BUYING, SELLING, AND CRUISING: NEW AND OLD CRUISE SHIPS IN THE CARIBBEAN
It is no pun to say cruise ships are always coming and going. Sailing from port to port, sometimes under the command of a small and new operator, but often under old and famous flags that can trace their heritage back decades. Just as the cruise industry can trace its beginnings all the way back to the mid-1800’s!
Because cruise ships always sail into port with confidence, glamour and a glittering itinerary of capitals they will visit, it’s easy to imagine for a moment that a cruise line’s business is perpetual, unending, and unchanging. That it is always smooth sailing, and the ships unchanging from sea to sea. Behind the scenes, though, the picture can be very different.
While a cruise line may maintain its operations seamlessly, the ships it uses at the heart of its business are often being bought new, or sold on to others. This arena of exchange is an ‘industry within an industry’ and a business sector that warrants an in-depth look as the cruise industry is only set to grow stronger in years ahead. So let’s now look at the buying and selling of cruise ships.
THE LIFE, DEATH, AND RESURRECTION OF A CRUISE SHIP
When a cruise ship is launched for the first time it is always a huge affair. When done properly, its maiden voyage can be a party to end all parties, one that passengers still talk about years later.
Names like the Queen Mary, the QE2, and even the Love Boat AKA Island Princess have not only been iconic vessels but found their way into pop culture history. Just the same as no mention of cruise ships in pop culture can fail to list the Titanic and its epic story of disaster.
But most cruise ships are not like the Queen Mary (or thankfully) the Titanic. Many of them are constucted, have a period of service and then, for whatever reason, find their owners no longer have use for them in the same way. So what happens when a cruise ship leaves its first service?
Commonly they are handed down from a top tier cruise provider to a budget-focused one. Thereafter, the old cruiser may find service with an NGO or even as a car ferry. The many uses of Carnival’s former ships Tropicale and Jubilee after their initial run of service is illustrative of this. But there is one particular group that’s made especially notable inroads in this sphere lately.
TUI CHARTS ITS COURSE
The Anglo-German tourism company Tui bills itself as the biggest travel group in the world. Collectively, the Tui Group has five airlines, over 300 hotels, 67,000 employees and operates in over 130 countries with its 2017 annual report detailing 18.5 billion Euros in revenue over the year prior.
All of this is undoubtedly impressive, yet it’s Tui’s most recent ventures in the cruise sector that represent such an interesting new chapter for its business, and the Caribbean region it operates in. Presently the group has 16 cruise ships sailing in its fleet, and its recent moves in this space provide a great insight into the comings and goings of cruise ships on the market.
It’s now expected that Tui will have 18 ships by 2023. It has pursued its strategy to become a heavyweight in the cruise industry by not only commissioning new ships like the Mein Schiff 1 and 2, but also by acquiring the sole ownership of the Golden Era thanks to the end of a joint venture with SkySea, and by the purchasing of the Legend of the Seas by Royal Caribbean.
The cruise industry is a growing one, and it can be said this is just good business for Tui. But for those in the Caribbean watching with a view to the next ship in port – and what it may mean for business locally – the expansion of Tui can be seen as illustrative of the growth in the cruise sector as a whole. Yet this growth shouldn’t be regarded as totally absolute or unstoppable locally.
THE EVOLUTION OF THE CRUISE INDUSTRY
Beyond the business of buying and selling cruise ships alone, there are short-term and long-term trends emerging in this sector. The rise of the Asian region as an economic powerhouse is set to see greater purchasing power and disposal income grow across its residents.
That means an uptick in cruises in Asia and beyond it. Just as cruise providers identify an opportunity to expand here – and can look to Asia-only tours that meet this demand without changing operations elsewhere – it’s also clear that some of the pros of this trend (more tourists from Asia visiting the Caribbean and cruising) will also bring a greater competition in some
While a cruise line may maintain its operations seamlessly, the ships it uses at the heart of its business are often being bought new, or sold on to others
Similarly, the way in which younger generations travel will pose new challenges for cruising long-term.
Stats show many younger travellers often seek a short and luxurious trip, such as a weekend getaway at a 5-star resort, over a longer one that’ll see them away for a month. The reasons for this can vary – whether its reluctance to use all their vacation days in one go, less disposable income, or other factors – but it means that as generations shift, the appeal of intercontinental cruises may be tested.
Beyond this, there is also the rise of digital content, as virtual reality and augmented reality (as seen in 2016’s hugely popular smash hit game Pokémon GO) come to the fore. There’s no suggestion here that emerging tech like this could ever outright replace the feeling of arriving on a cruise ship on a sunny day at Pointe Seraphine here in Saint Lucia, just instead that cruise providers will need to consider how to best introduce the new tech in a way that does not simply ignore it, but embraces it, and sees it enhance the cruising experience.
SAILING WITH THE WIND
The buying and selling of cruise ships is not a new process. But within the context of a time of great change not only for the cruise industry but the Caribbean as a whole, the ‘industry within an industry’ offers us a glimpse of where its major players identify future growth trends, and commercial opportunities.
A greater understanding of this can benefit not only the cruise ship industry, but the wider tourism sector in the region. Just as the selling on of cruise ships and the buying of them by other providers can not only help sustain existing routes and related businesses, but build them stronger as an old boat gets a new lease of life. Local business that can build on the growth of the cruise industry will surely welcome every ship to port, whether on its first voyage or its 1000th.
TUI Group’s Cruises segment is one of the Group’s strong growth pillars. Due to the continued increase in demand, the world’s number one tourism group is planning to expand the segment by an additional newbuild of the Mein Schiff fleet. A vessel of identical design to the new Mein Schiff 1 and Mein Schiff 2 with a capacity for up to 2,894 passengers will be built at the Finnish Meyer Turku shipyard