Cruise Arabia & Africa looks at what the cruise industry can expect from this high-profile newcomer…
UPDATE: Sir Richard Branson has revealed in an interview with Abu Dhabi-based newspaper The National that he is planning to launch his new cruise line by 2017. In the interview the serial entrepreneur indicated that he would launch Virgin Cruises with two new-build ships operating in the Mediterranean and Caribbean initially. Speaking recently at the CEO Forum 2014 in Dubai, the head of the pioneering Virgin Group also revealed that most of the USD $1.7-billion in funding had been secured. “It’s true that we are looking to set up Virgin Cruises, and most of the money is now committed,” said Branson. “We are building two large ships from scratch.”
Branson also informed The National that the cruise line would be based in Miami, although the homeports of the ships are yet to be decided. While Miami is the most popular cruise departure point for the Caribbean among North American cruise passengers, Branson may consider other options, such as Barbados or the British Virgin Islands if he intends to focus on the British cruise market.
His decision to base the line in Miami, however, makes this unlikely.
The USD $1.7-billion venture by Virgin Group, which was founded by Richard Branson with its flagship brand, Virgin Atlantic Airline, will be funded through in a mix of debt and equity. He has reportedly enlisted a New York-based investment bank that specialises in media and leisure projects to help him search for partners.
Virgin Cruises would be aimed at a younger market in a sector of the travel industry with a traditionally top-heavy age structure. The ships would offer more entertainment and leisure, according to a spokeswoman for Virgin Group.
“We believe we can supply the Virgin ‘touch’ on cabins, leisure and dining facilities. Virgin is exploring a number of opportunities within the leisure sector including hotels and cruises. We believe both markets lend themselves to creating a new proposition based on Virgin’s history of doing things differently,” she said. Virgin Atlantic, the founding brand of the Virgin Group, was established in 1984 and quickly became an immensely popular airline in Europe for its refreshed approach to the travel experience.
It is therefore an exciting prospect that a new comer to the cruise sector may be able to create the ‘Virgin Atlantic’ of the sea, but the last cruise line that tried to shake up the traditional cruise model, easyCruise, was launched in 2005 by another serial entrepreneur Stelios Haji-Iaonnou, and was sold four years later after failing to find a foothold in the market.
This new move by Branson is in keeping with his historic tendency to enter into markets dominated by a handful of companies. Other sectors in which Virgin Group are active include aviation, energy, media, banking and fitness, with Virgin Active. Their Virgin Radio brand has a presence in the UAE, where it is the most popular radio station among under 30s.
The cruise industry has for the past decade been dominated by three cruise corporations, which together control 80-percent of the market: Carnival Corporation, Royal Caribbean Cruises Ltd, and Norwegian Cruise Line. All three corporations own several subsidiary cruise lines, but Carnival is the dominant player, with a majority stake in iconic brands such as Princess, Cunard Line, Costa Cruises, P&O Line and Holland America Line.
It seems there are certainly exciting times ahead for the cruise industry.