Top Headlines

CBR Odo Commentary: Newbuilding race highlights need for record demand growth

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 16 May 2016 16 May 2016

Genting Hong Kong last week placed an order for a total of10 newbuildings for its various cruise brands at the Lloyd Werft Group shipyards in Germany that it owns.

The €3.5 billion deal is the latest in a series of large scale ship orders that have propelled the numbers of vessels on order and their combined capacity to an all time high.

We think that the cruise industry is arriving at a watershed. Either the demand growth will have to accelerate so that the market can absorb all the new supply, the huge majority of which involves increasingly large contemporary market ships, or a crisis unforeseen in the sector will unfold.

The industry is placing great expectations that continue, rapid demand growth in China will continue and that this market will employ a large part of the new tonnage on order. It may well do so.

Development of the demand for any product tends to follow an S-shaped curve. At first, a new product meets little demand, which comes from primary consumers keen try new things, and costly marketing efforts mean that it does not generate profits.

After a while, when awareness of new the product increases and sales volumes pick up also among the less adventurous, the demand for it rapidly accelerates. At some point, this will peter out and the product will either wither away or restart the cycle after a revamp.

The Chinese cruise market is at the moment experiencing the stage of rapid acceleration in demand. The question is at what point of that stage it is.

Should the demand growth fall short of the expectations of the lines that have ordered new tonnage, the entire industry could run into unprecedented problems.

Cruise lines now order contemporary market ships of about 200,000 gross tons. Only a few years ago, the figure was about 160,000 gross tons. The ships being ordered now have capacity of 5,000 passengers or more. Few ships built before the year 2000 could take 3,000 passengers.

If it becomes necessary to start reducing capacity by selling for scrap older vessels, two or three of them will have to go to equal the capacity of a single newbuilding entering service.

In container and dry bulk shipping, expectations that Chinese manufacturing growth would remain at very high levels resulted in a wave of newbuilding orders. Large dry bulk carriers known as Capesize cost more than $100,000 per day to charter before the outbreak of the financial crisis. Earlier this year you could have one for about $500 per day.

The cruise industry calls itself supply driven. Although yield management and marketing measures can keep ships full, they do not guarantee returns on invested capital.

We think that the cruise industry is either a) on the threshold of an unprecedented period of growth or b) heading towards an unprecedented oversupply of tonnage.

The longer the good times roll in any industry, the more convinced industry executives tend to become that this is what they will do in the future as well and the greater risks they are prepared to take as a result.

Odo Maritime Research, in cooperation with Cruise Business Review, will publish Global Ocean Cruise Market Analysis & Forecast 2016 in June.

This will be the second issue of the bi-annual report, which will study and analyse the recent development of the cruise industry in terms of fleet growth deployment of tonnage, various aspects of the newbuilding sector and the financial performance of the industry.

The pdf format report will comprise about 120 pages and feature a large number of graphs, charts and other visual forms of presentation of information, which makes it easier for readers to form a comprehensive picture of the industry than if lots of text had been used.

To pre-order your copy, please send an email to us at This email address is being protected from spambots. You need JavaScript enabled to view it.

UPDATED: Genting Hong Kong plans to build one, later two Global Class ships per year

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 14 May 2016 14 May 2016

Update adds fourth paragraph re possible employment of later units of class outside Asian source markets

Star Cruises, the contemporary market unit in the Genting Hong Kong group, will receive one and later two global class ships per year from Lloyd Werft Group in Germany, Genting Hong Kong said in a statement.

“Delivery of the “Global Class” series of ships will commence between 2019 and 2020 starting with one ship a year and eventually increasing to two ships a year,” Genting Hong Kong said. It did not provide further details, e.g. when the accelerated delivery schedule should be introduced.

The first two 201,000 gross to ships ordered on 10 May in the are designed with Chinese Characteristics and they will be the first purpose built cruise ships deployed for the contemporary Chinese market.

However, it did say that the design is intended for "world-wide cruising," which could mean that future units of the class could be employed the Asian source markets

The Lloyd Werft Group is also part of Genting Hong Kong.

Fincantieri's Vard books two more small-sized cruise newbuilds

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 13 May 2016 13 May 2016

Fincantieri’s subsidiary Vard Holdings Limited (Vard) has signed a Letter of Intent with an undisclosed international cruise company for the design and construction of two small-sized cruise vessels. The hulls will be built by Vard’s shipyard in Tulcea, Romania, while the delivery of the units is scheduled, respectively, in Q1 2019 and Q1 2020 from Vard Langsten in Norway.

The parties have a common intention to enter into contracts at the beginning of Q3 2016.

The vessels, for which Fincantieri will be engaged in the supply of some important parts to be built in Italy, are specially designed in cooperation with the customer by Vard Design in Ålesund, Norway, for a high standard of facilities, ice-class and the highest demands for environmentally friendly and safe operations. They will be 137 metres long, 22 metres wide and approximately 14,500 gross tons, being able to accommodate on board 240 passengers in 120 cabins.

This success enhances Vard’s diversification strategy, carried out in close collaboration with Fincantieri, which has already given important outcomes with the achievement of prestigious goals, as the signing of the Letter of Intent for four small-sized luxury cruise ships for the French ship owner Ponant, a subsidiary of Artemis Group (holding company of the Pinault family).

VARD is 55.63% controlled by Fincantieri which fully consolidates its financial results.

Royal Caribbean takes delivery Harmony of the Seas, the largest cruise ship in the world

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 12 May 2016 12 May 2016

Royal Caribbean International today honored the crew and project team of the new Harmony of the Seas at a traditional delivery and flag changing ceremony in Saint Nazaire, France. Following 32 months of construction at the STX France shipyard involving thousands of shipyard employees, sub-contractors and suppliers, the world’s largest and most innovative cruise ship is now home to 2,100 crew members from 77 different nationalities. Joining the festivities in the ship’s signature AquaTheater were Richard Fain, Chairman and CEO of Royal Caribbean Cruises Ltd. and Michael Bayley, President and CEO of Royal Caribbean International together with Laurent Castaing, General Manager, STX France.

“Harmony of the Seas is the product of our zealous spirit of continuous improvement, where we have combined revolutionary ship design with the technological strides that have defined the Royal Caribbean brand,” said Richard D. Fain. “Thank you to STX France for their ongoing partnership in building our ships, which continue to introduce unexpected industry innovations.”

“Harmony is truly magnificent in every sense of the word, from her architecture and design to the level of care and attention to detail with which our incredible crew are taking to prepare for our first guests,” said Michael Bayley. “The ship is the ‘best of the best’ of what our guests love most about Royal Caribbean, combined with new and thrilling experiences never before found in one place but it is the passion and dedication of our crew that will make everlasting memories for our guests.”

Costing more than a $1billion, Harmony of the Seas will be the 25th ship in the Royal Caribbean fleet and boasts highly anticipated first-at-sea experiences, including:

– A 100-foot drop with The Ultimate Abyss, the tallest slide at sea, plunging courageous adrenaline seekers 10 stories down from deck 16 to the Boardwalk on deck 6
– 4,700,000 lbs. (2,150 tons) of water in 23 swimming pools, whirlpools, two FlowRider surf simulators and waterslides, including the Perfect Storm, a thrilling trio of waterslides, and the Splashaway Bay waterpark for young guests
– The first double-story Wonderland, the specialty restaurant concept first introduced onboard the global cruise line’s Quantum class of ships delivering an imaginative and whimsical feast for all the senses
– The debut of Broadway’s hit musical Grease in the Royal Theater and spectacular diving shows in the AquaTheater
– 11,252 works of art showcased throughout the ship and Central Park, a living park in the center of the ship which features a total of 10,587 plants, 48 vine plants and 52 trees, some over 20 feet (6.1 meters) high
– VOOM, the fastest internet at sea, available exclusively to Royal Caribbean guests, which allows travelers to seamlessly stay connected, stream their favorite entertainment, video chat and share their adventures with friends and family at home

Harmony of the Seas will homeport in Barcelona, Spain and embark on the first of 34 seven-night sailings in the western Mediterranean on June 7, exploring some of Europe’s most beautiful locations. In November 2016, Harmony will arrive at her homeport of Port Everglades, Fort Lauderdale, FL., from where she will offer 7-night eastern and western Caribbean sailings. The newest member of the fleet will join sister-ships Oasis of the Seas and Allure of the Seas, sailing from Port Canaveral and Port Everglades respectively, on the east coast of Florida.

Harmony of the Seas is the world’s largest cruise ship with a bold and unexpected lineup of experiences found nowhere else on land or sea. An architectural marvel, Harmony of the Seas combines the distinct seven neighborhood concept that Royal Caribbean's Oasis class of ships are known for with some of the most modern and groundbreaking amenities. Innovative features include The Ultimate Abyss, a thrilling slide 10 stories high – the tallest at sea, robot bartenders, virtual balconies with real-time views of the destination for interior rooms, and VOOM – the fastest internet at sea – so that guests can stay connected, stream their favorite entertainment and share their adventures.

Unparalleled entertainment in the air, in water and on ice will keep guests dazzled with exciting high-diving, acrobatic and aquatic performances in the deepest pool at sea at the iconic AquaTheater; an ice show extravaganza and Broadway’s hit musical Grease.

Imaginative dining in the ship's 20 venues include the widest variety of cuisine from Wonderland, a whimsical culinary adventure for the senses, to the popular Jamie's Italian by celebrity chef Jamie Oliver.

Harmony of the Seas will span 16 guest decks, encompass 227,000 gross registered tons, carry 5,479 guests at double occupancy, and feature 2,747 staterooms.

Genting Hong Kong contracts ten ships from Lloyd Werft for 3,5 billion euros

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 10 May 2016 10 May 2016

Kalle Id reporting from Wismar, Germany

Crystal Cruises and Star Cruises, both brands of the Genting Hong Kong conglomerate, today contracted ten new ships from the also-Genting-owned Lloyd Werft group, to be delivered between 2017 and 2020. The ships contracted included the confirmation of the already publicised orders with Crystal Cruises for four river cruise ships, one polar class yacht and one Exclusive Class ocean-going ship. In addition to the earlier publicised newbuilds, Crystal Cruises ordered an additional pair of river yachts for delivery in 2018.

At the same time Star Cruises, Genting's contemporary brand for the Asian market, contracted a pair of 201,000 gt and 5,000 lower berth mega cruise ships for Star Cruises. Known as the Global class, the new ships will be designed with ”Chinese characteristics”, Star Cruises describing them as the first purpose built cruise ships for the contemporary Chinese market. According to Tan Sri Lim Kok Thay, the chairman of Genting Hong Kong, the new ships are ”focused on delivering a world-class vacation experience for Chinese cruise passengers at an affordable price.” The standard cabins on the Global Class ships will be 19.2 square metres in size, designed specificially for family travel with separate bathrooms and toilets.

The previously publicised second and third unit of the Exclusive Class for Crystal Cruises will be contracted at a later date, once final financing is in place, Tan Sri Lim Kok Thay, told the gathered media.

Thanks to the extensive portfolio of new contracts, Lloyd Werft is expecting to increase the workforce across the four shipyards from current 1,700 people to 3,000, in addition to expected 3,000 subcontractors.