You might also like:
Carnival Cruise Line’s decision to pour nearly $200 million into the renovation of one ship, the 20-year-old Carnival Triumph, shines a spotlight on a surge in refurbishment spending that has seized the cruise industry.
The Triumph is the fourth ship in the past three years to be scheduled for more than $100 million of improvements.
Where cruise lines once budgeted $10 million to $25 million on drydocks, with $40 million being an exceptional amount, the expenditures are now increasingly nine digits.
“The refurbishments are really going beyond replacing the carpeting and cleaning up things,” said Roger Blum, principal at Cruise & Port Advisors, a Miami consulting firm. “They’re trying to bring this older tonnage up to the level of the newer tonnage with the bells and whistles that the new ships have.”
A prime example is Celebrity Cruises, which last fall announced a $400 million refurb project it calls “The Celebrity Revolution,” which will change the look of its older ships over the next several years.
Celebrity is taking delivery in October of the Celebrity Edge, a $900 million ship that will be the first of four vessels in a new class. Among other features, it has an exclusive new sanctuary for suite guests called the Retreat.
In the Celebrity Revolution, all of the line’s existing larger ships will be retrofitted with a Retreat Sundeck and Retreat Lounge, both developed by Kelly Hoppen, a New York interior designer who has given the Edge a light, neutral, contemporary look that differs from previous Celebrity ships.
Celebrity recently raised the amount being spent on the Celebrity Revolution to $500 million.
“We wanted to do everything we could do,” said Dondra Ritzenthaler, senior vice president of sales, trade support and service.
Initially, only some staterooms were going to be addressed. That changed.
“Particularly on the [older] Millennium class, we decided we wanted to do everything right,” Ritzenthaler said. “So now we’re doing all of the staterooms, all of the bathrooms. We couldn’t be more proud of the fact we are spending a half-billion dollars, and we’re really going to make these ships like brand new.”
That urge to be comprehensive, rather than piecemeal, may be the hallmark of the new refurbishment trend.
The Carnival Triumph will be out of service for nearly two months next year getting a “bow-to-stern” makeover, according to a news release that listed 18 features that will be added to the ship.
When it was built in 1999, the Triumph cost $420 million. That’s about half the price of a new Carnival ship today.
Considering that math helps put the new refurbishment wave into financial perspective, Blum said. Older ships compete with new tonnage, which commands better pricing, and cruise lines can’t afford to let that gap grow too large.
“So if you can take essentially a really good ship and turn it into a brand new ship again — or at least offer the features, the amenities, the decor of a new ship for a price of $200 million — that’s a bargain,” Blum said.
It doesn’t hurt that cruise lines are flush with money after several years of rising demand and profits. Capital projects are always easier in that environment.
Royal Caribbean International has 10 ships in its sights for a refurb program called Royal Amplified. The first two ships to be “amplified,” the Independence of the Seas and the Mariner of the Seas, have cost $110 million and $120 million, respectively.
In addition to adding new features such as the Skypad bungee/trampoline, those two ships got additional cabins, including premium suites. The Independence got a partial new deck, adding 107 cabins.
Turning unused spaces into more cabins helps pay for expensive renovations by directly raising the return on investment.
Carnival will add 115 cabins to the Triumph, which will be renamed the Carnival Sunrise.
Luxury lines, too, are raising their refurbishment spending. When Cunard Line overhauled the Queen Mary 2 in 2016, it put $132 million into the effort, buying 594,000 square feet of carpeting and 4,000 framed pictures, among other items. It also added 50 cabins and 10 kennels for canine and feline passengers.
With Royal Caribbean Cruises Ltd.’s acquisition of 66.7% of Silversea Cruises, it’s embarking on a revitalization program for that line, including an overarching plan for a fleetwide “Musification” that will take inspiration from the design of the Silver Muse.
Earlier this year, Silversea became the latest line to split a ship in half and insert a new section, a $70 million overhaul of its 9-year-old Silver Spirit.
As the ship-splitting concept shows, there are few limits when it comes to renovating cruise ships. Still, there are a few.
Carnival looked at adding to the Triumph the popular Havana Cabana area featured on its latest ships, the Carnival Vista and the Carnival Horizon. But those ships are 133,500 gross tons, compared with the Triumph’s 102,000 gross tons.
Gus Antorcha, Carnival’s COO, said that the Havana Cabana area was designed with an aft pool. “We don’t have that real estate” on the Triumph, he said.
To a degree, the refurbishment boom is also being driven by the growing sophistication of shipyards that do renovations and their greater number compared with the number of yards making newbuilds.
“I think it’s exciting,” Blum said, “because not only is it expensive to build new ships today, it’s hard to get the shipyard space to do it. So to take this older tonnage which is really healthy, strong ships with great layouts and everything else, and to be able to bring them up to today’s standards, I think it’s great.”
Source: travelweekly.com
