The cruise industry view of Trump’s order to leave China

Image result for royal caribbean in china

With President Trump “ordering” U.S. companies via Twitter to leave China, and suggesting they return home, one wonders what would happen if he turned his attention to the cruise firms headquartered in Miami.

Could he “order” them to bring their Shanghai-based ships back to U.S. waters? Or to stop building their $1 billion ships in Europe?

Of course, the first obstacle is that none of these companies are legally incorporated in the U.S. But set that aside for a minute. They’re certainly American companies in other respects.

Norwegian Cruise Line Holdings CEO Frank Del Rio appears to have beaten Trump to the punch by ordering home the Norwegian Joy to sail in Alaska this summer alongside its doppelganger, the Norwegian Bliss.

Of course, Del Rio acted for business reasons and not out of any animosity towards China or need to chastise Chinese leader Xi Jinping for raising tariffs.

If Royal Caribbean International or Princess Cruises did pull their ships from China, they would probably be rewarded on Wall Street, which has a much easier time analyzing profits in the short term than investments for the long haul, which the China market needs.

But the cruise ship example shows how perverse the strategy of “finding an alternative to China” can be for many industries. Calling home the ships in the China market doesn’t mean they would sail from Seattle to San Diego full of happy Americans.

In fact, American law would prohibit them from being used that way. The ships would go back into the international mix of itineraries that have some ships departing from Miami and New York, but others from Barcelona and Southampton.

The kingly notion of imposing tariffs and directing private business decisions from the throne was losing viability when economist Adam Smith attacked it in the 18th century. It may have some political appeal but in economic terms, the world has passed it by.

For the same reason, building big cruise ships in America – no matter the cost – makes no particular sense either.

As many companies manufacturing in China are finding out, the key in the 21st century to making things reliably and at market prices is an intelligent and at least somewhat skilled workforce and a robust network of proven contractors that can accommodate just in time delivery.

That’s what the European shipyards that make cruise ships have. And by operating within the framework of the European Union they can bring to bear a workforce that while not as large as China’s is larger than the U.S’s.

Yes, China may be cheating on some of the economic terms and conditions that make free trade a win-win proposition. But going back to the idea that each country should manufacture everything on its own makes about as much sense as booking your next cruise on the Nina, the Pinta or the Santa Maria.

Norwegian Encore Floats Out

Norwegian Encore

The new Norwegian Encore has left the building hall in Germany and is now at Meyer Werft’s outfitting dock ahead of an October delivery.

Norwegian Encore

Following her delivery, the 4,200-guest ship will cross to New York for preview events, before ending up in her winter homeport of Miami in late November.

Norwegian Encore

A representation of his modern and abstract style, the ship’s hull features a “labyrinth of color” inspired by Arranz-Bravo’s life by the sea in Barcelona and pays tribute to the vibrant guest experience for which the Norwegian brand is recognized, according to company statements.

Encore Float Out

After her debut in Miami, the Encore will move to Seattle in 2021, sailing seven-day cruises to Alaska.

Encore Float Out

Also new will be a partnership with LDV Hospitality to bring the Scarpetta concept to the Norwegian Encore with Onda by Scarpetta. The new restaurant is the first of its kind and will join the Scarpetta portfolio’s locations in New York, the Hamptons, N.Y., Miami, Las Vegas, Philadelphia, Newport, R.I., and London.

Encore Float Out

The name Scarpetta is derived from the Italian expression, ‘fare la Scarpetta,’ which means to savor a meal to the last bite, according to a statement.

MSC Unveils Stunning Multiple Ship Miami Terminal

MSC Terminal Rendering

MSC Cruises has announced details of what it said is a new highly-innovative cruise terminal at PortMiami that will support its expanding presence in North America and in the Caribbean

As per the terms of the agreement, which has today received approval from the Miami-Dade Board of County Commissioners, MSC Cruises will design, construct, operate and maintain a large building that hosts two cruise terminals (AA and AAA) as well as two berths.

MSC Terminal Rendering

The PortMiami terminals will be capable of hosting two mega cruise ships at the same time, allowing the MSC to conduct two turnaround operations simultaneously, handling up to 28,000 passenger movements per day.

Pierfrancesco Vago, MSC Cruises Executive Chairman, said: “With another 13 cruise vessels due to join our fleet in the next eight years, our ambition is to have our most innovative ship classes represented at PortMiami, bringing a wealth of choice to our North American as well as international guests.

“In particular, the new terminal – which will be one of the most innovative the industry has seen – will ensure that we can provide our guests an enhanced end-to-end high-quality experience while both embarking and disembarking, thus adding to their ability to fully enjoy every moment of their vacation.”

Work on the new terminals is due to commence in early 2020. MSC Cruises currently estimates that the work will be completed by late 2022, at which time it will transfer all its PortMiami operations to the new Terminal, according to a statement.