Over the next five years, Carnival Corporation & plc, Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd are expected to grow their total gross capacity by more than 30 percent—or by 135,000 berths, Moody's Investors Service says in a new report. Combined, the three companies represent about 75 percent of worldwide cruise capacity.
"On average, our rated cruise companies grow capacity between 4 percent to 6 percent annually on a gross basis and we expect the next few years to be within that range," Moody's assistant vice president Peter Trombetta says. "This level of capacity growth is reasonable and will continue especially as bookings continue to come in higher than previous years."
Through 2020, NCL will be adding three ships – two for its Norwegian brand and one for Regent Seven Seas Cruises; over that same period, Carnival will be adding 12 ships across seven brands.
The increase will be supported by growing demand, Moody’s says. It adds that cruisers are willing to pay more for newer ships to experience the onboard attractions, new restaurants and social novelty. The Caribbean remains one of the biggest differentiators for cruise ships, as it’s the most popular cruise destination (35 percent of all cruise capacity is deployed to the area).
Backing up this, the CLIA says the number of worldwide cruise passengers has increased by over 20 percent since 2013 and that this percentage is expected to continuing growing in the next five years. The CLIA notes Baby Boomers continuing to see cruising as an attractive option and younger generations seeing cruising as a value proposition as two of the top reasons why demand will continue to grow. A growing segment of cruising that’s increasing in popularity, according to Moody’s, is the ultra-luxury cruise, with Viking Cruises, Lindblad Expeditions and Silversea Cruise among the top brands.