TUI Benefitting from ‘Shortage of Cruise Ship Supply,’ More Ships to Come

Mein Schiff 4

TUI Group’s cruise business accounts for 25 percent of EBITA for the company and TUI noted strong earnings for the first half of 2018 were being driven by a “shortage of cruise ship supply,” in an investor presentation hosted aboard the new Mein Schiff 1.

The company noted that European cruise source markets were growing quickly, but still underpenetrated, and said additional cruise ship orders for TUI Cruises were likely.

TUI said its business was benefitting from continued strong market demand, and its new capacity is arriving at the “right time” after being ordered several years ago.

At TUI Cruises, the young fleet offers low fuel consumption, while an overall strategy is focusing on yield and its distinct market segment, serving the premium market in Germany. The average passenger age is just over 55 and the line accounts for 24 percent of the German cruise market by revenue, according to the company.

In Britain, Marella is going all-inclusive and benefitting from product updates. With air and hotel packages, the brand is able to sell and control the complete vacation product.

The Marella Spirit will conclude its charter later this year, paving way for the more modern Marella Explorer 2, which is the current SkySea Golden Era.

Another strong performer, Hapag-Lloyd Cruises is seeing ticket prices continue to rise, and TUI has rewarded the performance with a third new Hanseatic-class expedition vessel which will join the fleet in 2021.

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