Newbuilding delivery and orderbook updates. Return of megaship orders

Reflecting the current trend of the industry, the ocean cruise-ship newbuilding delivery volume and orderbook size revived decisively in the first half of 2024.

After years of hesitation, following the leads of Royal Caribbean Group (RCG) and MSC Cruises, the remaining two members of the “big four” cruise giants have finally joined the exclusive 200,000-gross-ton cruise megaship operators club.

Orderbook activities have been increasing steadily in recent months. But the size of the orderbook in the first half of 2024 did not swell as fast as we hoped, partly because of the larger volumes of vessel deliveries and overcapacity in the upscale expedition cruise segment.

The announcement of an eight-ship order by Norwegian Cruise Line Holdings Ltd (NCLH) in April was the defining moment of the next stage of orderbook development. This trend was solidified by Carnival Corporation’s (CCL) three-megaship order at the end of July.

Bigger capacity

After the recent dips as a result of the pandemic, the total capacity of newbuildings delivered has recovered in the first six months of 2024. Judging by the content and dynamism of the current orderbook, CruiseTimes expects the situation to improve much further from this point on.

But the number of vessels delivered has fallen to less than half of the figure from the same period in the peak year of 2019, because of shrinking expedition and luxury vessel productions. This situation will persist for the foreseeable future, as megaship newbuildings are now in vogue again.

Source: CruiseTimes Research

Source: CruiseTimes Research

On 19 April, Cunard took delivery of the much-anticipated 3,000-passenger Queen Anne from Fincantieri, the line’s first new ship in more than a decade. The introduction of this new vessel meant that the brand would operate four ships for the first time since 1999. The ship, commissioned in 2017, had been delayed because of the pandemic, and its eventual delivery was not entirely trouble free. The ship’s inaugural arrival at its homeport of Southampton, UK, was put back a few days because of some last-minute “touch-ups”.

On 14 May, Silversea Cruises took delivery of its second Nova-class ship, the 54,700-gross-ton, 728-passenger Silver Ray, from Meyer Werft. The vessel was set to depart Lisbon for its inaugural cruise on 15 June and spend the summer in the Mediterranean. It would then reposition to the Americas in autumn.

In early June, TUI Cruises took delivery of the 2,894-passenger, methanol-ready Mein Schiff 7 from Meyer Turku. This was the Finnish shipyard’s first-ever methanol-ready cruise newbuild. Meyer Turku is famed for its decade-long know-how in pioneering LNG-powered passenger ship construction.

On 14 June, Chantiers de l’Atlantique delivered the 5,714-lower-berth Utopia of the Seas, the sixth Oasis-class vessel and the second-biggest cruise ship in the world, to Royal Caribbean International. The ship would debut on 19 July. It was the first Oasis-class ship designated for shorter, three-to-four-day itineraries from Port Canaveral.

At the same time, the French shipbuilder held a keel-laying ceremony for the 140,600-gross-ton Celebrity Xcel, the fifth and final Edge-class ship of Celebrity Cruises. This newbuild, due for delivery in November 2025, will be methanol-ready, featuring a Wärtsilä tri-fuel-capable engine.

On 12 July, Chantiers de l’Atlantique handed over the 448-passenger luxury newbuild Ilma to its owner, the Ritz-Carlton Yacht Collection.

Four more newbuilds are expected for the remainder of 2024, with an estimated size and capacity totalling 366,000 gross tons and 8,700 lower berths.

Newbuildings delivered 1 January – 6 July 2024

Source: CruiseTimes Research

More delays

Lingering global supply chain issues still plague the shipbuilding business. In April, Princess Cruises and Fincantieri jointly announced the delay of the next Sphere-class newbuild, Star Princess, from 29 July to 26 September 2025, following a comprehensive review of the “remaining construction milestones”.

In June, it was reported that Explora Journeys had delayed the delivery of its second ship, Explora II. The setback forced the line to cancel five planned seven-night cruises. Last year, the line’s first ship, Explora I, was delayed because of an issue with materials used.

Initially, Explora II had been scheduled to depart on its maiden voyage on 11 August, but its delivery date was subsequently changed to 12 September. The company said it needed more time for the final finishes to the ship, whose maiden voyage is now slated for 16 September.

Cruise lines are still forced to cancel planned inaugural cruises because of ship construction delays. More delay announcements may be forthcoming.

Orders coming

Following the mid-February order of a fourth Excel-class vessel, in late March CCL ordered a fifth newbuild of the same series from Meyer Werft for 2028 delivery. This will be the group’s 11^th Excel-class ship.

As predicted, the new wave of newbuilding orders surged in April when NCLH placed a momentous eight-ship order at Fincantieri for its three brands, for deliveries between 2026 and 2036. This was the group’s most ambitious newbuilding programme to date, spanning a period of 10 years and totalling 25,000 lower berths.

After completion of the Prima-class series, NCLH’s Norwegian Cruise Line brand expects four entirely new, 200,000-gross-ton-class ships, the biggest in the company’s history. Upon ordering these newbuilds, NCLH became the latest entrant to the 200,000-gross-ton ship operators club, joining RCG and MSC.

For its Oceania brand, the group expects two 86,000-gross-ton, 1,400-lower-berth newbuilds for 2027 and 2029 deliveries, following the completion of the Allure-class series.

Finally, after completion of the Explorer-class vessels, NCLH’s Regent Seven Seas brand expects to take delivery of a 77,000-gross-ton, 850-lower-berth newbuild in 2026 and an identical unit in 2029.

This is a massive and ambitious fleet expansion programme. The group is banking on continuous year-on-year growth in demand. In this connection, it must be mentioned that NCLH’s last major newbuilding journey ended in downgrading the Prima-class ship size because of weakened demand.

Elsewhere, Scenic Cruises announced its expansion plan in April, with a new ship, the 128-passenger Emerald Kaia, which is to enter service in April 2026. It will be built based on the blueprints of the 2023-built Emerald Sakara and 2022-built Emerald Azzurra, but it will be 10 per cent bigger.

In late May 2024, the newly listed Viking Holdings Ltd, operator of Viking Cruises, exercised options at Fincantieri for two more newbuilds for 2029 deliveries, bringing its total number of ocean cruise ships on order to eight. The orders were announced during the company’s first earnings call. Following this move, the company had two more options with the Italian shipbuilding giant that needed to be executed by 2025 for 2030 deliveries.

At the end of June, A&K Travel Group signed a memorandum of agreement with Fincantieri for the construction of two 61,800-gross-ton, 690-passenger vessels, provisionally slated for 2028 delivery, for its Crystal Cruises brand. The agreement came with an option for a third ship, planned for delivery in 2032.

In early July, Orient Land, the operator of Toyko Disneyland, ordered a 140,000-gross-ton, 4,000-passenger newbuild at Meyer Werft, throwing the struggling shipyard a lifeline. The German shipbuilder has been facing a deepening liquidity crisis in recent years because of the pandemic and inflation. The new Disney Wish-class ship will be delivered in 2028 and enter service in early 2029.

On 23 July, CCL announced it had ordered three 230,000-gross-ton vessels from Fincantieri for its namesake brand Carnival Cruise Line for 2029, 2031, and 2033 deliveries, thus becoming the last of the big four to join the 200,000-gross-ton vessel operators club. The group now has six newbuilds on order, five of them for its Carnival Cruise Line brand, which is on the pathway to major capacity expansion.

CCL’s strategy is one of measured capacity growth. It intends to add one or two ships per year from 2027 by capitalising on its anticipated strong cash flow and improved balance sheet in the coming years.

RCG’s performance track records for its Oasis- and Icon-class ships have inspired the latest megaship gold rush. The demand for these large ships remains undiminished.

CruiseTimes expects a continuing tangible orderbook recovery in the medium term, provided the global macroeconomic environment remains reasonably stable.

The discontents

In the cruise ship construction sector, one of the most noticeable phenomena at present is how much the size of the smaller expedition vessel orderbook has shrunk in just one year because of overcapacity. As of 6 July, only 13 units were listed on the orderbook, totalling about 206,000 gross tons and just over 2,000 lower berths. A year earlier, the figures stood at 25 units, 500,000 gross tons, and 6,800 lower berths. We see no discernible driver in the short to medium term to reverse this trend.

Despite the still largely full orderbook for bigger ships and brightening prospects, some cruise ship builders are struggling financially because of inflation and rising costs. Meyer Group, for instance, has been mired in deep losses that would take a substantial cash injection to rectify the situation. The willingness of cruise lines to renegotiate the contracts will be key.

Source: CruiseTimes Research

Ocean cruise newbuilding orderbook on 6 July 2024 (140,000 gross tons and above)

Source: CruiseTimes Research

Ocean cruise newbuilding orderbook on 6 July 2024 (45,000–139,999 gross tons)

Source: CruiseTimes Research

Ocean cruise newbuilding orderbook on 6 July 2024 (small, upscale, & expedition)

Source: CruiseTimes Research