Why 1 small cruise line is growing its fleet even as others cut back

Not every cruise line is cutting back on its fleet in a response to the coronavirus pandemic.

Upscale cruise line Azamara on Monday bucked the downsizing trend in a big way by announcing it would grow its capacity by 33% over the coming year with the addition of a fourth vessel.

The three-ship line said it would buy the 672-passenger Pacific Princess from Princess Cruises, one of many lines that have been shedding ships in recent months.

Built in 1999, the 30,277-ton Pacific Princess is an outlier in the Princess fleet due to its small size. But it'll fit right in with Azamara's existing fleet. It's a sister vessel to Azamara's three ships -- Azamara Journey, Azamara Quest and Azamara Pursuit.

"This is a great opportunity," Azamara's new president, Carol Cabezas, told The Points Guy on Monday in an exclusive interview. "Princess felt like this was the right time to sell this beautiful vessel and ... (we) wanted to jump on the opportunity of the ship being available. It just made a lot of sense."

The announcement comes just days after Azamara's parent company, Royal Caribbean Group, announced that it was selling Azamara to Sycamore Partners, a private equity firm.

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Cabezas suggested that the purchase of Pacific Princess for Azamara was a sign of Sycamore's confidence in the brand's future and its commitment to growing the brand.

"Sycamore is ... really making it obvious that they believe in what we're doing here by, in less than a week, announcing that we're adding a fourth vessel," she said. "I think that speaks volumes (about) what's to come. Right out of the gate, (they're) saying, 'We believe in the product and guess what, here's the start of that growth.'"

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The sale of Azamara to Sycamore, which is expected to close in the next couple of months, means that Azamara will be a standalone cruise business for the first time in its 13-year history.

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Royal Caribbean Group founded Azamara in 2007 as a small, upscale brand that would complement its bigger, more mainstream Royal Caribbean and Celebrity Cruises brands. Azamara is known for destination-focused itineraries with lots of long stays in ports, including overnight stays, and a high level of service.

Cabezas suggested that the addition of a new vessel would allow the Azamara brand to expand its lineup of itineraries and the number of destinations that it served.

"There are things that we cannot do today because we don't have enough capacity in the fleet," she said. With an extra ship, Azamara "might be able to do more country-intensive types of voyages, and there are certain areas where, with only three ships, we haven't had the opportunity to go."

All three current Azamara ships and the new one coming from Princess Cruises originally were built for Renaissance Cruises, a cruise line that ceased operations in 2001. They were part of an eight-ship series built between 1998 and 2001 known as the R Class.

The other four R Class ships are now part of the Oceania Cruises fleet and sail under the names Insignia, Regatta, Nautica and Sirena.

Azamara will rename Pacific Princess after it takes control of the vessel, but Cabezas didn't say what the new name would be. The ship originally sailed as the R Three for Renaissance. It was renamed Pacific Princess in 2002 after joining the Princess fleet.

Cabezas promised a major renovation for Pacific Princess before it joins the Azamara fleet to give it the same interior look and feel of the current Azamara vessels.

The ship won't start sailing for Azamara until 2022, with initial sailings in Europe, she said.

Like all other major cruise lines in the world, Azamara stopped departures worldwide in March 2020 as the coronavirus pandemic grew. It hasn't operated a single voyage since. But it's hoping to restart operations in the coming months. The line has canceled all sailings through the end of April but still has voyages on the books for May and beyond.

Unlike many lines, Azamara hasn't shed any of its ships during the industrywide shutdown. Princess Cruises, by contrast, has shed five of the 17 ships that were in its fleet at the start of 2020. Other major brands that have downsized by removing ships include Carnival Cruise Line and Holland America, which both have eliminated four vessels from their fleets. Royal Caribbean has cut two ships from its roster.

Sycamore Partners is a private equity firm based in New York. The firm specializes in consumer, distribution and retail-related investments and partners with management teams to "improve the operating profitability and strategic value of their business," according to a company overview.

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