Seatrade Cruise Connection

December 2007

Current Trends within a Healthy, Vibrant and Expanding Cruise Industry

While growth in the cruise market remains heavily focused in Europe and North America, new developments are emerging in the global cruise industry with major refurbishment projects, differentiation in the luxury market, the expansion into new cruise regions, and port facilities keeping pace with world wide growth.

As construction of new tonnage continues at a rapid pace, cruise lines are also updating their existing fleets and acquiring older, smaller ships for niche products.

During 2007, several lines refurbished older midsize ships including Celebrity’s Century and the completion of Holland America's fleet wide Signature of Excellence program. Carnival Cruise Line also began a refurbishment program with an Evolutions of Fun retrofit of its popular Fantasy-class ships.

Spain's Pullmantur, Oceania Cruises and Princess Cruises all have taken possession of 30,000-ton, 700-passenger R-Class ships from the non-operational Renaissance cruises. Upon acquiring Pullmantur, Royal Caribbean Cruises Ltd. transferred its R-Class ships to its Celebrity brand, which promptly created a new deluxe brand, Azamara Cruises.

Annually, the refurbishment market is a $1.5 billion business. The Design and Refurbishment Pavilion, one of four specialized pavilions on the exhibition floor at this year's Seatrade Cruise Shipping Convention, is the model venue for suppliers and buyers to meet and discuss the challenging but creative and integrated processes of marine interior and exterior design.

An innovative cruise product is always in development and the smaller, luxury cruise market is distinguishing themselves from the mass-market lines with imaginative concepts that go beyond the emphasis on suites, food and service.

Silversea recently purchased the 6,000-ton, 140-passenger World Discoverer to create an expedition-style cruise product aimed at a younger demographic. Regent Seven Seas Cruises’ Circles of Interest program, offered on some voyages, enables passengers with specific interests or hobbies to attend shipboard workshops and participate in shore excursions tailored to those interests. And, Seabourn Cruise Line, with two new builds on order, is redefining its luxury yacht experience.

The cruise industry, as a whole, continually seeks new ways to enhance and expand its passenger services. From small quantity specialty foods and gift shop items to luxurious carpeting and novel outdoor furniture, suppliers will find specialized forums to showcase their products to decision-makers with real buying power in the Food & Beverage Pavilion and Ship Services & Hotel Operations Sector.

With larger fleets, cruise operators are quickly responding to the necessity for new cruise regions. Traditionally, cruise lines have deployed smaller, older ships to new destinations until they build a significant market that will support a larger vessel. Today, cruise lines are assigning bigger, newer vessels to those regions to attract more active travelers.

Princess Cruises deployed its Sapphire Princess and Princess Diamond to Asia and Australia/New Zealand. Carnival, for a second season, will operate its newest ship, Carnival Splendor, in Europe. Following its inaugural season, post-Panamax Splendor will become the first Carnival ship to cross the Equator and round Cape Horn to enter service on the West Coast of the United States.

While the China market has been slow to develop, other parts of Asia are quickly becoming popular cruise regions. Kuala Lumpur is one of Southeast Asia's most sophisticated cities and fastest-growing cruise ports. Vietnam is well represented on cruise itineraries, with a number of ships from Crystal, Oceania, Princess, Seabourn and Silversea set to make port calls.

Costa, along with German sister line Aida, is the first mainstream line to homeport a ship in the Middle East for an entire season. Its first season in Dubai was so successful the line announced an increase in capacity there for the 2008 winter season. Crystal Cruises plans to homeport its ships in Dubai for a handful of voyages.

The increasing numbers of ships and cruise vacationers create competition among destinations, prompting cruise ports around the world to update and expand their passenger facilities. The Panama Canal has plans for expansion and Ocho Rios Cruise Ship Terminal will be upgraded to accommodate the current largest ship afloat, Freedom of the Seas.

New ports are a hot topic in Europe, too, where cities like Stockholm, Copenhagen, Barcelona, Savona and Venice are receiving major upgrades. In the United States, homeports are hoping to lure lines with snazzy terminals. Norfolk's $36 million facility opened in March and the Port of Miami opened two new terminals for Carnival Corp. ships in September.

For ports and land-based excursion companies entering or firmly established in the cruise market, the Destinations Sector offers outstanding opportunities to reach strategic planners to promote new ideas for adventurous itineraries.

The cruise industry continues to amaze and excite its passengers and create huge opportunities for its suppliers. Seatrade Cruise Shipping Convention is the largest gathering place of cruise owners and operators and suppliers in the world and participation in the 2008 event will ensure your place in this lucrative market. Previously mentioned are four of the specialized pavilions that make up the Seatrade Cruise Shipping Convention exhibition floor. In addition, opportunities abound in the Ship Equipment Sector, and the Information & Entertainment, SuperyachtSupplier and National Pavilions.

Breaking News… Announced on October 10, 2007, Cunard Line ordered a new 92,000-ton liner, to be named Queen Elizabeth, scheduled to enter service in the fall of 2010. Costa Crociere announced on October 18, 2007 its order for two new 114,200-ton ships to be delivered in 2011 and 2012. The three ships carry an approximate value of $2.1 billion.