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Cruise lines still have more than 100 ships on order. Do they really need them?

March 09, 2021
7 min read
Cruise lines still have more than 100 ships on order. Do they really need them?
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You might think that after a 12-month-stretch that has seen almost no cruising around the world, cruise lines would be cutting back on the number of new ships they have on order.

But that hasn't been the case.

None of the world's major cruise lines has canceled a single ship order since the coronavirus pandemic brought cruising to a halt in early 2020.

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Indeed, in what may seem counterintuitive, many major lines are plowing ahead with plans to grow cabin capacity significantly over the coming years -- even as they contend with the lingering effects of a worldwide pandemic on operations and bookings.

A TPG count of new ships on order at all major cruise lines found that there still are more than 100 new oceangoing vessels on the way -- a significant sum considering the world's major lines currently operate fewer than 300 ocean ships.

MSC Cruises alone has five giant new vessels on order for delivery by 2025, with options for six more for delivery between 2026 and 2030. This for a line that currently has just 18 vessels. Norwegian Cruise Line, which currently has 17 ships, has six more vessels on order for delivery by 2027. Royal Caribbean also has six ships on order. It currently operates 24 vessels.

Related: The best credit cards for booking cruises

MSC Cruises executive chairman Pierfrancesco Vago takes delivery of the 4,842-passenger MSC Virtuosa on Feb. 1, 2021, at a ceremony at the Chantiers de l’Atlantique shipyard in St. Nazaire, France. The ship now sits idle. (Photo by Ivan Sarfatti courtesy of MSC Cruises)

And then there's fast-growing Viking, which has nearly a dozen ocean vessels on order as well as several river ships on order.

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Other major lines that have new ships on the way include:

Since the start of the coronavirus-caused industrywide shutdown, many of these lines have been cutting costs by shedding older ships. Carnival and Holland America have each removed four older vessels from their fleets in recent months, for instance, with some of the ships heading to scrapyards. Royal Caribbean has sold off two older vessels.

The lines also have negotiated delays in the delivery dates of new ships with shipyards for a number of vessels scheduled to arrive this year and next year.

But they have shied away from canceling new orders outright.

Related: This small line is the first to cancel all 2021 sailings

Cruise line executives say there's a logic to their strategy. Cruise ships can take years to build, forcing cruise executives to forecast demand far in the future when ordering vessels. And their forecast now is that demand for cruises in three, five, 10 or even 20 years will be far higher than it is today.

Put simply: They need the ships, they think.

“There are plenty of new ships on order, but to be honest with you, they are going to be needed,” Arnold Donald, the CEO of the world's largest cruise company, Carnival Corp., noted in October at a cruise conference. “There will be demand. There will be need for capacity. Shipbuilding will stay robust in terms of bringing new ships into the global fleets.”

Donald noted that only 30 million people in the world take a cruise each year — a small fraction of the 500 million people he said took some sort of vacation annually.

Related: A seventh small cruise line goes out of business due to pandemic

That number, he suggested, is likely to soar over the coming decades.

At the same cruise conference, Richard Fain, the chairman and CEO of the world's second-largest cruise company, Royal Caribbean Group, also made clear that he expected demand for cruising to grow strongly in the long term, resulting in a need for more ships.

The first block of a new Royal Caribbean ship scheduled for delivery in 2022, Wonder of the Seas, was lowered into place at a shipyard in 2019. (Photo courtesy of Royal Caribbean)

“This is not (a situation where) the industry is going to tail off,” Fain said. “I think what you’re going to see is the industry will continue to grow. Once we’re past this crisis, people will see the value of cruising.”

Among the ships that Royal Caribbean has on order is Wonder of the Seas, which will be the new world's biggest cruise ship when it debuts in 2022. Forecast to measure around 230,000 tons, it's been under construction at the Chantiers de l’Atlantique shipyard in St. Nazaire, France, since 2019.

Norwegian Cruise Line Holdings president and CEO Frank Del Rio also has made comments about his company's commitment to stay the course with new ship orders.

Related: How to plan a cruise with points and miles

"We think that we will continue to grow as we bring on these nine incredible ships that we have on order," Del Rio said in November during a conference call with Wall Street analysts, referring to vessels on order for the line's Norwegian, Oceania and Regent brands.

In the short term, all the above lines are facing a situation where they have too many ships. They all have said that when cruising resumes, they will restart with just a few vessels at first, leaving most of their ships on hiatus. They then will add a few more ships to operations every month as they find their footing with both new health protocols and also customer demand, they have said.

But the consensus in the industry is that pent-up demand for cruising and favorable demographics will mean a relatively quick rebound to the days of all ships sailing and sailing full.

Related: Stop waiting for deals -- prices are on the rise

In the meantime, newly competed ships keep piling up. Just last month, MSC Cruises took delivery of its 18th vessel, the 4,842-passenger MSC Virtuosa. It currently sits idle at a dock in St. Nazaire, France, the shipbuilding town where it was constructed.

Carnival recently took delivery of its biggest ship ever, Mardi Gras, from the Meyer Turku shipyard in Turku, Finland. In recent days, it's been circling in the waters just off Barcelona.

The temporarily-unneeded newcomers join such long-idled newbuilds as Scarlet Lady, the first vessel from startup line Virgin Voyages. It was complete a full year ago but has been unable to operate due to the pandemic. It's currently docked in Civitavecchia, Italy -- the port for Rome.

The list of new cruise ships that have been completed but unable to sail with passengers over the past year also includes ships from Princess, Celebrity, Silversea and Lindblad Expeditions.

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Featured image by Royal Caribbean's Allure of the Seas is one of the world's biggest cruise ships. (Photo courtesy of Royal Caribbean)
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
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  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

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    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
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Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023