RCCL follows up stellar 2017 with an even bigger Wave

Royal Caribbean Cruises Ltd., in the first public indication of how the cruise industry’s Wave season is going, said that it is unfolding well, with consumer demand strong, particularly from North America.

“The critical Wave period is upon us and is off to a very good start, with booking trends above the same time last year,” RCCL CFO Jason Liberty said during the company’s fourth-quarter earnings call. “Booking volumes exceeded prior year’s levels for the past three months and we are once again turning the year in a record booked position.”

Liberty added, “Last year’s Wave season was incredibly strong, so we are encouraged that bookings are trending even higher this year. As a result, we are booked ahead of last year on both load factor and rate.

“The strength in demand we’ve been seeing for the last couple of months has been particularly evident in North America, with bookings up nicely for sailings on both sides of the Atlantic.”

RCCL’s net income for 2017 was $1.63 billion, up from $1.28 billion in 2016, while revenue advanced to $8.8 billion from $8.5 billion.

For 2018, the initial forecast calls for net income in the range of $1.83 billion to $1.88 billion.


Global Ambitions

Pierfrancesco Vago, executive chairman of MSC Cruises
Pierfrancesco Vago, executive chairman of MSC Cruises.

“In three years we will double our capacity and in 10 years we will triple it,” said Pierfrancesco Vago, executive chairman of MSC Cruises.

In 2018 MSC will operate a fleet of 14 ships with an average size of 2,892 guests at double occupancy and is expected to be the largest operator by capacity in Europe. It has ambitious expansion plans in North America and China and is the market leader in South America and South Africa. By 2028 the company will have 24 ships in service, with an average size of 3,734 passengers.

“Our objective is to deliver a holiday experience which is unique to our customers and to tourism in general,” Vago told Cruise Industry News. “It’s also to expand the concept of cruising to the world,” Vago added.

Between now and 2026, MSC will take deliveries of ships on the Seaside, Meraviglia, Meraviglia Plus, Seaside EVO and the LNG-powered World Class platforms.

Vago described MSC as a global brand, with a premium level product offering at a contemporary price.

“Our common denominator is that we are a Mediterranean brand with the capability to fine-tune the experience to the area of operation,” Vago said. “We can fine-tune the product delivery.”

While its peers have a house of brands competing in the cruise market, MSC has a single brand with large ships.

“MSC has traditionally believed in organic growth,” Vago said.

But that doesn’t mean they may not one day explore other market segments as customers grow with the brand.

The MSC Seaside

In Europe, Vago said the company has realized their ambition to conquer the market, also entering the business later than all their competitors.

That strategy is now expanding to the rest of the world, he said, and the plans will follow demand.

In China, the MSC Splendida is replacing the Lirica on a seasonal basis, upping summer capacity out of Shanghai. In South America, the new Seaview will sail from Brazil for winter 2018-2019.

In North America, the new Seaside is year-round, to be joined by the 2017-built Meraviglia come 2019.

“We have customers travelling to the Caribbean and we needed to introduce new ships, with a different platform,” Vago said. “We had the need to put more cabins and a new offering into the North American market if we wanted to evolve our brand there.

“We had one ship (in North America) and she was filled with customers from Europe. We did not have the opportunity to grow,” he continued. “There is an opportunity for MSC to grow in North America but we needed to create both the hardware and the software for the market. That is the vision behind the building of a very new platform and prototype, the MSC Seaside.

“The Seaside is a spirit of our leadership in many ways. We are setting the pace for innovation and we will see many reflections of this platform for years to come.”

The Seaview, a sister ship, will be delivered this summer. The Seaside EVO platform, essentially an enlarged version with more staterooms, will be launched in 2021, with a second ship scheduled for a 2023 delivery from Fincantieri.

Cruise Fleet to Reach 315 Ships and $35.5 Billion in Revenue in 2016

The cruise industry will reach 315 ships this year, generating an estimated $35.5 billion in ticket and onboard revenue worldwide, up from $33.2 billion last year according to the 2016-2017 Cruise Industry News Annual Report.

The North American market will represent approximately 56 percent of the global industry in terms of passenger sourcing and revenue; Europe 27 percent, and the Asia/Pacific region 17 percent.

Year-over-year, the market shares for North America and Europe have contracted from 59 and 29 percent respectively in 2015, while the Asia/Pacific region has grown from 12 to 17 percent.

The global passenger capacity is estimated at 23.6 million this year, up from 22 million last year.

About the Annual Report:

The Cruise Industry News Annual Report is the only book of its kind, presenting the worldwide cruise industry through 2025 in 350+ pages. Statistics are independently researched. Learn more by clicking here.

The report covers everything from new ships on order to supply-and-demand scenarios from 1987 through 2021+. Plus there is a future outlook, complete growth projections for each cruise line, regional market reports, and detailed ship deployment by region and market, covering all the cruise lines. New for 2016-2017 based on customer feedback are detailed Chinese market statistics and projections.