Cruise ships get back on course

• Published date: 24 June 2022
• Publication title: New Zealand Herald, The (Auckland, New Zealand)

Norwegian Cruise Line (NCL) has its 17-strong fleet in the water again, is preparing to take delivery of its most advanced ship within weeks and in six months will return to New Zealand waters

The company is the world’s third-biggest cruise line and, like most of the industry, its operations were halted for much of 2020 and into 2021 as the sector reeled from the pandemic’s fallout. But now NCL — which restructured and recapitalised its balance sheet during 2020/21 — has all its Norwegian-brand ships back with occupancy rapidly climbing.

“Overall, we are seeing demand at about 90per cent of where we need to operate full ships, which we think is outstanding considering how things have transpired over the last few quarters,” said Harry Sommer, president and chief executive of Norwegian Cruise Line.

He said the rebound’s strength wasn’t all that surprising given the pent-up demand. Worldwide, the ocean cruise industry had an annual passenger compound growth rate of 6.6per cent from 1990-2019, but for about 18 months most cruises were suspended, meaning close to 30million journeys weren’t taken.

“All the cruise lines started up in a phased approach and none of us had all of our ships in operation last year, nor are we operating them at full so you had almost two full years of this pent-up demand,” said Sommer. “That’s now ready to go.”

This is reflected in the latest full-year figures from Cruise Market Watch, which show that 2021 total worldwide ocean cruise industry spending was $US23.8 billion ($37b) — an 81.8per cent increase over 2020 but a 52.9per cent decline from 2019.

Global cruise industry trade group Cruise Lines International Association (Clia) said that more than 75per cent of its member ships had returned to service, with almost all forecast to be sailing by the end of the year.

Clia forecasts that passenger numbers will exceed pre-pandemic levels by the end of 2023.

COVID-19 accelerated the retirement of dozens of ships. Between 2019 and 2021, 31 ships were beached or scrapped. The fallout continues: one very large exception to the buoyant trend is an unfinished mega-liner that was to be one of the world’s biggest cruise ships. Reports say the vessel is at a German shipyard waiting to be scrapped, because bankruptcy administrators can’t find a buyer.

Cruise industry magazine An Bord reported the lower hull of a liner known as Global Dream II, commissioned by Hong Kong-based Dream Cruises, is to be disposed of at scrap prices.

But according to...