MSC Cruises Anticipates American and Chinese Expansions

Posted on 30 August, 2016 by Spacejunkie2

MSC Seaside, soon to home port in Miami; Florida

For a company like MSC Cruises with eleven new ships set to come online between 2017 and 2026 – contributing to a total $10.2 billion growth investment – it’s important to establish the firmest foundation possible in which to deploy in new markets, and both North America and China are still relatively new to the European line.

MSC Cruises has dedicated the MSC Divina to sailings roundtrip from Miami, Florida, but the line has vacillated on its year-round commitment – establishing it in 2013, leaving it temporarily and then returning again in 2015.

As it is, the Divina was an existing ship that was retrofitted for the U.S. market, and its success was questionable at the start. Initially, service and dining were particularly not up to standards, but the ship has much improved since then, making the Divina a wonderful Mediterranean experience in the Caribbean.

Now, the line is anticipating the launch of its MSC Seaside (rendered above) which, come December 2017, will be the line’s first ship to be exclusively based in the States from the very start, and with the ship’s launch will also coincide the opening of the line’s new Ocean Cay MSC Marine Reserve in the Bahamas.

With the island destination alone costing $200 million, there is a lot at stake for MSC Cruises in the Caribbean next year.

So, the line is making a fresh start with its North American leadership team. It is bolstering it up by effectively putting two in the driver’s seat: 12-year-veteran Rick Sasso becomes Chairman of MSC North America, and executive Roberto Fusaro takes the role of President of MSC North America after his success in South America on behalf of the cruise line.

“With the ultra-modern and beautiful MSC Divina home-porting in Miami, the revolutionary MSC Seaside to be christened in Miami in December 2017 and to also home-port there, as well as the development of Ocean Cay MSC Marine Reserve – the most exciting new private destination ever built by a cruise line – it is clear that MSC Cruises is committed to the North American market,” said Fusaro.

“I am honored to have the opportunity to take on this new challenge and excited to work with Rick and the rest of the North American team as we look to further grow our business in the region and deliver a unique vacation experience to guests on board one of the most modern and elegant fleets at sea.”

Similarly in China, MSC Cruises has meanwhile opened up an office for the line in Shanghai, where its MSC Lirica has been recently deployed, and appointed Helen Huang as President of MSC Greater China. She comes to MSC after regional endeavors with Costa Asia and Costa China. As more and more cruise lines enter Asian markets, competition rapidly grows, and MSC Cruises’ new developments in China show that the company means business.

“I look forward to a new journey to contribute to making MSC Cruises – in the footsteps of what the company has already accomplished in China – the most attractive brand to Chinese vacationers,” added Huang.

Norwegian Cruise Line disappointed in Caribbean returns

Posted on 10 August, 2016 by Spacejunkie2

Norwegian Cruise Line Holdings CEO Frank Del Rio said the company’s “lofty” expectations for the Caribbean this summer have not been met, one factor in revising expectations downward for the rest of the year.

In a conference call to discuss second-quarter results, Norwegian lowered its guidance for second-half earnings and said it will not make its previously forecast goal of earning $5 a share in 2017.

A big part of the problem is lower demand for European cruises by North Americans due to geopolitical factors. But Norwegian surprisingly said that keeping two big new ships, Norwegian Escape and Norwegian Getaway, in Miami for the summer has not worked out.

“Today is not a happy day at Norwegian headquarters for obvious reasons,” Del Rio said. “We had to reset expectations based on the current booking environment.”

Although yields are still up in the Caribbean from last year by mid-single digits, Del Rio said strong pricing growth did not fully materialize.

As a result, in 2017 Norwegian Getaway will be deployed on Baltic itineraries for the summer months. “It’s a recognition that high expectations just aren’t being met,” Del Rio said, “almost exclusively due to heavy concentration of inventory during the weak period.”

The Norwegian Getaway is leaving Miami for the Baltics next summer.

Del Rio also delivered bad news about Europe. Norwegian had been seeing modest traction in the weeks following the Brussels terrorist attack in March. But with the bombing of the airport in Istanbul, the Nice truck massacre and the failed coup in Turkey, that “evaporated,” Del Rio said.

About 70% of Norwegian’s passengers on European itineraries are sourced in North America, considerably higher than competing cruise companies. Attracting more Europeans will produce lower ticket and onboard spending revenue, Del Rio said.

Del Rio also said South American itineraries are soft, and are being impacted by perceptions about the Zika virus.

Norwegian reported a decline in earnings in the second quarter to $145.2 million, down from $158.5 million a year earlier. Revenue increased 9.3%, to $1.2 billion.

In late morning trading, shares of NCLH were down over 9%, to $39.04, while stocks overall were up slightly.

Agents get reacquainted with Royal Caribbean’s Empress

Posted on 4 August, 2016 by Spacejunkie2

Royal Caribbean International recently spent $50 million to refurbish the Empress of the Seas. It originally joined Royal in 1989 as the Nordic Empress and had been sailing for Pullmantur until earlier this year.

The 1,602-passenger ship is currently doing 4- and 5-day Caribbean cruises from Miami through Oct. 29, but Royal expects to use it for cruises to Cuba once the Cuban government gives permission. Shown here is the pool deck.

Photo Credit: Tom Stieghorst

Royal Caribbean International has an unusual dilemma with the Empress of the Seas.

Because it is planning to sail the ship to Cuba when it gets approval from Cuban authorities, it can’t plan cruises very far ahead on the ship’s current Caribbean itineraries.

So, for example, it can’t sell groups early in the booking cycle to get a base of business going. It only has inventory available through Oct. 29, basically a three-month window.

Moreover, Empress is an old ship — the former Nordic Empress — albeit with a recent $50 million makeover. There’s nothing really like it in the rest of the Royal fleet.

So Royal held an open house for agents last week, in a bid to show off the improvements, help agents get a better understanding of the ship and bring it top of mind.

The ship looked remarkably good for a 27-year-old vessel. Some minds were changed.

Cheryl Scavron, a Dream Vacations franchisee in Pompano Beach, Fla., said she initially thought the ship and its four- and five-day itineraries was best suited as a party cruise for young people. “Now that I see it again, I think this would be nice for a couple,” she said.

Over the course of a couple of hours, about 200 agents got a thorough tour of the ship’s cabins and public spaces. They also got entertained by a Cuban combo in boleros; had a sample of the mixed drinks served onboard; saw snippets of two main theater shows, “Bailamos” and “Three”; and had a lunch of branzino or steak in the main dining room.

Two Royal executives, senior VP of hotel operations Mark Tamis and senor VP of sales Vicki Freed, hosted the event, but Scavron was impressed that Royal brought sales reps, not only from South Florida, but from as far away as California, to conduct the tours.

“Vicki really knows how to sell a ship,” Scavron said. “She brought in enough people, and had good entertainment. She made the ship look the best it can look,” she said.