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New CLIA 2023 State of the Industry report


Mary229
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21 minutes ago, JRG said:

Do you have an opinion on why the US Shipbuilding has a big GooseEgg in the column for relative shipbuilding that you can back up with proof.

Since you never provide "proof" when asked for it, I'll ignore that.  US shipbuilding has lost its competitive edge many years ago, due to the shortsightedness of keeping the construction subsidy program in place from the Merchant Marine Act of 1936.  US shipyards are so inefficient that they don't even wish to compete for repair business, for the most part, but prefer to cater to the US Navy, where timelines are flexible, cost overruns are the buyer's responsibility, and changes can be made over weeks instead of hours or minutes.  Even "US built" Jones Act or PVSA vessels typically have 40% or better of their equipment, materials, and structure built in overseas yards and shipped to the US.

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On 10/21/2023 at 7:23 AM, chengkp75 said:

I especially like the 4 pages devoted to "sustainable" tourism, when more and more  cities around the world are banning large cruise ships.  Apparently, the cruise lines are working with the wrong groups in those cities.

 

And, who can forget Carnival Corp's near complete disregard for their environmental stewardship, even in the face of court cases.  But, CLIA still spouts environmental stewardship.

 

They tout the fact that all new build ships will have shore power capability, yet they also admit that in the next 5 years, only 3% of cruise ports will support this.  And, note that the busiest cruise ports in the world, those in south Florida, are conspicuously absent from their list of current shore power facilities, showing how far behind they are.

 

They brag about 100% of new ships having Advanced Waste Water Treatment systems.  Every single NCL ship had these installed by the 2000's.  Hardly new technology, why has it taken so long?

 

88% of new builds that are not LNG capable, are being fitted with exhaust scrubbers.  This is another 20 year old technology, why aren't 100% of all new builds being outfitted with this?   Are they closed loop scrubbers, or open loop which dump the pollutants into the sea instead of the air?  What studies on the effects of open loop scrubbers have CLIA members sponsored?

 

For LNG powered ships, does the CLIA data on GHG reduction apply only to the fuel burned on the ship, or is it using the figure for "life cycle" (wellhead to combustion), which I doubt, as "methane slip" (the amount of raw methane released during the LNG "life cycle") is a known problem, and methane is 200 times more damaging as a GHG than CO2.

 

And what about the debt load the cruise lines have?  On another thread, someone asked why Carnival shares are selling so low, when things like this CLIA presentation, and Carnival's quarterly reports are so glowing?  Because Carnival is using passenger deposits to pay down their debt, hoping they won't have another situation where they have to refund massive amounts of deposits.

 

Chief - another consideration. The CLIA Club would like us to think they are switching to shore power to help the environment, but based on my experience, the primary driver is cost savings.

 

Back in the early 2000's when I ran one of our local shipyards, we brought the largest vessel in for a wet docking. We addressed all infrastructure needs except the provision of power, as the yard didn't have the required voltage or spare capacity. The service couldn't be upgraded in time for the first docking, so I had to cost hiring a Genset (Cat 35xx series) and the generating cost for diesel, compared to local hydro.

 

Can't remember exact numbers, but hydro was single digit per kWh, whereas diesel was almost $0.80 per kWh, or about 10x the cost of hydro power. I expect the cruise ships using shore power in Vancouver are purchasing the power from Metro Port Vancouver at about 10-15% of the cost to run the ship's gensets.

 

CLIA would like pax to believe the primary reason they are finally jumping on the shore power bandwagon is due to their concerns for the environment. Might be a contributing factor, but certainly isn't the predominant factor.

 

At least they were consistent, since they didn't mention the cost savings on both LNG or shore-power.

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I think the lesson from FTX is that discussions of alternative energy are just marketing.  Of course the primary motivation is cost savings followed closely by regulation, the rest is window dressing.  
 

Demographics and sources of revenue speak to the financial health of the industry.  

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1 hour ago, Mary229 said:

I think the lesson from FTX is that discussions of alternative energy are just marketing.  Of course the primary motivation is cost savings followed closely by regulation, the rest is window dressing.  
 

Demographics and sources of revenue speak to the financial health of the industry.  

 

Couldn't be further from the truth.

 

The quality ship owners implementing alternative energy for propulsion not most definitely not marketing initiatives. They are addressing real issues that are already being faced by the cruise industry, with the planned 2026 closure of some Norwegian Fjords being the next. Once Norway implements this closure, I don't expect it will be long before other jurisdictions follow suit. As the Chief so aptly posted previously, an increasing number of cities are banning cruise ships, so these non-CLIA members are building smaller ships and embracing technology to address the concerns. Hardly a marketing initiative.

 

Marketing is about selling your product, the quality ship owners are implementing these technologies, not to sell cruises, but to keep their ships sailing in the regions their pax wish to visit.

 

The old technologies mentioned in the CLIA report are cost saving, as I have experienced with the operation of my last command and managing a shipyard. The current technologies being implemented - fuel cells, batteries, solar were not available prior to my retirement, so I have no real data on costs. However, I expect they are not cheaper than LNG/Bunker Fuel, so potentially have higher capital and possibly operating costs.

 

If the cruise industry is so healthy, as per the CLIA report, why is Carnival's stock price plummeting. It has dropped about 25% in less than 1 month. I'll suggest a company's stock price is a vastly superior bellwether, as to a company's financial health, than a glossy marketing report from CLIA. 

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1 hour ago, Heidi13 said:

If the cruise industry is so healthy, as per the CLIA report, why is Carnival's stock price plummeting. It has dropped about 25% in less than 1 month. I'll suggest a company's stock price is a vastly superior bellwether, as to a company's financial health, than a glossy marketing report from CLIA. 

 

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10 hours ago, Heidi13 said:

 

Couldn't be further from the truth.

 

The quality ship owners implementing alternative energy for propulsion not most definitely not marketing initiatives. They are addressing real issues that are already being faced by the cruise industry, with the planned 2026 closure of some Norwegian Fjords being the next. Once Norway implements this closure, I don't expect it will be long before other jurisdictions follow suit. As the Chief so aptly posted previously, an increasing number of cities are banning cruise ships, so these non-CLIA members are building smaller ships and embracing technology to address the concerns. Hardly a marketing initiative.

 

Marketing is about selling your product, the quality ship owners are implementing these technologies, not to sell cruises, but to keep their ships sailing in the regions their pax wish to visit.

 

The old technologies mentioned in the CLIA report are cost saving, as I have experienced with the operation of my last command and managing a shipyard. The current technologies being implemented - fuel cells, batteries, solar were not available prior to my retirement, so I have no real data on costs. However, I expect they are not cheaper than LNG/Bunker Fuel, so potentially have higher capital and possibly operating costs.

 

If the cruise industry is so healthy, as per the CLIA report, why is Carnival's stock price plummeting. It has dropped about 25% in less than 1 month. I'll suggest a company's stock price is a vastly superior bellwether, as to a company's financial health, than a glossy marketing report from CLIA. 

You do understand that the lines have the option to mute the regulations by no longer sailing to certain ports.  That is an economic decision that can override engineering.  Lines are not building smaller ships to comply with various port regulations. Business planning far more complex than engineering.  
 

i never said that they were healthy, I said it demonstrates the financial health, no matter the condition of that health.  Gauging a line by stock price leads to the question of how are those lines without audited public accounting and no stock price gauged?

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14 hours ago, Heidi13 said:

 

Couldn't be further from the truth.

 

The quality ship owners implementing alternative energy for propulsion not most definitely not marketing initiatives. They are addressing real issues that are already being faced by the cruise industry, with the planned 2026 closure of some Norwegian Fjords being the next. Once Norway implements this closure, I don't expect it will be long before other jurisdictions follow suit. As the Chief so aptly posted previously, an increasing number of cities are banning cruise ships, so these non-CLIA members are building smaller ships and embracing technology to address the concerns. Hardly a marketing initiative.

 

Marketing is about selling your product, the quality ship owners are implementing these technologies, not to sell cruises, but to keep their ships sailing in the regions their pax wish to visit.

 

The old technologies mentioned in the CLIA report are cost saving, as I have experienced with the operation of my last command and managing a shipyard. The current technologies being implemented - fuel cells, batteries, solar were not available prior to my retirement, so I have no real data on costs. However, I expect they are not cheaper than LNG/Bunker Fuel, so potentially have higher capital and possibly operating costs.

 

If the cruise industry is so healthy, as per the CLIA report, why is Carnival's stock price plummeting. It has dropped about 25% in less than 1 month. I'll suggest a company's stock price is a vastly superior bellwether, as to a company's financial health, than a glossy marketing report from CLIA. 

 

This is an exaggeration that smaller lines are being "more responsible." The smaller ships have always been their model. That's one of their biggest selling points.

 

Things like batteries and solar are not practical on a large scale. It's like the wealthy homeowners who have an EV for their 5 mile commute, and therefore EV must be practical on a large scale, ignoring semi-trucks, cargo ships, and planes. There is a clear anti-Carnival sentiment in this thread. Royal Caribbean, another giant, is also using LNG in their new ships. If there was truly a better fuel source why aren't either giants using it?

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2 hours ago, Joebucks said:

 

Things like batteries and solar are not practical on a large scale.

 

Actually, EV was a new technology and costly. Toyota wisely launched a hybrid Prius car in 1997. Today, EV have economies of scale and better technology. That's why EV vans and rigs are now available.

 

The reality is that the Scandinavians are moving ahead. For example Hurtigruten has hybrid ships like the MS Fridtjof Nansen and MS Roald Amundsen. This is the Fridtjof Nansen seen in Reykjavik in 2022.

 

https://www.hurtigruten.com/en-us/expeditions/ships/roald-amundsen/

 

The Norwegians have made a choice. And, diesel ships are no longer welcome in the fjords. The small independent cruise lines are nimble. The big cruise companies are invested in old technology and they need 25 years to write the ships off.

 

Of course, many of the small companies have $$$$ investors while the big companies are heavily in debt. So, the future belongs to the small companies if you like small ports and expeditionary itineraries.

Reykjavik Old Harbor DSC_1457.jpg

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Does anyone think a widespread assault on cruise ships based on environmental factors isn't going to happen?  Seems to me steps need to be taken to forestall that.  Trying to justify what currently exists isn't likely to work.   

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2 hours ago, Joebucks said:

 

This is an exaggeration that smaller lines are being "more responsible." The smaller ships have always been their model. That's one of their biggest selling points.

 

Things like batteries and solar are not practical on a large scale. It's like the wealthy homeowners who have an EV for their 5 mile commute, and therefore EV must be practical on a large scale, ignoring semi-trucks, cargo ships, and planes. There is a clear anti-Carnival sentiment in this thread. Royal Caribbean, another giant, is also using LNG in their new ships. If there was truly a better fuel source why aren't either giants using it?

 

Don't believe I stated that the 2 non-CLIA cruise lines I mentioned were being "More Responsible", as that is highly subjective. I did refer to them as "Quality", which is based on my 40 years in the industry and our son's 20 years in the industry, and counting.

 

Yes, both those Lines focus on smaller ships, which I concur is one of their selling points, but it also addresses the concerns being raised by an increasing number of the World's ports. The push-back on accepting ever increasing sizes of ship has a high probability of growing. With the knowledge of the potential for refusing larger cruise ships, how are CLIA members addressing the issue - they continue to build mega ships for economy of scale. I foresee in the medium term that mega ships have increasing port limitations, and in a 7-day cruise may visit 1 or 2 ports, with the ship being the destination.

 

This industry has evolved significantly since I started in 1975 and it will continue to evolve. In 8 - 10 year, I would not be surprised if the CLIA mega ships are nothing more than destination resorts. Economy of scale keeping prices low for the masses.

 

With respect to batteries and solar not being practical, the marine industry has a number of significant differences to the automotive industry. Hurtigruten current has plans to build a zero emission ship (450' LOA) for 500 pax, with the vessel entering service in 2030. This vessel will integrate automatic sails with extensive solar panels and batteries (60MWh). The batteries will be charged by the solar panels and shore power when docked. The sails will provide propulsion assistance and are covered with about 15,000 sq feet of solar. The ship's design will incorporate aero-dynamics and hull friction is addressed by a couple of initiative, including thrusters retracting into the hull when not docking.

 

The next generation of Viking ships have a small increase in size to accommodate the hydrogen propulsion system, increasing from 930 to 998 pax. They already have a test bed in operation and the first hydrogen powered ship enters service next year. If this option can be scaled to a 50,000 tons ship, I don't see why it couldn't be scaled to 100,000 ton ships. How many CLIA members are implementing this technology - none, that I am aware of.

 

Why aren't Carnival brands & RCI introducing alternative fuels, other than the old LNG dual fuel technology. Since I no longer work in the industry and everyone I knew is now retired, I have no definitive answer.

 

However, Carnival has the worst record of environmental infractions, with RCI being a close second.

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6 hours ago, Mary229 said:

You do understand that the lines have the option to mute the regulations by no longer sailing to certain ports.  That is an economic decision that can override engineering.  Lines are not building smaller ships to comply with various port regulations. Business planning far more complex than engineering.  
 

i never said that they were healthy, I said it demonstrates the financial health, no matter the condition of that health.  Gauging a line by stock price leads to the question of how are those lines without audited public accounting and no stock price gauged?

 

With the exception of @chengkp75  I probably have a better understanding of the multiple levels of regulations facing this industry than most.

 

When the World's ports increasingly ban/restrict both the number and size of cruise ships, and CLIA member cruise ships are restricted from docking, I hardly consider that as muting regulations. All businesses should conduct regular SWOT Analysis - strengths, weaknesses, opportunities and threats.

 

As part of the threats analysis, mega ship owners should be concerned by the ever increasing trend of ports restricting the size and number of cruise ships. A quality ship owner will address these threats by developing plans, of which building smaller ships is only 1 of many options. Based on the report, the CLIA club do not appear interested in building smaller tonnage, as they continue with economy of scale. Therefore, I can only assume the mega ship owners are accepting they will be banned from an increasing number of ports, with their ships becoming little more than destination resorts. This may appeal to the younger generations, but I have always cruised for the destinations.

 

Private companies such as Viking, who are building 8 ocean ships in the next 6 years and a number of river cruise ships, must acquire financing for the capital expenses from somewhere. Viking's Chairman is a billionaire, but even he doesn't have $4 to 5 billion sitting in the bank to pay the shipyards. With a little research you can find who is investing and often the rate of return. Might not be audited results, but better than nothing. Another key factor is comparing how the crews are treated, contract lengths, wages, benefits, crew retention rates, etc.

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32 minutes ago, Heidi13 said:

 

With the exception of @chengkp75  I probably have a better understanding of the multiple levels of regulations facing this industry than most.

 

When the World's ports increasingly ban/restrict both the number and size of cruise ships, and CLIA member cruise ships are restricted from docking, I hardly consider that as muting regulations. All businesses should conduct regular SWOT Analysis - strengths, weaknesses, opportunities and threats.

 

As part of the threats analysis, mega ship owners should be concerned by the ever increasing trend of ports restricting the size and number of cruise ships. A quality ship owner will address these threats by developing plans, of which building smaller ships is only 1 of many options. Based on the report, the CLIA club do not appear interested in building smaller tonnage, as they continue with economy of scale. Therefore, I can only assume the mega ship owners are accepting they will be banned from an increasing number of ports, with their ships becoming little more than destination resorts. This may appeal to the younger generations, but I have always cruised for the destinations.

 

Private companies such as Viking, who are building 8 ocean ships in the next 6 years and a number of river cruise ships, must acquire financing for the capital expenses from somewhere. Viking's Chairman is a billionaire, but even he doesn't have $4 to 5 billion sitting in the bank to pay the shipyards. With a little research you can find who is investing and often the rate of return. Might not be audited results, but better than nothing. Another key factor is comparing how the crews are treated, contract lengths, wages, benefits, crew retention rates, etc.

Those port decisions and build outs are economic decisions and will have to be made in the board room.  I do believe there is a trend to the destination resort ship.  That is what may drive the financial engine that lets us others continue to cruise traditionally.  Then again decisions made may end our variety of travel.  It is all about the bottom line.  Even if it doesn't suit you or me it does not preclude a healthy industry.  (As a business person I have always held the firm conviction that each company in a free society is entitled to succeed or fail by their own hand)

 

Private companies are what they are, that is you try to discern and if you use their product you hope for the best.   That said I still find it interesting the esteem that is given to stock price.  As someone who has successfully maneuvered through the investment labyrinths of Wall Street since my youth I find that concept that Wall Street knows something you and I don't very amusing.  Yes, there are individuals who are worth paying attention to but the herd not so much. 

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2 hours ago, HappyInVan said:

 

Actually, EV was a new technology and costly. Toyota wisely launched a hybrid Prius car in 1997. Today, EV have economies of scale and better technology. That's why EV vans and rigs are now available.

 

The reality is that the Scandinavians are moving ahead. For example Hurtigruten has hybrid ships like the MS Fridtjof Nansen and MS Roald Amundsen. This is the Fridtjof Nansen seen in Reykjavik in 2022.

 

https://www.hurtigruten.com/en-us/expeditions/ships/roald-amundsen/

 

The Norwegians have made a choice. And, diesel ships are no longer welcome in the fjords. The small independent cruise lines are nimble. The big cruise companies are invested in old technology and they need 25 years to write the ships off.

 

Of course, many of the small companies have $$$$ investors while the big companies are heavily in debt. So, the future belongs to the small companies if you like small ports and expeditionary itineraries.

Reykjavik Old Harbor DSC_1457.jpg

 

Even with advancements, EV is still a novel technology. These small 500 passenger ships still have to recharge almost daily. We can all draw up whatever moral assumption we want. This strategy simply isn't viable for ships 5-12x bigger, sailing in the Caribbean. 

 

1 hour ago, Heidi13 said:

 

Don't believe I stated that the 2 non-CLIA cruise lines I mentioned were being "More Responsible", as that is highly subjective. I did refer to them as "Quality", which is based on my 40 years in the industry and our son's 20 years in the industry, and counting.

 

Yes, both those Lines focus on smaller ships, which I concur is one of their selling points, but it also addresses the concerns being raised by an increasing number of the World's ports. The push-back on accepting ever increasing sizes of ship has a high probability of growing. With the knowledge of the potential for refusing larger cruise ships, how are CLIA members addressing the issue - they continue to build mega ships for economy of scale. I foresee in the medium term that mega ships have increasing port limitations, and in a 7-day cruise may visit 1 or 2 ports, with the ship being the destination.

 

This industry has evolved significantly since I started in 1975 and it will continue to evolve. In 8 - 10 year, I would not be surprised if the CLIA mega ships are nothing more than destination resorts. Economy of scale keeping prices low for the masses.

 

The insinuation is greatly exaggerated that the "refusal" of mega ships is largely "environmental." Where is the cry over the "fragile ecosystems" when we're gladly waving in record numbers of airplanes, cargo barges, and other large vehicles? These big cities are often overdeveloped and littered with trash. But that big cruise ship sent it over the edge. 

 

The biggest reality we ignore is populations are getting bigger. Demand to visit destination spots is getting bigger. The spots themselves, remain the same size. Some of these spots are simply overrun with tourists. When deciding how to address the issue, the choice is often pretty easily to cut out the "riff raff" that cruises can bring. 

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25 minutes ago, Joebucks said:

 

Even with advancements, EV is still a novel technology. These small 500 passenger ships still have to recharge almost daily. We can all draw up whatever moral assumption we want. This strategy simply isn't viable for ships 5-12x bigger, sailing in the Caribbean. 

 

 

EV is a maturing technology for road transport. EV ships are limited by the lack of ports that allow them to link up with the power grid. That's why hybrid ships are the intermediary solution. Using traditional technology on the open seas. Cruising into ports and sensitive areas with battery power.

 

Do note that some countries/regions have an abundance of hydro power. For example, Norway is an exporter of electricity, as well as fossil fuels. In British Columbia, almost all of the grid comes from hydro. So, I would expect the ferries to be hybrid/EV ASAP.

 

On the other hand, small islands may not have the excess capacity to re-charge ships. So, diesel ships will continue to ply some regions. 

 

Here's the important thing, the companies with the big ships have to be careful not to fall too far behind. Its possible that the rich countries will finally agree to deal with the accelerating environmental problems. That means that the program has to be accelerated in order to catch up with the problem. Rush rush! How many ships have to be written off? How many new-gen ships can the shipyards build?

 

 

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4 hours ago, Joebucks said:

Things like batteries and solar are not practical on a large scale. It's like the wealthy homeowners who have an EV for their 5 mile commute, and therefore EV must be practical on a large scale, ignoring semi-trucks, cargo ships, and planes. There is a clear anti-Carnival sentiment in this thread. Royal Caribbean, another giant, is also using LNG in their new ships. If there was truly a better fuel source why aren't either giants using it?

Royal Caribbean started small scale fuel cell tests in 2016, with progressively larger scale installations on Oasis and Quantum class ships since then, and the largest will be the Icon class ships, which will have a 1 Mw fuel cell installation.  But, even so, RCI is behind the curve on new fuel technology.

 

Yes, solar is not practical for marine use, since it is a "low density" generator (requires large volume to generate a fixed amount of electricity), while ships are "high density" (needing to use a small volume to generate the same amount).

 

Why don't the major cruise lines invest heavily in the most advanced technology?  Because it costs, a lot, up front.  Don't kid yourselves that the mass market lines are looking at fuel technologies like LNG as anything other than a cost saving investment.  Why are there no LNG powered cruise ships in the Med, Near East, or Far East?  Because the cost differential between LNG and residual fuel is much smaller, or non-existent, in those places, as compared to the US/North America market.

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36 minutes ago, chengkp75 said:

Why don't the major cruise lines invest heavily in the most advanced technology?  Because it costs, a lot, up front.  Don't kid yourselves that the mass market lines are looking at fuel technologies like LNG as anything other than a cost saving investment.  Why are there no LNG powered cruise ships in the Med, Near East, or Far East?  Because the cost differential between LNG and residual fuel is much smaller, or non-existent, in those places, as compared to the US/North America market.

As usual it takes a while but you and I find solid agreement.  It is all always and ever about cost, they don’t have the luxury of adopting technologies that don’t produce immediate economic benefits.  
 

 

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30 minutes ago, Mary229 said:

As usual it takes a while but you and I find solid agreement.  It is all always and ever about cost, they don’t have the luxury of adopting technologies that don’t produce immediate economic benefits.  
 

 

Which leads me to why I would disagree with a statement of the "health of the industry" without a mention of the unusually large debt load that the major lines are carrying.  The need for "immediate" economic benefit is of course due to the need to make interest payments on their huge debt load.

 

And yet while they cannot afford to invest in a long term benefit, they can invest vast sums in new tonnage, that will need the increased demand to fill, and pay off the capital cost.  Ship owning, being a cyclical, and long lead time, industry in terms of building new tonnage, more conservative ordering, to keep demand high would also help with the bottom line.

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Just now, chengkp75 said:

Which leads me to why I would disagree with a statement of the "health of the industry" without a mention of the unusually large debt load that the major lines are carrying.  The need for "immediate" economic benefit is of course due to the need to make interest payments on their huge debt load.

 

And yet while they cannot afford to invest in a long term benefit, they can invest vast sums in new tonnage, that will need the increased demand to fill, and pay off the capital cost.  Ship owning, being a cyclical, and long lead time, industry in terms of building new tonnage, more conservative ordering, to keep demand high would also help with the bottom line.

I clarified that comment in a note to Heidi.  It does speak to the health of the industry - whether that health be good or bad.  Of course without financials the report is not all encompassing but it does provide interesting data points.  
 

Being able to expand into a younger demographic is a promising development, they have a longevity and no preconceived notions. They are also more likely urban raised and more comfortable with the higher population densities of big ships - after all many of them now live in high rises and other multi family domiciles.  As to build out I expect them to continue to build large resort ships which deliver the most dollars per transport costs.  
 

 

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To get back to a more general discussion, I've read the CLIA reports for a number of years. Like all such associations and all such publications, their purpose is to promote a positive view of the industry as a whole. To that end, they are going to emphasize positive aspects and de-emphasize more negative ones. 

 

I find the info frustratingly limited, especially as it is a "composite" view, whereas I would often like specific info on a single line, of a type that also is not generally included in annual reports.

 

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16 hours ago, chengkp75 said:

Royal Caribbean started small scale fuel cell tests in 2016, with progressively larger scale installations on Oasis and Quantum class ships since then, and the largest will be the Icon class ships, which will have a 1 Mw fuel cell installation.  But, even so, RCI is behind the curve on new fuel technology.

 

Yes, solar is not practical for marine use, since it is a "low density" generator (requires large volume to generate a fixed amount of electricity), while ships are "high density" (needing to use a small volume to generate the same amount).

 

Why don't the major cruise lines invest heavily in the most advanced technology?  Because it costs, a lot, up front.  Don't kid yourselves that the mass market lines are looking at fuel technologies like LNG as anything other than a cost saving investment.  Why are there no LNG powered cruise ships in the Med, Near East, or Far East?  Because the cost differential between LNG and residual fuel is much smaller, or non-existent, in those places, as compared to the US/North America market.

 

I have a hard time accepting they won't do it because of upfront cost. Especially considering an industry that spends billions on reach new ship and hundreds of millions renovating ports. As you said, they rack up tons of debt. All for the reason of creating a future returns on investment. It's what most publicly traded companies do. If a source of fuel would save hundreds of millions, they'd be all over it. The key distinguishing factor here is the companies are actually looking for a financial benefit vs some green slogan.

 

The truth is, there just aren't other reasonable fuel sources at this time. Especially ones worth retrofitting every port with. I read everyday how our large-scale intricate businesses need to completely change how they operate because the way some tiny Nordic country does something (energy, social, you name it). There simply isn't a technology out there right now that would properly power these large ships. If there was, it would be all over other types of large vehicles too. It isn't. Carnival and Royal Caribbean aren't energy companies either. They don't create these technologies. Certainly they dabble in how it fits into their model. 

 

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14 hours ago, cruisemom42 said:

I find the info frustratingly limited, especially as it is a "composite" view, whereas I would often like specific info on a single line, of a type that also is not generally included in annual reports.

 

I just skimmed over it,  but the graph I linked to caught my attention in two ways:

 

1) Why is CLIA talking about Ship Production and when WHAMMO

2) Why is there a big GooseEgg in the USA's Relative Ship Contribution when our audience has been listening to ovetures that the US Shipbuilding was being saved by our Cabotage laws. Clearly it isn't being saved.

 

Clearly from the GooseEgg, there is no MATERIAL shipbuilding going on that is being protected by strong US Cabotage Laws.   We are the Goose and We are laying the Golden GooseEggs for our neighbors in the form of inequitable economic benefit.

 

What is good for our Goose, has not been good for our Gander, and  the graphs I linked to prove it.

 

But back to your point.  Yes it is composite data.   But the Detail behind a Composite Zero (GooseEgg),  is still a zero,  or in this case,  less than 1%.

 

This was a fantastic post by the OP.   But what we do with it is what counts and I say she bagged a big one.

 

 

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21 hours ago, Mary229 said:

Those port decisions and build outs are economic decisions and will have to be made in the board room.  I do believe there is a trend to the destination resort ship.  That is what may drive the financial engine that lets us others continue to cruise traditionally.  Then again decisions made may end our variety of travel.  It is all about the bottom line.  Even if it doesn't suit you or me it does not preclude a healthy industry.  (As a business person I have always held the firm conviction that each company in a free society is entitled to succeed or fail by their own hand)

 

Private companies are what they are, that is you try to discern and if you use their product you hope for the best.   That said I still find it interesting the esteem that is given to stock price.  As someone who has successfully maneuvered through the investment labyrinths of Wall Street since my youth I find that concept that Wall Street knows something you and I don't very amusing.  Yes, there are individuals who are worth paying attention to but the herd not so much. 

 

We can agree that the CLIA club mega ships are gradually transitioning into low cost resorts, similar to the Billy Butlin's holiday resorts.

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7 minutes ago, Heidi13 said:

 

We can agree that the CLIA club mega ships are gradually transitioning into low cost resorts, similar to the Billy Butlin's holiday resorts.

 

Had not heard of Billy Butlin's resorts before your post.  Same as the mega ships, looks like a good place for families.  I would take the grandkids.  Only an hour from Southampton -- Hmmm.  😃

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3 hours ago, Joebucks said:

 

I have a hard time accepting they won't do it because of upfront cost. Especially considering an industry that spends billions on reach new ship and hundreds of millions renovating ports. As you said, they rack up tons of debt. All for the reason of creating a future returns on investment. It's what most publicly traded companies do. If a source of fuel would save hundreds of millions, they'd be all over it. The key distinguishing factor here is the companies are actually looking for a financial benefit vs some green slogan.

 

The truth is, there just aren't other reasonable fuel sources at this time. Especially ones worth retrofitting every port with. I read everyday how our large-scale intricate businesses need to completely change how they operate because the way some tiny Nordic country does something (energy, social, you name it). There simply isn't a technology out there right now that would properly power these large ships. If there was, it would be all over other types of large vehicles too. It isn't. Carnival and Royal Caribbean aren't energy companies either. They don't create these technologies. Certainly they dabble in how it fits into their model. 

 

 

When building a ship one of the key metrics is cost per lower berth. Cruise line also prioritise capital costs on the pax/hotel side of the business. A recent example being the Princess Cruises "Royal" class.

 

They went cheap with the propulsion & rudders, so are stuck with vessels that handle poorly at low speed in confined waters. You will find studies on this class of vessel by both Alaska & BC Coast pilots and the results are poor.

 

Your average cargo ship doesn't include high lift rudders, thrusters, CP props, etc as they dock way less than cruise ships/ferries, so hiring tugs for docking is cheaper than the additional capital cost. Cruise ships dock more frequently, so it is cheaper overall to provide the vessel with self manoeuvring capability, so tugs are only required in extreme conditions, or per local regs. Many cruise ships also navigate narrow channels, so require excellent low speed steerage, which the Royal Class do not have.

 

Another consideration is not all ports have access to large enough tugs to assist high freeboard cruise ships. Victoria is a classic example, with Ogden Point frequently experiencing high winds. Last departure from the graving dock, I requested 2 x 3,000 HP tugs a few days in advance, as I knew they had to come from Vancouver. The best I got was one 1,000 HP tug.

 

Carnival clearly knows the handling restrictions of a class of ship before delivery, as they conduct tank testing/simulations. With the Royal Class, the cost per lower berth was more important than providing current technology to provide the ship with acceptable handling characteristics. If they don't spend money on current technology providing acceptable handling, no way they are going to spend even more money on emerging technology.

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8 minutes ago, ldubs said:

 

Had not heard of Billy Butlin's resorts before your post.  Same as the mega ships, looks like a good place for families.  I would take the grandkids.  Only an hour from Southampton -- Hmmm.  😃

 

Don't know how many they have now, but used to be a number of them throughout UK, with 1 in Scotland.

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