With 30 newbuilds set for delivery this year, the industry must be careful not to oversupply the market
The cruise newbuilding orderbook spend crashed to a 30-year low in 2020 – but 2021 is expected to be ‘record-breaking’, with 30 ships set for delivery.
VesselsValue cruise analyst Guy Cooper tells Passenger Ship Technology, “Between 2012 and 2018 the number of cruise ships ordered each year grew continuously.” He says 156 vessels were ordered during this seven-year period. Total spend grew an incredible 605% between 2012 and 2017. In 2012, US$2.91Bn was spent whereas US$20.54Bn was spent in 2017.
Mr Cooper says, “This remarkable growth put the orderbooks at an all-time high in 2018. With an abundant supply of cruise ships on the orderbooks, cruise companies and owners quickly slowed ordering in 2019.”
Total spend in 2020 reached a 30-year low, with less than US$1.0Bn spent on orders. “A direct result of the Covid-19 pandemic, which threw the industry into turmoil, forcing entire fleets to halt operations and enter warm lay-up. As the industry was paused, demolition and S&P activity ramped up, forcing asset valuations down,” says Mr Cooper.
With the industry on pause for most of 2020 and yards on lockdown, several deliveries for 2020 were delayed and pushed back. 2020 saw 14 cruise ships enter the water, with a combined value of more than US$6Bn.
But the tide has turned – assuming no delays or pushbacks, 2021 looks set to be a “record-breaking” year, says Mr Cooper, with 30 cruise ships set for delivery. So far five cruise ships have gone live, with a further 25 to enter services before the end of the year.
But Mr Cooper warns, “The caution here for the industry is to not oversupply the market with new tonnage when there is no physical customer demand to match.”
2022 is also set to be a big delivery year, with the global fleet set to increase a further 28 vessels according to VesselsValue data.
Mr Cooper says, “The vast number of cruise ships set to be delivered over the next two years will set the trend for the future of the industry. The current live fleet sits at 371 cruise ships with a combined passenger capacity of 686,568. By the end of 2023, the global passenger-carrying capacity will grow by 18%.”
Mr Cooper says there are two directions the industry could see scheduled deliveries taking. “The first is global fleet renewal, with the new, more efficient and environmentally friendly cruise ships replacing the older tonnage. This would lead to an increase in scrapping as owners balance out the supply and demand.”
But he warns, “The second would be more delays and even the risk of cancelled orders, as the heavy supply of cruise ships struggles to match the lack of demand.”
As well as deliveries, more positive news can be seen as the cruise sector has seen its first signed order this year. Japanese cruise company NYK Cruises and Meyer Werft have signed a contract for the construction of a new cruise ship. This order, says Meyer Werft, makes it the first shipyard in the world to receive a cruise ship newbuild order since the start of the Covid-19 pandemic.
The newbuilding for NYK Cruises is scheduled for delivery in 2025. Meyer Werft will install LNG propulsion in the ship and will “implement numerous customised solutions” for the order, according to a statement.
The 229-m, 51,950-gt ship with capacity for 744 guests will be constructed at Meyer Werft’s Papenburg site.
Meyer Werft managing director Thomas Weigend adds, "We are delighted about the newbuilding order, but at the same time we have to push ahead with our future programme, continue to convert and optimise the shipyard so we can deliver the ship with economic success.”
Ferries: all electric and hydrogen
There have been several notable ferry deliveries since the start of the year, continuing the theme of using battery power. The world’s largest all-electric ferry has been delivered after Norwegian operator Bastø Fosen received Bastø Electric in January. The vessel plies Norway’s busiest ferry route, Moss-Horten. Built by Sefine Shipyard in Turkey, Bastø Electric has capacity for 600 passengers, 200 cars, is 143.24 m long and 20.7 m wide.
Elsewhere, Westcon delivered a zero-emissions ferry to Norled in April. Electric ferry Nesvik has started service on the Hjelmeland-Nesvik-Skipavik route.
The ferry was designed by LMG Marin and built by Westcon Yard in Ølen. The vessel has capacity for almost 300 passengers and 80 cars.
In terms of new ferry orders, Finland has received a boost with an order from Australia’s TT-Line Tasmania. Finnish shipbuilding company Rauma Marine Constructions and Tasmanian shipping company TT-Line Company have finalised an agreement for the construction of two car and passenger ferries at the shipyard.
TT-Line had to withdraw from a previous memorandum of understanding last year due to the coronavirus pandemic. Negotiations resumed in March this year, initiated by the Tasmanian Government.
Construction of the new car and passenger ferries will begin in Q2 2022. The first vessel will be delivered to TT-Line in late 2023 and the second in late 2024. The ferries will accommodate 1,800 passengers and will have an approximate gross tonnage of 48,000. The vessels will replace Spirit of Tasmania I and II, both built in Finland in 1998.
And the move towards hydrogen continues. In April, it was announced that Belgium-based shipping group CMB and Japanese shipbuilder Tsuneishi and its ship operating subsidiary Kambara Kisen Co have joined forces to develop hydrogen-powered vessels in Japan, producing HydroBingo, the next-generation 80-passenger ferry which uses hydrogen as a marine fuel for propulsion.
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