Raft of New Ship Orders a Good Sign, Agents Say

Travel agents are calling the cruise industry’s recent flurry of new ship announcements good news for the industry and a sound business call.

On Friday, Carnival Corp. announced its long-rumored order for two new cruise ships – a 4,000-passenger vessel for Carnival Cruise Lines and a 2,660-passenger ship for Holland America Line. Each ship represents a new class of vessel for its respective brand.

The order came a week after Norwegian Cruise Line announced plans to build its two largest vessels ever – the 4,200-passenger Breakaway Plus ships.

And Royal Caribbean confirmed last week that it is looking to add another ship to its fleet. The company is in negotiations for a new-build Oasis-type vessel, to be delivered in mid to late 2016. It said it hopes to sign an agreement before the end of the year.

‘Awesome’
“New is good,” said Cindy Martin-Rolsky, MCC, owner/manager of Cruise Masters Travel in Potomac, Md.

At Expedia CruiseShipCenters’ headquarters in Vancouver, British Columbia, sales executive Geraldine Ree shared that view. “To get these big beautiful new ships coming online is absolutely fantastic for the industry.

“More ships means more choices in destination, more amenities, more restaurants. It good for everybody,” said Ree, senior vice president of sales and marketing.

Cruise Planners CEO Michelle Fee commented that “even if there were just one new ship on order, it’s great for the industry. But to hear that there’s a potential four new ships, that’s just awesome. It just shows that our industry is continuing to grow.

“It doesn’t matter what cruise line. When any new ship comes out it helps the entire industry,” Fee told Travel Market Report. “It puts cruising in the forefront. It’s face time in the press.”

“It’s also good for Wall Street to hear things like that,” Fee said.

New ships on order
The news that Wall Street heard from Carnival Corp. was that the cruise giant now has nine ships, across all brands, scheduled for future delivery – two for 2013, two for 2014, three for 2015 and two for 2016.

For its newly announced ships, Carnival has tapped the shipyard Fincantieri, continuing its 20- year relationship with the Italian shipbuilder.

Carnival’s new Holland America ship is set for delivery in fall 2015, while the new Carnival Cruise Lines ship will be delivered in winter 2016.

Holland America’s new ship will debut five years after its last new-build, the ms Nieuw Amsterdam, was delivered. The Carnival vessel will be delivered four years after the launch of the Carnival Breeze in 2012.

Norwegian’s new order calls for delivery in October 2015 and spring 2017. The Breakaway Plus ship are larger editions of Norwegian’s popular Breakaway ships.

Royal Caribbean plans
At Royal Caribbean, chairman and CEO Richard D. Fain alluded to its plans for a new Oasis class ship on the company’s third-quarter earnings call.

“The Oasis of the Seas and Allure of the Seas have proven themselves to be exceptionally attractive ships by generating the highest guest satisfaction ratings in the fleet coupled with very compelling financial returns,” Fain said.

“Ordering another such ship for delivery in 2016, at a lower cost, with better energy efficiency is very consistent with our balanced goals of prudent growth, return improvement and debt reduction.”  

Forward-thinking
Eric Goldring, ECC, of Goldring Travel in Colts Neck, N.J., commented that the current round of new ship orders reflect good business sense on the part of the cruise lines.

It’s a smart time to place orders for new ships because shipyards are hurting, Goldring said. “There’s an opportunity now, because prices are low, to get a great deal on a new ship, in terms of purchasing it.

“It’s great forward-thinking by the cruises lines who are seeing very good ways to exploit the economies to their advantage by propping up the very industries they need.

“And of course the anticipation is that people in the future will be cruising even more,” he added.

New ships needed
There’s also a need for new inventory, Goldring commented. “As far as Holland America, they could definitely use the ship. As far as Carnival – same thing. I don’t see them necessarily growing the number of ships they have, but improving what they have.

“For NCL, I think it’s an incredible turnaround of a company; I think they are seeing growth.”

Goldring, who caters largely to high-end travelers, said he didn’t anticipate any similar announcements coming from the luxury end of the cruise industry. “I think there’s pretty much enough inventory,” he said.

Turning point after a tough year
Ree of Expedia CruiseShipCenters said she was especially “delighted” to see Carnival Corp. coming out with new ships, given how the year started out for the company. Ree was referring to the January shipwreck of the Costa Concordia, a Carnival Corp. ship.

“This shows that they’re resilient as an organization. Their move to financially invest when times are tough is a real move of leadership.”