World Capacity Growth
With the orderbook stretching to 2015, the worldwide cruise fleet will be able to carry some 20 million passengers that year, compared to more than 18 million in 2011, according to estimates by Cruise Industry News.
This year, more than 11 million passengers from North America are forecast, plus up to 6 million from Europe, with the balance made up mainly in South America, Australia and the Asia/Pacific.
Having grown at an average annual rate of more than 5 percent from 2000 to 2010, for the next five years, however, the average annual growth rate slows down to about 2.5 percent, based on existing ship orders. In addition, individual market growth will depend on ship deployment.
Industry growth is driven by capacity and with fewer new ships entering service over the next five-year period and more mobility in terms of deployment, the question is where will the growth come from?
More ports seem to be at odds with the industry these days. A local study on the costs and benefits of cruise tourism in Victoria, BC, estimates the benefits to amount to $24 million and the costs to $28 million. Based on the 2009 season, when Victoria received 226 calls, the study said that the pattern for 2010 was the same.
The study is also challenging industry estimates of the economic impact of cruise calls, claiming they are exaggerated, particularly for crew spending and shore excursions.
The sale of Windstar Cruises to Whippoorwill Associates is expected to be completed by May 23, although there is an auction component of the 363 bankruptcy sale allowing others to bid and potentially raise the purchase price. Whippoorwill, a financial firm that specializes investing in bankrupt and distressed companies, has agreed to buy Windstar for $40 million, including $30 million that Windstar already owes to the firm, plus $10 million in fresh operating capital, according to Hans Birkholz, president and CEO of Windstar.
“Once we have the balance sheet right-sized to the business, we will invest in our current fleet and look to invest in new ships,” Birkholz told Cruise Industry News. “There are plenty of opportunities in the small ship market. We believe there are brand opportunities as everybody else are building bigger ships.”
For the full reports, please read the April 26, 2011 edition of Cruise Industry News, the Newsletter, click here to subscribe