Cruise lines still have more than 100 ships on order. Do they really need them?
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.
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.
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And then there's fast-growing Viking, which has nearly a dozen ocean vessels on order as well as several river ships on order.
Other major lines that have new ships on the way include:
- Princess Cruises (three ships)
- Disney Cruise Line (three ships)
- Celebrity Cruises (three ships)
- Carnival Cruise Line (one ship)
- Oceania Cruises (two ships)
- Regent Seven Seas Cruises (one ship)
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.
"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.
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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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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
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You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits.Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.