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MSC Cruises names first Vista project unit MSC Meraviglia

MSC Cruises, the world’s fourth largest cruise company, has decided to name the first unit of its 167,700 gross ton Vista project mega ships MSC Meraviglia - ‘wonder’ in Italian.

Speaking at the STX France shipyard in Saint-Nazaire during the ceremonial steel-cutting at the start of the construction, MSC Cruises Executive Chairman Pierfrancesco Vago said bookings for the ship — due to be delivered in May 2017 – would open in June this year.

The work on MSC Meraviglia marks the start of MSC Cruises seven-ship, €5.1 billion investment plan that will double the cruise line’s capacity by 2022. The ship, which will carry up to 4,500 passengers (double occupancy), will spend its first summer sailing the western Mediterranean.

In a first for the cruise industry, it will have three home ports – Genoa, Marseille and Barcelona. “MSC Meraviglia will be the biggest and most innovative cruise ship ever built by a global European-based cruise line,” said Vago. “We chose a name that denotes a sense of awe and wonderment, because of the many stunning features planned. Today, building started on a true maritime marvel.”

RCCL booking volumes rise; Caribbean, Western Med strong, China outpaces forecasts

Royal Caribbean Cruises Ltd, (RCCL), the world's second largest cruise shipping company, said first quarter booking volumes have risen compare to the same period year-on on broad based strength of the market.

"Overall booking volumes during the first quarter were higher than prior year levels even after adjusting for our increase in capacity. Caribbean itineraries enjoyed particularly strong demand, and bookings were also up year-over-year for Europe and China itineraries," RCCL said in a sratement.

As previously discussed, the company has taken actions to extend its booking curve, as a result of which booked load factors and APDs are higher than historical levels. More recently, the company has taken further steps to improve the integrity of its pricing model including steps to eliminate last minute discounting.

Overall, European itineraries are booked at a higher load factor and APD than last year. Western Mediterranean itineraries have been booking well, while trends have been a little weaker for Eastern Mediterranean itineraries, particularly those that turn in Turkey. Demand for China remains strong and bookings have been outpacing expectations despite the significant capacity growth in the region. 

RCCL trims 2015 EPS forecast on strong dollar

Royal Caribbean Cruises Ltd (RCCL), the world’s second largest cruise shipping group, has reduced its 2015 earnings per share (EPS) forecast on strength of the US dollar.

“The company has updated full year Adjusted EPS guidance to a range of $4.45 to $4.65 from $4.65 to $4.85. The strengthening of the US Dollar and the increase in fuel prices since our January guidance is expected to negatively impact earnings by $0.36,” RCCL said in a statement.

Constant currency net yields are expected to be in the range of up 2.5% to 4.0%, a slight reduction from previous guidance mainly due to the impact of the stronger US Dollar on the purchasing power of our non-US guests.

Net cruise costs excluding fuel are expected to be flat to down 1% on a constant currency basis, better than previous guidance of 1% or better. The fundamentals of the business as well as the company's focus on the targets associated with the Double-Double program remain on track and are unchanged.

"The business continues to perform well, despite the currency volatility," said Jason T. Liberty, chief financial officer. "Our unwavering commitment to cost consciousness has helped us identify further efficiencies that are driving a significant shift in our cost guidance for the full year. This type of operational focus throughout all facets of our business is a core enabler of our continued financial success."

RCCL first quarter exceeds forecast on strength of major products

Royal Caribbean Cruises Ltd (RCCL), the world’s second largest cruise shipping group, has reported first quarter net profit of $45.2 million, a marked increase from $26.4 million in the same period a year earlier. Revenues fell slightly, to $1.82 billion from $1.88 billion.

Earnings per share rose to $0.20 compare to the company’s own forecast of $0.10 to $0.15.

“Commercially the year is turning out as expected, with strong booking trends and yield growth for all major products. The strengthening of the US Dollar and the rise in fuel prices are negatively affecting earnings, but cost efficiencies are mitigating a large portion of the impact,” the company said in a statement.

Net yields fell by 1.0% on a constant currency basis (down 5.4% As-Reported). “Strong close-in pricing on Caribbean sailings drove the better than anticipated performance.

Net cruise costs excluding fuel increased 0.9% on a constant currency basis (down 1.7% As-Reported), significantly better than guidance driven by further efficiencies,” RCCL said.

UK market to return to growth 2015, young people greatest challenge - Leven

The British cruise market should resume growth this year after a drop in 2014, said Stuart Leven, Managing Director of Royal Caribbean International UK & Ireland. "I wasn't surprised by the drop at all. There was less capacity deployed ex UK last year," he told Cruise Business onboard the new Anthem of the Seas.

The British source market is of strategic importance for the Royal Caribbean Cruises Ltd'S (RCCL) contemporary market unit, he said, adding that Oasis class tonnage could not be deployed in Barcelona without strong support of the British source market. Half of the customers the company sources from the UK sail from Southampton, while the other half goes on fly cruises. Europe, where the company has seven ships this summer, is the most favoured fly cruise destination, followed by the Caribbean. "We will bring Dubai back in December. It has been a favourite among British passengers," Leven pointed out.

The greatest challenge Royal Caribbean International and the entire cruise industry is facing is to bring new generations to cruising. The perception that cruising is expensive and only for old people remains alive and well and it has turned out to be very difficult to change. New ships are an important aspect in driving the business forward, but you cannot expect new hardware alone solve the industry's challenges. "If you think that hardware alone is enough, you are kidding yourself," Leven stated, adding: "We sell holidays. Last night, there were about 100,000 people on board our ships."

The industry will need to invest very significant resources in educating the younger generations about the attractions of cruise holidays, but at the same time the industry itself will have to understand how these young people live their lives. And here a fundamental change has taken place in a rather short time. "There was a time when people wanted escapism from gadgets. The millennials don't do that," Leven said. Communication with friends and relatives at home is essential to these people and they also live in "now" – decisions are made on the go. The cruise industry needs to understand this and its implications if it hopes to widen its customer base to young people.

Looking ahead to the year 2020, Leven said that the UK cruise market will be bigger then what it is now. "About 30 million package holidays are sold in Britan every year. And just under 1.7 million cruises. There's our potential," he concluded.