Three CruiseMates Election Day Predictions

| 11.06.12

This is a very close race but we have our own Election Day certainties about the future of cruising.

Announcing: predictions on the future of cruising

This is a very close election and it is vital for everyone to get out and vote. Now, to be honest we have no idea who is going to win this election, but we can make some predictions about what is coming in the near future no matter what; and so we are presenting our Election Day predictions.

Our first prediction is that cruising is still growing. There were four announcements of brand new ships to be built in just the last month alone. Our second prediction is that these ships will be bigger and higher capacity to maximize the efficiency of fixed costs per passenger. Our final prediction is that the cruise industry will grow at a somewhat slower but steady rate for the next four years at least. Royal Caribbean estimates its forward rate of growth is approximately three-percent.

One area where we have certainty is that the cruise industry has taken more than one big hit in the last few years. The first was the recession itself, which seemingly came out of nowhere in late 2008 and put a hurt on the pocketbooks of many cruise aficionados. We know that we are seeing signs that this economy is finally starting to recover, but whether or not this is because of the efforts of our elected officials or despite them we do not know. While most recessions do turn around within a few years this has been an unusually severe downturn.

Care to make your own cruise predictions? Tell us here: Cruise Forum

But going by the most recent conference calls given by the three largest cruise lines we see a recovery has at least started and we are certain that cruising will continue to grow in the next few years.

Carnival reported better than expected earnings last September 25th for the most recent quarter at $1.53 per share (9-cents above guidance), Norwegian Cruise Line reported an increase in earnings of 19% and Royal Caribbean reported a net income of $1.68 per share (23-cents above guidance).

These results were despite the still lingering effect of the tragic accident in Italy last January and a 13.5-percent increase in the cost of fuel according to Norwegian.

Cruising is Still Growing

We know for certain that the cruise industry is still growing. In just the last month alone we have seen four very exciting ship orders.

Royal Caribbean affirmed the rumors that it is in negotiations to build a third ship in the Oasis-class. This is headline news since the two existing "biggest cruise ships in the world" still command a "new ship premium" in cruise fares - even though Oasis is more than three years old now. Royal says that the new Oasis-class ship will implement some new cost-savings measures because of the higher cost of fuel. Most likely this will include more LED lighting and other similar efficiencies to conserve on the cost of fuel.

Norwegian announced that it has just ordered it biggest ship yet - not yet named, but currently code-named as the "Super Breakaway" project. This new ship is slated to become the second largest class of cruise ships in the world - coming in at 163,000-gross tons. Delivery is scheduled for December of 2015.

The new ship is positioned as a larger version of the new 146,000-ton Norwegian Breakaway and Norwegian Getaway ships currently under construction in Germany. Norwegian Breakaway is very close to its debut in March of 2013 and sister ship Getaway is ready to follow in January of 2014. Both if these new ships are already on sale, with Breakaway sailing out of New York City year round and Getaway set to cruise out of Miami.

Carnival Corp., the parent company of Carnival Cruise Lines and Holland America - as well as Princess, Seabourn, Costa and Cunard, just announced that it will build a new ship for Carnival Cruise Lines and a new ship for Holland America.

The Holland America Line ship will be a 99,000-ton, 2,660-passenger ship. A memorandum of agreement was signed with Italian shipbuilder Fincantieri for delivery in fall 2015. This will be a new class for Holland America, although the size is very similar to the Vista-class vessels the line already has in service. The new ship will arrive five years after the last Holland America ship, the Nieuw Amsterdam, was delivered in 2010.

The new Carnival ship will be a 135,000-ton, 4,000-passenger vessel scheduled for delivery in winter 2016. Carnival says this will be an entirely new class of vessel to be launched four years after the introduction of Carnival Breeze, which debuted in spring 2012. If this is an accurate statement it indicates a radical departure for Carnival, which has maintained a very similar superstructure design for all of its ships for decades now, mostly limited to changes in size and scale but not floor plan.

Other Ships Also Ready to Debut

Princess Cruises also has two ships set to debut; Royal Princess will appear in June 2013 and will be the biggest Princess cruise ship yet. It will feature a much larger internal atrium which will serve as the centerpiece of the ship with several restaurants, a coffee bar, a gelateria, live music and other attractions. Its sister ship, Regal Princess will appear a year later.

The two new Princess ships will be 141,000 gross tons and provide 3600 passenger berths. They will feature innovative entertainment options such as a television studio with seating for a live audience where they will present a morning talk show, game shows and live music in something like an "MTV Unplugged" format. These shows will be broadcasted to the staterooms of the entire ship.

What Do These Predictions Mean?

These new ships are proof of the resilience of the cruise industry due to the inherent value in cruising as a vacation and we predict that will never change. But more importantly all of this combined activity signifies one thing - the shared optimism within the cruise community that the American economy will continue to thrive, despite enduring the toughest of hard times. They show that the current challenges will pass, they believe a full recovery will ensue and that people will always want to cruise.

Care to make your own cruise predictions? Tell us here: Cruise Forum

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