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Germany overtakes UK as market shrank 4.8% in 2014

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 18 March 2015 18 March 2015

Germany has overtaken the UK as the world’s second largest source market for cruises after the British market contracted by 4.8% in 2014 to 1.62 million passengers, wiping out the meager growth in the previous years of the decade, Travel Weekly reports.

“The cruise market in the UK and Ireland shrank for the first time in more than a decade last year, declining by 4.8% to 1.64 million passengers. The 2014 figure compares with 1.72 million carryings in 2013 and is the lowest figure since 2010. The drop means Germany overtook the UK last year to become Europe’s biggest market for cruise passengers,” the report said.

The UK decline was revealed in figures unveiled by trade body Cruise Lines’ International Association (CLIA) at the Cruise Shipping Miami conference on Tuesday.

Andy Harmer, director of CLIA UK and Ireland, blamed the dip on an 11.4% decrease in capacity in Europe in 2014. He said he was confident the industry would “get back on track this year”, adding: “We rely very strongly on where ships are based and sailing. UK guests have a really high propensity to cruise in Europe and there was a big reduction in the number of ships in 2014.

“That’s reversed in 2015, when we are seeing a 9% increase in the number of ships sailing here. Everything suggests there’s every reason to be positive about the year ahead. We will continue to support the trade in the best way we can with new events and training opportunities.”

Harmer said agents had switched cruise customers to other destinations, growing the number of UK cruisers in the Caribbean. However, he said it was difficult to sway those intent on sailing only in Europe.

The total European market grew by 0.4% last year to a record 6.39 million, with the German market expanding by 5% to 1.77 million.

Harmer said the growth in Germany was due to lines such as Aida and Tui Cruises building ships dedicated to the market.

Italy remained the third‑largest source market in Europe, with 842,000 passengers, despite a 3.1% drop.

France’s cruise industry grew by 13.7% to 593,000, while Spain saw a 4.5% drop to 454,000, the report said.

Cruise Shipping Miami 2015: Perspectives of top four helmsmen on cruise industry

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Written by Teijo Niemelä Teijo Niemelä

Category: Top Headlines Top Headlines

Published: 17 March 2015 17 March 2015

In the State of the Industry debate, the opening session of this year’s CSM, chaired by the flamboyant Richard Quest, CNN’s International Business Correspondent, different perspectives of the cruise industry were elaborated by four current helmsmen of the business. Alan Lam reports from Miami.

The industry has experienced a stronger 2014, with global cruise passenger number reaching the record 22.1 million. Its economic impact is now estimated at $117 billion, supporting 890,000 direct employments and paying $38 billion per year in wages. 23 million passengers are forecast for 2015.

Against this background, the four distinguished personalities of the industry were quizzed, by Richard Quest, for their perceptions of the industry. While they agreed on many aspects of the business, they seemed to have perceptibly different attitudes on a number of other issues.

Richard Fain, Chairman and CEO, Royal Caribbean Cruises Ltd., was realistic about he state of the industry. “We somehow haven’t managed to break through and attract a whole new range of customers,” he said. “That’s our biggest challenge. The growth in the US is moderate, tiny in Europe and infinitesimal in Asia.” He was interested in demand growth, not just in supply increases. “The value we offer is so much better than other forms of vacation,” he went on. “It is cheaper; but this isn’t sustainable. We need more customers so the prices can rise. We are in the middle of a price deflationary period. We are charging the 2008 prices, but we offer so much more.”

“We have to grow profitably,” echoed Frank J. Del Rio, President and CEO, Norwegian Cruise Line Holdings Ltd.

Arnold Donald, President and CEO, Carnival Corporation & Plc, was less guarded and more ambitious with his objective. “We plan to grow 25% this year,” he said. “ We’ve got to give the guests what they want; then they’ll buy our products.”

Pierfrancesco Vago, Executive Chairman, MSC Cruises, spoke about the depressed state of the economy in Europe, but he pointed out that cruise industry still managed to grow against this background.

When asked about whether or not the industry is ready for Cuba. The Big Four appeared to be on different pages.

“I am not sure if any of us is ready,” said Richard Fain. “We have a lot to learn about every country we go to. Cruise industry in not a one-size-fits-all.” Royal Caribbean is not ready for Cuba. Clearly there are infrastructure and other issues to consider.

Frank J. Del Rio saw it differently. “Yes, we are ready for Cuba. The wonderful thing about cruise industry is that we bring our own infrastructure. But there are other destinations we’d like to go to, such as Eastern Mediterranean where most of the best Roman ruins are found. Eastern Mediterranean will be more profitable than Cuba.” But he was keenly aware of the geopolitical challenges for the region.

For MSC, the perspective was again different. Pierfrancesco Vago said they were already in Cuba, as his company was the only one of the four majors without the constraint of the US embargo.

The attention was then inevitably switched to China. In this subject area, we were told that the reason Norwegian an MSC were not operating in this fastest growing region was because they did not have enough ships. “It is a matter of resources deployment,” said Frank J. Del Rio. “We’ve got to deploy our ships where we can get the best returns.” But, as expected, Norwegian cannot ignore China for long. “I’m grateful for Royal Caribbean and Carnival for paving the way in China,” he went on, lightheartedly. “ We are watching them closely and learn from their mistakes. At present, like MSC Cruises, we do not have enough ships. But we have four ships on order. In the next few months we’ll make a decision.”

While everyone is heading for China, Pierfrancesco Vago, on the other hand, saw Europe as destination for the rapidly growing Chinese source market. As a European, he was also protective about Europe’s cruise shipbuilding knowhow and did not believe that it should be shared with Chinese shipyards.

The differences in perspective reflected the diversification of the industry.

Two ships named in UK within three days

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 12 March 2015 12 March 2015

Two cruise ships were named at separate ceremonies in the UK within three days from each other.

On Tuesday, Her Majesty The Queen named P&O Cruises' 147,730 gross ton newbuilding Britannia in Southampton. She was accompanied by His Royal Highness, The Duke of Edinburgh. Britannia is the eight vessel in the fleet of the Carnival Corp & plc group's UK focused contemporary market unit

Today Thursday, Gloria Hunniford, named Cruise & Maritime Voyages, 46,052 gross ton Magellan in Tilbury, east of London. The ship was built as Holiday in Denmark for Carnival Cruise Lines in 1985 and five years ago, it underwent a €55 million refit that gave it a completely new identity. It is the largest unit in the four strong deep sea cruise ship fleet of the company.

Both vessels are net additions to their respective fleets.

Former Norwegian ceo Colin Veitch sues Branson and Virgin Group - report

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 12 March 2015 12 March 2015

Colin Veitch former chief executive of Norwegian Cruise Line is suing British billionaire Sir Richard Branson and his Virgin Group conglomerate, claiming that Virgin stole his ideas and business plans to enter the luxury cruise industry, the Daily Telegraph newspaper reports on its website.

"Colin Veitch, who oversaw Norwegian from 2000 to 2008, and his VSM Development company is seeking more than $300 million in damages and has asked a judge to stop Virgin from going forward with its recently announced Miami-based cruise line," the report said.

The lawsuit, filed in Miami federal court, alleges Virgin reneged on a May 2011 agreement with Mr Veitch over how estimated profits would be split. Mr Veitch would get nothing if the 4,200-passenger "ultra" ships were not profitable but could earn $315m if projections were met, the report continued.

The 4,200 passenger capacity of the planned Virgin ships is the same as that of the Breakaway Plus series that Norwegian is currently building at the Meyer shipyard in Germany.

"Richard Branson and the Virgin Group first looked at the cruise market in the late 1970s, and our current team has been exploring the opportunity for more than a decade. Over the years, we have been in discussions with a number of parties including the plaintiff, and those discussions ceased in 2012. We strongly believe the claim has no merits," the report quoted a Virgin spokesman as saying.

Sir Richard told The Telegraph at the weekend that he will commission the construction of two giant ships as part of ambitious plans to gatecrash the cruise liner market. The ships are likely to be built in a German or Italian shipyard and will take four to five years to complete, at the cost of around $1.7bn (£1.1bn).

“We’re in the final throes of those negotiations,” Sir Richard said. Financial backing for Virgin Cruises, which will be based in Miami, South Florida, has been secured from private equity firm Bain Capital. Sir Richard has brought in Tom McAlpin, part of the management team that founded the Disney Cruise Line in 1996, to head up the new company, the report concluded.