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Genting Hong Kong’s cruise activities plunge to deep loss in first half

  • Written by Kari Reinikainen

The cruise operations of Genting Hong Kong, the rapidly expanding cruise shipping group, plunged to a deep loss in the first six months of the year despite a significant increase in turnover as one-off expenses hit the company.

The company owns Star Cruises, the Asia-Pacific focuded contemporary market line, Dream Cruises that focuses on the premium market in the same region and Crystal Cruises, the Los Angeles based luxury market line.

Loss from cruise operations amounted to $49.5 million compared to a profit of $0.3 million in the same period last year. Ticket revenues increased sharply, thanks to the Crystal Cruises’ acquisition last year, and reached $201.9 million compared to $99.5 million in the first half of 2015.

On board revenues increased too, to $182.0 million from $165.6 million, which pulled total revenues to $383.9 million from $265.1 million in the first six months of 2015.

“Passenger ticket revenue and onboard revenue increased significantly for the six months ended 30 June 2016 due to the full six months’ contribution from Crystal Cruises. However, one-time start-up and marketing costs for the launch of new Dream and Crystal cruise brands and products in 2016, together with higher overall operating and selling, general and administrative expenses including depreciation and amortisation resulted in segmental loss of our cruise and cruise-related activities,” the company said in a statement.

The group held $793.1 million in cash at the end of June, a fall from $1.25 billion at the end December 2015. "The Group adopts a prudent treasury policy with all financing and treasury activities being managed and controlled at its corporate head office. The Group manages its foreign exchange exposures primarily through forward rate agreements. It is also the Group’s policy that hedging will not be performed in excess of actual requirement," Genting Hong Kong said.

Carnival Corporation and Port Everglades extend landmark agreement to 2030

  • Written by Teijo Niemelä

Carnival Corporation & plc, the world’s largest leisure travel company, yesterday signed an addendum to one of its most strategic passenger terminal agreements, extending the contract through 2030 with an additional five years of sailings to and from Fort Lauderdale-based Port Everglades, one of the world’s top three cruise ports.

The addendum builds on the landmark 15-year agreement reached in 2010 with the Broward County Board of County Commissioners and furthers Carnival Corporation’s commitment to Port Everglades, which overall has more than 3.6 million multi-day cruise passengers a year. Overall, the agreement and business generated from Carnival Corporation’s brands operating at Port Everglades produces a significant positive economic impact for the port and county.

As part of the addendum, Carnival Corporation will have preferential use of Cruise Terminal 4, which reopened last year after $24 million worth of renovations and upgrades designed for greater efficiency and guest convenience.

Additionally, the port is currently undertaking an estimated $13.6 million slip extension project on Terminal 4, expected to be complete by the middle of 2017, that will lengthen the slip to accommodate larger cruise ships.

As part of the long-term agreement, the company also has preferential use of three additional terminals, Cruise Terminals 2, 21 and 26, along with one additional terminal. This provides five terminals in total for Carnival Corporation to serve its guests who visit Fort Lauderdale as part of their cruise vacation.

“Carnival Corporation is a critical Port Everglades partner, and its many unique cruise line brands offer guests sailing into and out of our port with a wide variety of cruise experiences and itineraries,” said Steve Cernak, chief executive and port director of Port Everglades. “Carnival Corporation has a strong, long-standing presence in the Broward County community, and the additional five years included in the agreement reinforces that commitment. We look forward to welcoming the newest member of Holland America Line’s fleet, ms Koningsdam, to our sunny shores in November.”

Furthering its dedication to the port, the company will add a second ship from its Carnival Cruise Line brand, Carnival Splendor, to sail from Port Everglades during the 2017 summer season. In addition to Carnival Cruise Line, six more of Carnival Corporation’s 10 global cruise line brands currently carry nearly a million and a half passengers to and from Port Everglades each year. These brands include Holland America Line, Costa Cruises, Cunard Line, P&O Cruises UK, Princess Cruises and Seabourn. The seven Carnival Corporation brands and 28 different ships account for a combined average of more than 300 calls at the port each year.

“Florida is the largest cruise market in the world, and we are thrilled to extend our agreement with Port Everglades, which is an extremely convenient and popular location for our guests with close proximity to Fort Lauderdale-Hollywood International Airport and the Caribbean, the world’s most popular region for cruise vacations,” said Giora Israel, senior vice president of global port and destination development for Carnival Corporation. “We place great value on the long and successful relationship we have built with the port and Broward County, and we look forward to working together to meet our most important goal -- providing memorable vacation experiences for our guests for many years to come.”

As part of the original agreement, the port undertook a $54 million cruise terminal renovation project to make significant improvements to four existing cruise terminals to accommodate ships from Carnival Corporation’s fleet of global cruise line brands. Enhancements made as part of the project included features to enable simultaneous embarkation and debarkation processes, including two passenger loading bridges, separate and larger baggage halls and improved ground transportation areas. As part of the extension, Carnival Corporation and Port Everglades will engage in discussions to examine the opportunity for possible further improvements to Cruise Terminal 21 to accommodate Carnival Corporation’s newest class of ships.

No Brexit slowdown in TUI’s UK cruise sales

  • Written by Kari Reinikainen

TUI AG the Anglo-German tour operator, says cruise bookings at its UK based Thomson Cruises unit, have not slowed down after the 23 June referendum at which Britain opted to leave the European Union, the company said in a statement.

“UK cruise sales continue to perform well. There has been no apparent slowdown in UK bookings as a result of the EU referendum, demonstrating once again the resilience of demand for our unique and differentiated holidays, distributed directly to the customer,” TUI AG said in a statement.

Thomson Cruises introduced the 69,130 gross ton Thomson Discovery this summer. The former Royal Caribbean International vessel will be followed by three other ships – one from Royal Caribbean International and two from TUI Cruises – in the next three consecutive years.

 In the UK, the 2016-17 tour programme is 89% sold, ahead of prior year. We are continuing to deliver a strong performance, with revenue and bookings up 6%. Short haul growth is driven by holidays to Spain, Greece, Cyprus and Portugal. Long haul bookings are up 16%, driven by growth to Mexico, Dominican Republic and Jamaica as well as new destinations such as Costa Rica.

The underlying EBITA of TUI’s German cruise operations that comprise Hapag Lloyd Kreuzfahrten and a 50% stake in TUI Cruises, increased to €29 million in the third quarter to 30 June from €19 million in the year before, driven by the launch of Mein Schiff 4 in June 2015 and continued improvement in performance by Hapag-Lloyd Cruises.

Asian volumes, capacity continue to grow – CLIA study

  • Written by Kari Reinikainen

Cruise Lines International Association (CLIA) has released the findings of the new, comprehensive 2016 Asia Cruise Trends study. The Asian source markets experienced the most growth year over year in ocean cruise passengers with 24% increase from 2014 to 2015 and a total of 2.08 million passengers in 2015. Asian cruise deployment, capacity and destinations have been showing remarkable growth too.

"While we expected Asia to experience record-breaking growth in cruise travel, we are astonished at the rate at which the region is emerging as one of the most significant cruise destinations and cruise source markets in the world,” said Dr. Zinan Liu, Chair of CLIA North Asia, in a statement.

“The Asia Cruise Trends project has again developed extremely valuable data on what is happening in Asian cruising, its current size and recent growth trends”.

“The cruise industry has been nimble and responded quickly to the demand for cruise travel in Asia by delivering cruise ships with amenities and experiences tailored to Asian travellers," said Cindy D’Aoust, President and CEO, CLIA. “Asian cruise travel continues to deliver a growing number of enticing opportunities for international guests to visit Asia's fascinating destinations."

The project reveals many essential facts and trends on the current State of the Asia Cruise Industry:

  1. More Cruises Offered – The number of ocean cruises and voyages offered in the region continues to grow to meet demand with 1,560 sailings scheduled for 2016 alone, a sharp increase of 43 percent when compared to last year. There has also been a significant increase in the number of days cruise ships are in operation, from 4,307 operating days in 2013 to 7,918 in 2016.
  2. Increase in Cruise Ships – This year, 60 ocean cruise ships will sail in Asia versus 43 ships in 2013, 15% more ships than the 52 operating in 2015. Of the ships sailing this year, 14 operate year-round while another 12 have extended deployment in Asia.
  3. Capacity Boost – The capacity to carry passengers continues to grow, surging by 51% in 2016. As a result, the overall passenger capacity on ocean cruise ships will reach 3.2 million in 2016.
  4. Demand for Destinations – Cruising in the region includes more than 204 destinations across 17 countries, making traveling by cruise ship one of the easiest ways to see multiple destinations throughout Asia. While the introduction of new ports throughout Asia is great for travellers, it is also great for local economies by bringing more visitors to Asian destinations.
  • Japan is again the biggest destination country with 1,526 port calls in 2016, followed by China (850), South Korea (745), Vietnam (466) Malaysia (422) and Singapore (391).
  • The most visited port in 2016 will be Jeju Island, South Korea (460 calls), closely followed by Shanghai (437), Singapore (391) and Fukuoka (258).
  1. Asia Passenger Growth –Asian travellers are cruising more than ever before. Asia experienced the most growth year over year in ocean cruise passengers with an impressive 24% increase from 2014 to 2015 and a total of 2.08 million ocean cruise passengers in 2015.
  2. Increase in Chinese Cruisers – From 2012 to 2015, the number of Chinese passengers grew at an annual compounded rate of 66%. Growth in 2015 alone was 40%. In 2015, 986,000 passengers were from mainland China, representing close to half of the Asian volume, compared to 703,000 in 2014. In both 2014 and 2015, China has been the world's fastest growing major source market.
  3. Preference for Shorter Cruises – Asian passengers continue to prefer shorter ocean cruise lengths. In 2015, almost three out of ten (30%) Asian passengers continued to choose cruises two to three nights in length and half (50%) chose four to six night cruises. Almost a fifth of passengers chose extended cruises with 19% of Asian passengers opting for seven to 13 night cruises. As a result, the average length of cruises taken by Asian passengers has increased slightly from 5.2 nights in 2014 to 5.3 nights in 2015.
  4. Asian Exploration – While Asian outbound tourism is exploding around the world, the study found that Asian cruisers are primarily exploring Asian destinations. More than eight out of ten Asian passengers (84%) cruised within Asia. The remaining 16 percent flew to cruise destinations outside the region, primarily in Europe with 74% of the international volume, followed by Alaska and the Caribbean. From Japan, 23% are traveling outside Asia, along with 30% from India. Only 3.6% of Chinese travel outside of Asia
  1. Under 40 Cruisers – In China, the average age of cruisers is below 43 with about 42% of cruise travellers below 40 years old. For the region, the same segment represents 38% of all cruisers.
  1. Attracting the Asian Traveller – Cruise lines have recognized the need to britheir best ships and amenities to the region. New on board offerings tailored to the Asian guests include inclusive on board activities aimed at multi-generational families, high-end shopping, languages, adapted menus to include familiar favourites and regional cuisine, cabin amenities and high-tech features.

NCLH shares open stable after Tuesday’s heavy losses

  • Written by Kari Reinikainen

Shares in Norwegian Cruise Line Holdings, Ltd (NCLH), the world’s third largest cruise shipping group, opened a fraction higher on Wednesday morning following a loss of almost 12% on the previous day.

In early trading on Nasdaq in New York on Wednesday, NCLH shares traded at around $38.00, about 0.2% higher from the opening.

On Tuesday, they closed 11.8% down on the day at $37.66 after NCLH had trimmed its earnings forecasts for the rest of the year and abandoned a goal to reach earnings per share of $5.00 in 2017.


CBR 1/2016 contents

CBR 3/2015 contents