Tag Archives: Germany’s TUI

TUI Adds Second Ship Back Into Service; Doubles Capacity

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Mein Schiff 1

TUI Cruises is already doubling capacity and spinning up a second ship as the Mein Schiff 1 will restart service at 60 per cent occupancy out of Kiel in August, according to the German cruise company.

This follows the Mein Schiff 2, which resumes service later this month with short cruises from Hamburg.

The Mein Schiff 1 will sail cruises to nowhere (known as “Blue Cruises”) from Kiel, offering three- and four-day short sailings.

“This gives guests the opportunity to enjoy the Mein Schiff experience on board with the premium all-inclusive concept and at the same time treat themselves to a break at sea, of course with an adapted and expanded health and safety concept,” the company said. “The basis for the resumption of cruise operations is the guiding principles of the responsible authorities, which were developed in coordination with CLIA Germany and the shipping companies as well as in cooperation with experts.”

Pricing starts at 599 euro per person for a balcony stateroom.

Learning from RCCL’s cruise line partnerships

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By Tom Stieghorst
*InsightForming partnerships to operate cruise lines is a tricky business that can have hard-to-predict consequences.

Take, for example, two cruise lines that Royal Caribbean Cruises Ltd. (RCCL) got involved with in Europe.

One, Spain’s Pullmantur, has been a qualified disaster. As the economy in Spain soured over the past decade, Pullmantur’s results worsened. Because RCCL had acquired Pullmantur outright in 2006, it had to accept the subsidiary’s losses as its own on profit or loss statements.

Last year, RCCL took a $414 million writedown of Pullmantur’s assets. The only positive has been Pullmatur’s growing business in Latin America.*TomStieghorst

The other cruise line Royal took an interest in is Germany’s TUI. It remains 50/50 partners in TUI with TUI AG, which means it can’t incorporate either losses or profits directly in its bottom line.

In this case, it wishes it could. Unlike Spain, the German economy has mostly been strong and TUI has been highly profitable.

“TUI Cruises has been a very solid performer,” RCCL Chairman and CEO Richard Fain said in a recent conference call with Wall Street analysts. “I dearly wish they were included in our yield stats because it would make them look very good.”

Royal Caribbean reported $18.8 million of “other income” in a third quarter in which it earned $490.2 million. Most of that came from TUI, CFO Jason Liberty said.

The exact structure of how cruise line partnerships are formed is worth keeping in mind as both Royal Caribbean and Carnival Corp. negotiate joint ventures in China to further their interests in that key country.

The devil is in the details, as they say. It should be interesting to see what the details are if and when these Chinese ventures are finalized.