Is the ocean cruise sector poised for a recovery like the one post Great Recession?
The ocean cruise sector entered both of the last two major crises, the economic one in 2008 and the public health crisis in 2020, with a cruise ship order book in a sharp ascending cycle. Following the great recession, rebuilding the order book took several years, with a sharp acceleration in 2015 resulting in an order book at a record level in 2019, right before the beginning of the pandemic.
Starting in 2025, the cruise industry could enter a similar cycle for rebuilding the orderbook as the number of cruise ships due to launch will decrease drastically. Indeed, since the pandemic’s beginning, cruise operators have not announced any new orders other than for smaller luxury or ultra-luxury vessels. The cruise order book has not been replenished as most cruise lines are integrating significant new capacity into fleets while still absorbing the financial burden generated during the global shutdown.
What you will learn:
- The frequency of new launches will slow down next year, but there will still be almost 20% more berths than in 2019, raising concerns of a repeat of the scenario the sector experienced after the 2008/2009 Great Recession.
- The sector could be positioned to further benefit from the deceleration of the capacity growth below the historical level to boost occupancy and revenues while starting from a stronger pricing position than in 2010.
- Pricing and occupancy will also be helped by normalisation of deployment by region, although Asia is still lagging compared to the pre-COVID level.
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