Royal Caribbean’s new Miami cruise terminal to be work of art

Royal Caribbean’s facilities are situated at the start of the cruise ship row, so its new terminal will be the first port building anyone sees as a vessel enters the harbor.

FORT LAUDERDALE — Royal Caribbean Cruises Ltd. (RCCL) is reviewing submissions from five internationally recognized architects competing to design its new terminal at the Port of Miami.

The 170,000-square-foot space will be radically different from what most cruise terminals look like. The designs are highly unusual for RCCL, which like most cruise companies prioritizes function and economy in terminals, which are typically designed by engineering firms, not architects.

John Tercek, RCCL’s vice president of commercial and new business development, said the company was taking a different approach on this terminal because the project has several additional benefits.

“Because of its location, it has some marketing value, and it’s also a good thing for Miami, so we can spend a little more,” Tercek said.

Tercek previewed some of the renderings from a design competition during a breakout session at the Seatrade Cruise Global conference here. He described one, by New York firm Aedas, as looking like a giant, bright blue Transformers toy.

A second proposal, from Copenhagen-based Bjarke Ingels Group, which designed the World Trade Center Two project in New York, took its inspiration from the Lincoln Road pedestrian mall on Miami Beach.

“They kind of stacked all those canopies from Lincoln Road,” Tercek said. “That was pretty cool. Then they put a park inside. A cruise terminal with trees inside.”

Tercek described a submission from avant-garde architect Zaha Hadid as “very futuristic,” with a concert space inside. A proposal from Broadway Malyan of Singapore is a basic box with lots of abrupt angles grafted on.

A fifth plan, from New York-based Asymptote Architecture, is also a basic box but with a reflective drape. Tercek said it would have “a billion LED lights on it,” so that every night would offer a different light display.

Situated at the start of the cruise ship row, it will be the first port building anyone sees as a vessel enters the harbor.

“All the traffic going to Miami Beach on the MacArthur Causeway passes it,” said Hydi Webb, the assistant director of business development and marketing for the port. “Everyone is going to be intrigued by it.”

Royal Caribbean International plans to move a 5,200-passenger Oasis-class ship from its current base at Port Everglades to Miami to occupy the terminal, so there were functional criteria the designers had to meet in terms of drop-off areas, traffic circulation, luggage lay-down and check-in times.

Tercek said RCCL isn’t giving up on economy. “We think we’re going to be able to come within about 15% of what a basic warehouse terminal would look like, but we’re going to have a world-class facility on the waterfront,” he said.

One such basic design, the company’s recently completed terminal at Cape Liberty in Bayonne, N.J., cost about $70 million, Tercek said.

RCCL is working under a memorandum of understanding to develop the terminal, which would be owned and operated by RCCL on land leased from Miami-Dade County. The process is expected to conclude in a couple of months with a single design that would go to the county for approval.

Miami has typically been the world’s busiest cruise port. In 2014, it handled nearly 4.9 million passengers.

Tercek said the new terminal should be completed in 2018. The Seatrade convention has moved temporarily to Fort Lauderdale while upgrades are made to the Miami Beach Convention Center.

“So by the time we go back to Miami in a couple years for the next cruise convention, this facility will be ready, and we’ll probably have some event there to celebrate,” he said.

Cruise CEOs say ship renovations key to maximizing revenue

Cruise CEOs say ship renovations key to maximizing revenue

Enchantment of the Seas

FORT LAUDERDALE — The cruise industry will increasingly emphasize growth in revenue yields rather than the number of cabins and ships it is adding, according to the CEOs of its top companies.

Four chief executives spoke together on a panel at the annual Seatrade Cruise Global convention, held for the first time this year at the Broward County Convention Center.

“You’re going to see a more balanced approach to building new ships,” said Frank Del Rio, CEO of Norwegian Cruise Line Holdings. More dollars will flow toward maintaining the existing fleet at the highest level so that higher prices can be supported fleetwide, he said.

“We have no choice,” chimed in Arnold Donald, CEO of Carnival Corp. “The fastest we can grow is at about 6% a year, even with the largest ships. And there’s only so many shipyards.”

Donald said investors in any of the companies represented on the panel would not be satisfied with a 6% return on investment. So attention is turning to investing more in existing ships to bring up yields and to introduce innovations that customers will pay extra for.

In sheer numbers, Carnival’s fleet has already plateaued. Since mid-2011, Carnival Corp. has added only one net ship to its 101-ship fleet, according to a presentation by Giora Israel, Carnival’s senior vice president of global port and destination development. But in that timeframe, it has added 32,000 berths because bigger new ships are taking the place of smaller old ones.

Arnold pointed out that new ships on order are increasingly split between China and other markets, which means growth from North America could only be 2-3% a year if it had to depend solely on new capacity.

On another topic, the CEO panel agreed that cruises to Cuba, while of high interest, await approvals from the Cuban government.  And they said the infrastructure to support cruise tourism is lacking for anything larger than mid-sized ships.

MSC Cruises, which is privately owned and headquartered in Geneva, is currently the only major cruise company sailing in Cuba. Pierfrancesco Vago, executive chairman of MSC Cruises, said that when its 2,150-passenger MSC Opera ship docks in Havana, the 275-meter ship (about 902 feet) overhangs the end of the pier by about 80 meters (about 262 feet).

Cruise shipbuilding versus ship refurbishments

Cruise Ship Building yardUnlike the scheduled cruise ship refurbishments, major refits may include even a cruise ship lengthening, like in the case of Royal Caribbean ship Enchantment of the Seas lengthened in 2005 (see the photo below). The Enchantment ship lengthening cost ~ US$55 million, it was a process of cutting the ship in two and inserting a whole new 73 ft (22 m) 3,500 tons midsection, pre-built at the Aker Finnyards. The month-long dry-dock at the Keppel Verolme shipyards (Rotterdam, The Netherlands) resulted in adding 151 brand new cabins, a 50% bigger Pool Deck area, a new kids area, a teen center, several new bars and lounges, an expanded main dining room, a new specialty restaurant. This “refurbishment cost” record was recently beaten by the CCL line and the US$155 million Carnival Destiny refit 2013 producing a brand new ship named Carnival Sunshine!

The average cost of building a cruise ship is around US $450 for mid-sized vessels and up to $800 million for bigger cruise ships. These prices, along with the current economy status force many cruise lines to hold off from building new ships – the biggest expense of all. As a rule, all new cruise ships on order/currently under construction are by contracts signed years ago when the dollar had a good rate.

cruise ship builders and refurbishment companies (firms)Cruise ship building prices are high enough to not meet the return requirement. Even the mighty Carnival Corporation (the largest cruise company in the world) puts its ship building plans on hold. Royal Caribbean is one of the few companies continuing to place orders for new ships – and not any ships, but the ever largest, the most innovative, the most expensive in the world. Still, most passenger ship lines are trying to keep their current fleet fresh and good looking. Two of the best examples are Holland America with its $450 million SOE program for ship renovations, and Carnival investing over $250 million to fully refit and refurbish 8 of its oldest vessels.