This is a year of strong recovery in the new shipbuilding market orders for cruise ships. As we all know, the cruise newbuilding market has almost collapsed under the attack of the COVID-19, and is now regarded as the focus of market investment to meet the growing demand for cruise tourism.
However, compared to the years before the pandemic, the focus of cruise companies' orders has changed - considering transportation efficiency, economies of scale, demand growth, and the trend of using clean fuels, cruise companies have begun to order large cruise ships.
According to Clarkson's global new shipbuilding order statistics, the number of global cruise ship new shipbuilding orders has slightly decreased compared to the years before the pandemic, but the average scale of cruise ship new shipbuilding in 2024 is larger than any previous year.
According to publicly available data, the number of new ship orders for cruise ships worldwide so far in 2024 is only 19, with a total tonnage (GT) of 2.53 million and a value of $14.3 billion. In 2019, the global number of new shipbuilding orders for cruise ships was 46, with a total tonnage of 2.39 million. Therefore, the average scale of new cruise ship construction in 2024 also exceeded the record set in 2010.
Stephen Gordon, general manager of Clarksons Research, said that after experiencing the challenges of the COVID-19, the focus of the cruise industry is to invest in large cruise ships and deliver delayed orders.
Stephen Gordon added that there were indeed some orders for small adventure cruise ships in 2022 and 2023, but there was a strong rebound in orders for large cruise ships from European shipyards in 2024. Currently, out of 19 new ship orders for cruise ships, 10 have a passenger capacity of over 4000.
Stephen Gordon said, "We expect passenger traffic to increase by 10% this year, reaching nearly 35 million people. As a comparison, passenger traffic in 2019 was below 30 million people, and the financial performance of cruise operators has also significantly improved
The key driving force for the strong recovery of the new shipbuilding market for large cruise ships is the growth of passenger flow. At the same time, industry professionals and analysts in the cruise industry also believe that transportation efficiency is an important advantage for large cruise ships.
William Burke, Chief Maritime Officer of Carnival Corp, pointed out that the transportation efficiency of cruise ships has enabled Carnival Corp to reduce carbon emissions by 10% while increasing capacity by 30%.
This year, Carnival Corporation ordered three LNG powered cruise ships with a capacity of 6000 passengers from Fincantieri, a shipbuilding company based in Italy, with a total capacity of 220000 tons. The Royal Caribbean Group, on the other hand, has chosen to order a larger scale cruise ship, ordering a 250000 ton giant cruise ship at Meyer Turku shipyard that can accommodate 5610 passengers.
Regarding this, William Burke stated that there is a clear economies of scale for large cruise ships: "This is reflected in fuel, labor, and every aspect of the cruise business. However, due to market segmentation, luxury cruise brands like Seabourn do not order such large-scale cruise ships. But for brands like Carnival Cruise Lines, large cruise ships are very attractive.
Assia Georgieva, CEO of Infinity Research, a professional organization that tracks cruise stocks, said that large cruise ships have improved efficiency in many aspects, one of which is to cope with energy transformation.
Assia Georgieva pointed out that many cruise ships ordered this year will use liquefied natural gas (LNG) as fuel for their power systems, and some of them will also be equipped with hydrogen fuel cells as auxiliary power.
Assia Georgieva recalled visiting Royal Caribbean International's new LNG powered cruise ship, Utopia of the Seas, which can accommodate 5714 people and will be built in 2024. She said, "The cruise ship's power system does require space, and of course, each ship needs to maximize space utilization. It is difficult for a cruise ship that can accommodate 3000 passengers to have space to install shore power equipment, LNG storage tanks, or fuel cells. In contrast, larger cruise ships can achieve this
Although luxury cruise ships and high-end cruise brands may not order large cruise ships, the scale of even small cruise ships is constantly expanding. For example, Viking Cruises recently ordered six 54300 ton cruise ships from Fincantieri, which can accommodate 998 passengers, while the company's existing cruise ships can only accommodate 930 passengers.
In addition, taking Regent Seven Seas, a luxury cruise brand under Norwegian Cruise Line Holdings, as an example, the company's cruise ships usually can accommodate 700 passengers, but the company is building cruise ships that can accommodate 850 passengers.
Regarding this, Assia Georgieva stated that the ticket prices of cruise ships are very expensive, so expanding the scale of cruise ships is profitable: "In terms of the hull, power system, and other aspects, building larger cruise ships only increases the number of cabins and does not require too much investment, but the ticket price for a 7-night cruise is worth thousands of dollars, indicating that the profit margin is very large
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