Silversea Cruises has announced what it called a restructuring of the owners' - the Italian Lefebvre family's - holdings, resulting in Manfredi Lefebvre becoming chairman of Silversea, assuming the position from his brother Francesco Lefebvre.

In a prepared statement, the new chairman's said his first order of business was to appoint Albert Peter as the new CEO, effective immediately. Neither was available for interviews at press time.

Peter has been associated with Silversea since 1998, having been its banker throughout its current expansion, according to a spokesperson.

Silversea took delivery of the 382-passenger Silver Shadow in 2000 and was slated to take delivery of the 382-passenger sister ship, the Silver Whisper, today. An option on a third ship has not been exercised.

Silversea is also responsible for the sales and marketing of 88 guest suites aboard Residensea's the World, which enters service this fall. A sistership is scheduled to follow in 2003.

Silversea also said that Silversea 's present management team stays on, including President and COO Bill Smith.

Luxury Market

While Silversea executives said they were too busy with the delivery of the Silver Whisper to be interviewed, sources said that the company is struggling with low load factors.

Carnival Corporation has repeatedly indicated similar problems at Cunard Line and Seabourn Cruise Line.

The most solid confirmation of problems is management changes, which have taken place at both Silversea and Cunard, while the latter is also working to re-brand and reposition its products.

And hopeful start-ups, including Luxus, have so far not been able to convince enough investors to step forward with the required financing.

The luxury market capacity is projected to grow 37 percent from the start of 2001 through 2003, which is the last year when confirmed newbuildings will enter this market, boosting passenger capacity from 179,880 to 246,540.

Perspective

Perhaps the biggest problem the luxury market is facing was best identified by a remark by Carnival Corp. Chairman Micky Arison in a recent conference call to analysts. He asked why passengers should cruise on a luxury ship (Seabourn?) when they could cruise to the same ports in another new, (relatively) small ship (Renaissance?) for a third of the price?

The mass market cruise products (read: contemporary and premium) undermined the existence of the budget market when they lowered prices, offering cruises on brand new ships for the same price as sailing on an old (often tired) ship.

Now, is it the luxury market's turn?

The question is: Are the contemporary and premium ships, which are now offering so many service features and new itineraries, increasingly competing against the luxury ships as well? The survival of the luxury market as it exists today would seem to depend on two factors: sufficient brand differentiation and sufficient product delivery differentiation from the rest of the cruise market.