Panama expansion delays hurting cruise lines

Delays to the expansion project underway at the Panama Canal will affect the itineraries of cruise lines that had intended to send their larger ships along the iconic waterway this year.

The canal is currently undergoing a multi-billion dollar widening some 100 years after it was first opened, which will see it able to hold ships larger than the existing locks allow for.

Currently, only vessels measuring approximately 290 metres or less in length and up to 32 metres in width can traverse the canal.

However, the consortium undertaking the work to widen the waterway – which connects the Atlantic and Pacific oceans – has threatened to down tools if authorities do not compensate it for the significant cost overruns on the project, amounting to $1.6 billion (£975 million).

As a result, Cruise Critic reports that larger ships could be forced to wait until April 2015 or later before they are able to pass through the Panama Canal.

The expansion plans would see ships measuring approximately 425 metres in length, 55 metres in width and 18 metres in depth capable of traversing the canal.

That should be enough to accommodate the current largest cruise ships in the world, Oasis of the Seas and Allure of the Seas.

Preview 2014: Cruise

By Tom Stieghorst

A rendering of the Costa Diadema.It’s been five years since the cruise industry has enjoyed anything like a historically “normal” year.

Starting with the 2008 financial meltdown and continuing through last year’s setback with the Carnival Triumph fire, the headwinds have made profit growth a struggle.

But 2014 could prove to be the breakout year for cruise earnings.

Norwegian Cruise Line Holdings CEO Kevin Sheehan is predicting a 60% rise in earnings before items like interest and depreciation. A Wave season that doesn’t put the industry in an early hole would improve pricing power throughout the year, a boon for agents as well as suppliers.

To be sure, forecasts are more measured at Royal Caribbean Cruises Ltd., and Carnival Corp. isn’t expecting positive year-over-year price comparisons until the second half of 2014.

But if prices do rebound, several factors will be working to keep them moving upward in 2014.

One is the increasing value that suppliers are placing on the travel agent distribution channel. It is likely, for example, that following Carnival Cruise Lines’ Carnival Conversations program, more agents are motivated to sell those ships today than they were a year ago.

Norwegian recently debuted an “Ask Away” monthly video chat with its top sales executives, while Princess Cruises has unveiled a rash of changes in 2013 designed to make selling that line easier.

An energized agent force can only stimulate demand for cruising, which supports improved pricing.

Cruise lines are also being more disciplined about buying new ships, to keep pricing power from eroding. Carnival, for example, is restricting growth to two to three ships a year across its 10-brand fleet. New deliveries scheduled for 2014 include the Costa Diadema, effectively a replacement for the Costa Concordia, and the Regal Princess, a sister to this year’s Royal Princess.

Also taking a sister ship next year will be Norwegian Cruise Line, which is adding the Norwegian Getaway in late January as a Miami-based version of the Norwegian Breakaway.

The most anticipated ship of 2014, however, will be Royal Caribbean International’s Quantum of the Seas, which will debut in the fall in New York. It is a new class for Royal, its first since the two successful Oasis-class giants.

Quantum will include several “wow” elements such as simulated skydiving and a London Eye-style observation capsule.

Another innovation debuting in 2014 will be “virtual balconies,” which are floor-to-ceiling screens on the wall of interior cabins onto which exterior views are projected. The Navigator of the Seas will get some in February in drydock before they are introduced on the Quantum.

Other innovations in 2014 come in itinerary planning, such as the Oceania Cruises world cruise, which debuts at an unheard-of 180-day length.

Below deck, new backup generators and air scrubber devices are being installed on some vessels to make cruises safer and cleaner next year.

On the service side, Carnival Cruise Lines rolls out two new main dining room programs in 2014 that will emphasize American cuisine.

In communications, several lines are upgrading to provide faster Internet access, with the most dramatic speeds promised for the Oasis and Quantum of the Seas, which will access a network of lower-orbiting satellites starting next year.

But not everything is going high-tech. Printed brochures are back at Carnival Cruise Lines in 2014 for the first time in five years.

Next year will be Carnival Corp. CEO Arnold Donald’s first full year at the helm, following his surprise appointment in 2013. Meanwhile, Edie Bornstein takes over as president of Crystal Cruises, and Cunard Line has new leadership, as well.

Two big anniversaries will be celebrated in 2014: The pioneering Queen Mary 2 will be 10 years old next year, and the Panama Canal will turn 100, leading to more interest in canal transits.

Challenges for 2014 will include crowding in the Caribbean, which will get the large MSC Divina and Norwegian Getaway ships as year-round additions to the market, as well as more short itineraries from Princess Cruises.

In Asia, expansions by Princess into Japan and by Royal Caribbean and Costa into China should continue, although the rise in tensions between those two countries might prevent the most desirable itinerary options.

And in Europe, signs of a turnaround in demand in the second half of 2013 could mean a better year in 2014. Although a weak economy in Spain has drained the life from that country’s cruise industry, Pullmantur will further redeploy in 2014 to Latin America, where it appears to be finding a second wind.

Port Canaveral aims big with new terminal size

Port Canaveral aims big with new terminal size

By Tom Stieghorst

 

 

 

 

 

Port Canaveral, already one of the powerhouse cruise ports worldwide, recently said it will be adding a new terminal in the next year capable of handling “the largest cruise ships currently sailing, as well as the 6,000-passenger vessels in design.”

That phrase brought to mind the only ships capable of carrying 6,000 passengers: The Oasis-class vessels of Royal Caribbean International.

The pair make their home at Port Everglades, about 175 miles to the south. But a third copy is being built for delivery in 2016. Could one of the trio make its home at Port Canaveral?

Richard Fain, chairman and CEO of parent company Royal Caribbean Cruises Ltd.,  isn’t tipping his hand quite yet. He says too much can be made of the “6,000-passenger reference.”*TomStieghorst

At a recent dinner aboard the Vision of the Seas, Fain said the same reference was made when the new Kai Tak passenger terminal was opened in Hong Kong harbor last year.

”Oasis has sort of become the standard when they say they’re capable of dealing with the largest ships being built,” Fain said. “So you shouldn’t read too much into that.”

The 185,000 square foot terminal at Port Canaveral will be the first modern one on the south side of the port’s ship channel. It will be adjacent to the port’s newly opened Exploration Tower, as well as the shops and restaurants on that side of the port.

“Cruise visitors will be able to walk outside the terminal to enjoy port destination options or depart from the terminal and Exploration Tower to enjoy area excursions,” said John Walsh, the port’s director.

Announcements regarding tenants for the new $85 million terminal, which comes with its own 1,000-space parking garage, are expected soon, Walsh added.
There is another possibility, or two.  One is that the new terminal could be for Anthem of the Seas, the sister ship to Quantum of the Seas, and a class somewhat smaller than Oasis. Royal is expected to announce the home port and itineraries for the Anthem as soon as this week. Although speculation currently centers on Southampton, England, the Canaveral terminal is slated to open next November, in time for the spring 2015 debut of the Anthem.

Also, Disney Cruise Line is putting three of its four ships in Port Canaveral to start 2015. Disney already has a dedicated terminal at Port Canaveral, but with the Magic Kingdom only an hour away, Disney has unique needs in central Florida. Carnival Cruise Lines is also at Port Canaveral with several ships.

One way or another, Port Canaveral is on the march. It should be interesting to watch where it is going.