NCLH CFO Admits Caribbean Expansion Was Premature

NCLH CFO Admits Caribbean Expansion Was Premature

Norwegian Cruise Line Holdings’ Chief Financial Officer Mark Kempa offered commentary on the company’s Caribbean capacity strategy, acknowledging that a 40 percent capacity increase into the region was pushed forward prematurely.

“In hindsight, it is clear that this shift was executed without the necessary enterprise-wide coordination,” Kempa told investors on the company’s fourth quarter and year-end earnings call.

“The capacity increase was premature.”

At the center of that was Great Stirrup Cay, the company’s private Bahamian island, which is undergoing a significant enhancement program.

The capacity shift happened before the opening of Great Tides water park on the island, which expected to open later this summer.

Kempa said the commercial infrastructure needed to absorb the additional capacity simply wasn’t ready.

Revenue management, sales, marketing, itinerary planning, and on-island monetization strategies were not aligned or integrated under a single cohesive operating plan.

“The individual components were moving forward, but they were not integrated under a single cohesive operating plan designed to absorb the capacity at the right yield,” he said.

Kempa said the headwinds are more pronounced than the company anticipated.

Kempa did express confidence in the long-term Caribbean strategy, pointing to strong early guest satisfaction scores at Great Stirrup Cay following the opening of a new pier, expanded pool facilities, and enhanced amenities.

“The early feedback reinforces our confidence that our investments are improving the guest experience and will drive strong returns,” he said.

MSC Revving Up for Global Exposure

MSC Revving Up for Global Exposure

MSC Cruises is aggressively building up its global exposure through sponsorships of sports, including auto racing, soccer and basketball, in addition to the more traditional sales and marketing channels.

Comparing the cruise line to the worldwide Formula 1 racing series, Gianni Onorato, CEO of MSC Cruises, said: “We share common goals; we are focused on sustainability and driving new technologies, while also being in the entertainment business. F1 allows us to deliver our brand message across the world.

“This fits with our other sports sponsorships, such as the well-known soccer brands Paris Saint-Germain and Chelsea, and in basketball, the New York Knicks, which is drawing record spectator and (TV) viewer numbers.

“These sponsorships give us a high and positive visibility across the globe and in key markets,” Onorato added.

Showcasing MSC Cruises’ product this summer is the new 181,500-ton, 4,888-passenger (double occupancy) Euribia, built by Chantiers de l’Atlantique.

Onorato described the Euribia as the most environmentally sustainable cruise ship ever built and as for the new hull livery, he explained: “What is most important is not the decoration itself, but the message it sends with the hashtag ‘save the sea.’ Our assignment to the artist was to interpret our love of the sea and the need to care for and protect the sea.”

Built to run on LNG, the Euribia used biofuel on her first sailing, however, which meant net-zero greenhouse gas emissions, according to Onorato.

“The Euribia will allow us to sail in the heritage fjords of Norway,” he continued. “She will give us access to regions that in the future will become more restricted. In addition, our customers are also looking for a ship like this that is more environmentally oriented. I think that more and more sustainability will be a driver in people’s choice of holidays.”

The new ship is also fitted for shore power connection and will be dedicated to Northern Europe during its first year of operation.

Onboard features are shared with other ships of the same platform, Onorato said, noting that these have been fine-tuned. “Every time we introduce a new ship we work to improve and perfect certain aspects,” he said. “Thus, we have focused a lot on the entertainment and have three new shows on board as well as speciality restaurants ranging from Japanese to French and Italian cuisines, and bars similar to what you will find in high-end European destinations.”

Meanwhile, MSC continues to invest in new technologies like dual-fuel engines and systems to run on LNG, while also testing fuel cells, Onorato explained.

“For our legacy ships, we see non-fossil fuels as the solution, you can call it biofuels or synthetic fuels. And while our new ships run on LNG, longer-term solutions may also include hydrogen.

“We will do the necessary modifications to our ships so they will be ready to burn new fuels whenever these become available on a large scale.”

The clear target is net zero emissions across the entire fleet by 2050. Meanwhile, a target is to reach 40 per cent carbon intensity reduction by 2030, compared to 2008, is on track and already MSC Cruises is at 33 per cent, according to Onorato

“We believe the cruise market will continue to grow, and we are committed to maintaining our own leading position,” he said. “Our goal is not necessarily to be bigger than the other major brands, but to have our piece of the cake if I can put it that way.

“How far we will grow will be determined by our customers. What I can say is that we had 2.7 million passengers in 2019 and are on track to reach 4.2 million this year. So that means our customers love us.”

Photos: Gianni Onorato; MSC Euribia (Credit: Oceanliner Photos)

Excerpt from the Cruise Industry News Quarterly Magazine Summer 2023

MSC Cruises Announces Plans for Galveston Homeport

MSC Cruises Announces Plans for Galveston Homeport

MSC Cruises has announced the next phase of its U.S. expansion with plans for a new homeport in Galveston, Texas, according to a press release.

The cruise line said it is in negotiations with Galveston Wharves on the development of a fourth terminal at the port, which has led to both entities signing a non-binding memorandum of understanding (MOU) outlining parameters of a potential agreement for the development and operation of a terminal at piers 16-18.

MSC Cruises will announce more details next year, including the timing of the launch, ship name and itineraries, the company said in a statement.

The line currently sails from Miami and Port Canaveral (Orlando) in Florida, with year-round service from New York City beginning in April of 2023.

Rubén A. Rodríguez, President, of MSC Cruises USA, said: “The prospect of developing a new homeport in Galveston is exciting because it represents a big step in our ongoing North American expansion.  Bringing our modern, glamorous ships to Texas would provide even more access and opportunities for guests and travel advisors to experience the future of cruising with MSC Cruises and our unique European style.  We look forward to productive discussions with Galveston Wharves as we chart MSC’s future in the U.S. market.”

Rodger Rees, Galveston Wharves port director and CEO, added: “Adding MSC to our family of cruise lines homeporting from Galveston would continue to elevate our status as a top U.S. cruise port and boost the regional economy.  It also allows MSC to reach a new market of millions of cruise passengers in the Central U.S.  We’re excited about the huge potential of this mutually beneficial public-private partnership.

“Our popularity as a cruise homeport is reflected in the growth of our passenger counts and sailings.  In 2023 we forecast a record 362 sailings, the highest in the port’s 22 years as a cruise port.  This is great news for the port and our region because our cruise business is a major revenue and jobs generator.”

Disney Considering a ‘Competing Port’ Ahead of Miami-Dade Meeting

Disney Cruise Line is considering “a competing port” to Miami for use with its expanding fleet.

This was reported in Miami-Dade County’s Memorandum ahead of the Board of County Commissioners meeting on Feb. 17.

“Disney has recently advised the Port that, prior to entering into a preferential berthing rights agreement with the County, it will conduct due diligence with a competing port regarding a long-term berthing agreement at that port,” the Memorandum reads.

Disney currently sails cruises seasonally from PortMiami, and is a key client at Port Canaveral, with a year-round presence.

However, by 2025, Disney’s fleet is expected to grow from four to seven – with the Disney Wish and two other unnamed ships entering the family.

If MSC Cruises signs a lease agreement with PortMiami for Berths 8, 9 and 10, Disney Cruise Line may share Berth 10 with MSC, getting preferential use rights over other cruise lines, according to the Memorandum.

It is not wholly clear which other port the cruise line is considering, although Port Everglades would be the closest major cruise port to Miami.

Port Everglades Expansion On Track

Port Everglades is advancing $1.6 billion in infrastructure improvements that are underway and expected to be completed in the next five years, according to a press release.

“The COVID-19 pandemic is certainly impacting this year’s bottom line, but we are fortunate that Port Everglades’ diversified business sectors of cargo, cruise and petroleum can address a dip in one business sector and be balanced out with stability in other revenue-generating business sectors. As a result, Port Everglades has a history of financial success and has budgeted for several sizeable construction projects that are moving forward at a rapid pace with little disruption from the virus,” said Port Everglades’ Glenn Wiltshire, Acting Chief Executive & Port Director.

The U.S. Army Corps of Engineers is in the preconstruction engineering and design phase of deepening the Port’s navigation channels from 42 feet to 48-50 feet and widening narrower sections of the channel for safe vessel passage.

In February 2020, this project received $29.1 million in funding under the U.S. Army Corps of Engineers FY 2020 Work Plan. The funding will be used to build a new facility at U.S. Coast Guard Station Fort Lauderdale so the Intracoastal Waterway can be widened by 250 feet. Currently, this chokepoint in the channel puts operating restriction on large Neo-Panamax cargo ships, which affects their ability to transit past docked cruise ships. The Coast Guard Station reconfiguration is the first phase of the larger dredging project.

Port Everglades is also building a new parking garage to serve Cruise Terminals 2 and 4. The new 1,818-space garage is currently under construction, with a Fall 2020 completion date. It will feature an air-conditioned bridge with moving walkways to deliver guests to Terminal 2, Princess Cruises’ prototype Ocean Medallion terminal. The Northport Garage, where passengers now park, will be dedicated to the Greater Fort Lauderdale Broward County Convention Center.

Cruise chiefs talk expansion, recession

Norwegian Encore after float-out from Meyer Werft.

Another year, another non-recession.

How long can this go on?

It has been a decade since the so-called Great Recession bottomed out in June 2009. Since then the U.S. economy has experienced a remarkable 125 months of uninterrupted growth, breaking the 120-month record set by the 1991-2001 expansion.

Ten years of steady climbing has had a predictable effect on cruise sales. According to executives of Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings, which recently reported third-quarter results, things couldn't be better.

"I can't stress enough the underlying strength of the business," Frank Del Rio, CEO of NCLH said in a conference call with analysts.

Despite doing nothing strategically to extend the booking window, it expanded by 10% in the third quarter, Del Rio said, "underscoring consumers' underlying appetite for cruising on our three brands."

Cruise lines are at that happy point where, at least in North America, an abundance of bookings is creating scarcity, driving prices higher, and stampeding more consumers to book even earlier to lock-in early booking savings.

All good things come to an end, to be sure, but the chances of them coming to an end in 2020 aren't that likely.

In its monthly survey of economists for November, the Wall Street Journal found that only 34.2% of economists expect the expansion to end in 2020, with another 29.3% saying it will end in 2021.

One of the main drivers of a classic recession, inflation, is expected to clock in at 1.9% in November, just below the Federal Reserve's target. The unemployment rate next month is forecast at 3.6%, meaning most of the people who want a job have one, providing fuel for further consumer spending.

Economists used to talk about the Goldilocks economy - not too hot, not too cold - and without much fanfare, we may be in one. But one troubling footnote is that the growth in the current expansion - 25% since 2009 - has been only half as strong as the 42.6% growth in the 1991-2001 period.

"It's been the slowest recovery in American history," said RCCL chairman Richard Fain in a talk at Travel Weekly's CruiseWorld event last week.

Fain said that expansions don't die of old age; there has to be a trigger, which right now isn't blindingly obvious to most observers. He said that when the recession does come, the cruise industry will do okay.

He recalled that the Oasis of the Seas, then the biggest cruise ship in the world with a startling capacity for 5,400 guests, was delivered in 2009 when the economy was flat on its back.

"The truth is it did beautifully even in 2009. Oasis was gangbusters, and it was because it met a need," Fain said.
He added that it was important that Royal Caribbean's cost-cutting during the last recession didn't cut from the guest-facing functions.

"Lots of businesses say 'Oh business is bad, we're not selling so many shoes, so we'll cut costs and lay off some people.' If we fill our ships, we can't let one customer feel like we've cut back in order to make our earnings look better," Fain said.

"We're going to continue to function, continue to operate, continue to market because it's the right thing to do to be in business five years from now," Fain added. "And everybody in this room will remember what we do."

Galveston Continues Expansion of Cruise Products

For the Port of Galveston, the major news for 2018 is the continued expansion of cruise products and related services available, according to Interim Port Director Peter Simons.

Carnival Cruise Line is moving the Carnival Vista to Galveston later in the year replacing the Breeze. The Vista will sail alongside the Liberty and the Freedom.

“To accommodate the Vista we are in the process of doing some infrastructure upgrades in Cruise Terminal No. 1,” said Simons.

Last fall, the port also welcomed the Vision of the Seas, and Simons explained that while she was originally intended to be a seasonal product, she is replacing the Enchantment of the Seas on a year-round basis.

“We will have three Carnival and two Royal Caribbean ships year-round, and Disney seasonally from October to January,” he added.

The current scheduling has two ships in port on Saturdays, two on Sundays, one each on Mondays and Thursdays, and Disney on Fridays.

Terminal Expansion

“We have completed the expansion of Cruise Terminal No. 2, and when we did the design for that, we planned for larger ships and more passengers. Both of our terminals are able to handle bigger ships and more capacity,” he said.

“What we are doing though on the channel side is adding mooring structures to accommodate the longer Carnival Vista, and we are also finishing a mooring improvement project at Terminal No. 2 that will enable us to handle even larger ships in the future. We are upgrading the main mooring to be 200-ton bollards – the longer dock will also allow us easier access to the loading doors.

“We are also in the conceptual stage, looking at the designs and options for a third cruise terminal. There is definitely demand to sail from Galveston on weekends and we want to be able to accommodate what we see as future growth in that market.”

Simons said the port is talking to cruise lines about how to fund the new terminal. He said the port’s options were either bank financing or teaming up with a cruise line.

Meanwhile, he is also looking at how to provide the next generation of ships with LNG.

Team Effort

At press time, Galveston projected just short of 1.9 million passengers embarking and disembarking on some 258 sailings for 2017, up from 1.7 million passengers for 2016. For this year, the forecast is for 308 sailings and more than 2 million passengers, according to Simons.

“We see a lot of people coming down a couple of days early for special events, so there is a fair amount of extra local spending in connection with the cruise traffic. The vast majority of the passengers are drive-ups regionally and usually from the lower Midwest, but even as far north as Illinois and South Dakota. The fly-ins are typically from the West Coast.

“There is also a wide variety of things to do both on Galveston Island and in the vicinity that we are working with the cruise lines on for pre- and post-stays,” he added.

Simons, who joined the port in 2012 and was director of operations before being named interim port director, credited the port staff, the longshoremen and the stevedores for Galveston’s growing cruise traffic. He said it was a team effort with very attentive and hard-working people, making the cruise lines feel comfortable here and helping to grow their business. 

Royal Caribbean Will Invest $250 Million to Expand Presence in Miami

Oasis Class and Quantum Class to call Miami Home

Big Thank You To David Block for this story.

Check out David's Google+ site; https://plus.google.com/u/0/112416669860023952159/posts

Royal Caribbean Cruises has plans to open a new cruise terminal in Miami by 2018, increasing its presence in the U.S. market and giving its giant new-build vessels a potential homeport in South Florida.

Earlier this week, the Miami-Dade county Board of Commissioners signed a legislative resolution which will likely lead to a new home for Royal Caribbean’s ships in the region.

The resolution, obtained by Skift from the Miami-Dade county Board of Commissioners, shows that a long-term lease to accommodate Royal Caribbean’s large new vessels will likely be signed in the next four months.

According to deal, Royal Caribbean will invest more than $100 million to build a new cruise terminal in a ten-acre plot on the north side of PortMiami. Its expected investment over the course of the contract is $250 million.

Royal Caribbean Cruises will introduce eight new ships across its six brands by the end of 2020, including four more gigantic Oasis- and Quantum-class ships.

PortMiami says the deal is a good one for them because Royal Caribbean will bear the brunt of all upfront costs for building the new terminal. The port just completed a costly dredging project to let large cargo and cruise ships access its facilities.

Port of Miami.

“Although much work remains to determine the cost ranges for various elements of this program, RCL will bear the full cost for constructing the cruise terminal, parking garage, ancillary facilities, and any bulkhead work,” according to the report.

PortMiami expects to earn $9.5 million annual from leasing the land to Royal Caribbean, an increase from the about $1.2 million it currently earns from cargo companies using the land. The initial lease will run for 20 years and will be renewable in ten year increments once the original terms expire.

Royal Caribbean’s biggest vessels now homeport at Port Everglades due to its infrastructure’s support for larger ships, and PortMiami wants the cruise line’s continued business.

“At the time that PortMiami failed to secure the Oasis of the Seas and the Allure of the Seas, the Port did not have facilities capable of hosting these vessels nor did it have suitable expansion plans,” reads the document.

Royal Caribbean can bring in other investors to help finance the new terminal, but will be on the hook for at least 20 percent of the venture when the project is completed.

Norwegian Cruise Line giving Great Stirrup Cay a big upgrade

Great Stirrup Cay will have a new air-conditioned reception area.

VANCOUVER — Norwegian Cruise Line outlined plans to upgrade facilities at its Great Stirrup Cay private island in the Bahamas.

Norwegian will increase dining capacity by 50%, spend $1 million on new landscaping, and create 100,000 square feet of new pathways, including a new boardwalk along the beach.

Other features include a pair of parallel zip lines that will be 1,000 feet long and elevated 100 feet in the air, and a new air conditioned reception area where guests can get oriented, change clothes and make reservations.

New family activities will be available, including an underwater sculpture trail for snorkelers.

Great Stirrup Cay will have villas in its exclusive Lagoon Retreat area.

There will be a new lounge area with bar service in the center of the island, a new Landshark Bar & Grill and an Abaco Taco bar, as well as a redesigned buffet.

The amount of shaded area will be increased and more restrooms will be built.

A Lagoon Retreat aimed at high-end guests staying in Haven and Suite accommodations will have the Silver Palm restaurant, a private party room that can be reserved for groups of up to 75 and 22 air-conditioned villas (studio, one bedroom and two bedroom) for rent. A Mandara spa will be on site.

The Lagoon Retreat will be reserved for Haven guests, anyone who books a spa treatment and a limited number of guests on each cruise who will pay extra.

A posh Mandara Spa will have four treatment rooms.

At a press conference at CLIA's Cruise360 conference, Norwegian president Andy Stuart said the features were not designed after MSC Cruises announced an island with similar amenities in Bimini last year. “We’ve had plans in place for a number of years,” Stuart said.

He declined to say what Norwegian will spend on the upgrades, other than to say it was part of Norwegian’s $400 million Norwegian Edge initiative.

The upgrades at Great Stirrup Cay are expected to be in place by spring 2017, except for the cabanas, which will open in the summer, Norwegian said.  

Work halted on Panama Canal expansion

By Tom Stieghorst

The Panama Canal Authority said almost all activity has ceased on the project to widen the canal, amid a payments dispute with the contractor.

A consortium led by Spain’s Sacyr Vallehermoso is seeking reimbursement for cost overruns of more than $1 billion.

Two weeks of negotiations have not produced a resolution, the authority said.

Canal Administrator Jorge Quijano said the authority continues to try to find a solution, but stressed that the contractor must resume normal activity, which is critical during the dry season in Panama.

The widening project had been scheduled for completion in mid-2015. Current canal passage is not affected.

Amid Asia tensions, uncertainty over expansion

By Tom Stieghorst

Maritime disputes in Asia have thrown a crimp into the cruise industry’s plans to expand in that fast-growing area of the world, and signs are the problem is growing worse.

The latest is a report in the Wall Street Journal that China is challenging archaeological exploration of hundreds of shipwrecks, many of them distant from its own shores.

The article says China views the wrecks as proof of Chinese exploration of islands in the South China Sea, in areas close to the Philippines, Malaysia, Vietnam and Brunei.

According to the report, of particular concern was an incident last year off the coast of the Philippines, when Chinese vessels forced a French archaeological team to abandon its exploration of a 13th century Chinese junk.

Already, China and Japan are in a standoff over disputed islands in the East China Sea. As a result, Royal Caribbean International and other cruise lines are not including Japan on their itineraries from China, opting for only Korean ports on cruises from northern Chinese cities.

The tensions in that area have escalated, too, with China claiming air rights over a wide swath of international ocean, including the disputed islands known as Diaoyu in China and Senkaku in Japan.

In its new air defense identification zone, China seeks to require all aircraft to file flight plans before entering the area. Japan and the U.S. immediately sent military planes into the space unannounced, to challenge the newly asserted Chinese zone.

None of this can improve the chance that China will get more big cruise ships. Until the uncertainty clears, the cruise industry’s Asia expansion, certainly in China, will not be full steam ahead.

Speaking on a third-quarter conference call to analysts, before China asserted its new air defense rights, Royal Caribbean International President Adam Goldstein said Royal had been hoping in 2013 to announce plans to resume calls in Japan on its China cruises aboard the Mariner and Voyager of the Seas. Instead, it has been forced to open 2014 bookings with only Korean destinations again.

“This is, of course, frustrating particularly since we do not see any signs of positive geopolitical change in the dynamic between China and Japan,” Goldstein said. “We continue to build our brand, our distribution and our management team in China with a view to making the best of the itinerary options that are available to us.”

Amid Europe river cruise boom, lines say there’s room for more

By Michelle Baran

It’s hard to believe that 2014 will see considerably more investment and expansion in the European river cruise market than the previous couple of astonishing years of growth and interest — but it will.

For starters, Viking River Cruises will break its own shipbuilding record with 14 additional vessels in Europe next year; a startup river cruise line, Emerald Waterways, is launching with two ships and competitive pricing; and the largest river cruise company in France, CroisiEurope, has decided to make a run at the U.S. market.

And that doesn’t even cover the standard handful of newbuilds and itineraries that most other existing river cruise players are planning to introduce next year.

But even with all that added inventory, retailers insist there’s still a lot of room to grow in this category. That’s because despite all the new capacity and itineraries in the industry, river cruising still only accounts for a small percentage of retailers’ overall business.

In Travel Weekly’s Travel Industry Survey this year, river cruising accounted for 6% of travel agents’ overall business mix, and 22% of travel agents said they were already selling river cruises. But agents say that client requests for river cruises are mounting as the category continues to grow and gain exposure.

“Everybody’s asking about river cruises now,” said Debby Hughes, owner of a CruiseOne franchise in Big Bear City, Calif. “People are hearing about all the new ships and all the new changes. People are looking for something different, something a little more cultural, a little more unique. It’s more inclusive than the larger cruise lines.”

Hughes said her river cruise bookings probably account for between 10% and 20% of her overall bookings, and there is still plenty of opportunity in the river cruise market.

But even Viking, which launched 10 ships this year and six in 2012, in addition to the 14 it plans to unveil next year, has acknowledged that while the demand merits the growth, the industry needs to make sure the infrastructure in Europe can keep up.

“We have 14 Longships on order for next year because the demand among our passengers is there, and we believe that the waterways we sail in Europe can accommodate that type of growth,” said Richard Marnell, Viking’s senior vice president of marketing. “But we do recognize there is a need for investments in local infrastructure, and we will actively work to play a role in those discussions.” 
Asked if her clients have started to notice any degree of crowding on European river cruises, Hughes said they had not, nor did she expect they would.

“People are used to larger ships,” Hughes said. “They’re used to getting off with thousands of people. I’ve never had a complaint that there were too many other tourists in town.”

As for the growing issue of rafting, where river cruise ships are forced to dock alongside one another, thus requiring passengers to walk through other vessels to embark and disembark, Hughes said, “Being able to go from one boat to the next, it’s one of the quirks of being able to cruise in Europe. It’s just one of those neat things.”

Few can deny that the growth and increased competition in the river cruise industry has spurred a race for better and more diversified product.

While for some river cruise lines, such as Tauck, that has meant amping up its upscale accommodations with more suites (Tauck is launching two newbuilds in Europe in 2014 that will each have 57% more suites than the company’s existing vessels), for others, such as Emerald Waterways, it has meant coming to market with more attractive pricing and amenities.

Earlier this fall, Scenic Tours, an Australian company, announced that it was launching Emerald Waterways, which would serve as the lower-priced alternative to its existing river cruise brand, Scenic Cruises.

In an attempt to capture the four-star river cruise market, Emerald Waterways will officially launch on April 15 with the unveiling of two newbuilds, the 182-passenger Emerald Star and the 182-passenger Emerald Sky, both of which are being outfitted with more playful features such as a heated swimming pool and a movie theater.

An eight-day cruise along the Danube, Rhine and Moselle rivers on Emerald Waterways will start at $2,230 per person, compared with an eight-day sailing through the Netherlands on Scenic Cruises that starts at $2,735 per person.

French river cruise line 

CroisiEurope thinks there is space in the lower-priced river cruise market, as well. After 38 years of selling river cruises in Europe, CroisiEurope this fall launched a website and call center devoted to U.S. retailers and clientele. The company’s pitch: low-cost river cruises with a multicultural mix of passengers.

“The founder of the company had the philosophy to make this product available for the mass market,” said Michel Grimm, international sales director for CroisiEurope. “Our pricing is very aggressive.”

An eight-day CroisiEurope river cruise, including meals, open bar and excursions, won’t run more than $2,400 per person, Grimm said.

As a European river cruise operator, CroisiEurope will host a mix of nationalities onboard, something the former Peter Deilmann Cruises tried to do with German- and English-speaking clients on its ships. Some observers say that strategy played a role in Deilmann’s demise several years ago.

But CroisiEurope’s executives are adamant that for the right customer, having people from different countries onboard will be seen as an added draw, not a drawback.

“This is not for people who want the safety of being with all other English speakers,” said John McGlade, director of CroisiEurope’s U.S. reservation center. “For people who want the international experience, it’s the perfect marriage.”

CroisiEurope is also building up its own fleet of canal barge vessels that have a capacity of 24 guests. The barges will allow the pricing on the canal itineraries to also be more aggressive than existing, more expensive canal barge trips that can often host only six to 12 passengers onboard.
Tour operator Abercrombie & Kent had resisted the river cruise market for years, focusing solely on those much smaller capacity and intimate canal barges in Europe.

But last year, the company introduced its first river cruise program with the launch of Connections by A&K, its new line of itineraries priced about 30% less per diem than a typical A&K small-group journey.

For 2014, Connections by A&K is expanding its river cruise offering from three departures in 2013 on the 152-passenger Amadeus Brilliant, to 18 departures in 2014 on a fleet of three Amadeus ships. The vessels are owned by Austrian shipping company Luftner Cruises, and Connections will limit its onboard group sizes to 24 passengers.

For 2014, Connections will offer nine river cruise itineraries ranging from nine to 17 days.

The river cruise industry “is growing by leaps and bounds,” Hughes said. “They’re getting innovative, they’re getting more competitive.” All of which, she said, is better for retailers in this swelling market segment, as well as for their clients.

Port Canaveral approves new cruise terminal

By Tom Stieghorst

Port Canaveral will gain another cruise terminal under a plan approved by port commissioners.

The 185,000-square-foot terminal, along with a 1,000-square-foot parking garage, will be the first on the south side of the port channel in the Cove restaurant and retail area.

That’s the same side of the port where a striking new Exploration Tower is set to open this month. The combination of the tower, restaurants and retail will for the first time give passengers pre- and post-cruise activities within walking distance of the ships, said Port Canaveral CEO John Walsh.

The terminal is expected to cost $80-$85 million and be ready for use by November 2014. It will be able to handle the largest ships in the industry, Walsh said.

Construction is expected to start in January, with tenants to be announced shortly.

Currently, Carnival Cruise Lines, Disney Cruise Line and Royal Caribbean International are prime users of the central Florida port.

To accommodate the new terminal, Port Canaveral will relocate its recreational boat ramps to a new, larger complex at the channel’s entrance west of Jetty Park.

Port Everglades slip to be lengthened

By Tom Stieghorst

Port Everglades in Fort Lauderdale said it was awarded a $1.85 million allocation to lengthen Slip 2 by 250 feet to accommodate larger cruise ships.

The award from the Florida Seaport Transportation and Economic Development Council becomes part of a budget that goes before the Florida legislature next spring.

The slip will be extended west and will be 1,150 feet long and 42 feet deep when completed in September 2016.

The engineering firm Bermello Ajamil & Partner was awarded the planning and design contract.

The work coincides with a $13.4 million renovation of Terminal 4 set to be finished by the fall cruise season in 2014. 

Cruising Excursions out to cause waves with international expansion

By Travolution

Two-and-a-half years after introducing its disruptive start-up model in the world of cruise, UK-based cruisingexcursions.com is poised to expand its international reach.

The firm, which will turn over £6 million this year, has created new websites for the Germany, French and Dutch markets and expects to make a splash after seeing considerable growth in the UK.

Having agreed deals with the UK’s big two, Thomas Cook and Tui Travel, the firm has seen sales increase 400% this year, double what it had projected.

It turned a profit last year according to accounts filed last September and is now out of its start-up phase and a fully sustainable business, founder and managing director Simon Purchase told Travolution.

He was in London this week to meet with the technology firm Correl8 which built the existing website and has created its second version including its international sites in just eight weeks.

Purchase admitted at first it was a hard slog convincing agents to feature his product, but the signing of the big two was a turning point.

“We have had a very successful couple of years. It’s gone round in a circle to the point where people are asking us whether they can take product.

“With Thomas Cook and Tui Travel now offering excursions to their passengers, customer are now asking their agents if they can do their excursions.”

Purchase said agents have also been forced to seek out additional revenue opportunities since cruise lines cut commission to agents - the UK’s leading operators by as much as 10%.

With 10,000 tours in 700 ports worldwide, Cruising Excursions believes it is well ahead of any potential rivals in a sector tipped as the next battle ground for disruptive technology.

Behind the business, however, is more than just fancy technology it has contracted its own tours and organises its own transfers to give it control over the product.

The firm’s entry into the sector has seen local tour guides and operators previously frozen out by the major lines able to grab a slice of a growing and lucrative market.

At the same time a market that was sewn up by the operators has been broken open, offering customers significant savings on their on-shore activities.

Cruising Excursions now claims to have 8% of the UK cruise market of 1.7 million annual cruisers. It had originally targeted hitting 2% after two years.

Purchase said trade distribution has played a key part in the firm’s growth, rising from just 10% at the outset to 50% today.

European expansion isn’t Cruising Excursions first foray overseas; it already has a health business to consumer operation in the US and has just signed with Harvey World Travel in Australia.

But Purchase said he expects its latest expansion will cause further ripples among operators who are seeing good growth in cruise in Europe particularly in Germany, the second-biggest market.

“When I started this business I never thought there was this much money in excursions. The dramatic growth from direct and agents has been incredible in comparison to what we budgeted for.

“I’m obviously very pleased with the company’s success and am driving the business forward in the future to inhibit potential competitors.

“This sector has been a closed shop for 20 years. The cruise lines have never put their prices down they have always put them up. What do they expect?”

Cruise Excursions plans to launch an app that will allow customer to book their cruises while they are away, up to a day in advance.

It has also developed an API although this is not being used widely to date, most agents approaching shore excursions as an after sale add-on rather than inserting them into the booking flow.

The firm also hopes to add pre- and post-cruise trips, something failed rival Shorex set out offering but was unable to make work.

Carnival chief says Nassau port project is in the works

By Tom Stieghorst

MIAMI BEACH — Carnival Cruise Lines President Gerry Cahill said the line is working on a port-improvement project in Nassau, Bahamas.

Cahill made the disclosure on the State of the Industry panel at the Cruise Shipping Miami conference.

Carnival has previously partnered to build Caribbean port infrastructure in the Turks & Caicos and on the island of Roatan in Honduras.

Cahill would not discuss the scope or nature of the project, but said Carnival is working with a third party and getting cooperation from the Bahamian government to facilitate it.

In an interview after the panel discussion, Cahill said he wasn't prepared to say more, but that details could be forthcoming in several weeks.