What Will Happen to Smaller Ship Options?

[jabberwk]

I understand the philosophy behind building bigger cruise ships with more options, and understand the popularity of those ships, but what about those of us who prefer the smaller, more intimate ships? As the older, smaller ships are phased out (as they surely will be) will any newer smaller ships be built and added to the fleet? Are cruisers like me going to be phased out as well?

[Rackham]

Who knows. There are business reasons why it would make sense for Royal to abandon the small ships and their unique ports of call, and there are business reasons why it'd be brilliant to keep at least a handful in the fleet. We'll find out, probably, this decade due to cruise ships aging out after about 30 years of service (see attached chart).

My take is Royal will most likely introduce a new ship class that can transverse the Panama Canal (even if they're not planning on using the canal, various ports and waterways will construct themselves for ships of that size), and with the new locks, Royal can go larger than the traditional Panamax form factor with the ships. Maybe something larger than Vision/Radiance class but smaller than Voyager class. Much like Icon of the Seas wasn't the largest in the fleet until she was, I doubt we'll find out much about a new ship class until Royal is right and ready to tell us. Wouldn't want to jeopardize bookings on the current ships, you know.

[twangster]

Enjoy small ship cruising while you can.  We've got between 5 and 10 years to enjoy small ships with Royal.  

Start thinking about Celebrity.

[Adriana]

I would imagine that there will always be some of the smaller ships. Namely, because they are needed for some of the ports and itineraries. Not all can accommodate the large ships. But I hear you, many do like the intimacy and excellent service of the smaller ships. 

[twangster]

12 minutes ago, Adriana said:

I would imagine that there will always be some of the smaller ships. Namely, because they are needed for some of the ports and itineraries. Not all can accommodate the large ships. But I hear you, many do like the intimacy and excellent service of the smaller ships. 

I don't share your enthusiasm.  Small ships don't do well in the mass market cruising segment and they aren't consistent with Royal's current direction. 

Unless there is a change in management thinking, small ships won't exist in the future Royal Caribbean International fleet.  The only question is how long will the current small ships remain?

[steverk]

As you can see, there's considerable disagreement about what Royal will do about smaller ships. 

Part of what makes it interesting is that none of us know what Royal is thinking. Therefore our predictions are worth every penny you paid for them! 

With that in mind, I think Royal will develop a new class of post panamax ships.  That's about the size of a Voyager class ship. I certainly don't see them going any smaller. 

Any way you slice it, we'll know on 5-10 years because the age of the ships means they will have to start building this hypothetical new class by then. 

Btw: @twangster has convinced me that Voyager class can't get through the new locks. But it isn't really a size problem.  Rather, part of deck 4 juts out from the ship. If this were high enough from the waterline, then it wouldn't be an issue.  Alas it doesn't appear to be that high. If Royal were designing a ship from scratch,  this problem would be easily avoided. 

 

[Zambia-Zaire]

5 hours ago, Rackham said:

My take is Royal will most likely introduce a new ship class that can transverse the Panama Canal (even if they're not planning on using the canal, various ports and waterways will construct themselves for ships of that size), and with the new locks, Royal can go larger than the traditional Panamax form factor with the ships. Maybe something larger than Vision/Radiance class but smaller than Voyager class. 

Hmmm.... I suspect Royal would build a fleet of 150,000 tons ships, if not slightly smaller, whereas the beam of these ships would squeeze through the Post Panamax (~160' max) ...a mini-Oasis version style class of ship(LNG of course), as some of these ships that was built Pre-Oasis start to hit there 30yr retirement party.

[RCVirgin22]

While i think it would be beneficial to keep a few smaller ships around even if it means replacing them with new ones as there is definitely a market for them.

The question is does Royal think those travelers will just stop cruising with them once those ships are gone, or adapt and continue cruising on bigger ships? That will play into the decision but I tend to think some people are just too loyal and will adapt rather than make a statement and cruise elsewhere for that experience. 

There is certainly a lot of reason why they would rather have all big and bigger ships as the revenue possibilities increase with each added guest. 

[Chili]

6 hours ago, twangster said:

Enjoy small ship cruising while you can.  We've got between 5 and 10 years to enjoy small ships with Royal.  

Start thinking about Celebrity.

I think you’re right unfortunately.  
Royal Caribbean will become more of a mass market cheaper brand with the big ships.
Where celebrity will have smaller more expensive ships to run with a premium price.

[twangster]

7 hours ago, RCVirgin22 said:

While i think it would be beneficial to keep a few smaller ships around even if it means replacing them with new ones as there is definitely a market for them.

The question is does Royal think those travelers will just stop cruising with them once those ships are gone, or adapt and continue cruising on bigger ships? That will play into the decision but I tend to think some people are just too loyal and will adapt rather than make a statement and cruise elsewhere for that experience. 

There is certainly a lot of reason why they would rather have all big and bigger ships as the revenue possibilities increase with each added guest. 

Older ships are less efficient including those that were once tried to make look "green" back in the day (Radiance class).

At some point soon running old legacy ships will be seen as anti-green.  

Also consider that once 20 years old ships have to dry dock for periodic maritime required maintenance twice every five years.  While they are in dry dock they produce zero revenue. 

As ships age they will start to break down more.  Parts get old beyond the marine equipment monitored by the classification societies and government regulators of the seas.  Galley equipment, hotel equipment,  entertainment equipment, etc.  Like owning an old car it's great not having a car payment but they start breaking down more often.  

Older ships have an anchor around their necks and an albatross on their backs.  

As far as building new if you are going to spend $700M for building a small ship that can carry 2,500 you might as well make it $1B and have it carry 5,000.  That's mass market cruising.  The extra $300M investment will see the asset generate twice as much revenue with nearly the same operational costs.

A ship that can carry 7,000 has one captain and one set of senior officers.  A ship that can carry 2,500 has one captain and one set of senior officers.   The most expensive crew positions cost the same for a small ship or a mega ship but on a per passenger basis the mega senior crew costs a lot less.  

The numbers will never work for small ships in the mass market cruise industry.    

[twangster]

The Royal Caribbean Group with all of its operating cruise lines is a for profit business that has one primary goal.  Make money for its investors.  

All of these cruise lines exist to fulfil the primary mission of making money.

None of the operating cruise lines (or the interest they have in other cruise lines) was done in attempt to service every port in the world.

Nowhere is there a mission statement that says the company will go everywhere and be everything to all potential guests.  

Royal Caribbean International is the cruise line that the parent company has designated to the mass market cruise segment.  

For every dollar they spend there is a measurable return on the investment made by shareholders of the company.  Going to small ship ports when compared to going to large ship ports represents a poor use of investor money.  One could argue they have a fiduciary responsibility to avoid small ship ports in the mass market cruise segment.

All cruise lines exist to make money, not to pander to individual guest likes and dislikes.   

It is not enough to say they can make money going to small ship ports.  They can make way more money by not going to small ship ports.  

[steverk]

As always, @Twangster raises several very good points. Economy of scale is a major factor in this business. Thank you for your insight.

Naturally, I have a few questions. 

• There are a few ports in Alaska that Royal currently services with Radiance class vessels.  (Seward, Haines, Sitka come to mind) Can a Quantum class ship visit these ports?  If not, is it feasible for the ports to be upgraded? 
• Do you think that Royal will want to introduce mass market cruising to new markets? I'm thinking markets like India or South America. If so, would it be easier to get started with a medium sized vessel rather than an Oasis or even larger?

[twangster]

14 minutes ago, steverk said:

As always, @Twangster raises several very good points. Economy of scale is a major factor in this business. Thank you for your insight.

Naturally, I have a few questions. 

• There are a few ports in Alaska that Royal currently services with Radiance class vessels.  (Seward, Haines, Sitka come to mind) Can a Quantum class ship visit these ports?  If not, is it feasible for the ports to be upgraded? 
• Do you think that Royal will want to introduce mass market cruising to new markets? I'm thinking markets like India or South America. If so, would it be easier to get started with a medium sized vessel rather than an Oasis or even larger?

Sitka has received Quantum class ships going back to 2019.  Icy Strait Point recently expanded through an NCL investment adding another berth so it is now capable of two very large ships, Quantum and Breakaway Plus class at the same time.  New ports in Alaska are being developed now.  

There will be some smaller ports that are skipped by mega ships in Alaska.  Haines may be a physical limitation or a limitation of the local community being able to support larger number of guests.  That doesn't preclude them from making investments to change that.  Seward would only need a few dolphins added much like Sitka and Victoria have both completed in the last 5 years in a desire to accommodate larger ships.   Both the existing and new berth in Ketchikan are capable of Quantum sized vessels.  Juneau and Skagway are already capable.  The glacier channels are capable of very large ships. 

This past year Quantum and Ovation plus similar sized ships from NCL completed successful Alaska cruise seasons.  Very large ships are doing Alaska now and have been for a number of years.

Vancouver is a PITA port for larger ships due to tidal timing related to the bridge.  There have been ongoing local discussions for years how to deal with the need to accommodate larger ships and much like Sydney the answer may result in a new cruise terminal in close proximity.   Time will tell.  

So I don't see Alaska as being a challenge to very large ships.   Much like other areas there will remain some ports that can only be accessed using a small ship cruise line but the presence of small ship ports in Alaska doesn't prevent very large ships from being successful.  They are there already and successful.  

[Rackham]

Providing some numerical support to twangster's position that no new smaller ships are coming is readily done by looking at Royal's ships on order. Based on the approximate dates here https://www.royalcaribbeanblog.com/royal-caribbean-cruise-ships-order and capacity information from Royal, the company could retire the entirety of Vision and Radiance-class ships during the year when Grandeur turns 30 (2026) and increase their guest capacity fleetwide by over 9,000. This doesn't mean Royal will retire these two ship classes that year. This means the option would be there to do so without reducing guest capacity, versus current capacity, at that time.

[Rackham]

10 hours ago, RCVirgin22 said:

While i think it would be beneficial to keep a few smaller ships around even if it means replacing them with new ones as there is definitely a market for them.

The question is does Royal think those travelers will just stop cruising with them once those ships are gone, or adapt and continue cruising on bigger ships? That will play into the decision but I tend to think some people are just too loyal and will adapt rather than make a statement and cruise elsewhere for that experience. 

There is certainly a lot of reason why they would rather have all big and bigger ships as the revenue possibilities increase with each added guest. 

Off the top of my head, Royal is the only mass-market cruise line that has reciprocity with its premium line.

https://www.celebritycruises.com/mx/captains-club/exclusive-offers/loyalty-reciprocity-program

Royal could point towards its premium offering for people who are looking for a smaller ship. Their parent company could run a cross-line promotional to encourage small ship cruisers to make the jump when Royal's smaller ships are retired. Something like sail with Celebrity X number of times (once, twice, thrice?) in the next year and earn the equivalent number of bonus points (150 or 300 under the current points chart) with the Captain's Club for your particular status match.

I would like to see Royal introduce a new, smaller ship class, but the signs are pointing towards Royal getting out of the market. 

[TravisMA81]

It would be cool if they took some of the better smaller ships and refurbished them and made them adults only.  Similar to Vigan.  I like the bigger ships but would go on a smaller one without kids.  Even though they don't bother me too much it would still be nice.

[smokeybandit]

I wonder if buying newer smaller ships from other cruise lines would be an option.  I would think some high demand, but thin/seasonal routes.

[steverk]

12 minutes ago, smokeybandit said:

I wonder if buying newer smaller ships from other cruise lines would be an option.  I would think some high demand, but thin/seasonal routes.

You never know, but I doubt this would happen.  Royal has always built their ships from scratch and aren't likely to change now.  

It's really a brand positioning/cost question.  Does Royal Caribbean group want to position Royal Caribbean International as a large ship, high volume, high economy of scale line or do they want to try to appeal to everyone and preserve more flexibility to change itineraries to smaller ports or change oceans? 

As others have pointed out on this thread, Royal Caribbean Group may decide to make RCI as the large ship division and put smaller ships in to Celebrity, SilverSea or even some other brand (new, purchased or even one they already partially own).

Even if RCI decides to build a new class of "smaller" ships, it won't be their main focus. 

Keep in mind, that even if they do build a post Panamax class, that's still a pretty large ship.  Voyager of the Seas over 137,000 tons and carries 3600 passengers at double occupancy.  That's "small" compared to Icon of the Seas, but still large.  In comparison, Carnival only has 2 ships larger!

[twangster]

28 minutes ago, smokeybandit said:

I wonder if buying newer smaller ships from other cruise lines would be an option.  I would think some high demand, but thin/seasonal routes.

Which cruise line is selling off their newer ships?  AFAIK cruise lines tend to want to dump older ships which is exactly what Royal is already about to do.  

[smokeybandit]

12 minutes ago, twangster said:

Which cruise line is selling off their newer ships?  AFAIK cruise lines tend to want to dump older ships which is exactly what Royal is already about to do.  

Bankruptcy I guess.

[twangster]

24 minutes ago, steverk said:

Keep in mind, that even if they do build a post Panamax class, that's still a pretty large ship.  Voyager of the Seas over 137,000 tons and carries 3600 passengers at double occupancy.  That's "small" compared to Icon of the Seas, but still large.  In comparison, Carnival only has 2 ships larger!

Royal favors maximizing internal volume so there is more space to do more stuff.  That means hanging lifeboats outside of the ship and outside the profile of the ship which precludes it from using the Panama Canal.  

For a ship to be compatible with the PC the lifeboats need to be contained within the profile of the ship but that means reducing internal volume.  

18 minutes ago, smokeybandit said:

Bankruptcy I guess.

RCG did buy a small ship from a bankruptcy... and placed it at SilverSea. The Crystal Endeavor is now known as the Silver Endeavor.

[JasonOasis]

If Royal were to phase out all ships smaller than Freedom Class over the next 5-10 years would they be doing themselves a disservice?

Take NCL as example and the Prima Class which is smaller than NCL Breakaway Plus Class it is even smaller than Royal's Freedom Class, and while Prima Class isn't exactly small the fact that it is only slight larger than Royals Voyager Class is a win for NCL.  A ship the size of Prima gives NCL options at different ports that could/would disappear from Royals schedule if they continue to go down the road of bigger is better. I understand the ship being the destination, but not every passenger is looking for the ship to be the destination some passengers want to actually visit a destination set foot on dry land and not the same destinations all the time.

I 100% agree with twangster about it being the end of the line for Vision and Radiance Class ships.  However, if Royal intends on continuing to offer their guest a diverse number of ports I think they need a ship that size wise fits somewhere between Voyager Class and Freedom Class, or they are going to have to spend upgrading ports around the world.  If they don't people may or may not take a look at Celebrity Cruises, as Celebrity isn't in the same category or price point as Royal.  If Royal continues to go down the bigger is better road this could result in limited ports of call/itineraries .  It may  have people taking a look/switching over to NCL, especially with NCL's price point being lower than that of Celebrity and a bit closer to that of Royals.

 

Not everyone chooses their cruise based on the ship, for some people there are a number of factors they consider when booking a cruise, including ports of call and price among other things.  I hope Royal isn't looking at alienating loyal customers who pick cruises based on ports of call/itineraries, in their never ending quest of bigger is better.

[smokeybandit]

They should raffle off the chance to be at the helm and pushing the throttle when beaching the old ship into the scrapyard. That alone could raise enough money to build another ship

[Plumlee2028]

58 minutes ago, JasonOasis said:

If Royal were to phase out all ships smaller than Freedom Class over the next 5-10 years would they be doing themselves a disservice?

Take NCL as example and the Prima Class which is smaller than NCL Breakaway Plus Class it is even smaller than Royal's Freedom Class, and while Prima Class isn't exactly small the fact that it is only slight larger than Royals Voyager Class is a win for NCL.  A ship the size of Prima gives NCL options at different ports that could/would disappear from Royals schedule if they continue to go down the road of bigger is better. I understand the ship being the destination, but not every passenger is looking for the ship to be the destination some passengers want to actually visit a destination set foot on dry land and not the same destinations all the time.

I 100% agree with twangster about it being the end of the line for Vision and Radiance Class ships.  However, if Royal intends on continuing to offer their guest a diverse number of ports I think they need a ship that size wise fits somewhere between Voyager Class and Freedom Class, or they are going to have to spend upgrading ports around the world.  If they don't people may or may not take a look at Celebrity Cruises, as Celebrity isn't in the same category or price point as Royal.  If Royal continues to go down the bigger is better road this could result in limited ports of call/itineraries .  It may  have people taking a look/switching over to NCL, especially with NCL's price point being lower than that of Celebrity and a bit closer to that of Royals.

 

Not everyone chooses their cruise based on the ship, for some people there are a number of factors they consider when booking a cruise, including ports of call and price among other things.  I hope Royal isn't looking at alienating loyal customers who pick cruises based on ports of call/itineraries, in their never ending quest of bigger is better.

 

Norwegian takes a very different approach to a "similar market."  They want Prima to be more similar to Celebrity, and have pretty regularly said so.  They believe their brands should be top quality in their larger market segments.  Norwegian's hope is that they won't be in the same price point as Royal, they hope to be higher. Another note is that Prima is not that much smaller than their largest ships.  Breakaway Plus class ships are around 165,000 tons, or about the same as a Quantum Class ship.  They want smaller ships, because in their view they have to discount too much to fill larger ships.  Their entire holding company is about the same size as Royal Caribbean International, so a different strategy should be used.  

Part of the calculus Royal has to make is when they have a position in a ship yard, what is the best way to do it.  If it is a 140,000 ton ship to build, recently, they have made the choice to assign that to Celebrity, believing that ship will make more money than a 140,000 ton ship from their other brands.  At some point, some of Celebrities Millennium Class ships, built at the same time as Radiance Class, will have to be replaced too in some form or fashion.  

For Royal I look at it this way, for the first time they chose to take a ship on a world cruise.  Maybe that's a financial gold mine, or maybe they just didn't have enough of their standard sailings for that size to use it.  This year in Galveston, small Grandeur of the seas sailed short sailings in the summer.  Next year it is back to a voyager class ship.  That maybe, was another case of one of these ships not fitting in their mold, but needing to sail somewhere.  Royal also avoids the Carnival habit of having smaller ships sailing from more smaller ports (Mobile, Jacksonville, New Orleans (year round on Carnival), Charleston (for now), Norfolk.  

Celebrity on the other hand, is taking their smaller ships back to Asia, year round mediterranean and pushing what they historically have done...

[twangster]

Within the mass market cruise segment the big lines are all evolving within their own approaches to the market.

NCL is introducing new ships.  Carnival (Whale Tail) is introducing new ships.  MSC is introducing new ships.  RCI is introducing new ships.  

There is a bit of Newton's 3rd law in play but that isn't a precise analysis.  As one line moves in one direction other lines adjust in a sort of way to equalize.

The market and competition is evolving.  The cruise lines react to each other but it's played out over time.  With Royal "owning" the mega ship concept we are seeing other line adapt and trying to find their own place where they can set themselves apart.   Royal has momentum in the mega ship area and the way I see it some of the other lines appear willing to concede that and are trying to find their own place they can differentiate and shine.   

MSC continues to be the dark horse.  The pandemic stymied their plans and it has impacted their penetration into the US market.    If they ever commit to the US market they are the dark horse that stand to make the most gains.  MSC is firmly in the go big mindset yet they are stumbling at the moment.  If they can get over themselves they could put a serious hurt on Royal in North America.

Carnival Whale Tail has shed the most small ships throughout this.  They've have made great gains with their newest ships moving beyond the stagnant ways of old with wild decor on the ships and the coral colored cabins.  They have seen the light and started to move in a new direction a few years ago.  Only now is that becoming apparent.  It takes time to shift, build new and different and Carnival is well along that journey now.   Some of that isn't going over well with their target demographic - cheap cruises above all else.  Can they push their typical guest into more cruise spend?  Time will tell, but they are trying.

NCL's latest ships are a reflection that they can't compete with the likes of Royal so they are trying to create a niche where they can compete.  NCL is trying to reinvent itself away from Carnival and Royal and possibly into the Princess/Celebrity realm.  Time will tell if they can make that shift.  They need to shed some old, tired ships to continue on their journey.  At any rate NCL has given up trying to take on the mega shift and they trying to find a place they can be successful.  For some Royal cruises who don't like the mega trend they are a line to think about.

Princess needs to take a deep look at their position and move beyond the vanilla cabins if they ever hope to take on Celebrity in a serious way but now NCL stands to take some of their market share.  I think that is exactly where NCL is targeting.  Princess needs to do some soul searching to survive. 

Royal made the mega concept successful and they own that space.  That may cause some Royal cruisers to test the waters with other lines and Royal seems to be okay with that.  Half of a typical mega ship manifest is new to Royal so Royal is clearly trying to tap the never cruised before consumer and they appear to be successful.

So far it seems Royal is enjoying the mega ship space mostly alone.  While Royal perfected the "ship is the destination" concept Carnival, NCL and MSC took notice.  As those lines continue to progress making the ship more than that just a vessel the gravitational forces of the market will continue to influence each other as the market seeks to achieve equilibrium.  Unless there is shift in the market from an external source I don't see Royal trying to make a quantum shift back to the past.  

[Matt]

I asked Royal about this topic the other week and they seem quite content with Radiance and Vision Class as they are now: https://www.royalcaribbeanblog.com/2022/11/16/the-best-launch-weve-ever-had-royal-caribbean-talks-icon-of-the-seas-launch

Quote

 

"You'll notice they're not competing on a seven night Caribbean with Icon or Utopia or one of those ships."

"Great destination rich itinerary ships. That's why we use them in the Mediterranean, Alaska and the Baltics, in the South Pacific."

"The Vision and Radiance class are great ships doing great itineraries. They're very profitable for us. They rate really well and we're really thoughtful about how they age. Now, that may not be a full amplification for them, but they serve a kind of very specific purpose for us in our in our our brand."

 

Granted, I didn't expect them to say "Yea, we're dumping those ships" or anything truly newsworthy. But short of seeing their master plan for the next decade, it seems to me they don't see these ships going anywhere anytime soon.

[smokeybandit]

That sounds corporate-speak for "We're doing just fine for now, but we haven't decided how to keep them profitable in the future without putting tons of money into them"

[twangster]

26 minutes ago, smokeybandit said:

That sounds corporate-speak for "We're doing just fine for now, but we haven't decided how to keep them profitable in the future without putting tons of money into them"

The same answer I used with my kids quite often... "We'll see". 

[JasonOasis]

7 hours ago, Matt said:

Granted, I didn't expect them to say "Yea, we're dumping those ships" or anything truly newsworthy. But short of seeing their master plan for the next decade, it seems to me they don't see these ships going anywhere anytime soon.

Do you see Royal keeping these smaller ships in their fleet once they past 30 years in service? 

I don't the first thing about cruise ships and how long their life span typically is before the originally owner retires the vessel.  However in the airline industry which I'm very familiar with most major carriers in the US do retire their aircraft between the age of 25-30 years.  Some of these aircraft find new operators in other countries some of these aircraft are turned into Coke or Pepsi cans.  Which is why I ask the question do you think Royal would keep these aging vessels in their fleet once they past 30 years in service?  

Another reason many major carriers retire aircraft which are over 30 years old is because once an aircraft hit 30 years in service your maintenance cost on that aircraft increase dramatically. Maintenance cost go up when an aircraft hits 20 years in service but at 30 years it becomes cheaper for an airline to buy a new aircraft than spend the money on required maintenance.  I think earlier in this thread twangster was saying something about maintenance cost, how much more money in maintenance cost will for example Grandeur of the Seas cost Royal once it crosses the 30 year in service mark?

[Matt]

16 hours ago, JasonOasis said:

Do you see Royal keeping these smaller ships in their fleet once they past 30 years in service?

With the caveat that Covid made the cruise ship resale market nearly non-existent for the time being, I'll say a 30 year old cruise ship in 2022 is different than a 30 year old cruise ship 15-20 years ago.

Not too long ago, you'd be right that a 30 year cruise ship would be overdue for being dumped by the major lines. 

But refurbishments (amplifications) have breathed new life into older ships compared to the last generation. Royal has invested far more into keeping these ships up to date compared to what was done in the past. Empress of the Seas was a great example of this prior to Covid.

So the short answer is, yes, I do think they will keep them in service past 30 years. Especially given there's not much of a market to sell old ships other than scrap.

[twangster]

I'd agree we have the next 5-10 years to enjoy the existing small ships.  During that time they may shed one or two, probably Vision class, IF the opportunity presents itself.  If no buyer appears that isn't also a competitor or a business that would look to steal market share in a given region then they won't shed any Vision class ships until they reach the point that scrapping them is the only logical choice.

I don't see them deliberately or eagerly looking to abandon small ships, they'll go away through natural attrition.

[baltodave]

I really hope they are able to build or amp smaller ships in the future.  This past summer, we took Rhapsody in the Greek/Adriatic seas.  One of our favorite stops was in Montenegro and I don't see how "mega" ship could have navigated that harbor.  Granted, I can see how the mega ships are great for families but if you aren't sailing with kids the smaller ships are great.

[Mike.s]

On 11/29/2022 at 3:39 PM, twangster said:

I don't see them deliberately or eagerly looking to abandon small ships, they'll go away through natural attrition.

Or they might pass them on to brands they are linked with. Marella (owned by TUI) currently sail 2 x Royal ships, Legend and Splendour and will soon be sailing 3 x Celebrity ships. I know Royal have a joint venture with TUI cruises in Germany, not sure if it extends to Marella in the UK.

[twangster]

1 hour ago, Mike.s said:

Or they might pass them on to brands they are linked with. Marella (owned by TUI) currently sail 2 x Royal ships, Legend and Splendour and will soon be sailing 3 x Celebrity ships. I know Royal have a joint venture with TUI cruises in Germany, not sure if it extends to Marella in the UK.

Some of those line have been arguing to acquire new builds, not take on hand-me-downs.  The failure of Pulmantur has temporarily ended the RCI "graveyard" where it could send old ships to die.  It remains to be seen if any of the other business interests can be swayed to take Pulmantur's place as the line to send old ships to die.  

[dogs4thewin]

On 11/26/2022 at 3:49 PM, twangster said:

I don't share your enthusiasm.  Small ships don't do well in the mass market cruising segment and they aren't consistent with Royal's current direction. 

Unless there is a change in management thinking, small ships won't exist in the future Royal Caribbean International fleet.  The only question is how long will the current small ships remain?

They just have to remember that if they do that they will lose certain cruisers too either because they like the smaller ships and/or because there are certain ports that cannot handle those large ships, so you have people that will take their business elsewhere if you do not offer small ships.

[twangster]

3 hours ago, dogs4thewin said:

They just have to remember that if they do that they will lose certain cruisers too either because they like the smaller ships and/or because there are certain ports that cannot handle those large ships, so you have people that will take their business elsewhere if you do not offer small ships.

Yes, no doubt.  No cruise line can please everyone all the time.

It's the same story as why they can't put ships in <insert home port name>.  It's not that they can't get revenue from people on small ships.  They can get more revenue from more people on larger ships.  

[mac66]

I would think that as long as CLs can continue to fill the smaller ships that will keep them in service.

  I don't know what the cost ratio is but a full 2500 passenger ship seems like it would cost less to operate and be more profitable than a 5000 passenger ship that is less than full.

We booked a 7 n western Caribbean cruise for February on the Serenade because it was significantly cheaper than the same itinerary on an Oasis class ship. No sense paying for stuff we don't use (flow rider, climbing wall etc).  We really prefer the Radiance and less than Oasis class ships to the bigger ones.

If/when they phase them out we will find another cruise line.

[Rackham]

5 hours ago, mac66 said:

I would think that as long as CLs can continue to fill the smaller ships that will keep them in service.

  I don't know what the cost ratio is but a full 2500 passenger ship seems like it would cost less to operate and be more profitable than a 5000 passenger ship that is less than full.

We booked a 7 n western Caribbean cruise for February on the Serenade because it was significantly cheaper than the same itinerary on an Oasis class ship. No sense paying for stuff we don't use (flow rider, climbing wall etc).  We really prefer the Radiance and less than Oasis class ships to the bigger ones.

If/when they phase them out we will find another cruise line.

I don't remember the exact numbers, but Royal has said previously an Oasis-class ship requires about 40% occupancy to turn a profit while a Vision-class requires around 70% occupancy. Newer ship designs could reduce the occupancy required to cover costs, but there's still the issue of larger ships can generate more revenue due to passenger volume. So while the expenses of a smaller ship are less, the potential profit is too. 

To me, there's a lot we don't know about backend discussions and analysis at Royal. How do smaller ships fare during the off-season? How beneficial are smaller ships with retaining frequent cruisers and guest spending (due to the loyalty program and on-board accounts they know all)? How are they viewing smaller ships with various environmental regulations being put into place in parts of Europe? 

[steverk]

20 minutes ago, Rackham said:

 

To me, there's a lot we don't know about backend discussions and analysis at Royal. How do smaller ships fare during the off-season? How beneficial are smaller ships with retaining frequent cruisers and guest spending (due to the loyalty program and on-board accounts they know all)? How are they viewing smaller ships with various environmental regulations being put into place in parts of Europe? 

All very good points. I'd add one consideration as well. Would a new, modern cruise ship, that happens to be smaller and more efficient,  change the calculations you've mentioned. 

It would be very interesting to be a fly on the wall when Royal's management is discussing this!

[twangster]

A wild card could be the EU.  They like to dictate what private companies can do and often levy fines.   "You must have ships with fewer than 2,000 passenger or you will be fined 19B euros per day for every ship over 2,000 passengers" sort of thing.