by Mark Tre’ – "The Cruise Examiner"
The recent news that the Carlyle Group of Washington has taken a controlling interest in Brazil’s CVC Cruises follows major incursions into the UK, Italian, Spanish and French markets in the last decade.
The result is that Americans will soon control all the world’s significant cruise fleets other than Swiss/Italian-based MSC Cruises, Malaysian-based Star Cruises and Cypriot-based Louis Cruises. We also look at recent events in the rapidly expanding Brazilian cruise market and what’s happening with Bleu de France in France.
THIS WEEK’s STORY
Are The Americans Taking Control of World Cruising?
The news that the Carlyle Group of Washington has taken control of Brazil’s CVC Cruises leads one to sit back and wonder what is happening to the control of the cruise market.
At one time, Europeans effectively controlled the cruise industry in North America, with British, Dutch, Norwegian, Greek, Italian and Swedish shipowners all running cruise businesses from local offices in New York or Miami with a titular US president.
The first move away from this was the formation of Carnival Cruise Lines in 1972, after the Arisons and Klosters parted ways, with Kloster having owned the ships and Arison having run them. Set up as an independent, Carnival has come a long way from a one-ship operation to to-day, where it owns 95.
According to Ryan Wahlstrom’s Cruise Market Watch web site, Carnival now controls 55% of the North American market and 52% of the rest of the world, with Royal Caribbean having 27% and 22% respectively. If we ignore for the moment Apollo Corporation and its interests in NCL, Oceania and Regent, these figures for just the top two come to 82% and 74%. And adding NCL’s 10% North American share brings that figure to 92%.
This leaves MSC with 2% of the North American market and 10% of the rest of the world and Star Cruises with 5% and Louis with 4% of the rest of the world. Beyond that is getting into niche and one or two-ship brands.
As the world market has grown outside North America, there have been many incursions by the American "big two." The following timeline summarises the most important of these in the past dozen years or so:
1997 Royal Caribbean Cruises acquires Celebrity Cruises (UK/Greece)
1997 Carnival Corporation and Airtours (UK) jointly acquire Costa Cruses (Italy)
1998 Carnival Corporation acquires Cunard Line (UK)
2000 Carnival Corporation acquires the remaining 50% of Costa Cruises (Italy)
2000 P&O Princess Cruises PLC acquires Aida Cruises (Germany)
2003 Carnival Corporation merges with P&O Princess Cruises PLC (UK)
2003 P&O Princess Cruises PLC becomes Carnival PLC (Carnival UK)
2006 Royal Caribbean acquires Pullmantur Cruises (Spain)
2007 Carnival Corp & PLC acquires 75% of Iberocruceros (Spain)
2008 Pullmantur Cruises forms Croisières de France (France)
2009 Carnival Corp & PLC acquires the remaining 25% of Iberocruceros (Spain)
2010 Carlyle Group acquires 63.6% of CVC Cruises in Brazil (Brazil)
With Carnival and Royal Caribbean having taken control of most of the market in the UK, Germany, Italy, Spain and now Brazil the trend is obvious.
Mitigating this of course is the fact that both Carnival and Royal Caribbean do have European shareholders as well as American. Carnival PLC is listed in London and Royal Caribbean have European shareholders in Anders Wilhelmsen, one of the original Norwegian founders of the line, and Sammy Ofer, based in London. But Carnival management is clearly in American hands, with deputies in the UK and in Italy, while in the case of Royal Caribbean the decisions are made in Miami.
THIS WEEK IN CRUISING
The Cruise Market in Brazil
Many years ago, in the 1960s, Brazil had four very handsome cruise ships built in what was then Yugoslavia and in Spain. Anna Nery and Rosa de Fonseca were built in Yugoslavia while Princesa Isabel and Princesa Leopoldina came from Spain. Members of this class were used in coastal passenger service in Brazil and also for cruising, but they all later cruised elsewhere, not only from Miami and Piraeus, but also in the South Pacific and from Japan.
For many years previous to this, Brazil had been on the routes of major liner services from the United States, Moore-McCormack Lines being one of the big players, with its luxurious Argentina and Brasil, and from Europe, with operators such as Costa Line, Hamburg-Sud, Italian Line and Royal Mail Lines building ships for the South American market, regarded as second only in importance to the New York. All this activity to a keen interest in Brazil in things maritime, one that continues to this day.
The Brazilian cruise market in 2008-09 numbered 502,000 and this winter eighteen ships are offering berth capacity in excess of 900,000 with 405 cruises from Brazil. Cruise growth has averaged 33% annually over the past eight years and estimates are that the overall market could grow to 1.5 million, the size of the UK market to-day.
With the 2014 World Cup and 2016 Olympics both scheduled for Brazil, the government is also looking at building new cruise terminals in its most important ports. Besides CVC, and the usual lines running into the Amazon, other important cruise operators in Brazil include Costa, MSC, Pullmantur and Louis.
In this context, Royal Caribbean opened an office in Sao Paulo in August 2009 and to-day has the 1,800-berth Splendour of the Seas and the 2,000-berth Vision of the Seas based there, offering 3-,4-, 5-, 7- and 8-night cruises from Santos. Ricardo Amaral, managing director of Royal Caribbean Cruizeros Brazil, is also president of ABREMAR, the Brazilian association of cruise lines.
It is also in this context that Carlyle made its latest move into the Brazilian market by taking control of CVC Cruises. Carlyle is not new to cruising, however, having taken a part interest in Iberocruceros before selling it to Carnival Corporation & PLC in 2009.
Croisières de France
Last week, Croisières de France announced that Bleu de France had been chartered as of October 24, 2010, and that her Eastern Mediterranean cruises beyond that date through to her Christmas cruise were being cancelled. This is the second time in just a few months that Bleu de France cruises have been cancelled, the last event being the cancellation of her 2009-10 Red Sea programme.
Nine cruises have been cancelled and passengers now booked are being offered substitute cruises on Pullmantur’s Zenith, which is not a French-speaking ship, in October or November, or a full refund.
In fact, Bleu de France will be going on charter to CVC Cruises to run cruises to Fernando de Norhona, an archipelago of twenty-one islands situated some two hundred miles off the Brazilian coast that enjoys wonderful beaches and dolphin sanctuaries and has been declared a UNESCO World Heritage site. This unknown destination has been listed number four in the world’s best destinations by jetsetter.com.
It seems that Bleu de France will replace Orient Queen, which has been operating 4- to 7-night cruises from Recife and Fortaleza to Natal and Fernando de Norhona, where she stays for a full day and a half. Bleu de France will also cruise from other Brazilian ports and the CVC web site now shows her season running from November 3, 2010, to May 22, 2011.
Meanwhile, what will be the future of Croisières de France now that French passengers are being booked on to Pullmantur ships, with Pacific Dream substituting for Bleu de France in the Caribbean and Zenith substituting for her in the Eastern Mediterranean?
Have Croisières de France’s bookings been successful enough that a larger ship can be sent to be based in Marseilles next summer? For now, at least as far as ships go, Croisières de France seems to have been reduced to a seasonal operation.