Late last week, Carnival Corporation signed a letter of intent to build a new luxury ship for Seabourn Cruise Line (www.seabourn.com). The move had been expected, as detailed in UBS Investment’s capacity monitor report for August 9.
What are the “takeaways”? First, it’s not going to send Seabourn’s capacity soaring. The new build, planned for delivery in 2016, will replace existing capacity leaving the brand. Seabourn's three smallest ships, the 208-passenger Seabourn Pride, Seabourn Spirit and Seabourn Legend, have already been sold to Xanterra Parks & Resorts for use by Windstar Cruises.
That will happen over time, with the Seabourn Pride leaving Seabourn fleet in April 14, while the two other sister ships will leave the fleet in April and May of 2015, respectively
Second, it’s a bit hard to believe, say agents, but the most recent Seabourn brand delivery wasn’t this year or even last year. The 450-berth Seabourn Quest, the luxury line's last new build, was delivered more than two years ago.
Third, not all berths are created equal in price. Robin Farley, analyst for UBS Investment notes that “as a smaller, high-end vessel, price for the newbuild should not be comparable to a more typical cost per berth of $200,000 to $250,000.”
Farley said the new Seabourn ship’s berth cost should be “perhaps more comparable to Prestige Cruise Holdings’ recent order for a new 738-berth luxury ship for Regent Seven Seas for a contract price of $610,000 per berth.”.
Fourth, the transfer of vessels from Carnival Corporation to Windstar means North American capacity is essentially unchanged, assuming Windstar sources mostly from the North American market. “We assume Seabourn’s new order is a 450-600 berth vessel, same as the last three Seabourn newbuilds,” Farley told investors.
Fifth, given the ship’s small size, Farley said the order is consistent with Carnival Corporation’s previously stated goal of building two to three orders a year, even though the company already has three on tap for 2016.
What do you as a travel agent think of the Seabourn decision to order a new ship? How will it be received by your luxury clients? Let us know on our Facebook page or in the comments below.