Small ships popular but proving difficult to get built

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Shipyard problems have delayed Ritz-Carlton Yacht Collection’s first ship, the Evrima.

The small-ship cruise sector is booming, but getting its ships built on time is proving to be a big challenge.

Expedition and small luxury ships are among the hottest segments when it comes to passenger demand. But unlike the mega-liners churned out like clockwork by the big shipyards, small ships tend to be built at small yards, where inexperience with cruise work is the general rule.

The latest example is the Ritz-Carlton Yacht Collection, a new entrant to the cruise industry that had hoped to make a splash this winter with its 298-passenger Evrima before the Super Bowl in Miami.

Instead, on Oct. 4, three months before scheduled delivery, Ritz-Carlton announced that the much anticipated Evrima (Greek for “discovery”) would be delayed until June 2020 because of shipyard issues.

In a statement, Ritz-Carlton blamed “delivery and project cost” problems at the Hijos de J. Barreras shipyard in Vigo, Spain, for the delay. 

“With additional challenges around the former shipyard management, both the new board of Hijos de J. Barreras and the board of the Ritz-Carlton Yacht Collection are working cooperatively toward a long-term solution for the shipyard,” Ritz-Carlton’s statement said.

Ritz-Carlton joins Scenic Luxury Tours & Cruises, the German line Hapag-Lloyd Cruises and Norway’s Hurtigruten in suffering delays, ranging from minor to extensive, in the past two years in attempting to bring their ships to market.

All were building ships of under 600 passengers, and all were being built at smaller, lesser-known yards.

The Scenic Eclipse was delayed several times before making its debut in September 2019.

The Scenic Eclipse was delayed several times before making its debut in September 2019.

The delays make life hard for travel advisors. Many have clients who want to be among the first to experience new vessels. Some agents are themselves booked on inaugural cruises in order to better evaluate new ships for clients.

When ships are delayed and inaugural plans cancelled, it is hard to explain to clients who have blocked out time off and who have high expectations that they will be the first to sample the ships.

“When it hurts the advisors, of course, it hurts us,” said Ann Chamberlin, vice president of sales at Scenic, which christened its 200-passenger Scenic Eclipse expedition yacht in New York on Sept. 10. 

The ship, built in Croatia, was delayed not once but several times. All a line can do, Chamberlin said, is protect agent commissions, re-accommodate passengers and beg both groups for understanding. 

The delivery of the Scenic Eclipse was hurt by multiple issues, including worker strikes, financial malfeasance, management turnover and frozen bank accounts. In February, Scenic owner Glen Moroney invested in Uljanik Shipyard in Pula, Croatia, along with Croatia’s DIV Group and Italy’s Fincantieri to get the ship finished.

Scenic is not the only line to become a shipyard owner. After delays on its 530-passenger Roald Amundsen last year, Hurtigruten bought the Kleven shipyard in Norway to expedite the project.

In March, Hapag-Lloyd cancelled the first two scheduled cruises of the expedition ship Hanseatic Nature because of delayed delivery from the Vard shipyard in Norway. Fincantieri, which owns Vard, said in its most recent financial report that reorganization of Vard is a top priority and that some of its best Italian employees have been assigned to the job.

Lawrence Rapp, a principal at Seawise Consulting, said that many small yards are better prepared to build simpler ships.

In general, Rapp said, “these small yards are not aware of just how complex the projects really are. To get a prototype fully approved by [country] flag and class take much more time than they would anticipate because you have to go through impact-stability calculations, damage-stability calculations. And each time you make adjustments to one of these things, it affects the others and also the functionality of the ship itself.”

In addition, small ships are more often designs from prototypes, rather than copies of previous ships.

“When Carnival or Royal Caribbean are building ships, they will build five, six, eight, 10 of the same class,” Rapp said. “Once the calculations have been gone through and the design has been accepted, it’s a whole lot easier to plan going forward.”

In March, Hapag-Lloyd canceled the first two scheduled cruises of the Hanseatic Nature because of delayed delivery from the Vard shipyard.

In March, Hapag-Lloyd cancelled the first two scheduled cruises of the Hanseatic Nature because of delayed delivery from the Vard shipyard.

Moreover, small yards sometimes have to bring in workers who have cruise experience. 

“If you’re a small yard and you’re undertaking a project that is an order of magnitude bigger than anything you’ve ever done before, you’re probably bringing in a lot of people who are not used to you, and you’re not used to them, and relationships can be difficult to maintain,” Rapp said.

Daniel Schaefer, CEO of Sea Cloud Cruises, is currently building a 136-passenger ship at Metalships & Docks shipyard in Vigo, Spain. The project has been in the works since 2008 when it was at another shipyard that went bankrupt.

“Most of the time it’s that the yards have no experience in what they’re doing,” Schaefer said. 

Small-ship owners are forced to work with them because getting a slot at one of the big yards is next to impossible. 

“Going to Meyer Werft in Germany, you get a slot in 10 years,” he said. “So you have to go to some inexperienced yards and see if you get a berth there.”

One common stumbling block is weight, Schaefer said. And then there’s interior craftsmanship. “That creates a lot of problems. They come at the end because interior work is done at the end. And if you find out that it’s not the quality you were expecting, you don’t have much time to correct it.”

Schaefer said Sea Cloud made its mistakes on a ship built in 2001 and is confident that the Sea Cloud Spirit will be ready for its August 2020 debut. He said the ship is already in the water at the proper weight and ready to be finished.

“Looking at the mock-up quality work, we’re pretty sure our interior workers will do a good job,” Schaefer said.

Cruise and Maritime charters ‘classic ship’

A 550-passenger ‘classic cruise ship’ is being chartered by Cruise and Maritime Voyages next year to replace Discovery after it is withdrawn from service.

The vessel Azores, which was re-built in 1994 for $150 million, will operate year round sailings, with its first departure from Bristol Avonmouth on January 26 on a 30-night voyage to the Caribbean.

The Azores has been chartered from Lisbon-based Portuscale Cruises on a long term basis. All crewing and ship management services will be handled directly by CMV.

Full details of the ship’s Azores programme for next year alongside CMV’s Marco Polo and Astor will be unveiled tomorrow (Tuesday)  when a 2015 first edition preview brochure is released featuring more 50 sailings until October 2015.

Eight five per cent of Azores’ 277 cabins have an ocean view and almost 20% are of a de-luxe standard including nine balcony suites. All cabins also have a bath tub and mini bar.

CMV commercial director Chris Coates said: “Azores is an excellent, upgraded addition to our cruise fleet and has been affectionately and very well maintained by her owners.

“We are confident that Azores will prove to be a real winner with our dedicated growing number of loyal customers and will also attract new clients seeking smaller ship alternatives and regional ex-UK no fly cruise options.”

Rui Alegre, CEO of Portuscale Cruises, added: “I’m a strong believer in developing close and long term business partnerships. I’m very pleased to have concluded a charter with CMV and look forward to working closely with their team in successfully establishing Azores on to the British market.

“Azores is a beautiful ship and has been operating very well in achieving high levels of customer satisfaction. I am proud that she will be carrying CMV passengers next year and for many years to come”.

MSC Cruises pinning U.S. market hopes on Divina

MSC Cruises pinning U.S. market hopes on Divina

By Tom Stieghorst
MSC DivinaMIAMI — Even though the MSC Divina made its debut in the Mediterranean 18 months ago, it will be met with fanfare when it arrives here this week.

The Divina is both the largest vessel in MSC’s 12-ship fleet and the first devoted to year-round sailing in North America.

For Rick Sasso, president of MSC Cruises USA, the Divina’s arrival marks the culmination of 10 years of effort to put MSC on the travel map outside of Europe.

The ship will be sailing a three-day preview cruise for thousand of agents, media and VIPs before launching seven-night cruises out of Miami to the Caribbean.

An aggressive and varied marketing campaign has been rolled out to prepare the ship for a successful North American debut.

Sasso said it will be a significant opportunity for agents to familiarize themselves with the MSC brand.

MSC has invested heavily in the Divina’s launch. For the first time, the company will advertise on TV in the U.S., and in another first, it will mount a consumer public relations campaign.

Much of the effort can be traced to yet another first: a day-long travel agent advisory council meeting in October.

Although Sasso and his marketing vice president, Ken Muskat, declined to disclose the promotion budget, they say MSC has opened its wallet.

“They understand what it takes to penetrate a market like this, especially when you’re a fairly unknown brand,” Muskat said.

The TV ads began appearing 10 days ago on cable channels including Discovery, Fox News, MSNBC and HGTV. There are also radio spots and billboards in key markets such as Miami, Fort Lauderdale, New York and Chicago.

Muskat has directed a Twitter and Facebook campaign to publicize the Divina since June. MSC’s agent website features a four-part video introduction, and MSC has been giving away a cruise a day to agents since October, a promotion that will continue through the end of the year.

MSC is battling some headwinds in its efforts to become more established in North America.

Many agents say they cannot afford to focus too much on cruise lines that are not big players in North America. While a year-round ship with a 3,959-passenger capacity improves on the seasonal presence MSC has had to date, it is still just one ship.

Other agents say past experience has been discouraging.

“I’ve had a few clients go on MSC,” said Denise Rogers of Palm Beach Travel Genie in Palm Beach Gardens, Fla. “It wasn’t their cup of tea.”

Sasso said MSC has been rapidly evolving to address past service and product concerns and that the Divina has been specially tailored to American tastes in food, smoking and entertainment.

Crew training has been a big emphasis, and U.S. executives were allowed to hand-pick key staff for Divina’s redeployment.

The Divina is also arriving at a time when Wall Street analysts are voicing concerns about overcapacity in the Caribbean. Ten weeks after Divina arrives, the Norwegian Getaway will debut, adding another 4,000 berths to the market on a year-round basis.

To leverage its resources, MSC has been courting agents since Sasso arrived at the company in 2004. Even as it appeals to consumers for the first time, it has ramped up trade marketing.

Muskat has led a series of road shows this year in cities that included New York, Miami and Philadelphia and has participated in every travel trade show he could schedule.

In mid-October, MSC Cruises Executive Chairman Pierfrancesco Vago flew from Geneva to Miami to attend the travel agent advisory council, which included top agency groups representing 80% of North American cruise sales.

“It’s a big deal for us, and its something we’re going to continue to do twice a year, ongoing,” Muskat said of the advisory council.

MSC redid the audio from its European TV ads to feature a travel agent call to action. And by year’s end, it will have given away about 65 weeklong cruises to agents who achieve a specific level of sales activity, mostly targeted at the Divina.

“We know that our primary attention has to be focused on Divina right now, because if we make that ship successful, that halo effect to send North Americans over to Europe to experience our other ships will be a tremendous benefit for us,” Muskat said.

He added: “We know this is where many travel agents will see us, experience us, for the first time, and then we can really get their focus on the rest of the beautiful ships we have in the fleet.”