As expected, P&O Princess Cruises (POC) announced the acquisition of the 684-passenger, ex­ Renaissance Cruises vessels R3 and R4, to be deployed in French Polynesia, the South Pacific and French New Caledonia. Together with its previously announced deployments, the arrival of the new ships will allow POC to carry just under half of all North American passengers cruising in the Asia/Pacific region during 2003, according to estimates by Cruise Industry News (CIN).

Currently owned by French investors, POC will lease the ships beginning in the fourth quarter of 2002 for a two-year period, then purchase the ships for a fixed price (including preceding lease payments) of approximately $150 million, or $109,649 per berth. Said POC CEO Peter Ratcliffe, "These two small ships, acquired at a very effective capital cost, are ideal for Princess' destination trades and will complement our modem fleet of larger vessels."

The R3 will be renamed Pacific Princess and will operate for six months of the year for the Princess Cruises brand, with itineraries throughout the Pacific region and French Polynesia. For the remainder of the year, the ship will be deployed in the fleet of Australia-bazed P&O Holidays, sailing out of Sydney to French New Caledonia. There, the ship will sail as a premium alternative to P&O Holidays' contemporary ship, the Pacific Sky, and will represent a 30 percent capacity increase for that brand overall.

The R4 will be renamed the Tahitian Princess and will be deployed year-round in Tahiti under the Princess Cruises banner, homeported in Papeete.

Under the terms of the acquisition contract, both ships must be deployed in the Pacific Ocean region for at least the first two years of operation by POC. According to the statement by POC, the Tahitian Princess will be deployed in French Polynesia for at least the first five years of its operation.

2003 Asia/Pacific

According to CIN estimates, North American capacity overall in the Asia/Pacific region is expected to grow 32 percent in 2003, to 134,194 passengers, with Princess accounting for virtually all of the increase.

The latest moves by POC will give Princess Cruises a 48.8 percent market share in the Asia/Pacific versus other North American cruise lines. Princess wili have an estimated capacity to carry 65,536 passengers in the Asia/Pacific aboard three ships next year, roughly triple its capacity in 2002. In addition to its two new acquisitions, Princess will deploy the 2,600-passenger Star Princess on 12- to 18-day Southeast Asian cruises between Osaka, Beijing and Bangkok, as well as a three-month stretch of 12- to 14-day cruises in Australia and New Zealand.

In the luxury sector, Silversea Cruises will also be growing its Asian presence dramatically.

In addition to seasonal sailings by Silversea's larger 396-passenger Silver Whisper and Silver Shadow, the company will position the 296-passenger Silver Wind in the region year-round. (The company originally planned to launch its year-round Asia program in 2002, but postponed it following Sept. 11.)

Other North American operators will be maintaining the status quo with Asia/Pacific programs next year, among them, Royal Caribbean International with the 1,800-passenger Legend of the Seas, and Holland America Line with the 740-passenger Prinsendarn. In Tahiti, the new Tahitian Princess will sail alongside Radisson Seven Seas Cruises' 320-passenger Paul Gauguin and Windstar Cruises' 148-passenger Wind Song.