Page 27: of Maritime Reporter Magazine (March 2019)

CRUISE SHIPPING • THE MARKET REPORT

By Barry Parker

Cruising, which is a blend of the hos- date. Further out on the MSC horizon nérale as lead mandated lead arrang- of vessel design; the competition for pitality and maritime businesses, contin- are two new Seaside class (5,646 passen- er, Citibank N.A. as initial mandated passengers also drives choices of itiner- ues to grow at a historic pace. The Cruise ger capacity), and four dual fueled World lead arranger and BNP Paribas, HSBC aries. As explained by Brunvoll, a lead-

Trends & Industry Outlook publication Class vessels (6,850 maximum passen- France, Banco Santander and Unicredit ing manufacturer of thrusters deployed from Cruise Lines International Associa- ger capacity). AG as mandated lead arrangers.” They across many cruise brands, “…vessels tion (CLIA) projects a passenger count add that Export Credit Agency assis- like to park close to city centers…” The of 30 million in 2019 – up nearly 2 mil- Show me the Money tance – which offers actual loans, as well equipment provider also makes the case lion from the previous year. By year From a funding perspective, cruise as insurance on bank credits, lowering that: “Larger ships bring economies of end 2019 CLIA members – a veritable vessels can attain higher ‘advance rates’ their cost – was provided by Bpifrance scale – but also the potential for higher ‘who’s who’ of the largest brands – will (the percent of vessel value provided by Export Assurance. operational risk.” have 272 vessels, 18 of which will have lenders) than many bank-? nanced com- The previous winners of the largest entered the market during the year. mercial vessels. Law ? rm Watson Farley Form, Function, Power cruise vessels leaderboard, with capaci-

Ocean liners gave way to cruising be- Williams (WFW), a maritime specialist, In the cruise segment, form and func- ties of 5,500 lower berth passengers, ginning in the 1960’s; by the late 1990’s explains that its teams advised long- tion are both important. As vessel de- were Royal Caribbean’s Oasis-class ves- and early 2000’s, a consolidation wave standing client MSC Cruises on a $3 signs have evolved, MSC touts its two sels (in excess of 225,000 gross tons). swept over the cruise business, creat- billion for three of the vessels described existing Seaside vessels (just under Beginning with the 2009 built Oasis of ing the big mega-brands led by Carnival above. They explain: “The ? nancing 5,000 maximum passenger capacity) the Seas, this behemoth was followed by

Corporation (the parent of brands includ- structure provides construction ? nancing MSC Seaside and MSC Seaview as “… Allure of the Seas (2010), and then Har- ing Cunard, Costa, Princess Cruise, Hol- for the vessels as well as post-delivery rewrite the rulebook of cruise ship mony and Symphony (with a maximum land America, among others) and Royal ? nancing in respect of 80% of the total design, blending indoor and outdoor ar- capacity of nearly 6,700 passengers).

Caribbean (with its own well known ves- cost of construction of the three vessels.” eas to connect with the While much marketing attention for sels complemented by Celebrity Cruise, The law ? rm, headquartered in Lon- sea like never before…”, referring to these ? oating cities is often focused on

Azamara and others including recently don, also provides insights into the com- glass walled promenade along the ves- the “hotel” side – rooms and suites, res- acquired Silversea, in the expedition plexity of such large ? nancings, saying sels’ port and starboard sides, and an taurants and activities – the operational sector). The middle tier includes inde- that the funding “…was provided by a abundance of balconies. Function also side is paramount. pendents Norwegian (listed on NYSE) syndicate of lenders with Société Gé- impacts the power and propulsion side As vendors have developed pods and and privately owned MSC

MSC Cruises, the indus-

Cruises; numer- try’s largest privately owned ous smaller op- company, is in the midst of a erators work in $13 billion expansion which will bring its ? eet, following different niches the delivery of MSC Meraviglia of the market. in 2017, to 25 vessels by the

In recent mid 2020’s. Still on order are years, the head- four Meraviglia class ships.

lines have been dominated by megaships built through megabuild pro- grams funded by multi-billion capital raises. MSC Cruises, the industry’s larg- est privately owned company, is in the midst of an unprecedented $13 billion expansion which will bring its ? eet, fol- lowing the delivery of MSC Meraviglia in 2017, to 25 vessels by the mid 2020’s.

Still on order are four Meraviglia class ships. Next to deliver – from the Chan- tiers de l’Atlantique (formerly STX)

MAKE SMARTER ENVIRONMENTAL yard at St Nazaire, France, are MSC

COMPLIANCE DECISIONS

Bellissima and MSC Grandiosa, the ? rst of two Meraviglia-Plus ships (6,335 pas- senger capacity) will come into service in 2019. A sister, MSC Virtuosa, will

SAFETY LEADERSHIP be completed in 2020. A ? fth vessel, www.eagle.org/environmentalcompliance DRIVING SUSTAINABILITY ordered in mid-2018 for just more than $1 billion, will have dual fuel (MGO or o ha AvigatorTha Av © Av g or Tha Av ga or Tha © Avigat r Tha and Shu © AvigatorThail nd/S Shu © Av gator T T Thail a a a a and/ d/ d/ /Shut utters s r tock kS S S Sh ters ockc ck ck

LNG) capability with a 2023 delivery www.marinelink.com 27

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