MSC Cruises Builds Momentum with All Ships Back in Service

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MSC Virtuosa docked in Rotterdam, Photo credit Spacejunkie2 – Flickr

When the MSC Musica started sailing in early June, the entire MSC Cruises fleet was back in service. For the summer that means 11 ships in the Mediterranean, five ships in Northern Europe, two ships in the Caribbean and one ship in the Middle East, according to Gianni Onorato, president of MSC Cruises.

“We have all 19 ships operating and are looking forward to two more new ships coming in October and November, the Seascape and the World Europa,” he said.

The 205,700-ton, 5,400-passenger MSC World Europa will be the largest and also the greenest and most efficient ship in the fleet, with a dual-fuel powerplant able to operate on LNG, while also testing a fuel cell onboard for auxiliary power. The intention is to explore a potential hybrid propulsion solution for future implementation. The new ship will also be able to plug into shore power wherever that is available.

“The market is driven by capacity and demand,” Onorato continued. “But obviously the last two years have been different and difficult as we were not able to operate as we normally do. And then as we started to ramp up, there was omicron, then the war, and then the high inflation rate. But over the last couple of months, we have seen demand picking up as people have a strong need to go on cruises again. People want to go on holidays, and we are seeing strong booking trends.”

In terms of the other challenges the industry is facing, Onorato said: “As we started sailing again before anyone else, and because we spent less time in the layup, we were able to ensure continuity of employment, and we maintained our recruitment and training centres. The turnover rate may be a little higher than normal, but manageable.

“As for the supply chain, we share some of the same issues as others in the cruise industry but have an advantage as we are also in the logistics business.

“We have also maintained our organizations in China and Japan, and we are ready to resume service, which most likely will happen next year,” he added.

Operating in many markets, Onorato said that among the selling points differentiating MSC Cruises are its beautiful ships, which, he added, reflect the soul of the family-owned company and its commitment to quality and innovations, and most of all, its maritime heritage.

“The passion we put into building our ships is also a way of expressing how much we care about the sea. We are more and more a company that is focused on sustainability and a sustainable future,” he explained.

“Another feature that sets us apart, is that as a family-owned company we offer a different atmosphere onboard, a different ambience for our customers and crew alike.

“We are also the only true international company. As our Chairman Pierfrancesco Vago likes to say, we are local and global, or glocal.

“Wherever our ships are sailing, we also adapt our product to local tastes and preferences,” Onorato added. “I think we are the only company operating ships in Brazil for Brazilians, in Argentina for Argentinians and in South Africa for South Africans.

“Our ships in the Middle East also have a high ratio of local customers onboard, and in Northern Europe, most of our customers are from countries in that region. And in the Mediterranean, our main markets are Italy, France and Spain.

“Our cruises are always open to anyone. In the United States, for example, a large share of passengers is from outside the U.S. So, we offer a different experience; more sophisticated, more discovery, all in all a different experience than the other brands in that market.”

In the United States, MSC sails from Miami and Port Canaveral and will also have the Meraviglia year-round out of New York in April.

Meanwhile, the city will serve as the backdrop for the naming of the MSC Seascape in December. (She then sails to Miami where she will be deployed for a winter season in the Caribbean.)

And, there is more to come, Onorato promised.

Excerpt from Cruise Industry News Quarterly Magazine: Summer 2022

Royal Caribbean Group Raising $900 Million to Refinance Debt

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Royal Caribbean Group announced on Monday that it has commenced a private offering of senior convertible notes to be issued by the company due 2025 in an aggregate principal amount of up to $900 million.

In addition, the company intends to grant the initial purchasers an option to purchase up to an additional $135 million principal amount of Convertible Notes.

“The purpose of the offering is to replace some of the existing near-term maturities of convertible bonds with new longer-term convertible bonds in a manner which is non-dilutive to shareholders as described,” said Naftali Holtz, Chief Financial Officer of Royal Caribbean Group.

The cruise company said it intends to use the proceeds from the sale of the Convertible Notes to repurchase a portion of its 2.875% convertible senior notes due November 15, 2023, and 4.25% convertible senior notes due June 15, 2023, through open-market purchases, privately negotiated transactions, tender offers or otherwise. The Company intends to retire any Existing Convertible Notes so purchased.

“The proposed transaction proactively addresses the near-term maturity of our existing convertible notes,” said Holtz. “With the proceeds of this offering, our intention is to opportunistically repurchase the existing convertible notes, and we have the option to settle the remaining notes in cash to address our convertible debt maturities in a manner that is net neutral to our outstanding shares and share equivalents.”

The Convertible Notes will be convertible at the holder’s option in certain circumstances. Upon conversion, the company may satisfy its conversion obligation by paying or delivering, at its election, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock.

Scenic Group Overcomes Cyber Attack with IT Restructure

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On February 20 of this year, Scenic Group was subject to a cyber attack, which caused issues with guest pre-travel documentation and customer service overall. The company overcame the challenges by completely rebuilding its IT systems and is now able to provide top-tier services to its customers once again.

According to a statement by company founder Glen Moroney, the hackers who took control of Scenic’s systems demanded a ransom, and he decided to refuse to pay it and enable these criminals to continue hacking other businesses.

Yet, stronger measures had to be taken.

Despite the initial projection of a short reboot lasting up to three weeks following the attack, the company chose a total system rebuild that took more than nine weeks. They were able to keep all guest data secure and leak-free thanks to this process.

Although communication with guests and industry partners was nearly impossible, and call centre times were impacted by the incident, Scenic Group has changed dramatically since then. Since the company is still dealing with a massive backlog, they have hired additional staff to deal with the return to full operations, as well as established a dedicated support team to handle the administrative tasks for each reservation.

Moroney further noted that some regions have seen an unprecedented level of flight rescheduling and late flight cancellations – even on the day of departure, resulting in a significant volume of incoming calls to the customer contact centre.

Scenic’s pre-departure document issuance is now approaching the pre-cyber attack timeframe, and average wait times for the customer contact centre have “decreased dramatically”, Moroney commented.