Small Players Look to Boost Market Share

Carnival Corporation, the world’s leading cruise group, and number two Royal Caribbean International have suffered a slight loss of market share over the last five years, according to UK-based cruise consultancy G. P. Wild International. Inching their way forward are Norwegian Cruise Line and MSC. While Carnival may decline slightly over the next five years at the hands of its three major rivals, it is really the boutique cruise market that is leaping forward in popularity.

Something for Everyone 

According to Avalon Waterways, river- and small ship-cruising has dominated market growth statistics since 2008, increasing more than 200 percent in both size and sales and making itself the fastest-growing travel style today. “There’s no sign that the excitement surrounding river cruising will slow down anytime soon. Our load factor for 2014 is already pacing well above where it was this time last year – another record-breaking year,” said Patrick Clark, Managing Director of U.S.-based Avalon. 

Cruising the rivers of France is in high demand, Clark stated. Also popular are the company’s special-interest cruises. “We’ve already sold out five of our 12 special-interest cruises, showcasing the immense popularity of these themed vacations. Sold-out themed departures include WWI & European History, Art & Impressionist, and Jazz cruises. We have also sold out two of our wine-themed cruises for 2014.” Yet to be fully booked are the company’s culinary, beer, Jewish heritage, golf and wellness itineraries. Avalon is adding three new ships to its fleet in 2014, the Avalon Illumination, Avalon Impression and Avalon Poetry II. They will cruise the Rhine, Main and Danube rivers. 

On the small-ship side, Paul Gauguin Cruises will expand its boutique offerings in 2014. The company offers exceptional service, destination immersion, and fine dining on luxury small ships. Demand continues to grow with increases in both bookings and yields. On the M/S Paul Gauguin, the company offers its most popular Tahiti, French Polynesia, and South Pacific itineraries along with exotic new ones like Fiji and Australia. The 90-guest M/V Tere Moana, christened in December 2012, will sail Europe, Latin America and the Caribbean in 2014.

If you feel like “roughing it,” the world’s cargo ships are seeing an increase in demand for their unique style of cruising where cabins are made available that are no longer required by ships’ officers. Most ships offer three cabins. Some are singles and some have twin beds. Freighter Expeditions of Australia have been agents for over 20 years and represent all cargo companies that will take paying passengers. “Our main problem is not enough space,” says Cruise Master Julie Richards. “Demand is growing as clients do not need to dress up. Most are over 40, mainly males, but I do get couples.” Bookings are taken a year in advance. 

“I also sell cruise ship voyages, so I often get a Cunard booking to England, then a cargo ship back,” Richards adds. “If the ships to Europe are booked, then a second option is to fly to Singapore and get a cargo ship coming down from China and take it to Europe via the Suez Canal.” 

The food is basic as these are working merchant ships. Rooms are cleaned, but passengers do their own washing. The ships have a lounge with TV (which will only work while in port), DVD player and video. There is a bit of alcohol, which is the only thing passengers have to pay for at the end of the voyage. “It’s just jeans and T-shirts. There’s no need to dress up,” quips Richards. 

In 2012, 662 passengers boarded CMA CGM container ships. CMA CGM offers voyages on their largest, 16,000-teu vessels, including Marco Polo and Jules Verne, and promises exploration of the seven seas with exceptional flexibility. Passengers can stay on board as long as they like, debark in any port, and then board another vessel to continue their voyage. Hamburg Süd is another company that offers voyages, and amenities include air conditioning, table tennis, gym, sauna and inside pool. 

Luxury Newbuilds 

For the majority, however, cruising is synonymous with luxury, and the newbuild market continues to focus on this. Le Soléal, the third of three small super-luxury cruise ships built by Fincantieri for the French cruise line Compagnie du Ponant, was delivered at the Ancona shipyard in 2013. Le Soléal, whose size and characteristics make it very much like a mega-yacht, is a unique niche product and will be the cruise line’s new flagship. Targeting a select clientele, it is designed to offer passengers a unique experience as its small size enables it to reach destinations inaccessible to larger vessels. The new ship can accommodate more than 260 passengers in 132 cabins and suites, all with a sea view and 94 percent with a private balcony. 

Many cruise lines seek to offer ever more sophisticated entertainment. Costa Cruises future flagship Costa Diadema, scheduled for delivery in October 2014, will feature a country rock club and the Star Laser room that has interactive laser games including Lazer Maze. Costa Cruises has developed a new children’s program that includes activities based on Spin Master games. These include hovering or bouncing off walls with AtmoSphere, aerial acrobatics with the remote-controlled Air Hogs, and learning to guide the Flying Fairy. 

Carnival Sunshine has undergone a $155 million upgrade that added a variety of innovations that are part of Carnival’s Fun Ship 2.0 enhancement initiative. Dining choices include the Fahrenheit 555 steakhouse, a new full-service Asian restaurant called Ji Ji Asian Kitchen, the BlueIguana Cantina Mexican-themed eatery, and Guy’s Burger Joint. New bar concepts were also added such as the cocktail pharmacy-themed Alchemy Bar and the largest RedFrog Pub in the fleet. 

Norwegian Getaway, recently completed at Meyer Werft’s Papenburg, Germany yard, will feature sizzling Latin-inspired dance productions by Broadway sensation Burn the Floor, performances of the seven-time Tony Award-nominated musical “Legally Blonde,” and a dazzling fireworks show at sea, set to music, as part of a dance party in the ship’s outdoor club, Spice H20, among other attractions. 

Meyer Werft is performing strongly in the newbuilding market with a series of orders from Royal Caribbean and Norwegian Cruise Line for their new classes of vessels in the 4,000-passenger range. The official keel-laying of the new Royal Caribbean ship Anthem of the Seas was celebrated in November 2013. The 167,800-gross ton vessel is one of the biggest ships the shipyard has built to date and is the second in a series of Quantum Class ships for Royal Caribbean. Delivery is scheduled for spring 2015 when the vessel will set standards in cruising by featuring a parachuting simulator, bumper cars, virtual balconies and many more innovations. Each of the Quantum Class ships can accommodate 4,180 guests at double occupancy and features 2,090 staterooms. 

Norwegian has ordered a second Breakaway Plus Class cruise ship with Meyer Werft for delivery in spring 2017. Along with the first Breakaway Plus ship, scheduled for delivery in October 2015, the two vessels will be the largest in the line’s fleet at approximately 163,000 gross tons and 4,200 passenger berths. They will be similar in design and innovation to the line’s current Breakaway Class, the first of which, Norwegian Breakaway, launched in New York in May 2013, to be followed by Norwegian Getaway later this month. 

Star Cruises also has a contract for a new cruise ship with Meyer Werft to add to its existing fleet of six ships. The 150,000-gross ton newbuilding will have 1,680 cabins and is scheduled for delivery in fall 2016. The Star contract increases the yard’s order book from six to seven large cruise ships through 2017. 

New and Emerging Markets 

Global dynamics are changing for the commercial fleet. “With the continuing comparative weakness of demand in the traditional markets of North America and Europe, further emphasis on emerging markets is anticipated, as exemplified by the recent deployment of a Carnival Cruise Lines’ ship for the first time in Australia,” says Peter Wild, Managing Director of G. P. Wild International. “One of the biggest success stories is Brazil. Passengers in this market rose from 139,000 in 2004/5 to 805,000 in 2011/12. However, 2012/13 saw a fall to 730,000, possibly reflecting the cooling down of the over-heated Brazilian economy.” 

The Middle East is another emerging market, where significant cruise port expansion plans are being undertaken in anticipation of the growing market there. H.E. Issa Al Mohannadi, Chairman of the Qatar Tourism Authority, says Qatar has a strategy for attracting seven million visitors annually by 2030. Commercial port activities would be relocated to a new site outside Doha in 2016 and the existing facilities redeveloped with increased draught to become a dedicated cruise port. Port development is also underway in Oman, where Port Sultan Qaboos in Muscat will no longer cater to cargo vessels after August 2014. Instead it will be developed to include three new cruise berths, ferry and marina berths, hotels, restaurants and other tourist facilities. 

Looking ahead, about 28 new vessels are expected to be added to the global cruise fleet by 2017. Carnival continues to be the largest investor in new tonnage with a 34 percent share over this period. Royal Caribbean, including its TUI joint venture operation, has a 28 percent share. The boom in cruise ship construction, both large and small, and in cruising itself, continues unabated. 

Wendy Laursen is the magazine’s Australian correspondent.