Cruise Analyst Sees New Ship Orders

Robin Farley, a leisure and gaming analyst with UBS Warburg, just issued her latest projections for cruise industry berth capacity— aimed at projecting any growth in ship deliveries for 2013-14

Farley says that while "new builds" will remain at a conservative level "as most cruise operators are still constrained by balance sheets and/or a more disciplined approach over the next few years, we do expect to see an uptick in new [cruise ship] order activity."

What could flow soon into the order pipline? "We believe NCL may be close to ordering two ships— with at least one for 2013 delivery— plus an option for a third," Farley says. She also notes that Carnival Corp. has reiterated its target of growth and that could mean one additional order for 2013 delivery.

And the "Royal Caribbean International brand has no new orders on the books after the [fourth quarter 2010] delivery of Allure of the Seas, so [we] could see an order for 2013 delivery," Farley says.

But even with any potential orders mentioned above, North American cruise industry capacity for 2013 would only show a 5 percent growth rate. Farley emphasizes that's below the 10-year historical average of 6-7 percent growth.

Plus, she says that as older tonnage leaves the North American fleet for service elsewhere— often with only a few months to a few weeks notice—that the "gross capacity increase always seems greater in advance, while the true net increase comes in lower," she says.

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