The winds of change are creating waves in the global cruise industry, with many of the latest statistics from the Cruise Lines International Association (CLIA) suggesting that their may be an imminent shakeup of the largest cruise lines in the world.
This year, like every year for the past decade or so, will be dominated by Carnival Corporation, the largest cruise company in the world, which owns Carnival Cruises, as well as many of the most famous cruise brands in the world (Princess, Costa, Cunard, Holland America Line, P&O Cruises and Seabourn) along with several other cruise brands for home markets (Ibero for Spain, AIDA for Germany and P&O Cruises Australia).
Carnival Corporation will account for around 47.7% of marketshare in 2014 in terms of passengers numbers, and 41.8% in terms of revenue. Royal Caribbean Cruises Ltd, the second-largest cruise company in the world, account for 22.7% of the market in terms of passenger numbers and 41.8% in terms of revenue. Royal Caribbean Cruises Ltd owns the flagship Royal Caribbean International cruise line, as well as Celebrity Cruises, Azamara Club Cruises, Pullmantur and the French cruise line Croicieres de France (CDF).
While Carnival Cruise Line remains the largest and most established cruise brand, its parent company has been beset in recent years by a series of incidents and one major disaster that hurt its brand value badly, like an old lion that has defended his pride one too many times. The Costa Concordia tragedy, which left 32 people dead when the ship ran aground and capsized off the coast of Italy in January, 2012, significantly undermined the Costa brand globally. But, perhaps even more damaging to Carnival Corporation was the Carnival Triumph fire in 2013, which left a ship in their flagship cruise line stranded at sea for five days with little power and no working air-conditioning or flushing toilets.
Images of the ship’s passengers sleeping on deck, human faeces overflowing into the hallways and long lines of people queuing for soup kitchen-style food, all challenged the notion of a Caribbean cruise being a safe, relaxing and value-for-money vacation option. In the wake of the incident, perhaps the most highly publicised cruise ship accident in history, the cruise line has invested heavily in revamping its product, not only enhancing safety onboard the ships throughout its fleet, but upgrading the onboard experience as well in line with the ‘Fun Ship’ concept that made the brand famous in the United States.
This expensive undertaking means that Carnival Cruise Lines will be building just one new ship, the mammoth Carnival Vista between now and 2016, which will be their largest launch to date. Royal Caribbean International, on the other hand, is expected to take delivery of four new ships by 2016, all of which will be equal to or larger than Carnival Vista and capable of carrying more than 4,100 passengers. What does this mean for the future? In short, Royal Caribbean International is on course to become the largest cruise line in the world, the first step in a long road toward balancing the market share between the two dominant parent companies.
This year, Carnival Cruise Line will carry around 4-million guests according to Cruise Arabia & Africa’s calculations, while Royal Caribbean International will reach a personal best of 3.2-million guests if their cruise program for the year remains unchanged. However, if Royal Caribbean International takes delivery of its four new ships, which include Quantum of the Seas this year and Anthem of the Seas in 2015, as well as another unnamed ship in 2016, and if their new Oasis-Class cruise ship, the third 5,000-passenger-plus ship in their fleet, is launched as planned in 2016, their capacity will increase by more than 1-million. This is a conservative estimate, because Royal Caribbean’s contract with the Meyer Werft Shipyard in Germany includes an option for a fourth Quantum Class ship; while their contract with STX Europe in Finland includes an option for a fourth Oasis class cruise ship, the largest cruise ships in the world.
Royal Caribbean International are therefore aggressively expanding their capacity, but a spokesperson for the cruise line wouldn’t confirm with Cruise Arabia & Africa whether they were actively pursuing a capacity war with Carnival Cruise Lines, instead indicating that the line was merely looking to take full advantage of the cruise market available to them.
Royal Caribbean International’s multi-billion dollar new build program is not unique, however. Having completed perhaps the most ambitious new build program in the history of the cruise industry from the early 2000s to 2013, MSC Cruises became the third largest cruise line in the world last year, with one of the youngest fleets. But, MSC Cruises is in a closely contested capacity race with Norwegian, Princess and Costa, which all carried roughly 1.4 million passengers last year. This year, the Italian brand, which is hugely popular in South Africa and the Middle East, falls to sixth place behind Norwegian Cruise Line, which saw a 19% increase in capacity following the first full year of operations for the new Norwegian Breakaway and the similarly-sized 4,000-passenger Getaway, which started revenue service early in the year.
Princess adds a full year of service for the new Royal Princess, and will take delivery of the Regal Princess in 2014, leading to an 18.5% capacity jump for an estimated double-occupancy capacity of 1.65-million passengers, putting her in fourth place, while Costa Cruises will add 5.5% to her capacity with the new Costa Diadema in October this year. MSC Cruises are not expected to be out of the top five for long, however, as they recently announced the signing of a contract with STX Europe for the build of two new megaships, each in excess of 130,000-gross tons and capable of carrying more than 4,000 people.