A checklist of ocean and river cruising trends

I think midsummer, pre-election, is a good time to examine a few major trends we're seeing in ocean and river cruising, though I'm going to concentrate on the upper ends of these markets.

The cruise market is growing at about 4% a year, despite some nasty weather, Zika concerns and the growing fear of terrorism. CLIA predicts that more than 24.2 million people will take an ocean cruise this year. The biggest one-year projected gains have been in Asia, which is up 24%, and Australia, up 14%. 

As recently as 2010, China's cruise market was still on the drawing board. Cruises in China tend to be sold as complete packages by middlemen who normally charter an entire ship or large portions of an available sailing.

Carnival Cruise Line will have six ships in China this year, and Princess has a new Chinese market subsidiary. Royal Caribbean has taken the biggest risk, placing the 4,905-guest Quantum of the Seas there, and Norwegian Cruise Line is building a ship specifically for the Chinese market. 

The big question is how appropriate are these "Chinese-designed" cruises for the American traveler? To what extent will Mr. and Mrs. Mainstreet feel truly comfortable on a cruise designed for Chinese tourists? 

In the meantime, I'm betting that luxury adventure cruising is poised to become this year's industry growth leader. A 2013 report from the World Tourism Organization placed the value of the adventure market at more than $265 billion. If this is accurate, it means that expedition cruising has enjoyed a 24-month growth rate of something like 195%, a staggering figure. Get ready for the advent of the adventure yacht boom. Here are some of the key players in this growth:

Lindblad Expeditions-National Geographic went public last year and promptly ordered two 100-passenger vessels for U.S. coastal voyages. It also bought Via Australis and will place several of its ships in the Galapagos after major refurbishments. 

Lindblad, which invented nonscientific expeditions to Antarctica 50 years ago, operates six vessels carrying between 28 and 148 passengers. Instead of casinos and lounge acts, its cruises are likely to include top-tier naturalists, undersea experts, historians and expedition leaders, plus a National Geographic photo instructor or photographer to ensure Pinterest-perfect photos. Lindblad has started including organic food sourcing whenever possible. But, alas, there is no bingo. 

Crystal Cruises will be taking delivery of a polar-class, 200-passenger megayacht, the Crystal Endeavor, in August 2018. At 600 feet long and 25,000 gross tons, it will be the world's "largest and most spacious" megayacht, capable of handling travel within polar regions. In its first season, it will follow migrating whales from the Arctic to Antarctica. 

To offer guests the ability to truly explore some of the world's most remote destinations, the Endeavor will carry equipment not previously seen on a luxury adventure vessel. These will include two helicopters to take guests for flyovers, two seven-person submarines for deep-sea dives to view underwater glaciers and coral reefs, an all-terrain vehicle, a fleet of personal watercraft and even a recompression chamber for serious scuba divers. 

Silversea has been credited with leading the growth trajectory of luxury adventure cruising. It began with the Silver Explorer in 2007, and the line is now converting a five-star luxury ship, the 296-guest Silver Cloud, into a polar-class vessel. The goal is to offer guests a chance to explore some of the more extreme destinations on Earth with a one-to-one staff ratio and five restaurants onboard.

In 2017, the line will take delivery of the 596-guest Silver Muse, which is expected to have the industry's best staff-to-guest ratio. In many ways, the line is redefining the way luxury travelers explore remote corners of the globe, with the assurance that a well-stocked wine cellar awaits them when they return to their ship.

Seabourn is approaching five-star adventure cruising with a different emphasis, having designed itineraries that highlight spots in the world high on every adventure traveler's list, including Patagonia, Antarctica and the Amazon. Seabourn is getting two new ships: the Encore later this year and the Ovation in 2018. With these newbuilds, Seabourn has decided to up the passenger count from 450 on its current Odyssey class ships to 604.

Scenic, the upstart Australian luxury tour and cruise company, is launching what it calls "the world's first discovery yacht" in August 2018. It will sail to the Mediterranean, Antarctica and the Arctic, which you would expect of a self-described "six-star" vessel whose smallest suites have a butler and a veranda and measure 345 square feet. Even more spacious will be a two-bedroom penthouse suite, at 1,775 square feet.

While it might sound like the routes through the ice in Antarctica will get rather crowded in the next several years, Scenic is also placing its "most technologically advanced yacht in the world" closer to home, with a series of cruises in the Americas that include two 14-day circumnavigations of Cuba from Miami. 

River cruising on the Mekong River is increasingly seen as a sexy alternative to traditional river cruising.

The Amazon has the world's greatest biodiversity, but the Mekong River is second, with more than 1,300 known species of fish along its 3,050-mile path through Southeast Asia. The Mekong is the next hot destination, and travelers will discover that the vessels deployed on this route are built locally and represent the highest levels of shipbuilding craft, with dark wood floors and original furnishing. AmaWaterways, Abercrombie & Kent and Aqua Expeditions are leaders in this market. 

It has been said that if you want to vacation in style with good food, just figure out where the French are going these days. But Americans have another option. They can sail with the French to all seven continents on the laid-back, luxury French line Ponant. 

The original Le Ponant still sails as a 64-guest cruise ship. But its four sisters, Le Boreal, Le Soleal, L'Austral and Le Lyrial, now form the bulk of the fleet. Ranging from 224 to 264 guests, they feature not only French style but ice-hardened hulls for polar exploration. Each of the vessels has several lounges, a theater, library and a pool. Ponant's ships are heavily utilized by Tauck Tours' escorted sailing itineraries.

In the meantime, river vessels have evolved to embrace luxury. There was a time when a ship sailing any of Europe's major rivers was filled with 120-square-foot cabins, close to the mandated size of a prison cell in many states. But things are changing. 

Since river ships must be less than 443 feet long to fit through locks and there are strict limitations on height because of low bridges, cruise lines have to get creative with cabin design. 

Uniworld has a simple little switch that raises window glass to form an open-air solarium. Scenic Cruises has a "sun lounge," a balcony surrounded by glass that can be easily opened to the river. 

AmaWaterways has one-upped its competitors by designing twin balcony suites consisting of both a French balcony and a true balcony. 

But perhaps the smartest and simplest innovation is that of Avalon's panoramic suites, which constitute a majority of its cabins. Avalon has managed to turn the beds around so they face the window. A glass wall opens so guests get a sense of floating on the river from the comfort of their beds.

Seabourn added Penthouse Spa Suites on the Quest, and they will be added to the line's other ships this year. Just one deck above the ship's spa facilities, each of the suites is a bedroom with a sitting area, and they are decorated to match the spa below. They will feature specially designed, oversize showers, spa bath amenities and a soundtrack of soothing spa-influenced music. 

Crystal is taking a different approach to health and wellness. The Serenity came out of drydock with 70 remodeled cabins that are cleaned using hypoallergenic products. Each cabin is also equipped with special air filters. The hotel industry has flirted with this "cleaned more proactively than our regular rooms" concept and decided to abandon it. It remains to be seen if Crystal will find an audience for environmentally treated cabins.

Norwegian and Margaritaville Expand Partnership

Photo credit By Dave Jones

Norwegian Cruise Line (NCL) passengers will have more opportunities to declare, “It's Five O'Clock Somewhere” in true Parrothead fashion as the cruise line is expanding its exclusive partnership with Margaritaville — a multifaceted brand masterminded by music legend Jimmy Buffett.

Margaritaville at Sea is opening onboard Norwegian Getaway Sept. 18, then on Norwegian Breakaway Oct. 9, as revealed by Andrew Stuart, NCL’s President & Chief Operating Officer, during a press event at Margaritaville Hollywood Beach Resort in Hollywood Beach, FL.

In addition to these ship-based venues, Stuart also announced that two Landshark Bar & Grills — another Margaritaville brand — will be opening on NCL’s private Caribbean islands. Harvest Cay’s location is opening Nov. 16 and Great Stirrup Cay’s during summer in 2017.

These expansions are part of NCL’s $400 million “Norwegian Edge” program, which has transformed the company’s ships, its private destinations and culinary offerings.

“When we first launched Margaritaville at Sea, on Norwegian Escape, it absolutely blew us away. The demand for that venue, was beyond anything we’d ever seen. So we knew we had a partnership that made sense,” Stuart said. “So we’re super-excited to be talking about how we’re expanding the partnership.”

Norwegian Breakaway sails year-round from New York to Caribbean destinations and Getaway sails from Miami to the Caribbean as well. 

US Basketball Teams Opt for Luxury Cruise Ship Over Olympic Village

Team USA's men's and women's basketball stars will be living a life of luxury during this month's 2016 Olympic Games in Rio de Janeiro.

While many American athletes will be staying at the oft-criticized Olympic Village this summer, America's best ballers will be laying their heads inside of Silversea Cruises' Silver Cloud cruise ship.

The Chicago Tribune reported the players arrived on the 296-guest ship Wednesday. 

The Silver Cloud, which is the oldest ship in Silversea's main fleet, is anchored at Rio's Pier Maua in the Guanabara Bay. 

Inside the ship, highlights include generous-sized beds (ideal for basketball players), a spa, a pool, multiple dining options and even a cigar lounge.

Outside, security will be extremely tight. According to the Daily Mail, there's only one entrance to the ship and it will be manned by security equipped with a scanner. Bulletproof glass will surround the ship and police boats will patrol the nearby waters. 

READ MORE: Norwegian Getaway to Become Floating Hotel for 2016 Olympics in Rio

The reason for booking the Silver Cloud is simple, according to USA Basketball spokesman Craig Miller, who told the Associated Press earlier this year that "we don't stay in the village because we don't feel it's the best way to prepare for competition."

"The players have a long professional season, and they want to spend as much time as possible with family and friends," added Miller.

While staying outside of the Olympic Village is nothing new for USA Basketball — the last time being the 1988 Summer Games — this summer will be the first time in 12 years that the teams have stayed on a cruise ship.

The teams stayed on the Cunard Line's Queen Mary 2 during the 2004 Summer Olympics in Athens, Greece.

Put a clear data plan in place

By Carrie Finley-Bajak

As the American author, salesperson and motivational speaker Zig Ziglar said, "Lack of direction, not lack of time, is the problem. We all have 24-hour days." 

I talk with a lot of business professionals who tell me they want to devote more time to social media marketing tasks to improve their brand presence, attract new customers or engage with clients. Many social media managers feel that social media moves at a fast pace, which makes it hard to keep up. 

Also, if a business does not have a clear plan in place, then competing priorities will most likely bump social media marketing tasks off the to-do list. If this sounds familiar, keep reading to discover five action items to keep social media marketing tasks on track. 

Action item No. 1: Use data to set goals and establish priorities.

At the cornerstone of any social-media marketing strategy is data. Analyzing data can provide valuable insights to help guide decisions. Every three months, travel agents should be taking a deep dive into social media metrics to make decisions about where to spend time and money on this form of marketing. 

There are many ways to analyze data. For example, does video, text or imagery generate comments, shares and likes? How about other engagement performance statistics that track reach or interactions by social channel? And don't forget about website traffic reports that reveal acquisition and conversion stats. Travel professionals need to know how visitors are coming to a website and also how many of those visitors are responding to calls to action on specific landing pages. 

There are free metric reports available on each social media channel for business owners. You can combine those reports with website data details via Google Analytics for a complete picture. 

To learn more about metrics and how to create a social media marketing plan you should read:

• "61 Key Social Media Metrics, Defined" 
• "How to Create a Social Media Marketing Plan in 6 Steps"

Action item No. 2: Tidy up social media profiles.

Making sure that consistent branding meets your online audience is necessary for public relations and for presenting a professional image online. 

If you don't have time to devote to posting regularly on social media, at least the online audience can find out more about your company.

Some people set up social media accounts and forget to check back with the descriptions to make sure the information is accurate and full of keywords. Make sure there is an address and that details about your travel niche and images are consistent and up to date. 

Consider making a spreadsheet that lists all your company's social media handles and stats. Not only will a spreadsheet of all the social media channels with links to the websites be a time-saver; it can also serve as a file to keep track of growth numbers for setting goals.  

Do a search for your business name on all social media channels to see if there are orphan accounts, which someone at your company or you set up and then forgot to use (this does happen). 

In fact, a Facebook search on your business name might show results for competitors or spammers who are using the name of your business. 

Facebook Search is also helpful to glean information about suppliers. Pay attention to other travel agents who are ranked on Facebook search along with your suppliers because of keywords in their business descriptions.

Action item No. 3: Use social media tools for better time management.

To combat the frustration caused by not knowing what to post or not having enough time to post on numerous social media channels, consider using tools to help curate content and to post messages on multiple accounts at the same time. Here are some tools to help accomplish more with less time.

• Find content to share with online audiences with tools such as Google Alerts,Feedly, Scoop.it or Storify.
• Use a tool such as Hootsuite to manage multiple social media accounts in one location.

Action item No. 4: Develop an asset library of sharable content.

Can you relate? It is Wave season, and your competitor seems to have sponsored ads all over Facebook, Twitter and Instagram. You have a budget set aside for social media advertising (in fact, your preferred suppliers are even willing to co-op some of the expense), but you don't have the time it takes to edit photos and to create compelling paid-ad campaigns.

Why not create a content action plan to anticipate the needs of consumers looking for travel products?

The following are suggestions for planning ad campaigns that increase brand awareness and engagement (remember engagement means access to more people who will become familiar with your brand; social selling is all about relationships).

• Collect and save photos from suppliers or recent site visits to use for ad campaigns. Use a photo-editing app on your smartphone or a program such as Canva.com or PicMonkey.com to compare two vacation destinations side by side and ask the audience to pick their favorite. The image can be used on Instagram, Facebook, Pinterest or Twitter with a call to action asking the audience to pick the best one. 
  
• Generate small videos to share online. Next time you are on vacation or on a fam trip, start recording video. These can be edited quickly with Google Photos or with iMovie on an iPhone. Add music and narration later.
  
• Have a list of popular hashtags at the ready. Hashtags are very versatile and can be used for building one's audience, promote an event or develop a sweepstakes campaign.

Action item No. 5.: Research the competition and use your suppliers to help with social media tasks.

Travel agents are competing for screen time for consumers who are on information overload. 

Instead of trying to reinvent the wheel when it comes to finding generic content to share with the online audience, it makes more sense to get inspiration from your competition and suppliers.

Because social media is a public forum, there is no harm in exploring how the competition is using it. Perhaps there was a new product launch that you forgot to mention online; maybe there was a press release about a new cruise line, hotel or promotion that you did not read. 

All these scenarios are realistic ways that travel agents can miss the boat when it comes to opportunities to share usable information with a target audience.

Instead of trying to develop original ideas, get inspired by the competition and use your suppliers to help with social media marketing tasks.

The following tools help find useable content to repurpose and keep an eye on the competition:

• Research with Tagboard. Use hashtags to search for and collect public social media within seconds to streamline work flows.
• Use DrumUp to explore keyword searches and curate trending content.
• Discover hot topics with Google Trends.  

Let me know how your quest for the information presented will inspire travel professionals to re-evaluate their approach to social media marketing tasks to save time and generate maximum results.

Disney river cruise starts with a party in a beer tent

Disney Adventure Guides were resplendent in traditional German outfits and happily got many of the kids up and moving. Photo Credit: Paul Heney

This summer, Adventures by Disney is offering river cruises for the first time. Paul Heney and his son are on the AmaViola, experiencing the new product. 

VILSHOFEN, GERMANY — Adventures by Disney’s inaugural season of European river cruising is proceeding with the start of the company’s fourth river cruise today aboard the AmaViola.

The company, in partnership with AmaWaterways, is offering five cruises on the Danube between Vilshofen and Budapest, Hungary, this summer, plus a sixth holiday-themed cruise in December.

My son, Matthew, 9 and I spent a day in Prague on our own, adjusting to the time zone, before taking a luxury coach to this tiny southwestern German town this morning, along with 34 other adventurers. Most of the 140 passengers aboard the ship are from the U.S., with just a handful of Canadian guests and a couple from the U.K.

The cruise started off interestingly, with everyone getting OFF of the ship (after the mandatory safety drill) and enjoying what Disney called “Vilshofenfest,” an Oktoberfest-type celebration held in a small dockside tent.

The writer's son wearing a lederhosen apron.Photo Credit: Paul Heney

While a five-piece German band played, we snacked on beer, sodas and German pretzels. Four male dancers treated us to traditional dances, as well as a fascinating synchronized performance with whips. A young woman who was introduced as the local “beer queen” explained the cultural aspects of the evening.

Disney Adventure Guides were resplendent in traditional German outfits and happily got many of the kids up and moving. Children were given aprons to wear that made them appear to be dressed in similar German outfits — my son needed some convincing to keep his on!

Afterward, the Adventure Guides encouraged the children — there are roughly a couple dozen on board — to eat a more casual kids-only dinner upstairs in the lounge area, leaving us adults time to chat about destinations, politics, and other less-interesting-than-Pokemon topics. My son gladly complied, as did most of the kids I noticed.

While the ship, which I found bright and cheery, does not have “Disney” plastered on it literally or figuratively, there were touches to be found. Our welcome snacks included sandwiches in the familiar shape of Mickey Mouse’s head. I noticed “I Just Can’t Wait to be King” from the Lion King playing in the hallway. One young traveler who ventured to the adults’ dinner was referred to as “princess.”

Tomorrow, the ship docks in picturesque Passau, Germany, and excursions include a walking tour, a tree top adventure and a hike to a castle overlooking the city.

Cruise.co.uk secures £52m private equity funding

Cruise.co.uk secures £52m private equity funding

Cruise.co.uk has been sold to Bridgepoint Development Capital for £52 million.

The deal means private equity firm Risk Capital Partners, which acquired the online travel agency three years ago, has exited and sold its majority stake to Bridgepoint.

Several other bidders were involved in the process, and it is understood that Bridgepoint wasn’t the highest bidder.

The investment will help spearhead Cruise.co.uk’s UK and international growth.  In recent months Cruise.co.uk has set up offices in Ireland and Australia, but its management team has openly admitted that it wanted to set up in other English speaking markets.

The agency's chief executive Seamus Conlon said: "We’re delighted to welcome Bridgepoint as a new partner and shareholder to help us take our business forward in its next stage of development. Their financial and operational expertise will power our ambitions, particularly as we look to expand internationally."

Adrian Willetts, partner of Bridgepoint Development Capital, who previously owned luxury French cruise line Ponant between 2012 and 2015, said: “Cruise.co.uk is an opportunity to invest in a market leading consumer business that has shown strong defensive characteristics and benefits from strong market trends that will underpin its ambitious growth plans.

"It has grown impressively and we will seek to maintain and enhance its ‘trusted expert’ reputation as we work with management to accelerate business growth through acquisitions and drive further value through digital and marketing expertise."

In a statement, Cruise.co.uk said its turnover had grown by 15% in 2015 to £104.5 million. It also delivered sales and Ebitda Compound Annual Growth Rate of 23% and 30% respectively over the last three years.

Chairman Andrew Gardner and Sukie Rapal, who led the initial online and international expansion strategies, have left the business to explore other opportunities.

Conlon added: “I need to give special thanks to two people who have been instrumental in our success to date. Andrew Gardner, who persuaded Carnival Corporation to allow us to buy the company back in 2007, and explained the world of cruising to me.

“Sukie Rapal executed our initial social, user generated content and web strategy, which is bedrock of our current success. Both have decided now is a good time to leave the business and explore other opportunities – but they were both key to the Cruise.co’s success.”

Tony Andrews, commercial and product director, has joined the board and will take over Sukie’s responsibilities for the commercial operations in Ireland and Australia, in addition to his UK remit.

The agency's website attracts 17 million visits a year, and claims to be the largest cruise travel agency website by traffic and content. It has 190,000 reviews and more than 260,000 cruise related questions and answers.

Cruise lines use initiatives to break free from the pack

Food and film pairings at the Rooftop Terrace on Celebrity’s Millennium-class ships is part of the line’s Celebrity Distinction program.

Cruise lines are increasingly bundling their innovations under a catchy title or phrase that draws attention to what they’re doing in the hope of differentiating themselves from the pack.

The latest to do so is Celebrity Cruises, which announced its “Celebrity Distinction” moniker in July.

Norwegian Cruise Line coined “Norwegian Edge” in January for a package of culinary, shipboard and private island improvements.

And before that, lines created platforms such as Fun Ship 2.0 (Carnival Cruise Line), Royal Advantage (Royal Caribbean International) and (Holland America Line).

What unites them, said one marketing expert, is the desire to create a more premium image for their brand. 

“These are all elite positionings within the overall category,” said Liz Dolinski, a New York marketing consultant and founder of the social media marketing firm Luminosity.

Dolinski said that cruise lines often struggle to convince travelers that their products are different from the rest “especially when you think about which are the customers who are going to pay a higher price. So they’re trying to create some specialness that rises up above their brand.”

Celebrity Distinction brings together a host of initiatives that Celebrity has launched in the past year. It includes some traditional elements, such as drydock upgrades to three older ships. It also applies to more novel ones, such as the pairing of food and cinema on Celebrity’s outdoor Rooftop Terrace on Millennium-class ships.

And it has some singular features, such as Celebrity’s naming one of its ships for the first American-born female captain.

Dondra Ritzenthaler, senior vice president for sales, trade support and services, said what motivated the new platform was that Celebrity was not gaining enough attention for its unique features when it announced them individually.

“Platforms like these give [us] the ability to be able to tell a wonderful story in a way that encompasses more than one thing at a time,” Ritzenthaler said.

Speaking to a group of travel agents at an event in New York Harbor last week, she said that although Celebrity was communicating its distinctiveness, “people weren’t really grasping it, weren’t appreciating the value we were adding or the money we were spending, because it came in one at a time.”

Labeling programs can be particularly vital to upmarket lines, where service programs and other tweaks can be subtle, Dolinski said.

Mass-market lines such as Carnival have used labels to aggregate the hardware improvements on their ships. Fun Ship 2.0 is devoted to physical improvements such as new restaurants, bars and entertainment venues.

Likewise, Royal Advantage began as a refurbishment program for Royal Caribbean’s older ships.

But Celebrity Distinction includes things not so easily communicated, such as an increased number of overnight stays in key ports or more cruises that are tied to high-profile events.

Dolinski said that making features better known can be a key to higher pricing.

“If all the brands feel the same and you want a high-end customer who will pay slightly more, you have to give them something that you can’t get anywhere else,” she said. “As soon as you add an element to your product that is not present in another place but is truly unique it helps create the extra price differentiation.”

Perhaps the prototype for marketing an upgrade package was Holland America’s Signature of Excellence, launched in 2004. It grouped not only hardware improvements, such as new bars and stores, but soft goods, including special linens, and onboard enrichment programs, such as free classes on Microsoft’s Windows software.

Last year, Holland America announced a $300 million fleetwide improvement program focused initially on suites, but bucking the trend, it did not give the new package a name.

Next Carnival ship to be called Horizon

Carnival Vista entering Valletta Harbor, Malta.

Carnival Cruise Line said the second ship in its Vista class will bear the name Carnival Horizon.

The 133,500-gross-ton ship is scheduled to enter service in March 2018.

Carnival said that in addition to all of the features on Carnival Vista, such as the pedal-powered SkyRide and an IMAX theater, the Carnival Horizon will have a number of innovations unique to the ship.

Carnival Horizon, which will have a double-occupancy capacity of 3,934, would be the 26th ship in Carnival’s fleet and follows the most recent new vessels Carnival Vista, Carnival Breeze, Carnival Magic and Carnival Dream.

Homeport, itineraries and ship features will be revealed at a later date, Carnival said.

Agents get reacquainted with Royal Caribbean's Empress

Royal Caribbean International recently spent $50 million to refurbish the Empress of the Seas. It originally joined Royal in 1989 as the Nordic Empress and had been sailing for Pullmantur until earlier this year. 

The 1,602-passenger ship is currently doing 4- and 5-day Caribbean cruises from Miami through Oct. 29, but Royal expects to use it for cruises to Cuba once the Cuban government gives permission. Shown here is the pool deck.

Photo Credit: Tom Stieghorst

Royal Caribbean International has an unusual dilemma with the Empress of the Seas.

Because it is planning to sail the ship to Cuba when it gets approval from Cuban authorities, it can't plan cruises very far ahead on the ship's current Caribbean itineraries.

So, for example, it can't sell groups early in the booking cycle to get a base of business going. It only has inventory available through Oct. 29, basically a three-month window.

Moreover, Empress is an old ship — the former Nordic Empress — albeit with a recent $50 million makeover. There's nothing really like it in the rest of the Royal fleet.

So Royal held an open house for agents last week, in a bid to show off the improvements, help agents get a better understanding of the ship and bring it top of mind.

The ship looked remarkably good for a 27-year-old vessel. Some minds were changed.

Cheryl Scavron, a Dream Vacations franchisee in Pompano Beach, Fla., said she initially thought the ship and its four- and five-day itineraries was best suited as a party cruise for young people. "Now that I see it again, I think this would be nice for a couple," she said.

Over the course of a couple of hours, about 200 agents got a thorough tour of the ship's cabins and public spaces. They also got entertained by a Cuban combo in boleros; had a sample of the mixed drinks served onboard; saw snippets of two main theater shows, "Bailamos" and "Three"; and had a lunch of branzino or steak in the main dining room.

Two Royal executives, senior VP of hotel operations Mark Tamis and senor VP of sales Vicki Freed, hosted the event, but Scavron was impressed that Royal brought sales reps, not only from South Florida, but from as far away as California, to conduct the tours.

"Vicki really knows how to sell a ship," Scavron said. "She brought in enough people, and had good entertainment. She made the ship look the best it can look," she said.

Cruise Ships a Beacon for Germany’s KfW in Dire Shipping Market

The world’s largest cruise ship, Harmony of the Seas (Oasis 3), leaves the STX Les Chantiers de l’Atlantique shipyard site in Saint-Nazaire, France, May 15, 2016. REUTERS/Stephane Mahe

By Nicholas Brautlecht for https://gcaptain.com

(Bloomberg) — The call of the Caribbean is proving irresistible for Germany’s KfW IPEX, the development bank that funds the shipbuilding industry.

After lending 1.1 billion euros ($1.2 billion) to finance pleasure ships last year, including part of the funding for two new Royal Caribbean Cruises Ltd. vessels built in Germany, KfW IPEX is preparing to fund yet more cruise liners, earmarking a total 2.8 billion euros in new shipping loans this year. More than half of its 16 billion-euro maritime loan book is now devoted to cruise ships.

With passenger numbers rising at an annual rate of 4.5 percent, the global cruise industry is one of the few bright spots in a shipping market awash with debris after eight years of crisis in the container segment. It also offers European shipbuilders an opportunity to steal a march on Chinese competitors, who are still several years behind technologically in this corner of the market, Carsten Wiebers, the global head of KfW IPEX’s maritime industries business, said in an interview.

“We don’t expect the Chinese to reach a standard in the next five to six years that can rival international cruise ship companies in existing markets,” said Wiebers, 53, who has led KfW’s maritime funding for 18 years. “There’s little risk that the cruise industry will see overcapacity, which is a very heavy burden for other shipping segments.”

KfW IPEX’s large exposure to the cruise industry is unique among German shipping lenders, which have traditionally focused on container ships and bulk carriers. By the end of March, Wiebers had increased the cruise share of the bank’s maritime-loan book to 51 percent from 32 percent in 2009, when the global financial crisis had sent the shipping market into a slump from which it has yet to recover.

By contrast, at Norddeutsche Landesbank, which is seeking to diversify while shrinking its 18 billion-euro shipping loan book, cruise ships and ferries have just a 1 percent-share.

At KfW, which boosted its maritime loan book by 10 percent over the past seven years, cruise ships accounted for 30 percent of new shipping loans last year. Commitments included two new liners for Miami, Florida-based Royal Caribbean, which controls about one-quarter of vessel capacity in the North American and European markets. Those contracts are for 12-year terms with a “considerable portion” syndicated with an international banking consortium, according to Frankfurt-based KfW, which declined to disclose further details.

Industry Booming

The industry is booming in Europe, where top shipyards including Germany’s Meyer Werft GmbH and Italy’s Fincantieri SpA are working to capacity to fill orders similar to Royal Caribbean’s $1 billion Ovation of the Seas that has been cruising around Asia, Australia and Europe since its delivery in April.

To lure as many as 4,180 passengers on board, the super-cruiser boasts a capsule on a swivel arm from which guests can view the ship from 300 feet in the air, while others can try the world’s first simulated skydiving experience offered at sea.

“Investment activity has shrunk drastically in all segments of shipping except the cruise industry,” said Wiebers, who is set to take up a new role as KfW’s head of aviation and rail financing next month.

Much of the wider industry’s demise stems from the fact that ship financiers ignored technological advances, lending clients too much money too long for vessels that aged rapidly, Wiebers said. With this in mind, KfW has changed its focus to companies with bigger fleets and corporate structures.

“We practically don’t take any asset risks,” Wiebers said. Almost two-thirds of KfW shipping loans are covered by export credit insurers like Euler Hermes Group, he said.

Chinese Competition

Still, competition for new business from top-tier clients like Danish shipping giant A.P. Moeller-Maersk A/S is getting stiffer, with Chinese peers including Industrial & Commercial Bank of China Ltd. and Bank of China entering the fray, he said.

“The Chinese are financing with terms that are unbeatable for European banks,” in some cases offering loan-to-value ratios of 90 percent and above and repayment periods as long as 18 years to large maritime companies, said Wiebers. European banks typically grant loans with a maturity of 10 years.

Norwegian tanker operator Frontline Ltd., which counts billionaire John Fredriksen as its largest shareholder, secured $328 million from China EXIM Bank in the first quarter to finance eight new vessels with the Asian lender, the company said in May.

With funding opportunities for banks in the wider shipping market still scarce, KfW’s 2016 financing target is ambitious, Wiebers said.

“The industry is undergoing massive structural changes on the shipping and the financing side,” said Wiebers. “All clients are very cautious, even in segments doing well like car carriers.”

Royal Caribbean sticking with the program in China

Ovation of the Seas in Tianjin, China

Despite falling yields in China, Royal Caribbean Cruises Ltd. won’t be pulling any ships out of the region.

RCCL executives spent most of its second-quarter earnings call discussing China, one of two markets where yields declined in the second quarter. Chairman Richard Fain gave an extended comparison of China’s evolution with development of North American and European markets at earlier stages.

He emphatically ruled out shifting current capacity out of China to Western markets if yields continue to drop next year. “It would require an enormous change in the fundamentals to even consider something like that,” he said.

Several topics were not even mentioned during the call, including the prospects for starting cruises to Cuba and the outbreak of Zika virus in a neighborhood of Miami.

One that did come up was the booking response to geopolitical events in Europe, such as the truck attack in Nice, France, and the attempted coup in Turkey. Royal Caribbean International president Michael Bayley said that by the end of June, North American booking activity for Europe was starting to wind down, so there wasn’t much impact. He said there’s been relatively little reaction from Europeans.

“The European market seems resilient,” he said. Increasingly, when incidents occur, “the recovery is a lot more rapid in both markets, and certainly in the European market,” he said.

Also discussed was the absence of a booking impact from the vote by the United Kingdom to leave the European Union. “We saw literally nothing,” Fain said.

Besides China, specifically Shanghai where capacity increased over 100% this year, the other area of global weakness was the eastern Mediterranean. Celebrity Equinox will stay in the Caribbean next summer, rather than do the Mediterranean itineraries it is sailing this year, although Fain said the move was made because of the impact of Celebrity being in the key Caribbean market year-round.

RCCL said net income climbed 23.8% in the second quarter to $229.9 million, a result driven by lower-than-expected fuel expenses.

But unfavorable currency exchange and fuel trends led RCCL to decrease its earnings expectations for all of 2016 by about $43 million, to a range of $1.3 billion to $1.32 billion.