Wall Street analyst to cruise lines: Cool it with the new ships!

[dursin]

Interesting read:

http://www.usatoday.com/travel/cruises/item.aspx?type=blog&ak=61468904.blog

Full analysis there for those who enjoy more details:

http://www.schaeffersresearch.com/c...ibbean+cruises+ltd/observations.aspx?ID=90582

Probably doesn't apply to Disney as much as the 'cruise only' operators and I don't think it will affect the building of the new ships, but Disney could have made a very wise decision in backing off on the idea of Alaska itineraries as the analyst specifically mentions "a high exposure to more expensive Europe/Alaska cruises at the wrong time" as part of the current problem for cruise operators."

 

[Toddymae]

Every economist out there is saying to "spend" it's the best way to get the economy going again.

 

[Orlando Disney Guy]

I do wonder though what happens to old ships? Where are the ships that Carnival and Royal caribbean started with? Do they get stripped and used for parts? I would imagine that those ships are way out dated with today's classes of ships.

How many more years do you think the Magic and Wonder will be in service, yes they are realativly new ships but in 20 years do you think they will still be sailing? Look at carnival's Celebration is was built in 87 and went out of service last year, that is only a 21 years on the high seas. Does that mean the Magic only has 11 good more years left?

 

[kcashner]

Premier Cruise Line's 2 old ships, the Atlantic and Oceanic (the Big Red Boats) were purchased by another company in hopes of being refurbished. It was then determined that it would cost more to bring them up to standards than to scrap them. They were stripped of all hazardous materials and taken out to sea and sunk to make sort of a fake coral reef for fish and wildlife!

 

[allears]

I didn't read the analysis yet, but I would think the DCL is most likely making a very wise decision to add the new ships in the next few years. While we think the Magic is awesome, it is over 10 years old and other lines are coming out with bigger and better. Also DCL has a great occupancy rate, but to stay really competative they need to be able to expand their offerings which can only be done with a larger fleet.

 

[wdwwishes]

Interesting article. I'm happy to see DCL expanding. I think that their new ships aren't so overdone that they might be a little less expensive to build than some of the other lines. I also think they aren't looking to make them over-the-top large either. The other lines seem to want to build them as big as they can and include everything but the kitchen sink on them. It would be fun to see DCL add a little something else for the kids, especially older teens, to do like the surf thing or rock climbing wall.

 

[tvguy]

So the Magic and Wonder really are still young ships.
The first ship I cruised on, the MS Mermoz was built in 1957 and retired to the scrap yard in 2008. So it has an operating live for 51 years. The second ship I cruised on was the SS Norway. It was built as the SS France in 1960, retired in 1974, then refurbished and returned to service as the Norway in 1977. The tragic boiler blast in 2003 started several years of questions about it's future until it too was scraped in 2008. While it was around for 48 years, it's actual active life was 40 years.
And of course, the Queen Elizabeth II is now about to become a hotel, it went into service in 1969 and had a service life of 39 years, including a stint as a troop carrier during the Falklands War in 1982.
It should be noted, that the new ship schedule in this months edition of Cruise Travel magazine still lists the 2 new Disney ships with delivery years of 2011 and 2012, but no specific month. It is interesting that Carnival is building a ship at the same shipyard as Disney, with a delivery date of Fall 2011......just makes me wonder if Disney may be sliding back the delivery of the ships. No inside information, just interesting.

 

[sftnslky]

Look at carnival's Celebration is was built in 87 and went out of service last year, that is only a 21 years on the high seas. Does that mean the Magic only has 11 good more years left?

DH and I took a honeymoon cruise on the Carnival Jubilee in 1994..and she was "old" and VERY small then. She was built in 1985...Carnival sold her to a new cruise company out of Australia in 2004..and she is still in service today. So she would be 23 years old So I would assume that Disney would also just sell the ships to other smaller companys when the Magic or Wonder get to old...will be a very sad day in my eyes but would be even sadder to me to see her disassembaled for scrap

 

[sftnslky]

It would be fun to see DCL add a little something else for the kids, especially older teens, to do like the surf thing or rock climbing wall.

100% YES... and my thoughts are that they should add an ice rink..NOT for all of us to use, but for ALL of the MANY Disney on Ice shows they have.

 

[Tink rules]

The difference between Disney and other lines, is that it is not the main part of their company. Disney has all different outlets to make money off of... The cruise industry for the most part - only has ships...

 

[Kiderak]

Why listen to the Wall Street guy.....look what they did to Wall Street.

Shipbuilding provides alot of jobs.

Some of us still have money for those trips.

 

[kaseyC]

It should be noted, that the new ship schedule in this months edition of Cruise Travel magazine still lists the 2 new Disney ships with delivery years of 2011 and 2012, but no specific month. It is interesting that Carnival is building a ship at the same shipyard as Disney, with a delivery date of Fall 2011......just makes me wonder if Disney may be sliding back the delivery of the ships. No inside information, just interesting.

Do you mean Celebrity? Celebrity's newest ships are being built at Meyer Werft (Solstice-2008, Equinox-2009, Eclipse-2010 and 2 unnamed scheduled for delivery 2011 & 2012) Meyer Werft is also where DCL is building their new ships. Carnival is using Fincantieri in Italy for their newest ships.

IMO, I don't think they are pushing back the delivery of their ships. Meyer Werft has the facilities to handle two large cruiseships at the same time. They will have completed their contract for AIDA in 2010, so then it will be just DCL and Celebrity with 2011 and 2012 delivery dates.

 

[NancyIL]

If you have some space cash, I think 2009 will be a GREAT year to pick-up some cruise bargains! I went on a Bahamas cruise in December and will go on two 7-night cruises in the spring because the prices were so good.

 

[tvguy]

Do you mean Celebrity? Celebrity's newest ships are being built at Meyer Werft (Solstice-2008, Equinox-2009, Eclipse-2010 and 2 unnamed scheduled for delivery 2011 & 2012) Meyer Werft is also where DCL is building their new ships. Carnival is using Fincantieri in Italy for their newest ships.

IMO, I don't think they are pushing back the delivery of their ships. Meyer Werft has the facilities to handle two large cruiseships at the same time. They will have completed their contract for AIDA in 2010, so then it will be just DCL and Celebrity with 2011 and 2012 delivery dates.

At Meyer Werft in 2011 AIDA has an unnamed ship set for delivery in April, Celebrity has an unnamed ship set for delivery in the fall. For Disney, they list an unnamed ship with "N/A" under the scheduled debut column.
At Meyer Werfth in 2012 AIDA has an unnamed ship set for delivery in May, Celebrity has an unnamed ship set for delivery in the fall, and Disney has an unnamed ship with "N/A" in the scheduled debut column.
So it appears Meyer Werfth is building 3 cruise ships a year, with Disney being the only ships in 2011 and 2012 without a set delivery date. And since there are AIDA ships listed in those years, their contract must not be compete. AIDA also has ships coming from Meyer Werft in 2009 and 2010.

 

[rtphokie]

I do wonder though what happens to old ships? Where are the ships that Carnival and Royal caribbean started with? Do they get stripped and used for parts? I would imagine that those ships are way out dated with today's classes of ships.

How many more years do you think the Magic and Wonder will be in service, yes they are relatively new ships but in 20 years do you think they will still be sailing? Look at carnival's Celebration is was built in 87 and went out of service last year, that is only a 21 years on the high seas. Does that mean the Magic only has 11 good more years left?

Older ships are sold off to small lines generally. Some of the larger lines have small subsidiaries that specialize in niche cruises. Royal Caribbean transferred it's Sovereign of the Seas to Pullmantur Cruises last year. This ship was the largest in the world when it debuted in 1988. Your 20 year lifespan suggestion is pretty acurate it seems.

 

[Soccermom-Cheri]

Premier Cruise Line's 2 old ships, the Atlantic and Oceanic (the Big Red Boats) were purchased by another company in hopes of being refurbished. It was then determined that it would cost more to bring them up to standards than to scrap them. They were stripped of all hazardous materials and taken out to sea and sunk to make sort of a fake coral reef for fish and wildlife!

Wow. I didn't know that. Where were they sunk? That would be something to see.

100% YES... and my thoughts are that they should add an ice rink..NOT for all of us to use, but for ALL of the MANY Disney on Ice shows they have.

I also sailed on the SS Norway. It's been terrible to watch it be dismantled in India. I can't imagine watching that happen to my beloved Magic.

Lastly, I don't believe that bigger is better. I can't imagine sailing on one of those mega-ships with 4,000 people. (oh, I'll be standing in line for the new DCL ships however.)

Aren't the European/Baltic cruises selling?

 

[Tink rules]

Alot of people have backed out on the Baltic and Med cruises cause of cost. The WB Repo is selling well - it includes the caribbean ports... We expect the EB repo to be about 1/2 full if that. The last one was.

I know that alot of others have already looked into other lines to do those itineraries and they are much less.

I'm holding off to see if they offer any specials.

If the pound and the euro don't improve I think they are going to have alot of problems...

 

[tvguy]

Older ships are sold off to small lines generally. Some of the larger lines have small subsidiaries that specialize in niche cruises. Royal Caribbean transferred it's Sovereign of the Seas to Pullmantur Cruises last year. This ship was the largest in the world when it debuted in 1988. Your 20 year lifespan suggestion is pretty acurate it seems.

I cruised the Soverign in 1988, about 4 months after it entered service, great ship. Yes, Royal Caribbean did transfer the ship to Pullmantur. But I think it had nothing to do with the age of the ship, the Caribbean cruise market is soft, the Med is hot, and RCCL, which operates as Pullmantur in the Med, just transfered the ship to a hotter market.

 

[kaseyC]

Alot of people have backed out on the Baltic and Med cruises cause of cost. The WB Repo is selling well - it includes the caribbean ports... We expect the EB repo to be about 1/2 full if that. The last one was.

I know that alot of others have already looked into other lines to do those itineraries and they are much less.

I'm holding off to see if they offer any specials.

If the pound and the euro don't improve I think they are going to have alot of problems...

Yep, we are one of those families. We are booked on one of DCL's 2010 Med cruises right now but I'm waiting for the release of Celebrity's 2010 European Itineraries, we are very interested in one of their new ships - either the Solstice or the Equinox. If they offer an Eastern Med itinerary, that's what we will probably book. Also if their prices remain similar to the 2009 rates we will be able to book a Sky Suite with a connecting Concierge Class cabin for much less than the Cat. 7 and Cat. 11 (across the hall) we have booked on DCL.

 

[Tink rules]

So... do you think DCL will listen to all the footsteps of their regular customers running over to the other lines??? I hope so... then I'll book...