The Atlanta Journal-Constitution
Billions in new cruise ships sit idle
Construction wraps on 10 amid pandemic but they have nowhere to go.
Normally when a new ship wraps construction at a shipyard, it’s cause for a party, with free-flowing champagne and executives in sharp suits. But when the sparkling 596-passenger ultraluxury ship Silver Moon joined Royal Caribbean Group’s elite Silversea Cruises brand in late October — the culmination of a $380 million, 20-month project — there was little pomp and circumstance. No media were on hand at the Italian shipyard to ooh and ahh over exquisite design features like bespoke Lalique panels in the French restaurant or handcrafted Savoir beds in the top suites.
This time, even Royal Caribbean’s top brass bowed out on the celebration, teleconferencing in
from Miami. And the ship’s handover, in Ancona, Italy, came with a cringe. After all, Silver Moon has nowhere to go. With border restrictions and a second wave of the COVID-19 pandemic freezing travel, she may have to wait until spring to make her maiden voyage.
“It’s very painful in many ways,” says Jason Liberty, Royal Caribbean Group’s executive vice president and CFO. “All this energy, whether it’s design, creating unique activities and venues, obviously you’re investing money as well, and you take delivery of the ship and you can’t do what you do best, delivering the best vacations in the world.”
What’s happened
Liberty isn’t alone in his frustration. At least 10 ships — ranging in cost from $75 million to near $1 billion — have wrapped construction amid the pandemic, representing an industry investment of more than $3.84 billion. Another three ships debuted at the beginning of the year. Most are stuck in holding pattern until the U.S. Centers for Disease Control and Prevention and its counterparts around the world greenlight a return to cruising.
At this point last year, 2020 had been predicted in the cruise world as the beginning of a boom decade for ship building. According to trade publication Cruise Industry News, the year started with 117 cruise ships on order by 2027, a record in the history of cruising. After all, the industry’s fast-growing popularity — 32 million projected cruisers in 2020, up from 30 million in 2019 — made new tonnage feel like a foolproof bet. Now it just feels like a sunk cost, adding to billions of dollars in quarterly losses that some companies were already experiencing.
Who was hit hardest
Entirely new brands, such as the adults-only Virgin Voyages and the luxe Ritz-Carlton Yacht Collection, may be among the hardest hit. They’ve invested in multiple ships with no previous revenue to defray costs, only to have their first planned year of operation wiped out entirely. Worse, they cater to a new-to-cruise market, which may be especially skeptical in the post-pandemic world. (Both of their debuts have moved to 2021.) Also debuting next year is new luxury expedition brand Atlas Ocean Voyages-which has added complimentary COVID-19 health insurance to its all-inclusive fares.
Of the 13 ships that have wrapped construction in 2020, few have carried guests.
Many of these debuts should have been media juggernauts for the ships’ parent companies, none more so than Windstar Cruises’ first “stretched” ship, set to debut later this month after being cut in half and getting stitched back together with an extra 84-feet in its midsection. The major transformation of the 312-passenger Star Breeze-which adds 50 suites to each deck-has been anticipated for two years, but now it will get shown off quickly via video feed and remain docked, indefinitely, at its shipyard in Sicily.
Can buzz help industry recover?
Brands will be armed with plenty of buzz when it’s safe to set sail. New ships like Carnival’s
forthcoming 5,282-passenger Mardi Gras, outfitted with the first roller coaster at sea, tend to draw loyalists who want to be the first onboard.
Will new-ship buzz help the industry recover from last winter’s images of hazmatsuited health officials investigating COVID-19 outbreaks? Silversea’s chief marketing officer Barbara Muckermann says yes, and she’ll have three ships to showcase next year.
Of course, that’s true only if he and his peers can persuade the market that cruising is safe — a looming question mark, given that at least three small-ship companies have already experienced COVID-19 outbreaks aboard their vessels since resuming sailing this summer.
Glitz and glamour is great says Windstar’s Prelog, but “safe to cruise has to be the main message.”