Vessel Performance Key to Secondhand Ship Market for Carnival

Oriana

Carnival Corporation has sold 28 ships since 2006, averaging around two ships per year based on demand in the market.

That number was up in 2018, with the company announcing the exit of four ships overall.

The Pacific Eden was sold to Cruise & Maritime Voyages while the Pacific Jewel will head to Indian start-up Jalesh Cruises.

Holland America Line sold the Prinsendam, which will become the Amera next summer for Phoenix Reisen.

P&O Cruises UK also announced the Oriana will leave the fleet in 2019.

“The practical reality for us is if the ship is relevant to our guests and is delivering a double-digit return on invested capital … we have to invest more in that ship over time. We’ll continue with the ship in the fleet if it’s relevant to the guests and his earning is key if it’s not then the ship will be gone,” said Arnold Donald, president and CEO, on the company’s year-end and fourth quarter earnings call.

The secondhand cruise ship market has historically been highlighted by two to three nine- to eight-figure transactions on an annual basis, according to the Secondhand Market Report by Cruise Industry News.

“And so in terms of there being a robust secondary market, there’s no question, the secondary market has an opportunity not only because the IMO regulations but simply because the ageing of ships that are in the secondary market,” Donald added.

Donald said many operators in the secondhand market were sailing ships that are 40 to 45 years old, and those vessels will need to be replaced.

“So there should be a market for a number of the ships. But at the same time, to drive earnings and return on invested capital, if we had a need to scrap for ships, in a nutshell, we would do that. We don’t see that at this point in time. But if it came to that, we have no problems doing that,” Donald continued.

“But we’re not going to hold onto an underperforming asset, because we’re not able to sell it. I mean, if – we would scrap it if we had to. I don’t anticipate that, but if we had to do it, we would do it.”

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Mexico: Acapulco: Calls and Homeporting

The Norwegian Sun calls in Acapulco
Norwegian Sun in Acapulco.

Thirty calls are scheduled for the 2017-2018 season for Acapulco. That is a slight dip from last year because Holland America cancelled eight calls when Carnival Corporation did not conduct its destination site inspection, despite being invited by the port, explained Alex Casarrubias, port director. “We are confident that once Carnival, as well as Royal Caribbean, visit our destination, their ships will return,” he said.

“Our top client is Norwegian Cruise Line Holdings with Norwegian, Oceana and Regent,” Casarrubias continued. “Last year we also added the Magellan and Astor of Cruise & Maritime Voyages.

“The Magellan will homeport in Acapulco for three months, starting in February 2019.”

Acapulco was also a homeport in 2010 and 2011 and has since accommodated a number of turnarounds. This season, 90 percent of its traffic is transit calls and 10 percent turnarounds, but those percentages will change next season.

Recent turnarounds for Phoenix Reisen’s Albatros and Artania meant that passengers flew directly to Acapulco from England and Germany.

Casarrubias pointed out that nonstop airlift from Los Angeles started in December and that nonstop flights from Montreal and Toronto are starting in January.

Meanwhile, the Acapulco Cruise Committee’s priority continues to be to showcase Acapulco as a safe destination with top-notch infrastructure and services, he said. “We are in constant communication with the cruise lines and our main priority right now is to get Carnival to do its site inspection so they can confidently resume their cruise operation in our port.”

Passengers will find a “renewed” Acapulco. Grupo Autofin’s $1 billion master plan includes renovations of the Pierre Mundo Imperial and Princess Mundo Imperial resorts, as well as a number of new developments – hotels, shops, restaurants, spas, an eco-amusement park, a tennis stadium, a medical center and more, slated to be completed between now and 2022.

This year will also see the inauguration of a new terminal at the airport.

The most obvious attraction is Acapulco’s stunning landscape, according to Casarrubias, with its lush green mountains and sandy white beaches, in addition to its well-developed tourism infrastructure.

Western Australia Committed to Growing Cruise Business

Ovation of the Seas arrives in Perth

“The State Government (of Western Australia) is committed to growing the cruise industry by addressing regulation and infrastructure issues,” said Tourism WA (Western Australia) Acting CEO Stephen Wood.

Among the changes for cruise operators, casino operations are permitted when ships are traveling between WA ports.

With nine ports, including Perth as a key homeport, WA is in close proximity to ships coming from Southeast Asia, offering a variety of niche destinations.

Mid-West Ports recently installed two sets of shore tension units for Geraldton, Wood said, to ensure reliable berthing. There is also funding heading to Kimberly Ports to purchase an all-tide gangway system for the Port of Broome.

In Exmouth, a steering group has been formed to enhance anchor and tender operations. Wood said Exmouth was a transformational cruise port that holds the key to growth for WA.

“Perth and the port city of Fremantle are also undergoing massive transformations, thanks to unprecedented levels of public and private investment, making both more attractive places to visit,” Wood told Cruise Industry News. “Perth has seen redevelopments on a huge scale including improvements at Perth Airport and the Elizabeth Quay waterfront precinct. Fremantle is undergoing major redevelopment, with more than $1 billion in the investment pipeline. New small bars, restaurants, cafes and retail precincts have popped up in both cities, giving cruise visitors many shore options for dining and shopping.”

Recent highlights included the Queen Mary 2 making a visit to Busselton, with a return call planned in February 2018. The Ovation of the Seas called in Fremantle last December and comes back earlier this year, with a November call on the books.

This coming season will see 44 cruise ship visits for Fremantle, a small decline as some capacity has been moved elsewhere. Cruise & Maritime Voyages is a key customer, homeporting the Astor for a fifth consecutive season.

Inaugural visits are scheduled by the Regatta, Ocean Dream, Azamara Journey, L’Austral, Seven Seas Navigator and Golden Princess.

Tourism WA is pushing its strategy to make its nine ports a key cruise destination, by developing the necessary infrastructure to serve industry capacity, according to Wood.

“Since 2012, Tourism WA has helped to deliver 30 ‘Welcoming Cruise Passengers to the West’ workshops to more than 1,000 tour guides/drivers and volunteers across the state,” he said.

In addition is a newly accredited training program for tour guides funded by Tourism WA, which will debut in Geraldton, Busselton, and Albany.