Global Cruise Outlook: Cruisings Elite Class
(Article originally published in Jan/Feb 2015 edition.)
***From Jan-Feb 2015 Edition of The Maritime Executive magazine***
Competition for the rich and über-rich heats up as cruise lines add new attractions and exclusive amenities.
Asian cruisers have earned a reputation for their love of luxury, and the growth of cruising in Asia over the last three years has been nothing short of remarkable. 2015 will see 26 cruise brands operating 52 ships in Asia, nine of them year-round. “In 2013 there were 802 Asia-Asia cruises. In 2015 we will see 981,” says Ann Sherry, Chair of Cruise Lines International Association Southeast Asia. “But the growth in capacity is even more impressive, driven by increasingly large and modern ships being deployed.”
Asia is dominated by short cruises. About 80 percent are less than a week with two and three-night durations the largest category. But the variety offered is enormous, and four-to-six-night cruises are growing rapidly, up from 263 to 367 in two years.
The Next Great Cruise Market
Also growing rapidly is the Chinese market, which is expanding despite the relative difficulty mainland Chinese have in obtaining visas. “China is now the world’s largest outbound tourism market for other forms of travel, and we believe it is just a matter of time until that is true for cruising,” says Jeff Bent, Managing Director of Worldwide Cruise Terminals (WCT) in Hong Kong.
WCT is a consortium owned by Worldwide Flight Services, Royal Caribbean Cruises and Hong Kong conglomerate Shun Tak Holdings. It operates Hong Kong’s Kai Tak Cruise Terminal. The terminal, built on the tip of the former airport runway, has as its catchment area 7.2 million people in Hong Kong, 104 million in Guangdong Province, which is connected by coach, rail and ferry, and another 270 million mainland Chinese who are within four hours’ travel time. The terminal can accommodate two Oasis Class vessels at once as well as three medium-sized vessels.
Mainland Chinese spend more per capita than any other source market, says Bent, and many countries are looking at streamlining their visa process in order to welcome them: “The best example is Korea. The island of Jeju has no visa requirements for the Chinese, and their cruise market just exploded over the last couple of years because of the number of Chinese visitors.”
It won’t be long before they venture further afield to places like Australia, Alaska and the Mediterranean, he says, and they’ll start to take longer cruises than the typical four-to-five-day variety.
According to market analyst Peter Wild of G. P. Wild International, China and Australia are currently the fastest growing markets. The industry is demonstrating renewed confidence and an enhanced rate of ordering new capacity. The worst of the recession seems to be past, Wild says, but in most major economies family budgets for many are tightly constrained: “Having transferred capacity from the Mediterranean to the Caribbean to combat weak pricing in the former region, the latter is now under pressure and further redeployments are now unlikely. These considerations have strengthened the case for globalization with a growing emphasis on the Asia Pacific region.”
Setting the Standard
Royal Caribbean’s Voyager of the Seas, the largest cruise ship in the region, had an $80 million revitalization last year at Sembawang Shipyard. The enhancements reflected Asian and Australian themes and included a first-at-sea FlowRider surf simulator and a new dining option called Izumi Japanese Cuisine.
Celebrity Cruises has ordered two 117,000-ton, 2,900-guest ships from STX France under the project name EDGE, which will build upon the modern luxury experience of the brand’s Millennium and Solstice Class vessels. The aim is to set the standard for premium world travel, says Michael Bayley, President and CEO of Celebrity Cruises.
He faces stiff competition. Norwegian Cruise Line is investing more than $250 million in Norwegian NEXT, a program focused on the goal of elevating the guest experience and building on the success of the line’s two newest ships, Norwegian Breakaway and Norwegian Getaway.
Norwegian NEXT encompasses ship revitalizations, dining enhancements, new experiences in entertainment and guest activities, innovations in technology, new tropical destinations and a continued commitment to the environment, says Drew Madsen, President and Chief Operating Officer. Through 2015, the company has plans to revitalize a number of vessels including Norwegian Jewel, which just re-entered service following a drydocking.
New food and beverage venues are being introduced. “Norwegian reinvented the dining experience at sea with its Freestyle Dining concept, which it is taking to the next level with the introduction of new menus in complimentary dining rooms that offer more variety and choice,” says Madsen. Norwegian is also making enhancements to its beverage program with a new wine menu, and a new destination-based handcrafted beverage menu is bringing guests seasonal specialty cocktails with a local twist.
Norwegian Escape, scheduled for delivery in October, will be Norwegian’s largest ship at 163,000 gross tons and 4,200 passenger berths. The Haven on Norwegian Escape will offer 95 ultra-luxurious suites. The exclusive, key-card-only access to the two-story Haven on Decks 17 and 18 ensures the ultimate in luxury and includes a private restaurant with outdoor terrace and an enhanced courtyard area with a retractable roof that features a pool, two whirlpools, sauna, spa treatment rooms and a sundeck exclusively for Haven guests.
Not content with the destinations on offer around the world, Norwegian is investing $50 million to develop a new eco-friendly cruise destination on 75 acres in southern Belize. Called Harvest Caye, the area embodies the concept of cruisers enjoying premium shoreside and ocean-going experiences. Major components include a floating pier, an island village, a water sports lagoon and a beach. The goal is to design an authentic experience that celebrates Belizean history and culture and is grounded in the storylines of nature, art, adventure and music. It’s scheduled to open this fall.
“The Most Luxurious Ship Ever to Set Sail”
Regent Seven Seas Cruises is building a 56,000-ton vessel, the Seven Seas Explorer, which is expected to be operational in 2016. It will boast the industry’s highest guest-to-space ratios and one of the highest staff-to-guest ratios and have just 750 guests.
World-renowned interior design firms Tillberg Design, RTKL Associates and ICRAVE are designing the vessel. All rooms will have balconies, and the company has added a new luxury two-bedroom suite. The lavishly appointed 3,875-square-foot Regent Suite will feature an outdoor, glass-enclosed sitting area with unobstructed 270-degree views over the ship’s bow.
The Regent Suite comes complete with an in-room spa retreat, a first at sea. The spa includes a full sauna, ceramic heated relaxation lounges and a multi-jet shower. An oversized hot tub located adjacent to the spa looks out over the ocean and is enclosed in glass, protecting guests from the elements while still providing an al fresco ambiance. Also included are unlimited complimentary in-suite spa treatments.
The privileges of the Regent Suite extend beyond its doors and include a private car with driver and guide in every port, free unlimited laundry and pressing, business and first-class air travel and limousine transfers to and from the airport.
“The opulence and elegance of the Regent Suite will be unmatched in the luxury vacation segment, and it truly epitomizes the vision we have for the entire vessel,” says Jason Montague, President and COO of Regent Seven Seas. “With Seven Seas Explorer, we set out to build a ship that will far surpass the current standard for luxury and bear the distinction of being the most luxurious ship ever to set sail.”
It’s hard to imagine where the cruise experience and desire for luxury will end, but Virgin Group Founder Richard Branson has some ideas. Branson has announced the formation of Virgin Cruises, a new company that will “make waves in the industry.” It will be based in Miami and has plans to design and construct two new world-class 4,200 passenger cruise ships that are “more informal, fun, sexy, hip and cool” than what’s on offer at present.
Like Norwegian, Branson is looking at the Caribbean with voyages expected by the end of the decade. “We plan to shake up the cruise industry and deliver a holiday that customers will absolutely love,” he says. “They’ll be sailing on the latest ships offering great quality, a real sense of fun and many exciting activities, all delivered with the famed Virgin service.”
Branson is keen to attract first-timers (“cruise virgins”) along with “cruise nevers.” Virgin will also target younger cruisers. Instead of creating a Las Vegas-like atmosphere with casinos, theaters and all-you-can-eat buffets, Virgin will give passengers more opportunities to experience life at sea. Additionally, parts of the ships’ interior will be designed to appeal to people who are more at home in “downtown Manhattan, SoHo and the West Village” than on a cruise.
As the owner of the 105-foot luxury catamaran Necker Belle, Branson has plenty of personal seafaring experience, and if none of the cruise industry’s latest offerings suit the discerning cruiser, Necker Belle is available for charter at a mere $110,000 per week. – MarEx
Wendy Laursen is the magazine’s Asia Pacific News Editor.
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The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.