 Could
a new ship be on the way for Royal Caribbean or sister line Celebrity Cruises?
The top executive of the parent company of the brands hinted
as much Thursday during a conference call with Wall Street analysts.
"We clearly are looking at that sort of thing," Royal Caribbean Cruises Chairman
and CEO Richard Fain said in response to a question about whether a new ship
order could come in the next few months. "I think what we're looking at is, we
see that even in this market, we could get some very attractive returns from
some of our vessels that have performed well."
Fain wouldn't give specifics about the size of the vessel the company might
order or whether it would be for the Royal Caribbean or Celebrity brand. The
Royal Caribbean brand has 22 ships in its fleet, with two more on order for
delivery in 2014 and 2015. Celebrity has 10 ships in its fleet, with one more
debuting this fall.
Fain noted the company's capacity growth has been slowing because of fewer
orders in recent years.
"From 2012 through 2016, our berth capacity growth is less than 3%, and in fact,
we don't have any ship deliveries in 2013 at all," he said. "But as we said
before, we also can't stagnate. Given the long lead time for a new vessel, we're
approaching the point where a new order could not be delivered until the middle
to late 2016, by which time, we will be enjoying much better profitability and
much improved credit metrics."
At least one Wall Street analyst voiced concern over the idea of another ship
order, noting the cruise industry has struggled in recent years with
overcapacity in some regions such as Europe. Goldman Sachs' Steven Kent
suggested Royal Caribbean could command higher rates if it rolled out fewer
ships.
Fain responded by saying that new capacity is needed to expand into new markets.
"A lot of what we are doing with our (new) capacity is shifting it to new
markets, and in essence, opening up new demand," Fain said, noting that the
company this year moved one of its larger ships, the 3,114-passenger Voyager of
the Seas, from Europe to Asia. "That actually brought down our capacity in the
existing markets."
Nearly two years have passed since the debut of Royal Caribbean's latest ship,
the 5,400-passenger Allure of the Seas. Along with sister Oasis of the Seas,
which debuted in 2009, it is the largest cruise vessel in the world. The two
additional Royal Caribbean ships on order will be somewhat smaller vessels that
carry 4,100 passengers. |
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150 S. University Dr. Ste E,
Plantation, FL 33324 - USA
Tel: +1 954 452 8800 Fax: +1 954
252 3945
EMail:
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