New Ships - Enough is Enough?

With the plethora of new ships arriving over the next couple of years (and don't they look fabulous) is there a point where there are simply too many ships? There are only so many ports that ships can visit and comments on other threads have shown people grumbling about the number of ships in port at any one time. This could get even worse in years to come.

On the other side of the coin, will more ships mean prices will become more competitive?

It is all based on supply and demand and who can attract the biggest share of the market based on the newest and most innovative ships. The cruise industry is still growing and more people are cruising now than ever. Unfortunately, pricing - while still a very good value for the vacation provided - is typically highest on the newer ships. I guess the long term remains to be seen.

And many of these new ships are Mega ships -- meaning many more people in the ports.

I don't like the Mega ships.

I see us cruising less.

Yup, supply and demand -- if they think they can fill the ships, they will build them.

Shipowning in general tends to be cyclical, not the least being the cruise industry. Due to the long lead time to produce a ship, unforeseen market factors can change the outlook between the time the order is placed and the time the ship is delivered. So, there can be times of overcapacity, where prices fall, and times of overdemand, where prices rise.

Balancing out the influx of new ships are the financial decisions to sell off older ships. Ships over 15 years of age tend to cost more to maintain (especially their drydockings are more extensive and more costly), so the major cruise lines will sell older ships to other lines that use a different business model, and can turn a profit on the older ships.

I'm sure occasionally a ship is sold or they stop using it, so maybe the number of ships even out. Yes, I know more passengers come with the newer ships.

Pretty much a supply and demand type of game. If you build it they will cruise! :evilsmile:

What is hurting the industry is that they are running the same iterates on each line they all follow each other around week after week. You can only go to the same spots so many times before people don't want to go there anymore. I know I am searching for a cruise that has new stops.

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It will be interesting to see where this goes.

In many, if not most, growing consumer-based industries there is "boom and bust" cycle. Real estate prices are still cycling up after the last bust, bricks and mortar stores are cycling down - with demand being cycled off to Internet shopping.

The cruise industry is still in growth mode, with more new cruisers signing on each year than old ones dropping out. New ships will keep coming on line, both to replace older ones which are being retired as well as to provide the additional berths needed to accommodate the growing numbers.

When (because it is surely not a matter of if) growth in passenger demand stops, the bubble will burst -- with at least temporary price slashing. Because new builds are years in the making, the industry will have to deal with more berths coming on line for a matter of years while passenger loads decline.

An additional factor will be the saturation of destinations - at some point there will be a tendency towards "cruises to nowhere" - or those with many more slow steaming sea days with far fewer port calls. There are already some Caribbean ports which have lost their attraction due to passenger overload - and some Mediterranean ports which may have to limit additional port calls before their "success" destroys what makes them attractive.

Relatively low interest rates have encouraged a lot of the new ship push the past several years. Older ships bumped from fleets are taking up new markets in Asia rather than glut the markets in North America and Europe. Ports will have about the same number of ships but they will be carrying more passengers. When financing gets more expensive there will be a slowdown in new builds.

What is hurting the industry is that they are running the same iterates on each line they all follow each other around week after week. You can only go to the same spots so many times before people don't want to go there anymore. I know I am searching for a cruise that has new stops.

I have been cruising for many years and have never repeated a port of call, and there are still hundreds I haven't been to yet. If you are tired of the same ports, just cruise a different area. It's your choice, and there are many out there. If someone is bored with the same ports, they have only themselves to blame.

And many of these new ships are Mega ships -- meaning many more people in the ports.

 

I don't like the Mega ships.

 

I see us cruising less.

I would like to see more middle size ships. Not huge but not tiny like the Pacific Princess.

Mid-size and small ships aren't as "cost effective" for a cruise line....and they can't fit all the "bells and whistles" that new cruisers expect onto the smaller ships.

And many of these new ships are Mega ships -- meaning many more people in the ports.

I don't like the Mega ships.

I see us cruising less.

Agree....

From the amenities and "things" cruise lines are putting on the new ships, it appears that they are trying to offer enough entertainment on board that maybe more folks will bypass even getting off at the ports. After so many times in a port, a ship where you could have an "excursion" on board might be the answer they are pushing for. I can envision cruises to nowhere becoming more of a possibility with the newer and more entertainment based ships. :confused:

I have been cruising for many years and have never repeated a port of call, and there are still hundreds I haven't been to yet. If you are tired of the same ports, just cruise a different area. It's your choice, and there are many out there. If someone is bored with the same ports, they have only themselves to blame.

It is hard to visualize cruising "for many years" without ever repeating a port -- unless very few actual cruises were taken over those many years. Our twenty-plus cruises have been generally selected to cover different areas: Northern Europe, Mediterranean, Bermuda, Aegean, Caribbean, Alaska, Hawaii, Panama Canal, Hawaii, trans-Atlantic, etc. and there have been several repeats - almost unavoidable.

It is hard to visualize cruising "for many years" without ever repeating a port -- unless very few actual cruises were taken over those many years. Our twenty-plus cruises have been generally selected to cover different areas: Northern Europe, Mediterranean, Bermuda, Aegean, Caribbean, Alaska, Hawaii, Panama Canal, Hawaii, trans-Atlantic, etc. and there have been several repeats - almost unavoidable.

Yep, about a dozen+ cruises over the last couple of decades. We don't take several cruises a year, but try for one about every 18 months. And, yes, we have never "visited" the same port twice. We have departed and arrived in the same port on a couple of cruises, but they weren't day visit ports. Have even arrived in one port and departed from the same port on a cruise years later on an entirely different itinerary. But none that had the same port as a mid cruise stop over.

So sorry that you are not convinced. If you still want to call me a liar, go right ahead. Doesn't bother me in the least what you think. I know what I know - and you don't. ;p

Mid-size and small ships aren't as "cost effective" for a cruise line....and they can't fit all the "bells and whistles" that new cruisers expect onto the smaller ships.

Unfortunately the above is true.

All that very expensive market research the cruise lines have been doing is pretty much unanimous. There are over 300 million ( and growing quickly) new middle class Chinese who very much want to take their first cruise.

 

This year a total of about 30 million people worldwide will be able to take a cruise. That fills up all the ships for the year.

 

Let's conservatively assume that the market research is wrong, and only 150 million ( and growing) Chinese will actually go on a cruise. And maybe only 10% of those will cruise additional times. That fact alone would fill every cruise ship on earth for more or less the next decade. By that time, the Asian Indians and the Brazilians will be cruising, filling up every ship on earth for a few more decades.

 

Yes, there is a growth and decline cycle for just about every industry and product. But the cycle for mass market cruising has only just begun - and it is going to be around far longer than we will be here.

The biggest issue for the cruise lines isn't attracting new passengers, but attracting new employees for the increasing number of cruise ships now in place or coming in the future. That is one reason why service levels have slowly deteriorated in recent years - not enough service staff to go around, so they have to serve more tables with fewer waiters, or clean more staterooms with fewer room attendants. If you cruise a regular line often, you can usually see the drop in service levels whenever their newest ship goes online and begins cruising. The best from the fleet are moved to the new ship, leaving the remainder to try to keep up, all the while with the additional task of training any new employees that are found.

I fear that this situation is only going to get worse as some of the countries where typical service employees come from become more affluent, making working on a cruise ship less attractive.

 

...

 

So sorry that you are not convinced. If you still want to call me a liar, go right ahead. Doesn't bother me in the least what you think. I know what I know - and you don't. ;p

Hold on, please. Mentioning that it is hard to visualize cruising for many years without ever stopping at the same port twice is not calling anyone a liar.

I am very happy for you.

As cruisers (and not cruise line shareholders) we should all be over-the-moon that all these new ships are being built! As has been said, this industry is cyclical and when demand eventually turns down that extra supply will result in much lower prices for all of us:D:D (and tears for the shareholders:loudcry:).

I've seen this happen in many cyclical industries over and over again during the past 50 + years. This industry is not immune to this fact of cyclical life and does not defy gravity.

Interesting question as to how many ships is enough and who is going to fill these ships. Also have to agree with the cyclical life approach. Also, what happens when the next market crash hits.

Regardless, I do find the following amazing: I booked the Celebrity Reflection for 4/2/2018 just last February and the cost for my balcony cabin has already increased $1747! Likewise, I booked the Royal Princess for 9/25/2018, also last February, and that cabin price has increased by $2260!!

For the time being, a lot of people must still be cruising. :)

Hold on, please. Mentioning that it is hard to visualize cruising for many years without ever stopping at the same port twice is not calling anyone a liar.

 

I am very happy for you.

Well, you did imply that I was exaggerating with that "for many years" quote. :eek:

No hard feelings on my end. That is why I added a cutsie ";p" at the end of my comments in that post. Just having fun at someone else's expense. :evilsmile:

And, we do agree once in a while, so we are actually more on the same page than not. :D

FYI: we're taking our first Alaska cruise this summer out of San Francisco. Again, with no repeated ports (unless you consider a ferry ride from Seattle to Victoria as a cruise!) :cool:

As cruisers (and not cruise line shareholders) we should all be over-the-moon that all these new ships are being built! As has been said, this industry is cyclical and when demand eventually turns down that extra supply will result in much lower prices for all of us:D:D (and tears for the shareholders:loudcry:).

 

I've seen this happen in many cyclical industries over and over again during the past 50 + years. This industry is not immune to this fact of cyclical life and does not defy gravity.

Not really---not for those of us who are looking for better cruising, not cheaper cruising. There isn't a price low enough to get me to want to cruise on many of the the huge ships being built and outfitted now.

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Excellent point. I agree completely.

But unless you are currently a teenager - or younger - you will probably not live long enough to see this inevitable downturn in the cruise industry.

 

Meanwhile, thank you for supporting my employer and my industry.

You might be surprised to see how quickly a boom can turn into a bust. Whether it is houses for sale or cruise ship cabins to book, the fundamental pricing mechanism is the same. When there are as many, or more, buyers than sellers, prices are steady or rising - a very small drop in the number of buyers changes everything and prices plummet rapidly. Look at the housing market between 2007 and 2009.

The stock market is subject to similar fundamentals: one more buyer than seller means rising prices, while one more seller than buyer means falling prices -- no huge shift in attitude is required to turn boom into bust.