When Ponant’s 180-passenger Le Laperouse is delivered in June, it will usher in a new era for the cruise industry as the expedition market will officially begin its new capacity boom.
Twenty-eight new expedition ships are scheduled for introductions between June 2018 and the second quarter of 2022, and by all indications more are coming, according to the 2018 Cruise Industry News Expedition Market Report.
Four new ships this year represent three companies, and two are new to the oceans: Scenic and Mystic.
Next year, 11 ships join the expedition fleet, all from established operators, while the ship introductions keep rolling into 2020, 2021 and 2022.
The business model is simple: go to very unique places, like Antarctica and the Arctic, and charge an extremely high ticket price while offering an exclusive and safe sense of adventure.
Driving Factors
Driving ticket prices up, new ships will offer comforts that are new to the market, which was dominated by rugged yet simple Russian research vessels as recently as a decade ago.
Silversea and Ponant have arguably led the way. Silversea entered the expedition market with a single ship in 2008, seeing a need to appeal to returning high-end guests. Ponant, meanwhile, expanded aggressively with new, purpose-built luxury expedition ships, with seven more to come.
Expedition ships are generally smaller, averaging around 200 guests. The total expedition orderbook stands at 5,420 berths, less than the passenger count on the recently introduced Symphony of the Seas.
With roughly 31 cruise lines offering expedition sailings on dedicated small ships, the offerings are radically diverse, from three-star adventure products to six-star ships with the best of any amenity imaginable.
The market is also diversified from a sourcing point of view. Strength comes from dedicated English-speaking markets, like most of the broader cruise business, while Germany and China are key growth areas in which to source guests.
Concerning
The new ship boom has been helped in part by a number of smaller shipyards. While not accustomed to building cruise ships, they have been looking for work after their other shipbuilding businesses underperformed.
That has led to its own set of challenges, as a number of ship introductions have already been delayed as yards struggled with complex builds.
Capacity growth is its own story, with the cruise industry having profitably grown over the course of the last five decades despite various pains such as accidents, geopolitical events, skyrocketing oil prices and government regulations. There is no reason the growth story shouldn’t continue, especially in the niche expedition market.
One unanswered question: net capacity growth, as a number of older ships will leave the fleet.
Perhaps the biggest challenge may come down to product delivery, which is driven by the crew and expedition team.
Proactive Approach
Who is managing the growth in tight and pristine areas?
Two regulatory groups, IAATO and AECO, have gathered the stakeholders and operators in Antarctica and the Arctic, respectively, and are working hard on everything from landing site regulations to training guides and emergency response.
There are itinerary planning systems shared by the cruise lines to manage congestion, while landing sites have been regulated heavily in terms of the number of guests that can be landed at once.
Hurtigruten is eliminating single-use plastics, as well as building a pair of hybrid ships that can run on battery power. Ponant is building an LNG-powered icebreaker, and Mystic’s vessels will be able to maneuver at low speeds with the main engines turned off.
With dozens of new ships coming in a short time window, the real success story will be in ticket pricing, which based on global demand, should remain at premium levels.
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About the Expedition Market Report:
The 2018 Cruise Industry News Expedition Market Report presents a complete 127-page overview of the entire expedition market, including capacity projections through 2027, and profiles of 30+ major players, with exclusive interviews and insight, along with trends, original data, operational coverage and much more. Original reporting, analysis and research.
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