Silversea Expansion

Silversea Cruises is doing well in 2005, according to CEO Albert Peter. He told Cruise Industry News (CIN) that the luxury line has reduced its debt load significantly and has increased its share capital, preparing for a stock listing in Norway by March or April 2006.

Peter’s plans also call for more newbuildings or acquisition of existing tonnage.”We have completed long-term bank refinancing at excellent rates,” Peter said. “We are now completely de-leveraged and ready for growth. We have to bring more growth to the table,” he added.

This year has generated load factors from 80 percent to 90 percent for Silversea with 15 percent to 18 percent higher per diems than last year. For 2006, Peter said that bookings are up 30 percent and that per diems are up 10 percent to 15 percent year-over-year.

How much of the company will be offered to investors and how much money will be raised depends on (financial) market conditions, Peter said, adding that the present sole owners, the Lefebvre family, will maintain (some) ownership.

Silversea also looked at an IPO before 9/11. “A period of growth is the ideal time to attract new investors,” Peter commented.

“We get the highest per diems in the industry,” he said, but would, for what he called tactical reasons, not reveal what the average per diem is. Whether to build or acquire existing tonnage will be a question of price, according to Peter, who said newbuildings will cost from 160 million to 180 million euros each.

Peter’s luxury formula calls for small ships – he said the ideal size may be somewhere between the line’s two classes of 296-passenger and 396 passenger vessels. He said that surveys have shown that their passengers prefer smaller ships – where it is easy to find your way around and meet .up, but big enough to offer some public amenities.

World Cruise

In related news, Silversea’s Senior Vice President of Sales David Morris announced the line’s first full circumnavigation of the globe – a 126-day world cruise, departing from Ft. Lauderdale on Jan. 15, 2007 and arriving in New York on May 22. The Silver Shadow will call at 61 ports, he said.

Promising a “vastly different product,” Morris listed a series of experts who will join the cruise, offering various enrichment programs, including beauty and fitness, food and wine, and cultural and lifestyle events – “some fundamental, some big surprises.” “I want to make the world cruise a lifetime experience,” Peter added. “People want to go and relax, but they also want to learn something. So we have set out do something different,” he promised.

Silversea has also named a world cruise director, Joe Proto, whose sole focus is to market, sell and organize the world cruise. The captain and the crew have also already been selected.

“Looking at the revenue potential, it makes sense to have a key person full time on the project,” Peter added. “Our goal is to personalize the entire experience. The more luxury you offer, the closer you have to be to your customer,” he said.

According to CIN’s estimate, the world cruise is expected to generate in the range of $20 million in revenues for Silversea. Peter said that was “good estimate.” Fares start at $52,794 per person double occupancy for the full cruise, including a 10 percent extended voyage savings as well as an early booking incentive and advance payment bonus. Port charges are additional. Full payment is due by July 19, 2006. The top suite sells for $150,000 per person for the full voyage.

Sixty percent to 65 percent of Silversea ‘s passengers are from North America and the rest from various other markets, according to Peter. He said his strategy was not to discount in North America to fill the ships, but to fill up with top per diems from other markets. He expects that the world cruise will have 80 percent of its passengers from the U.S. and the U.K.

Peter said that Silversea ‘s passenger satisfaction ratings have grown to 99 percent to 99.5 percent and that the average age has dropped to 49. He said it was 65 when he joined the company in June 200 I.

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