The Battle For Southampton 2015 – Other Cruise News: More Large Ships For Star Cruises and MSC – Costa Voyager Goes To Bohai Ferry
by Kevin Griffin
Last week, P&O Cruises’ new Britannia was floated out at Monfalcone, marking the first step towards a battle for cruise supremacy at the UK’s major cruise port of Southampton. This week, we look at the scene and compare the ships. Elsewhere, Star Cruises has confirmed an order for a second 3,364-passenger cruise ship from Meyer Werft while MSC Cruises is negotiating a larger order for four mega ships at STX France. Meanwhile, Costa Cruises’ Costa Voyager has been sold to China’s Bohai Ferry Co Ltd, who intend to enter the Far East cruise market through a new Hong Kong-based subsidiary.
THIS WEEK’S STORY
The Battle For Southampton 2015
The float-out of P&O Cruises’ new 141,000-ton Britannia at Monfalcone on Friday marks the beginning of a cruise turf war in the UK, particularly as Norwegian Cruise Line and Costa Cruises have already abandoned the ex-UK market and MSC Cruises will follow by the end of this year.
Last week’s ceremony followed by ninety days the laying of the keel for another big new ship, Royal Caribbean International’s 167,800-ton Anthem of the Seas. Both will be Southampton-based.
Over the years Royal Caribbean, with its UK headquarters in Weybridge, Surrey, has taken a tight hold on a good portion of the UK market, with Royal Caribbean basing one of its largest ships at Southampton, and often another at Harwich, Celebrity sailing from Southampton and Harwich as well and Azamara Club Cruises attracting more than a fifth of its customs from the UK.
All three lines have become very popular with UK travel agents because they play a good dame and treat them respectfully.
Carnival UK (P&O, Cunard and Princess), on the other hand, calling themselves Complete Cruise Solution, have been consistently negative towards UK travel agents, going so far two years ago as to reduce their commissions from 10-15% to a paltry 5%.
This was recently increased to 7.5% for P&O and Cunard and 10% for Princess. At the same time, many agents have accused P&O of trying to solicit their joint clients directly.
While P&O caters to the British market, it is not entirely a British-owned company since it was taken over by Carnival Corp in 2003. On the other hand, Royal Caribbean can boast of important UK links. The Ofer family controls London-based Zodiac Maritime Agencies Ltd, operating more than 150 cargo ships, and has had an important shareholding, said to be 16.5%, in Royal Caribbean Cruises Ltd since 1988.
Eyal Ofer, Zodiac chairman and a Royal Caribbean director since 1995, also became chairman of Associated Bulk Carriers Ltd, a joint venture between the Ofers and P&O, in 2002, a year before Ca
rnival took over P&O Cruises.
With this background, next spring will see an interesting battle between the world’s two largest cruise groupings when each introduces its latest new mega ship to the ex-UK trade from Southampton.
In view of this head-on-head competition, It is interesting that two lines have left the ex-UK market in the past two or three years and a third is about to go. Norwegian Cruise Line and Costa Cruises have already dropped ex-UK cruising, while MSC Cruises will abandon its ex-Southampton cruises later this year.
It is almost as if they are clearing the way for a battle royal between P&O and Royal Caribbean.
So let’s have a look at the contenders:
On activities, Royal Caribbean is the clear winner by a mile, but on the important subject of gratuities, P&O scores by far the best, with its recommended level of tipping being less than half what Royal Caribbean recommend.
From remarks made by Royal Caribbean crew on the present Southampton-based ship, Independence of the Seas, most prefer to work on other company ships as the Brits are renowned as being parsimonious when it comes to tipping, and many do not tip at all! There seems to have been no obvious affect on service, however.
OTHER CRUISE NEWS
More Large Ships For Star Cruises And MSC
In October, we reported that Star Cruises had ordered a new 3,364-berth 150,000-ton cruise ship, specifically designed to cater for the demands of its clientele in China, Hong Kong and Taiwan, at a cost of €707 million. Last week, Star announced that it was doubling this order, with a second ship for delivery in the autumn of 2017, at a cost of €697.2 million, a savings of almost 1.4%.
Also last week, French media reported that MSC Cruises was close to securing a newbuilding contract with STX France for two mega ships, with an option for two more vessels. The report quoted a total budget price of €2.4 billion for four ships, with a capacity of well over 4,000 passengers each.
MSC has also been quoted in the recent past as favouring a wider ship design than what they have been building, which might have an impact on the cost. An MSC spokesman was quoted as saying the line was looking for a fair price, and a decision is expected before April in order to achieve a delivery date to before the end of 2016.
Earlier this month, management and labour at STX France were also reported to have reached a productivity agreement that could be a precursor to landing new keenly-priced orders, and there is no doubt that a potential four newbuildings from MSC had a lot to do with this achievement.
If MSC actually manage to order new ships a price of €600 million each, they will be almost 14% to 15% less expensive than the smaller ships Meyer is building for Star Cruises. On a per berth basis, this differential would be even higher. If the MSC ships come in at 4,200 lower berths, the cost per berth at €600 million would be €142,850, where the new Star ships would come in at an average of €208,700, or 46% more per berth.
The Star ships would have to be quite stunning in order to command such a premium.
Costa Voyager Goes To Bohai Ferry
Following close on the news that it had established a new Hong Kong subsidiary with the intention of entering the cruising business, the Bohai Ferry Co Ltd last week announced plans to acquire the 840-berth Costa Voyager from Carnival Corp & PLC, which first acquired the ship with the acquisition of Iberocruceros, where she operated as Grand Voyager.
With a reported sale price of $43.7 million, Bohai Ferry has applied for a three-year $40 million loan from the Bank of China in order to finance the purchase and conversion of the vessel. No indication has been given yet as to what ports will be served.
Bohai Ferry currently primarily operates passenger ro-ro services between Yantai and Dalian and is the largest such operator in China. When Bohai Ferry went public on the Shanghai market in 2012 it set an objective of entering the international cruise business.
Founded in Yantai, a city of 6.5 million, as the Shandong Bohai Ferry Co Ltd in 1998, the company changed its name to Bohai Ferry in 2009. It now operates a fleet of fourteen ro-ro ferries in the Chinese domestic trades, mainly across Bohai Bay, with crossing times of six to eight hours.
The Dalian-Yantai ferry crossing saves an 800-mile drive around Bohai Bay. A recent announcement from China indicates that a 76-mile tunnel, more than twice as long as the Channel Tunnel, might be in the works for the route between Dalian and Yantai, for possible completion by 2026.
Bohai Ferry’s latest series of four 35,000-ton ships, delivered in 2012-13, are 2,038-passenger 300-vehicle ferries with dimensions of 585 by 92 feet, and similar in size to the Costa Voyager, at 590 x 84 feet. The builder was the Huanghai Shipbuilding Co Ltd in Shandong Province, which has built all of Bohai’s ships.
The Costa Voyager is one of two 27-knot cruise ships built by Blohm & Voss for Royal Olympic Cruises in 2000. Her sister ship, the Explorer, now operates in the University of Virginia’s Semester at Sea program and is managed by V.Ships of Monaco.
(Kevin Griffin is managing director of specialist cruise agency The Cruise People Ltd in London, England. For further information concerning cruises mentioned in this article readers can visit his blog)