Taiwan to Japan this Fall

Taiwan International Ports (TIPC) announced that the Costa Serena, which returned to sailing in Asia this year, will offer cruises to Japan in the fall of 2023.

The Costa Serena will sail three cruises to Okinawa, Japan from the Port of Kaohsiung in time for the mid-Autumn and National Day holidays in September and October.

In addition to sailing to Japan, the ship will return to Taiwan for regular homeport cruises first based out of Keelung and then Kaohsiung from July through October.

The Port of Kaohsiung has already set an all-time record this year with 157 cruise ship calls as of May 28, including 27 port-of-call visits.

The TIPC has recently opened a new Kaohsiung Port Cruise Terminal Building where automated smart passenger handling systems are being tested at the moment.

Upon completion, TIPC also plans to expand and upgrade the Penglai Cruise Terminal.

Costa Cruises May Be Getting Further Fleet Changes

Costa Cruises May Be Getting Further Fleet Changes

Carnival Corporation has been making strategic changes to its Italian brand, Costa Cruises, as a result of the pandemic and now more fleet moves may be coming.

In Carnival's third-quarter earnings release, the company said it was evaluating further moves for Costa.

"Given Costa Cruises' significant presence in Asia, particularly China, which remains closed to cruising, the brand continues to evaluate deployment options and fleet optimization alternatives beyond the previously announced transfers of Costa Luminosa to Carnival Cruise Line as well as Costa Venezia and Costa Firenze to the COSTA by CARNIVAL concept," the company said.

The Costa Luminosa recently transferred to Carnival Cruise Line, while the Venezia will move to the Costa by Carnival concept and sail from New York in 2023, followed by the Firenze moving to Costa by Carnival to sail from the U.S. West Coast in 2024.

The Costa Magica remains out of service, as does the Costa Serena, which had been positioned in Asia year-round.

Two other Costa ships, the Atlantica and Costa Mediterranea transferred prior to the pandemic to Carnival's joint venture with China State Shipbuilding Corporation and remain out of service with Costa branding. 

Costa China Set to Introduce ‘Game Changer’ New Ship

“It is our first newbuild dedicated to the Chinese market,” said Mario Zanetti, president of Costa Group Asia, referring to the new Costa Venezia, which debuts in Shanghai next May.  “We are creating a strategy for the new ship and it will be a game changer.”

That strategy is offering Italy at Sea to Chinese guests with a flair of local tastes as well, while a dramatic Venetian-themed interior design brings out the best of Italian culture aboard the 4,232-guest ship, as the company has its eye on the current and future needs of the modern Chinese cruise guest.

With the Venezia arriving in Shanghai, it will take the place of the Serena, which will move to Tianjin in place of the Fortuna, which heads back to Europe.

The Atlantica will concentrate on southern homeports, sailing from Shenzhen and Xiamen, said Zanetti, in an interview with Cruise Industry News.

"Those four ports are our backbone and the way to create accessibility, having homeports in the south, east and north,” he said.

Zanetti has helped lead Costa away from full ship charters in the market, helping to diversify risk while working to create value for travel agencies, he said.

“At this stage of the industry it’s largely based on the charter, and it’s not adequate for the sustainable development,” he said. “We are shifting models to reduce the risk and reduce the (size of the charters), to create a win-win culture. We are not only talking but working with our agency partners to help them educate the market.”

Earlier this year the company launched various business-to-consumer programs in China, including a roadshow covering the entire country.

 Moving away from full ship charters, he said a good number of agents were now involved in each sailing. Adjusting the model from a supply driven market to a consumer-centric market is key for the long-term development of the industry, Zanetti explained.

With other cruise companies making significant adjustments to their business operations in China, Zanetti said the numbers were promising.

“We are talking about a market where the penetration rate is very low,” he said, noting the growing middle class and their demand for leisure and entertainment options.

“We see our peers reducing deployment, but we are focused on being committed to the market to provide a high-quality and Italian cruise holiday experience. We are confirming this by introducing the Costa Venezia and increasing our capacity next year. That expresses our confidence in the growth and potential of this market.” 

Costa Venezia Poised for Taiwan Stint

Costa Venezia Poised for Taiwan Stint

The new Costa Venezia is heading for China in 2019 after her delivery from Fincantieri, and will also spend a month sailing from Taiwan next May, according to local media reports.

The 4,232-guest ship is a sister to the Carnival Vista and will spend next May on charter to a local tour operator in Taiwan, offering cherry blossom-themed sailings to Japan, according to Taiwan media.

The report said the ship would carry around 12,000 guests from Keelung, noting at least one cruise will be an eight-day sailing will include port calls in Kagoshima, Miyazaki and Osaka.

Pictured above: the Costa Serena in Keelung, Taiwan, earlier this month.

Costa Serena Becomes Largest Ship to Dock in Vladivostok

The Costa Serena has made history in Russia as it became the largest ever cruise ship to dock in Vladivostok earlier this week, with more than 3,000 guests aboard on a cruise from South Korea's Busan, also having called in Sokcho.

The ship was chartered by Lotte Tour, a Korean travel agency. 

The Costa Serena’s passengers and crew were greeted by hospitable welcome ceremony, organized by Vladivostok Sea Terminal in partnership with shipping agency, tour operator and prepared by Far Eastern State Technical Fisheries University, which presented their artistic program with drummers, singers and dancers.

Among the VIPs present for the call were the head of tourism in Primorsky Territory Government’ as well as the consul general from the Korean embassy. 

The port noted record time for immigration clearance, with all guest being cleared within two-and-a-half hours and the first group in under 30 minutes.

Tour programs included the highlights of Vladivostok and a Transsiberian railway experience, among others. 

The port and its tour operators arranged 79 total buses and 79 Korean-speaking tour guides for the call. 

A maiden call ceremony on the ship included Governor Andrey Tarasenk as well as other local officials and the ship's officers and CEO of Vladivostok Sea Terminal LLC  Valeryi Nagornyi.

The port is looking forward to dredging and pier improvements ahead of welcoming the Quantum and Spectrum of the Seas in 2019.

Costa Serena to Sail Two Cruises from South Korea

Costa Serena

The Costa Serena will deploy to South Korea for a pair of week-long sailings next May as the ship has been chartered by Lotte Tour.

The first voyage sails for seven days and six nights, from Incheon to Busan, according to a spokesperson. Calls include Ishigaki, Taipei, and Keelung.

Second cruise sails eight days and seven nights, round-trip from Busan, with calls in Sokcho, Vladivostok, Tomakomai, and Hakodate.

Competition for Chinese guests intensifies with Princess ship deployment

Shanghai Cruise Terminal

By sending its next ship to sail from Shanghai, Princess Cruises will vault into the vanguard of Western cruise lines seeking to source passengers from fast-growing China.

Princess said it will use the third ship in its Royal class, set for delivery in 2017, to establish a year-round presence in China, one of only three cruise lines to have done so.

The 3,560-passenger ship will be from the largest class of vessels that Princess sails, one-third larger than the 10-year-old Sapphire Princess, which begins its second season of summer sailings from Shanghai next week.

“Deploying our next new ship in China underscores our strong commitment to growing the China cruise market,” Princess President Jan Swartz said in a statement.

The move echoes the decision in April 2014 by Royal Caribbean International to commit the Quantum of the Seas to Shanghai even before it had been delivered. After six months of interim sailings, the ship left New York on a transit cruise May 2 and will begin year-round cruising in China in June.

At the time, Royal Caribbean CEO Adam Goldstein said the company felt it had an asset in the Quantum that was impossible to match.

The Princess ship, as yet unnamed, will be a follow-up to the Royal Princess and Regal Princess, which will remain on U.S.- and European-based itineraries. When they were introduced in 2013 and 2014, respectively, they made a splash with their protruding SeaWalk platforms, dancing water fountains and a pair of elegant chef’s table restaurants.

In addition to those features, the 2017 ship under construction at the Fincantieri shipyard in Italy will be customized for Chinese guests, using the Princess Class elements pioneered on the Sapphire Princess.

They include the World Leaders Dinner, a traditional English afternoon tea, a Lobster Grill, Ultimate Balcony Dining, an oceanview, hot-pot dinner option, ballroom dancing and expanded duty-free shopping.

“And as this ship is still in the design phase, we are looking forward to creating other new and exciting venues and experiences catering to the Chinese vacationer, which we will reveal in the coming months,” Swartz said.

In announcing the ship, Princess said it will be “the first year-round international luxury vessel designed and built specifically for Chinese guests.”

The announcement comes as competition begins in earnest for the Chinese customer.

On May 15, a joint venture between Royal Caribbean Cruises Ltd. and Chinese online travel agency Ctrip will begin sailing the former Celebrity Century from Shanghai.

The 1,800-passenger ship has undergone a renovation, which included the addition of an ice bar, a trampoline and minigolf as well as a makeover of the restaurants to tailor them to Chinese tastes. It will sail under the name SkySea Golden Era.

On May 21, the Sapphire Princess begins its second summer of sailings from Shanghai, followed by the arrival of the Quantum in June.

Carnival Corp. is also represented in the Chinese market by Costa Cruises, which has been sailing the Costa Serena from Shanghai since April.

In a note to investors issued after the Princess announcement, UBS Securities predicted that 2015 will be the tipping point for China to become a “game-changing force” for the cruise industry.

UBS analyst Robin Farley said China will not only provide a new source of demand but will reduce capacity and strengthen pricing in more mature markets such as North America and Europe.

The international cruise industry’s presence in China has been growing since 2008 when Costa first put a ship there dedicated to the Chinese market. Carnival Corp. sent then-Costa chairman Pier Luigi Foschi to oversee its Asian operations.

After Foschi left Carnival, former Princess Cruises president Alan Buckelew was named chief operations officer and was dispatched to China. Although Costa has two other ships, the Costa Victoria and Costa Atlantica, also sailing from China, the shift of a Princess newbuild to China will significantly step up Princess’ presence there.

After the 2017 delivery, Princess has no new ships on order, although Carnival Corp. recently announced an agreement in principle with two European shipyards to build nine vessels from 2019 to 2022.

Carnival Corp. has also agreed to explore a joint venture with Fincantieri and the China State Shipbuilding Corp. to develop the first “world-class cruise ship” to be built in China.

Norwegian Cruise Line has formed a task force to evaluate whether and how to enter the Chinese market. However, its largest shareholder is Genting Group, a Malaysia-based company that also owns Star Cruises, a line that is focused solely on the Asia market.

During the company’s earnings call last week, CEO Frank Del Rio said, “It is incredible to see our competitors devoting their newest, largest and probably best-performing ships to the Chinese market.”  He added that the Norwegian study group would deliver its findings by year’s end.

China redeployments could help boost Caribbean cruise prices

By Tom Stieghorst

China is suddenly the hot spot for large new cruise ships, a development that could help cure the plague of overcapacity and low prices seen in the Caribbean market this winter.

The latest ship to join the fleet cruising from China is the Costa Serena, which will be stationed in Shanghai, starting mid-2015.

At 3,780 passengers, the Serena will be the largest of three Costa vessels operating year-round from China and the largest Carnival Corp. asset in the region. The company’s Princess Cruises subsidiary plans to offer a summer of sailings from Shanghai on the Sapphire Princess, starting May 21.

The Costa move comes on the heels of a head-turning announcement by Royal Caribbean International that it will put the as-yet-undelivered Quantum of the Seas year-round in Shanghai, after a six-month stint at Bayonne, N.J.’s Port Liberty from November to May.
Robin Farley, a leisure industry analyst at UBS Securities, said that, taken together, the moves have implications beyond the Asia market.

“We believe the emergence of China as a major sourcing market can provide new demand for tonnage that can be redeployed from more mature markets, which could also potentially drive pricing in those existing markets,” Farley wrote in a note to investors.

More specifically, she said, the withdrawal of the Quantum from the domestic market reduces Royal’s capacity in North America by 1.5%; the ship represents 3% of its 2014 Caribbean capacity.

Except for the Oasis-class ships, at 4,180 passengers the Quantum would be the largest ship in the Royal fleet.

The impact of the shift of the Serena is a little more indirect on the North American market, since it is currently deployed on Mediterranean and Red Sea itineraries.

But if the loss of one ship in those regions results in Costa shifting a ship from the Caribbean (in the winter) to cover the void, it could reduce capacity in the Caribbean another 1%, Farley said.

Although the changes are small in absolute terms, a reduction at the margins could have a relatively larger impact on pricing as supply and demand come back towards equilibrium.

Sourcing of cruise passengers in China on a sizeable scale only started in 2006 when Costa positioned its first ship there, the 1,000-passenger Costa Allegra.

Since then, it has ratcheted up capacity with a series of bigger ships, including the current Costa Atlantica (2,680 guests) and Costa Victoria (2,394 guests) operating from Shanghai.

The debut of a second brand, Princess, with its 2,670-passenger Sapphire Princess, will increase Carnival Corp. capacity in China this year by 74%. Adding the Serena next year will mean 140% growth over two years.

Carnival has set up a dedicated unit in Asia (Carnival Asia, based in Singapore) and is laying the groundwork for selling more cruises to residents of that region, particularly in China.

“We have never been more committed to China as a market of great strategic importance for our company,” Carnival CEO Arnold Donald said.

Carnival has set up 10 offices in Asia, including five in China: Shanghai, Beijing, Tianjin, Guangzhou and Chengdu. It said seven of its 10 brands sail in Asia, and 23 ships will visit 90 ports with an estimated 1,439 port calls planned this year, including 220 in China.

Patrick Scholes, a leisure industries analyst with SunTrust Robinson Humphries, said the cruise lines are relatively slow to fully concentrate on China compared with other leisure industries. “It almost seems like the U.S. cruise lines are a day late,” he said.

Scholes pointed to the gaming giants like Las Vegas Sands and Wynn, who were not in the China market 10 years ago but “now they get the vast majority of their business out of Macau and China.”

Global hotel operators also converged on China about 10 years ago. “Now their strongest pipelines for opening new hotels are in China,” Scholes said.

Recently, Scholes said, cruise companies have started to shift their development attention to China. “Welcome to the party,” he said.

Scholes agreed that the increased desire to put competitive tonnage in China could help solve the industry’s structural impasse of recent years in which prices have been anemic even as capacity growth has been kept moderate.

“It sounds like [Caribbean] capacity for the first half of next year will be down simply because a lot of the ships are moving to Europe and Asia,” Scholes said. “So that will be a positive.” 

Costa Brings Spin Master Games Aboard for Kids

Starting December 2013 the innovative games by Spin Master will be making their debut aboard Costa Crociere – a world first exclusive to Costa – on the Italian company’s ships, where they will be the stars of the “New Costa Adventures” entertainment program.

The Italian cruise company’s youngest Guests on two of its ships – the Costa Pacifica and the Costa Serena – will be able to enjoy a truly special vacation on board, with fantastic games stimulating their curiosity while they interact with other children, kids’ staff and parents. Many of these games are now household names worldwide – for example the remote control “Air Hogs” vehicles, the levitating “AtmoSphere”, the family board games “” and “Fibber!”, and the “Flutterbye Flying Fairy”.

Thanks to the partnership with Spin Master Italy (Spin Master exclusive agent for Italy), a cruise with Costa confirms its reputation as the ideal vacation for the whole family. While parents and grandparents enjoy the cruise, young children and teens can have great fun at the free kids’ Clubs, where they will be supervised by dedicated kids’ staff and where the highlight will be the packed entertainment program featuring the Spin Master games.

The “New Costa Adventures” program includes a host of activities for children of all ages, all based on one or more Spin Master games: mission impossible with Spy Gear covert mission kits for secret agents; fun “drawing” for toddlers and their mums on the magic Aquadoodle color mat; hovering or bouncing off walls with AtmoSphere; aerial acrobatics with the remote control Air Hogs; courses on how to spread your wings and guide the Flying Fairy.

Thus the two Costa ships will turn into veritable floating “toy libraries”, where kids can while away the time between destinations on the itinerary: one-week Western Mediterranean cruises on the Costa Pacifica; 11-day cruises to Greece, Turkey and Israel or Morocco and Portugal on the Costa Serena.

This first phase of collaboration between Spin Master and Costa Crociere marks the beginning of a partnership that will continue in the Spring of 2014, when the Spin Master games and the “New Costa Adventures” program will be extended on 12 Costa ships.