Can The Luxury Market Absorb All The New Ships On Order?
Is there too much capacity on order at the top end of the cruise market?
After all, Crystal, Seabourn, Scenic, Silversea, Ponant and Regent Seven Seas Cruises are all building. And many would count fast-growing Viking Ocean Cruises in the luxury end, though the line itself prefers an upper premium positioning.
There can never be too much cruise capacity, according to MSC Cruises boss Rick Sasso, who recently told Open Jaw that the only impediment to cruise growth is supply. “I don’t think this industry will ever reach overcapacity. Ever,” Sasso stressed.
As to concerns about too much luxury growth, Regent Seven Seas Cruises President Jason Montague tells Seatrade Cruise News that luxury berths as a proportion of the overall market will actually shrink over the next few years, from 2.3% of the cruise market in 2013 to 1.78% in 2020. This is due to the high volume of larger ships on order in other cruise segments.
Regent itself, currently making a big splash with the newly introduced newly introduced Seven Seas Explorer - its 1st new-build in 13 years - isn't set to add more capacity until 2020. As long as competitors stay rational, Montague says he doesn't see cause for concern about growth.
The company was already attracting the highest per diems in the business. Regent’s oldest ship, the 1999-built Seven Seas Navigator was getting $1,000 per passenger day in Alaska last summer. And the line just spent $41 million enhancing that ship, part of a $125 million refurbishment program that continues with Seven Seas Voyager in October and Seven Seas Mariner in the spring.
Montague's boss, Frank Del Rio, told Seatrade that the world is getting richer and if the Chinese, the world’s greatest luxury consumers, really take to cruising, the impact will be substantial.