Cruise lines are increasingly focusing their capital investments on renovating older ships as fleet sizes grow and attitudes evolve about the kinds of returns they get from new ships versus refurbished ones.

In Europe, where most new ships are built, 20.3% of what cruise lines spent at shipyards last year was for refurbishment, up from 5.7% in 2008, according to a new white paper from Seatrade.

Last year, Carnival Corp. spent more on improvement and replacement of its ships than it did building new ones.

For passengers and travel agents, that translates to having a broader selection of up-to-date vessels from which to choose and new features on older ships, not just on newbuilds.

Cunard Line’s Queen Mary 2 provides a recent example.

The QM2 pulled into its pier in Brooklyn in July after a $132 million “remastering,” one of the most expensive refurbishments ever undertaken. In 25 days at the Blohm & Voss shipyard in Hamburg, Cunard added 30 balcony cabins and 15 solo traveler cabins and completely redid a restaurant and lounge.

It also overhauled the King’s Court buffet restaurant, upgraded the Queens and Princess Grill restaurants and expanded the dog kennels, a feature unique to Cunard.

The QM2 was one of 40 cruise vessels renovated during the first six months of the year, according to the white paper, which estimated their combined cost of renovation at $1 billion.

That’s more than what the QM2 cost when it was launched in 2004.

There are several reasons why refurbishment is a growing business segment for shipyards.

For one, the fleets keep getting larger. There were 448 ships last year owned by CLIA-member cruise lines. Safety rules dictate that ships go to drydock at least once every five years. Since ships can have a useful life of 30 years or more, each one could get at least six refurbishments.

Some cruise lines are also slowing the pace of new construction. Carnival Corp., with 100 ships already, is sticking to growth of two or three ships a year. So the proportion of its capital spent on refurbishment is growing.

Last year, Carnival spent $981 million on new ships, chiefly the P&O Cruises ship Britannia, and $1 billion on ship improvements and replacements, according to its annual report.

Other cruise lines said the financial returns from refurbishments can equal or surpass those of newbuilds.

Frank Del Rio, CEO of Norwegian Cruise Line Holdings, has roughly doubled the amount budgeted for the drydocking of Norwegian Cruise Line ships, to about $35 million per ship, according to the Seatrade white paper.

In comments to Wall Street analysts last November, Del Rio described it as an alternative strategy to simply churning out new ships to drive revenue.

“We think the return on invested capital on these kinds of choices outpaces the [return] and the payback of new vessels,” he said. “We’ve got billions of dollars invested in these ships. You have to maintain them at the highest standards if you expect to achieve these higher yields.”

As a result, all of Norwegian’s ships except one will undergo refurbishments between 2016 and 2018.

Norwegian and other cruise lines use drydock to add to older vessels features that have proven to be hits on newbuilds. This fall, Norwegian will add Margaritaville restaurants to the Norwegian Breakaway and Getaway after the concept was successful on the Norwegian Escape.

Carnival Cruise Line’s $500 million Fun Ship 2.0 program is largely about adding features to older ships that keep them competitive and consistent with its latest vessels.

“They’re looking to have a homogenous brand,” said Tony Peisley, a cruise industry analyst who authored the Seatrade paper.

Cruise lines also struggle with what to do with their oldest ships, which still have value but are no longer very competitive in North America. Ten years ago, they were often transferred to European lines, but as Europe has struggled economically that trend has been reversed.

Royal Caribbean International this year took back the Empress of the Seas from its Spanish subsidiary, Pullmantur, and spent $50 million renovating it for potential use in Cuba, an emerging market.

Also sailing to Cuba is the Adonia, an aging P&O ship that Carnival Corp. transferred to the Fathom brand following a drydock in March that included both technical work and some redecorating.

The Adonia was refit and made available to Fathom, in part, to find a use for a ship that wasn’t doing well for P&O.

“That’s what they’ve been doing, they’ve been refurbishing, not retiring,” said Vince Ciepiel, an analyst at Cleveland Research who has expressed concern about lines having too much capacity.

Peisley said cruise lines are loath to sell ships to competitors, because, “It’s not so much that they can’t get rid of them as they don’t want to sell them to their rivals. So that kind of limits their options.”

The Seatrade white paper identifies four levels of refurbishment, ranging from adding new paint and carpets at a minimal cost of between $4 million and $5 million to a redo the size of the QM2.

Most fall in the $30 million to $50 million range and involve a combination of technical upgrades, such as new air scrubbers, and retrofits of popular features, such as bars and restaurants.

While new ships are built almost exclusively in Europe, refurbishments are done there as well as in Canada, the U.S., Singapore and the Bahamas. This year, the Grand Bahama Shipyard in Freeport is by far the busiest yard, with 19 cruise ship drydocks on its schedule.

Carnival Corp. and Royal Caribbean Cruises Ltd. both have a 40% ownership stake in the yard, which was founded in 2000, and its location cuts transit times for refurbishment of ships based in the Caribbean.