Top Headlines

Genting's Crystal acquisition highlights luxury segment's need to make money - UBS' Farley

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 04 March 2015 04 March 2015

The acquisition of Crystal Cruises, the Los Angeles based luxury cruise operator, by Genting Hong Kong from Nippon Yusen Kaisha (NYK) is good for the luxury segment as it highlights its need to be profitable, said Robin Farley, cruise industry analyst at UBS in New York.

"We believe it'll also make for a healthier competitive environment to now have three of the four luxury brands owned by public co's that view such assets as a business that needs to make money rather than a trophy property. That is also marginally positive for CCL (Carnival Corp & plc), whose Seabourn brand is one of industry's 4 luxury brands," she said in a research note.

NYK is a major Tokyo based shipping group that has interest in container, crude carrier, dry bulk and vehicle shipping sectors. It retains one cruise liner, the 1990 built Asuka II that caters for rhe Japanese narket.

"It's unclear what Genting HK's plans are for the brand outside of their expressed intention to order a new ship for the brand, which is currently comprised of only two ships, & that would still taketwo to three years to enter service since it is not currently on order. But if Genting were to target the luxury brand to the Chinese market, for example, that could eventually help pave the way for other luxury brands in the Chinese market, also a potential positive for NCLH's (Norwegian Cruise L:ine Holdings') Regent brand and CCL's Seabourn brand," she pointed out.

CBR-Odo Commentary: Acquisitions, ship sales indicate growing cruise industry dynamism

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 03 March 2015 03 March 2015

Recent corporate acquisition and ship sale news suggest that the cruise industry is entering a period of growing dynamism after a number of years when weak earnings plagued it.

This morning's news that Genting Hong Kong, owner of Asia focused Star Cruises, has acquired Crystal Cruises, the Los Angeles based luxury market operator, from Nippon Yusen Kaisha (NYK) for $550 million, significantly raises the profile of Genting in the cruise industry.

It acquired Norwegian Cruise Line in 1999-2000, but over the years it has gradually reduced its stake: Norwegian is now a listed company and Genting's remaining stake cannot be seen as a strategic asset.

Genting has two 150,000 gross ton ships on order at Meyer Werft for Star Cruises, a move that reversed decline in the group's interest in cruising. Genting has also pledged to order a newbuilding for Crystal.

Norwegian's acquisition of Prestige gave it strong foothold on the premium market with Oceania Cruises and also on the luxury market with Regent Seven Seas Cruises. Norwegian Cruise Line is not, as yet, present in the Far East, but senior executives have indicated that this could be on the cards as new ships join the company's fleet.

To sum up, the acquisition of Prestige gave Norwegian group strong foothold in the market segments where it had no presence, while Norwegian Cruise Line's organic growth may soon bring to the Far East.

The picture is far less straightforward with Genting: Star Cruises is an Asia focused contemporary market brand, while Crystal Cruises has its focus on the top end of the US source market. The synergies are less clear here than in the case of Norwegian-Prestige.

Meanwhile, TUI AG's announcement on 02 March that its Hamburg based TUI Cruises joint venture with Royal Caribbean Cruises Ltd. (RCCL) has acquired the 69,130 gross ton Splendour of the Seas from RCCL marks a change in TUI Cruises' strategy. So far, it has operated ships solely under its own brand, but Splendour of the Seas will, after being renamed, join the fleet of TUI's UK based Thomson Cruises operation.

TUI has said that it wants to bring the TUI Cruises and Thomson Cruises operations closer to each other and that Thomson, which charters four of its five ships from third parties, could use owned tonnage in the future. The 1996 built Splendour of the Seas is a Vision class ship and given the fact that Thomson needs to move away from its mainly 1980s vintage tonnage, further transfers of these ships to the UK brand may well be on the cards. The fact that TUI Cruises owns the newly acquired vessel of Thomson Cruises brings this operation closer to the sphere of influence of RCCL.

Genting Hong Kong acquires Crystal Cruises

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 03 March 2015 03 March 2015

Today, Nippon Yusen Kabushiki Kaisha (NYK), Crystal Cruises’ parent company since its inception in 1988, announced it has entered into an agreement with Genting Hong Kong (GHK), under which Crystal Cruises will be acquired by GHK. The acquisition is expected to close in the second quarter of 2015.

With the support of GHK’s financial strength and expertise in ship design, Crystal Cruises’ fleet size will expand with a new ship, elevating the standard of luxury cruising and luxury cruise ships. Crystal’s fleet currently features Crystal Symphony and Crystal Serenity.

“After 25 successful years with NYK, we are excited to have Genting Hong Kong as the new owner of Crystal Cruises,” said Edie Rodriguez, President and COO of Crystal Cruises. “The proposed expansion of our fleet will present our loyal Crystal Society members and new luxury cruise guests with more itinerary options, accommodation choices and exceptional vacation experiences, as we continue to position Crystal as the innovative leader in global luxury cruising. Additionally, Crystal’s veteran leadership, management and crew will continue to focus on our award-winning guest service and our strong partnership with the travel agent community - which now has a greater opportunity to grow their business with a larger menu of Crystal product offerings.”

Established in 1993, GHK is part of the Genting Group, a global hospitality and leisure company with business in over 20 countries, including the United States in New York, Florida and Nevada. GHK wholly owns Star Cruises, Asia’s leading cruise line, and is a major shareholder of Norwegian Cruise Line. It is a public company primarily listed on the Hong Kong Stock Exchange and secondarily on the Singapore Stock Exchange.

“Crystal Cruises offers the epitome of luxury cruising and the service standard which all other cruise lines aspire to,” said Tan Sri Lim Kok Thay, Chairman, CEO and Acting President of GHK. “The current management team and crew will continue to lead Crystal Cruises. Genting will provide financial resources and proven expertise in innovative ship design to build a new ship that will set the highest standard in luxury cruise ships. This new ship, together with Crystal’s legendary six-star service, will reinforce Crystal Cruises’ reputation as the world’s leading luxury cruise line for decades to come.”

Under the terms of the agreement, GHK will acquire Crystal Cruises for US$550 million in cash which is subject to certain adjustment items to be ascertained after the closing. Crystal Cruises’ two ships have approximately 1,992 lower berths and the consideration has been determined on a cash-free and debt-free basis, translating into an enterprise value to lower berth ratio of approximately US$276,000.

TUI Cruises buys Splendour of the Seas for Thomson Cruises in UK

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 02 March 2015 02 March 2015

TUI Cruises unit of the Anglo-German travel group TUI AG has acquired Splendour of the Seas from Royal Caribbean Cruises Ltd. (RCCL) that owns 50% of the buyer company for introduction on the UK market under the Thomson Cruises brand name in the summer of 2016. It will replace the 1982 built Island Escape of 40,171 gross tons, marketrd under the Island Cruises brand name.

"The TUI Group will modernise its UK cruise operations through the acquisition of Splendour of the Seas from Royal Caribbean Cruises Ltd. The ship will be acquired by the Group’s subsidiary TUI Cruises, a joint venture between TUI Group and Royal Caribbean Cruises Ltd., and chartered to the Group’s British cruise line Thomson Cruises," TUI said in a statement.

"Splendour of the Seas is to be operated in the British market from Summer 2016. The vessel will replace Island Escape, currently operated by Thomson Cruises’ sister company Island Cruises, so that the overall UK fleet will continue to be comprised of five cruise ships. Financial details of the transaction were not disclosed," the company said.

Splendour of the Seas has a gross tonnae of 69,130 and a capacity of 1,830 passengers (double occupancy) and offers more than 900 cabins, nearly 40% of which have a balcony. The ship will be the largest vessel in the Thomson Cruises fleet. It was fully refurbished a few years ago. Following its integration in the fleet, Splendour of the Seas will be renamed.

"As already announced at our Annual General Meeting, we intend to continually modernise our fleet in the UK in the next few years. The acquisition of the Splendour of the Seas is the first step in this direction. We regard the cruise market as a growth market for our Group and intend to develop into one of Europe’s leading providers in this segment," said Sebastian Ebel, TUI Group CEO Platforms in charge of cruise operations.

The TUI Group currently has a fleet of 12 cruise ships via its subsidiaries TUI Cruises, Hapag-Lloyd Kreuzfahrten and Thomson Cruises. Mein Schiff 4 will be commissioned in the summer of this year. Mein Schiff 5 and Mein Schiff 6 have already been ordered and will be delivered in 2016 and 2017.

HM The Queen to name Britannia

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 27 February 2015 27 February 2015

Her Majesty The Queen, accompanied by His Royal Highness The Duke of Edinburgh, will name the new P&O Cruises vessel Britannia at Ocean Terminal, on Tuesday March 10, 2015, P&O Cruises said in a statement.

The biggest ship designed exclusively for Britain, Britannia is P&O Cruises latest "modern classic", heralding a new era of holiday choice.

"We are honoured and proud that Her Majesty will name Britannia almost 20 years after she named the P&O Cruises ship Oriana.

"Britannia, a ship for the nation, will be the embodiment of contemporary Britain, and with her Union Jack livery she will fly the flag for Britain across the Globe,”said Carnival UK chairman, David Dingle